sv4
As filed with the Securities and Exchange Commission on
March 30, 2007
Registration
No. 333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF
1933
UNITED AUTO GROUP,
INC.
(Exact name of registrant as
specified in its charter)
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Delaware
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5511
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22-3086739
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(State or other jurisdiction
of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer Identification
No.)
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SEE TABLE OF ADDITIONAL SUBSIDIARY GUARANTOR REGISTRANTS
LISTED ON THE FOLLOWING PAGE
2555 Telegraph Road, Bloomfield Hills, MI 48302;
248-648-2500
(Address, including Zip code,
and telephone number, including area code, of registrants
principal executive offices)
Shane M. Spradlin, Esq.
Vice President and Secretary
United Auto Group, Inc.
2555 Telegraph Road
Bloomfield Hills, MI 48302
(Name, address, including Zip
code, and telephone number, including area code, of agent for
service)
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the
effective date of this registration statement.
If the securities being registered on this Form are being
offered in connection with the formation of a holding company
and there is compliance with General Instruction G, check the
following box. o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(d) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
CALCULATION OF REGISTRATION FEE
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Each Class of
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Amount to be
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Offering
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Aggregate
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Registration
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Securities to be Registered
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Registered
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Price per Unit(1)
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Offering Price(1)
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Fee(2)
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7.75% Senior Subordinated
Notes due 2016
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$375,000,000
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100%
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$375,000,000
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$11,513
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Guarantees of the
7.75% Senior Subordinated Notes due 2016(3)
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$375,000,000
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N/A
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N/A
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(4)
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(1) |
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Estimated solely for the purpose of computing the registration
fee in accordance with Rule 457(f) under the Securities Act
of 1933. |
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(2) |
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Calculated pursuant to Rule 457(f)(2) under the Securities
Act of 1933. |
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(3) |
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The entities listed on the Table of Subsidiary Guarantor
Registrants on the following page have guaranteed the notes
being registered hereby. |
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(4) |
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Pursuant to Rule 457(n) under the Securities Act, no
additional registration fee is due for guarantees. |
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until this Registration
Statement shall become effective on such date as the Securities
and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
TABLE OF
ADDITIONAL REGISTRANT GUARANTORS
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State or Other
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Jurisdiction of
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I.R.S. Employer
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Incorporation or
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Identification
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Exact Name of Registrant Guarantor or Specified in its
Charter(1)
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Organization
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Number
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ATLANTIC AUTO FUNDING CORPORATION
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Delaware
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16-1480801
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ATLANTIC AUTO SECOND FUNDING
CORPORATION
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Delaware
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16-1502671
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ATLANTIC AUTO THIRD FUNDING
CORPORATION
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Delaware
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16-1505549
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AUTO MALL PAYROLL SERVICES,
INC.
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Florida
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65-0168491
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BRETT MORGAN CHEVROLET-GEO,
INC.
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Delaware
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62-1666250
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CENTRAL FORD CENTER, INC.
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Arkansas
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71-0472936
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CJNS, LLC
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Delaware
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86-1024936
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CLASSIC AUTO GROUP, INC.
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New Jersey
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22-3115638
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CLASSIC ENTERPRISES, LLC
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Delaware
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22-3115638
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CLASSIC IMPORTS, INC.
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New Jersey
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22-3528527
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CLASSIC MANAGEMENT COMPANY,
INC.
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New Jersey
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22-3271563
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CLASSIC MOTOR SALES, LLC
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Delaware
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22-3555425
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CLASSIC NISSAN OF TURNERSVILLE, LLC
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Delaware
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52-2097845
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CLASSIC TURNERSVILLE, INC.
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New Jersey
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22-3523436
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COUNTY AUTO GROUP PARTNERSHIP
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New Jersey
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13-3678489
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COVINGTON PIKE DODGE, INC.
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Delaware
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62-1470261
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DAN YOUNG CHEVROLET, INC.
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Indiana
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35-1123225
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DANBURY AUTO PARTNERSHIP
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Connecticut
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06-1349205
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DEALER ACCESSORIES, LLC
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Delaware
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26-0111056
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DIFEO CHRYSLER PLYMOUTH JEEP EAGLE
PARTNERSHIP
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New Jersey
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22-3186252
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DIFEO HYUNDAI PARTNERSHIP
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New Jersey
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22-3186280
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DIFEO LEASING PARTNERSHIP
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New Jersey
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22-3193493
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DIFEO NISSAN PARTNERSHIP
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New Jersey
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22-3186257
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DIFEO PARTNERSHIP, LLC
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Delaware
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22-3145559
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DIFEO TENAFLY PARTNERSHIP
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New Jersey
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22-3186285
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EUROPA AUTO IMPORTS, INC.
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California
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95-2305855
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FLORIDA CHRYSLER PLYMOUTH,
INC.
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Florida
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59-2676162
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FRN OF TULSA, LLC
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Delaware
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74-2870051
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GENE REED CHEVROLET, INC.
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South Carolina
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57-0714181
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GMG MOTORS, INC.
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California
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95-2691214
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GOODSON NORTH, LLC
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Delaware
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74-2962016
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GOODSON PONTIAC-GMC, LLC
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Delaware
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74-2962015
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GOODSON SPRING BRANCH, LLC
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Delaware
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74-2962017
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HT AUTOMOTIVE, LTD.
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Delaware
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86-0956598
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HUDSON MOTORS PARTNERSHIP
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New Jersey
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22-3186282
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JS IMPORTS, LLC
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Florida
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06-1174009
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KMPB, LLC
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Delaware
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33-0959285
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KMT/UAG, INC.
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California
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95-3189650
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LANDERS AUTO SALES, LLC
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Arkansas
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84-1664308
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LANDERS BUICK PONTIAC, INC.
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Arkansas
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71-0765000
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LANDERS FORD NORTH, INC.
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Arkansas
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71-0833592
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LANDERS FORD, INC.
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Delaware
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62-1786911
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ii
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State or Other
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Jurisdiction of
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I.R.S. Employer
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Incorporation or
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Identification
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Exact Name of Registrant Guarantor or Specified in its
Charter(1)
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Organization
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Number
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LANDERS NISSAN, LLC
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Delaware
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62-1842244
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LANDERS UNITED AUTO GROUP
NO. 2, INC.
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Arkansas
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71-0796323
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LATE ACQUISITION I, LLC
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Delaware
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33-1011098
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LATE ACQUISITION II, LLC
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Delaware
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33-1011096
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LMNS, LLC
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Delaware
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86-1024935
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LRP, LTD.
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Arizona
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86-0805727
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MICHAEL CHEVROLET-OLDSMOBILE,
INC.
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South Carolina
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57-0917132
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MOTORCARS ACQUISITION II, LLC
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Delaware
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38-3526433
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MOTORCARS ACQUISITION III, LLC
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Delaware
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38-3526235
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MOTORCARS ACQUISITION IV, LLC
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Delaware
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38-3569545
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MOTORCARS ACQUISITION V, LLC
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Delaware
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87-0721680
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MOTORCARS ACQUISITION VI, LLC
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Delaware
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86-1121782
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MOTORCARS ACQUISITION, LLC
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Delaware
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38-3526432
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NATIONAL CITY FORD, INC.
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Delaware
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33-0834429
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NISSAN OF NORTH OLMSTED, LLC
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Delaware
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38-3597513
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OCT PARTNERSHIP
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New Jersey
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22-3248303
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PALM AUTO PLAZA, LLC
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Florida
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65-1272503
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PEACHTREE NISSAN, INC.
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Georgia
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58-1273321
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PMRC, LLC
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Delaware
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22-3881752
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RELENTLESS PURSUIT ENTERPRISES,
INC.
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California
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93-1008771
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SA AUTOMOTIVE, LTD.
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Arizona
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86-0583813
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SAU AUTOMOTIVE, LTD.
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Arizona
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86-0839423
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SCOTTSDALE 101 MANAGEMENT, LLC
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Delaware
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n/a
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SCOTTSDALE FERRARI, LLC
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Arizona
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86-0981831
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SCOTTSDALE JAGUAR, LTD.
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Arizona
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86-0527896
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SCOTTSDALE MANAGEMENT GROUP,
LTD.
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Arizona
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86-0573438
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SCOTTSDALE PAINT & BODY,
LLC
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Delaware
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n/a
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SHANNON AUTOMOTIVE, LTD.
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Texas
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76-0528837
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SIGMA MOTORS, INC.
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Arizona
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86-1047752
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SK MOTORS, LTD.
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Arizona
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86-0839422
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SL AUTOMOTIVE, LTD.
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Arizona
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86-0610228
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SMART USA DISTRIBUTOR LLC
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Delaware
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87-0766681
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SOMERSET MOTORS PARTNERSHIP
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New Jersey
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22-3186283
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SOMERSET MOTORS, INC.
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New Jersey
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22-2986160
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SUN MOTORS, LTD.
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Arizona
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86-0782655
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THE NEW GRACELAND DODGE, INC.
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Tennessee
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62-1292399
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TRI-CITY LEASING, INC.
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California
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95-2690090
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UAG ARKANSAS FLM, LLC
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Delaware
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87-0766675
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UAG ATLANTA H1, LLC
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Delaware
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30-0282545
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UAG ATLANTA IV MOTORS, INC.
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Georgia
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58-1092076
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UAG CAPITOL, INC.
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Delaware
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76-0759095
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UAG CAROLINA, INC.
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Delaware
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13-3959601
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iii
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State or Other
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Jurisdiction of
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I.R.S. Employer
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Incorporation or
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Identification
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Exact Name of Registrant Guarantor or Specified in its
Charter(1)
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Organization
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Number
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UAG CENTRAL FLORIDA MOTORS, LLC
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Delaware
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75-3086724
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UAG CENTRAL REGION MANAGEMENT,
INC.
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Indiana
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38-3537233
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UAG CERRITOS, LLC
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Delaware
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33-0913909
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UAG CHANTILLY AU, LLC
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Delaware
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87-0766680
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UAG CHCC, INC.
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New Jersey
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22-2990922
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UAG CHEVROLET, INC.
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New Jersey
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22-2762327
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UAG CITRUS MOTORS, LLC
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Delaware
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59-3525335
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UAG CLASSIC, INC.
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Delaware
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13-3987807
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UAG CLOVIS, INC.
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Delaware
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76-0759096
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UAG CONNECTICUT, LLC
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Delaware
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06-1589742
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UAG DULUTH, INC.
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Texas
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58-1786146
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UAG EAST, LLC
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Delaware
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13-3944970
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UAG ESCONDIDO A1, INC.
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Delaware
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20-3697398
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UAG ESCONDIDO H1, INC.
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Delaware
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20-3697348
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UAG ESCONDIDO M1, INC.
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Delaware
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20-3697423
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UAG FAYETTEVILLE I, LLC
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Delaware
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71-0858576
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UAG FAYETTEVILLE II, LLC
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Delaware
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71-0858577
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UAG FAYETTEVILLE III, LLC
|
|
Delaware
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71-0858578
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UAG FINANCE COMPANY, INC.
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Delaware
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13-3953915
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UAG GD, LTD.
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Texas
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06-1664576
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UAG GN, LTD.
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Texas
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06-1664569
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UAG GP, LTD.
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Texas
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06-1664579
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UAG GRACELAND II, INC.
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Delaware
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13-3991339
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UAG GW, LTD.
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Texas
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06-1664570
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UAG HOUSTON ACQUISITION, LTD.
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Texas
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38-3542915
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UAG HUDSON CJD, LLC
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Delaware
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87-0766678
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UAG HUDSON, INC.
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New Jersey
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22-1919268
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UAG INTERNATIONAL HOLDINGS,
INC.
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Delaware
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51-0393682
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UAG KISSIMMEE MOTORS, INC.
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Delaware
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58-2361341
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UAG LANDERS SPRINGDALE, LLC
|
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Delaware
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71-0846659
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UAG LOS GATOS, INC.
|
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Delaware
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76-0759098
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UAG MARIN, INC.
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Delaware
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76-0759100
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UAG MEMPHIS II, INC.
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Delaware
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62-1722683
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UAG MEMPHIS IV, INC.
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Delaware
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62-1722679
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UAG MEMPHIS MANAGEMENT, INC.
|
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Delaware
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62-1722677
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UAG MICHIGAN CADILLAC, LLC
|
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Delaware
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38-3543705
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UAG MICHIGAN H1, LLC
|
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Delaware
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42-1539792
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UAG MICHIGAN H2, LLC
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|
Delaware
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|
06-1732404
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UAG MICHIGAN HOLDINGS, INC.
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|
Delaware
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30-0193048
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UAG MICHIGAN PONTIAC-GMC, LLC
|
|
Delaware
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38-3543709
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UAG MICHIGAN T1, LLC
|
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Delaware
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38-3543711
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UAG MICHIGAN TMV, LLC
|
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Delaware
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38-3544903
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iv
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State or Other
|
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Jurisdiction of
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I.R.S. Employer
|
|
|
Incorporation or
|
|
Identification
|
Exact Name of Registrant Guarantor or Specified in its
Charter(1)
|
|
Organization
|
|
Number
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UAG MINNEAPOLIS B1, LLC
|
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Delaware
|
|
76-0819658
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UAG NANUET I, LLC
|
|
Delaware
|
|
22-3784977
|
UAG NANUET II, LLC
|
|
Delaware
|
|
22-3784978
|
UAG NEVADA LAND, LLC
|
|
Delaware
|
|
86-1008719
|
UAG NORTHEAST BODY SHOP, INC.
|
|
Delaware
|
|
13-4044770
|
UAG NORTHEAST, LLC
|
|
Delaware
|
|
13-3914694
|
UAG OLDSMOBILE OF INDIANA, LLC
|
|
Indiana
|
|
38-3523400
|
UAG PHOENIX VC, LLC
|
|
Delaware
|
|
06-1590478
|
UAG REALTY, LLC
|
|
Delaware
|
|
38-3543708
|
UAG ROYAL PALM, LLC
|
|
Delaware
|
|
80-0072974
|
UAG ROYAL PLAM M1, LLC
|
|
Delaware
|
|
06-1774003
|
UAG SAN DIEGO A1, INC.
|
|
Delaware
|
|
20-3697335
|
UAG SAN DIEGO AU, INC.
|
|
Delaware
|
|
20-3955972
|
UAG SAN DIEGO H1, INC.
|
|
Delaware
|
|
20-3697304
|
UAG SAN DIEGO JA, INC.
|
|
Delaware
|
|
47-0957524
|
UAG SAN DIEGO MANAGEMENT,
INC.
|
|
Delaware
|
|
20-3955897
|
UAG SOUTHEAST, INC.
|
|
Delaware
|
|
13-3865530
|
UAG SPRING, LLC
|
|
Delaware
|
|
74-2981371
|
UAG STEVENS CREEK II,
INC.
|
|
Delaware
|
|
47-0957526
|
UAG SUNNYVALE, INC.
|
|
Delaware
|
|
76-0759097
|
UAG TEXAS II, INC.
|
|
Delaware
|
|
13-3933083
|
UAG TEXAS, LLC
|
|
Delaware
|
|
13-3933080
|
UAG TORRANCE, INC.
|
|
Delaware
|
|
47-0934123
|
UAG TULSA HOLDINGS, LLC
|
|
Delaware
|
|
51-0410923
|
UAG TULSA JLM, LLC
|
|
Delaware
|
|
06-1742289
|
UAG TULSA VC, LLC
|
|
Delaware
|
|
22-3877257
|
UAG TURNERSVILLE MOTORS, LLC
|
|
Delaware
|
|
84-1629421
|
UAG TURNERSVILLE REALTY, LLC
|
|
Delaware
|
|
38-3543708
|
UAG VC II, LLC
|
|
Delaware
|
|
43-2090811
|
UAG VK, LLC
|
|
Delaware
|
|
38-3590846
|
UAG WEST BAY AM, LLC
|
|
Delaware
|
|
61-1442389
|
UAG WEST BAY FM, LLC
|
|
Delaware
|
|
86-1088680
|
UAG WEST BAY IA, LLC
|
|
Delaware
|
|
30-0150593
|
UAG WEST BAY IAU, LLC
|
|
Delaware
|
|
61-1442390
|
UAG WEST BAY IB, LLC
|
|
Delaware
|
|
35-2196049
|
UAG WEST BAY II, LLC
|
|
Delaware
|
|
38-3672787
|
UAG WEST BAY IL, LLC
|
|
Delaware
|
|
30-0150590
|
UAG WEST BAY IM, LLC
|
|
Delaware
|
|
37-1458215
|
UAG WEST BAY IN, LLC
|
|
Delaware
|
|
04-3805793
|
UAG WEST BAY IP, LLC
|
|
Delaware
|
|
32-3360132
|
UAG WEST BAY IV, LLC
|
|
Delaware
|
|
32-0060125
|
UAG WEST BAY IW, LLC
|
|
Delaware
|
|
36-4521984
|
v
|
|
|
|
|
|
|
State or Other
|
|
|
|
|
Jurisdiction of
|
|
I.R.S. Employer
|
|
|
Incorporation or
|
|
Identification
|
Exact Name of Registrant Guarantor or Specified in its
Charter(1)
|
|
Organization
|
|
Number
|
|
UAG WEST, LLC
|
|
Delaware
|
|
13-3914611
|
UAG YOUNG AUTOMOTIVE GROUP, LLC
|
|
Delaware
|
|
32-2035279
|
UAG YOUNG II, INC.
|
|
Delaware
|
|
13-3985679
|
UAG/PFS, INC.
|
|
Arizona
|
|
86-0376346
|
UAG-CARIBBEAN, INC.
|
|
Delaware
|
|
13-3980142
|
UNITED AUTO LICENSING, LLC
|
|
Delaware
|
|
38-3556189
|
UNITED AUTOCARE PRODUCTS, LLC
|
|
Delaware
|
|
13-3922210
|
UNITED FORD BROKEN ARROW, LLC
|
|
Delaware
|
|
26-0111055
|
UNITED FORD NORTH, LLC
|
|
Delaware
|
|
26-0111052
|
UNITED FORD SOUTH, LLC
|
|
Delaware
|
|
26-0111051
|
UNITED NISSAN, INC. (A GEORGIA
CORPORATION)
|
|
Georgia
|
|
58-2038392
|
UNITED NISSAN, INC. (A TENNESSEE
CORPORATION)
|
|
Tennessee
|
|
62-0790848
|
UNITED RANCH AUTOMOTIVE, LLC
|
|
Delaware
|
|
86-1008720
|
UNITEDAUTO DODGE OF SHREVEPORT,
INC.
|
|
Delaware
|
|
72-1393145
|
UNITEDAUTO FIFTH FUNDING,
INC.
|
|
Delaware
|
|
16-1549850
|
UNITEDAUTO FINANCE, INC.
|
|
Delaware
|
|
16-1456003
|
UNITEDAUTO FOURTH FUNDING
INC.
|
|
Delaware
|
|
16-1543345
|
UNITEDAUTO SCOTTSDALE PROPERTY
HOLDINGS, LLC
|
|
Delaware
|
|
86-1123497
|
WEST PALM AUTO MALL, INC.
|
|
Florida
|
|
65-0050208
|
WEST PALM NISSAN, LLC
|
|
Florida
|
|
06-1773996
|
WEST PALM S1, LLC
|
|
Delaware
|
|
14-1961285
|
WESTBURY SUPERSTORE, LTD.
|
|
New York
|
|
11-2983989
|
WTA MOTORS, LTD.
|
|
Texas
|
|
33-1011102
|
YOUNG MANAGEMENT GROUP, INC.
|
|
Indiana
|
|
35-1897920
|
vi
The
information in this prospectus is not complete and may be
changed. We may not sell these securities or accept any offer to
buy these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.
|
SUBJECT
TO COMPLETION, DATED MARCH 30, 2007
PROSPECTUS
$375,000,000
7.75% Senior Subordinated Exchange Notes due 2016
EXCHANGE
OFFER FOR
7.75% SENIOR SUBORDINATED NOTES DUE 2016
United Auto Group, Inc. is offering, upon the terms and subject
to the conditions set forth in this prospectus and the
accompanying letter of transmittal, to exchange an aggregate
principal amount of up to $375,000,000 of new registered
7.75% senior subordinated notes due 2016 (which we refer to
as the exchange notes) for an equal principal amount of our
outstanding unregistered 7.75% senior subordinated notes
due 2016. When we refer to old notes, we are
referring to the outstanding unregistered 7.75% senior
subordinated notes due 2016. The exchange notes will represent
the same debt as the old notes and we will issue the exchange
notes under the same indenture.
The
exchange offer expires at 5:00 p.m., New York City time, on
[ ],
2007, unless extended.
Terms of
the Exchange Offer
|
|
|
|
|
All old notes that are validly tendered and not withdrawn prior
to the expiration of the exchange offer will be exchanged for an
equal principal amount of exchange notes.
|
|
|
|
You may withdraw tendered old notes at any time prior to the
expiration of the exchange offer.
|
|
|
|
The terms of the exchange notes are identical in all material
respects (including principal amount, interest rate, maturity
and redemption rights) to the old notes for which they may be
exchanged, except that the exchange notes generally will not be
subject to transfer restrictions or be entitled to registration
rights.
|
|
|
|
Certain of our subsidiaries will guarantee our obligations under
the exchange notes, including the payment of principal of,
premium, if any, and interest on the exchange notes. These
guarantees of the exchange notes will be senior subordinated
unsecured obligations of the subsidiary guarantors. Additional
subsidiaries will be required to guarantee the exchange notes,
and the guarantees of the subsidiary guarantors will terminate,
in each case in the circumstances described under
Description of the Exchange Notes Note
Guarantees.
|
|
|
|
The exchange of old notes for exchange notes generally will not
be a taxable event for U.S. federal income tax purposes.
See the discussion under the caption Material United
States Federal Income Tax Considerations.
|
|
|
|
There is no existing market for the exchange notes to be issued,
and we do not intend to apply for listing or quotation on any
securities exchange or market.
|
See Risk Factors beginning on page 9 for a
discussion of the factors you should consider in connection with
the exchange offer.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this prospectus is [ ],
2007
References
to Additional Information
This prospectus incorporates important business and financial
information about us that is not included in or delivered with
this prospectus. You may obtain, without charge, documents that
we file with the Securities and Exchange Commission
(SEC) and incorporated by reference into this
prospectus by requesting the documents, in writing or by
telephone, from the SEC or from:
2555 Telegraph Road
Bloomfield Hills, Michigan 48302
Attention: Shane M. Spradlin, Esq.
Telephone:
(240) 648-2500
If you would like to request copies of these documents, please
do so by
[ ],
2007 in order to receive them before the expiration of the
exchange offer. See Where You Can Find More
Information.
TABLE OF
CONTENTS
In this prospectus, the terms UnitedAuto and the
Company refer to United Auto Group, Inc.; the term
subsidiary guarantors refers to those subsidiaries
of UnitedAuto that guarantee the exchange notes and the old
notes; we, us and our refer
to UnitedAuto and its subsidiaries (including the subsidiary
guarantors); and notes refers to the old notes and
the exchange notes collectively.
You should rely only on the information contained in this
prospectus. We have not authorized anyone to provide you with
different information. We are not making an offer of these
securities in any state or other jurisdiction where the offer is
not permitted. You should not assume that the information
contained in this prospectus is accurate as of any date other
than the date printed on the front of this prospectus.
Any broker-dealer who holds old notes that were acquired for its
own account as a result of market-making activities or other
trading activities (other than old notes acquired directly from
us), may exchange such old notes pursuant to the exchange offer;
however, such broker-dealer may be deemed to be an
underwriter within the meaning of the Securities Act
of 1933, as amended or the Securities Act, and must, therefore,
deliver a prospectus meeting the requirements of the Securities
Act in connection with any resales of the exchange notes
received by such broker-dealer in the exchange offer, which
prospectus delivery requirement may be satisfied by the delivery
by such broker-dealer of this prospectus. We have agreed that,
for a period of as long as 180 days after the expiration
date of the exchange offer, we will amend or supplement this
prospectus in order to expedite or facilitate the disposition of
any exchange notes by such broker-dealers. See Plan of
Distribution.
Manufacturer
disclaimer
No domestic or foreign manufacturer or distributor or any of
their affiliates has been involved, directly or indirectly, in
the preparation of this prospectus or in the exchange offer
being made hereby. No automobile manufacturer or distributor or
any of their affiliates has made or been authorized to make any
statements or representations in connection with this
prospectus, no manufacturer or distributor or any of their
affiliates has provided any information or materials that were
used in connection with the prospectus, and no automobile
manufacturer or distributor or any of their affiliates has any
responsibility for the accuracy or completeness of this
prospectus or for the exchange offer.
Forward-looking
statements
This prospectus and the documents incorporated by reference in
this prospectus include, and public statements by our directors,
officers and other employees may include, forward-looking
statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended, or (the Exchange Act). Forward-looking
statements generally can be identified by the use of terms such
as may, will, should,
expect, anticipate, believe,
intend, plan, estimate,
predict, potential,
forecast, continue or variations of such
terms, or the use of these terms in the negative.
Forward-looking statements include statements regarding our
current plans, forecasts, estimates, beliefs or expectations,
including, without limitation, statements with respect to:
|
|
|
|
|
our future financial performance;
|
|
|
|
future acquisitions;
|
|
|
|
future capital expenditures;
|
|
|
|
our ability to obtain cost savings and synergies;
|
|
|
|
our ability to respond to economic cycles;
|
|
|
|
trends in the automotive retail industry and in the general
economy in the various jurisdictions in which we operate
dealerships;
|
|
|
|
our ability to access the remaining availability under our
credit agreements and other capital;
|
|
|
|
our liquidity;
|
|
|
|
interest rates and exchange rates;
|
|
|
|
trends affecting our future financial condition or results of
operations; and
|
|
|
|
our business strategy.
|
Forward-looking statements involve known and unknown risks and
uncertainties and are not assurances of future performance.
Actual results may differ materially from anticipated results
due to a variety of factors, including the factors identified
under Risk Factors in this prospectus and in our
reports filed with the Securities and Exchange Commission (the
SEC) that attempt to advise interested parties of
the risks and factors that may affect our business, results of
operations, financial condition or prospects.
1
Summary
This summary highlights information more fully described
elsewhere in this prospectus and in the documents incorporated
by reference in this prospectus. Because it is a summary, it is
not complete and does not contain all the information that is
important to you. You should read the entire prospectus and the
documents incorporated in the prospectus by reference carefully.
In addition, all references in this prospectus to either
franchises or dealerships are to the
dealerships operated by us in accordance with our separate
franchise agreements with a particular automobile manufacturer
to sell that manufacturers brand of vehicle at one of our
facilities. Each of our facilities may contain multiple
franchises or dealerships at one particular location.
United
Auto Group, Inc.
We are the second largest automotive retailer in the United
States as measured by total revenues and have the highest
concentration of revenues from foreign and premium brands among
the publicly traded automotive retailers. As of March 1,
2007, we owned and operated 169 franchises in the United States
and 145 franchises outside of the United States, primarily in
the United Kingdom. We offer a full range of vehicle brands,
with 93% of our total revenue in 2006 generated from the sales
of foreign brands such as Audi, BMW, Honda, Lexus, Mercedes and
Toyota. Sales relating to premium brands, such as Audi, BMW,
Cadillac and Porsche, represented 62% of our total revenue. In
addition to selling new and used vehicles, we offer a full range
of maintenance and repair services, and we facilitate the sale
of third-party finance and insurance products, third-party
extended service contracts and replacement and aftermarket
automotive products.
We were incorporated in Delaware in December 1990 and began
dealership operations in October 1992. Our executive offices are
located at 2555 Telegraph Road, Bloomfield Hills, MI 48302. Our
telephone number is
(248) 648-2500.
Summary
Terms of the Exchange Offer
The following is a brief summary of the terms of the exchange
offer. For a more complete description of the exchange offer,
see Exchange Offer.
|
|
|
The exchange offer |
|
We are offering to exchange up to $375,000,000 in aggregate
principal amount of our exchange notes, for an equal principal
amount of the old notes. |
|
Expiration of the exchange offer; Withdrawal of tender |
|
The exchange offer will expire at 5:00 p.m., New York City
time, on [ ], 2007, or a later date
and time to which we may extend it. We do not currently intend
to extend the expiration of the exchange offer. You may withdraw
your tender of old notes in the exchange offer at any time
before the expiration of the exchange offer. Any old notes not
accepted for exchange for any reason will be returned without
expense to you promptly after the expiration or termination of
the exchange offer. |
|
Conditions to the exchange offer |
|
The exchange offer is not conditioned upon any minimum aggregate
principal amount of old notes being tendered for exchange. The
exchange offer is subject to customary conditions, which we may
waive. See Exchange Offer Conditions for
more information regarding the conditions to the exchange offer. |
|
Procedures for tendering exchange notes |
|
To tender old notes held in book-entry form through the
Depository Trust Company, or DTC, you must transfer your old
notes into the exchange agents account in accordance with
DTCs Automated Tender Offer Program, or ATOP, system. In
lieu of delivering a letter |
2
|
|
|
|
|
of transmittal to the exchange agent, a computer-generated
message, in which the holder of the old notes acknowledges and
agrees to be bound by the terms of the letter of transmittal,
must be transmitted by DTC on behalf of a holder and received by
the exchange agent before 5:00 p.m., New York City time, on
the expiration date. In all other cases, a letter of transmittal
must be manually executed and received by the exchange agent
before 5:00 p.m., New York City time, on the expiration
date. |
|
|
|
By signing, or agreeing to be bound by, the letter of
transmittal, you will represent to us that, among other things: |
|
|
|
any exchange notes to be received by you will be
acquired in the ordinary course of your business;
|
|
|
|
you have no arrangement, intent or understanding
with any person to participate in the distribution of the
exchange notes (within the meaning of the Securities Act);
|
|
|
|
you are not our affiliate (as defined in
Rule 405 under the Securities Act); and
|
|
|
|
if you are a broker-dealer that will receive
exchange notes for your own account in exchange for old notes
that were acquired as a result of market-making activities or
other trading activities, you will deliver or make available a
prospectus in connection with any resale of the exchange notes.
|
|
Special procedures for beneficial owners |
|
If you are a beneficial owner whose old notes are registered in
the name of a broker, dealer, commercial bank, trust company or
other nominee, and you want to tender old notes in the exchange
offer, you should contact the registered owner promptly and
instruct the registered holder to tender on your behalf. If you
wish to tender on your own behalf, you must, before completing
and executing the letter of transmittal and delivering your old
notes, either make appropriate arrangements to register
ownership of the old notes in your name or obtain a properly
completed bond power from the registered holder. See
Exchange Offer Procedures for Tendering. |
|
Guaranteed delivery procedures |
|
If you wish to tender your old notes, and time will not permit
your required documents to reach the exchange agent by the
expiration date, or the procedure for book-entry transfer cannot
be completed on time, you may tender your old notes under the
procedures described under Exchange Offer
Guaranteed Delivery Procedures. |
|
Consequences of failure to exchange |
|
Any old notes that are not tendered in the exchange offer, or
that are not accepted in the exchange, will remain subject to
the restrictions on transfer. Since the old notes have not been
registered under the U.S. federal securities laws, you will
not be able to offer or sell the old notes except under an
exemption from the registration requirements of the Securities
Act or unless the old notes are registered under the Securities
Act. Upon the completion of the exchange offer, we will have no
further obligations, except under limited circumstances, to
provide for registration of the old notes under the
U.S. federal securities laws. See Exchange
Offer Consequences of Failure to Tender. |
3
|
|
|
Certain U.S. federal income tax considerations |
|
The exchange of old notes for exchange notes in the exchange
offer generally will not constitute a taxable exchange for
U.S. federal income tax purposes. See Material United
States Federal Income Tax Considerations. |
|
Transferability |
|
Under existing interpretations of the Securities Act by the
staff of the SEC contained in several no-action letters to third
parties, and subject to the immediately following sentence, we
believe that the exchange notes will generally be freely
transferable by holders after the exchange offer without further
compliance with the registration and prospectus delivery
requirements of the Securities Act (subject to certain
representations required to be made by each holder of old notes,
as set forth under Exchange Offer Procedures
for Tendering). However, any holder of old notes who: |
|
|
|
is one of our affiliates (as defined in
Rule 405 under the Securities Act),
|
|
|
|
does not acquire the exchange notes in the ordinary
course of business,
|
|
|
|
distributes, intends to distribute, or has an
arrangement or understanding with any person to distribute the
exchange notes as part of the exchange offer, or
|
|
|
|
is a broker-dealer who purchased old notes from us
in the initial offering of the old notes for resale pursuant to
Rule 144A or any other available exemption under the
Securities Act, will not be able to rely on the interpretations
of the staff of the SEC, will not be permitted to tender old
notes in the exchange offer and, in the absence of any
exemption, must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with
any resale of the exchange notes.
|
|
|
|
Our belief that transfers of exchange notes would be permitted
without registration or prospectus delivery under the conditions
described above is based on SEC interpretations given to other,
unrelated issuers in similar exchange offers. We cannot assure
you that the SEC would make a similar interpretation with
respect to our exchange offer. We will not be responsible for or
indemnify you against any liability you may incur under the
Securities Act. |
|
|
|
Each broker-dealer that receives exchange notes for its own
account under the exchange offer in exchange for old notes that
were acquired by the broker-dealer as a result of market-making
or other trading activity must acknowledge that it will deliver
a prospectus in connection with any resale of the exchange
notes. See Plan of Distribution. |
|
Use of proceeds |
|
We will not receive any cash proceeds from the issuance of the
exchange notes pursuant to the exchange offer. |
|
Exchange agent |
|
The Bank of New York Trust Company, N.A. is the exchange agent
for the exchange offer. The address and telephone number of the
exchange agent are set forth under Exchange
Offer Exchange Agent. |
4
Summary
Terms of the Exchange Notes
The summary below describes the principal terms of the
exchange notes. Certain of the terms and conditions described
below are subject to important limitations and exceptions. The
Description of Exchange Notes section of this
prospectus contains a more detailed description of the terms and
conditions of the exchange notes.
The exchange notes will be identical in all material respects to
the old notes for which they have been exchanged, except:
|
|
|
|
|
the offer and sale of the exchange notes will have been
registered under the Securities Act, and thus the exchange notes
generally will not be subject to the restrictions on transfer
applicable to the old notes or bear restrictive legends,
|
|
|
|
the exchange notes will not be entitled to registration
rights, and
|
|
|
|
the exchange notes will not have the right to earn additional
interest under circumstances relating to our registration
obligations.
|
|
|
|
Issuer |
|
United Auto Group, Inc. |
|
Exchange notes offered |
|
$375,000,000 aggregate principal amount of 7.75% senior
subordinated notes due 2016. |
|
Maturity date |
|
December 15, 2016. |
|
Interest rate |
|
7.75% per year. |
|
Interest payment dates |
|
June 15 and December 15, commencing on June 15,
2007. |
|
Guarantees |
|
All of our existing wholly owned domestic subsidiaries and
certain future domestic subsidiaries, jointly and severally,
will guarantee the exchange notes on an unsecured senior
subordinated basis. Our existing non-wholly owned domestic
subsidiaries and our foreign subsidiaries will not guarantee the
exchange notes. See Description of Exchange
Notes Guarantees. |
|
Ranking |
|
The exchange notes will be our direct, unsecured senior
subordinated obligations and will be: |
|
|
|
junior in right of payment to all of our existing
and future senior debt;
|
|
|
|
equal in right of payment to all of our existing and
future unsecured senior subordinated debt, including our
existing 3.5% senior subordinated convertible notes due
2026;
|
|
|
|
senior in right of payment to any of our future
subordinated debt;
|
|
|
|
effectively junior in right of payment to all of our
existing and any of our future secured debt, to the extent of
the value of the assets securing such debt; and
|
|
|
|
effectively junior in right of payment to all
existing and future indebtedness and liabilities, including
trade payables, of our subsidiaries that do not guarantee the
exchange notes, including all of our foreign subsidiaries and
our non-wholly owned domestic subsidiaries.
|
|
|
|
As of December 31, 2006, we had approximately
$1.2 billion of total long-term debt outstanding and
$1.2 billion of floor plan notes payable outstanding. Our
subsidiary guarantors had $559.3 million of senior
indebtedness outstanding, excluding inter-company debt and |
5
|
|
|
|
|
guarantees under the U.S. credit agreement and our
non-guarantor subsidiaries had $760.5 million of debt and
other liabilities, excluding inter-company liabilities and
guarantees under the U.S. credit agreement. As of
December 31, 2006, we also had $707.4 million of
additional senior debt capacity under our U.S. and U.K. credit
agreements. Effective February 13, 2007, we permanently
reduced the credit availability under the U.S. credit
agreement from $600.0 million to $250.0 million and
the letter of credit availability from $50.0 million to
$10.0 million in order to avoid certain credit availability
fees specified in the agreement. Giving effect to the reduction,
our total senior debt capacity under our U.S. and U.K. credit
agreements would have been $357.4 million as of
December 31, 2006. |
|
Optional redemption |
|
We may redeem some or all of the notes at any time on or after
December 15, 2011. We may also redeem up to 40% of the
aggregate principal amount of the notes, using the proceeds of
certain equity offerings, at any time prior to December 15,
2009. We may also redeem some or all of the notes at any time
prior to December 15, 2011 at a redemption price equal to
100% of the principal amount of the notes redeemed plus a
make-whole premium. The redemption prices are
described under Description of Exchange Notes
Optional Redemption. |
|
Change of control |
|
If we experience specific kinds of changes of control, we will
be required to make an offer to purchase the exchange notes at a
purchase price of 101% of the principal amount thereof, plus
accrued but unpaid interest to the purchase date. See
Description of Exchange Notes Purchase of
Exchange Notes Upon a Change of Control. |
|
Certain covenants |
|
The indenture governing the notes restricts our ability and the
ability of our restricted subsidiaries to, among other things: |
|
|
|
incur additional indebtedness;
|
|
|
|
make certain distributions, investments and other
restricted payments;
|
|
|
|
create certain liens;
|
|
|
|
sell assets;
|
|
|
|
enter into transactions with affiliates;
|
|
|
|
create restrictions on our ability to receive
dividends or other payments from restricted subsidiaries;
|
|
|
|
create or designate unrestricted subsidiaries; and
|
|
|
|
merge, consolidate or transfer all or substantially
all of our assets.
|
|
|
|
These covenants are subject to important exceptions and
qualifications described under Description of Exchange
Notes. |
|
Forms and denominations |
|
We will issue the exchange notes in fully registered form in
denominations of $2,000 and integral multiples of $1,000 in
excess thereof. Each of the exchange notes will be represented
by one or more global securities registered in the name of a
nominee of DTC. You will hold beneficial interests in the
exchange notes through DTC, and DTC and its direct and indirect
participants will record your beneficial interest |
6
|
|
|
|
|
in their books. Except under limited circumstances, we will not
issue certificated exchange notes. |
|
Absence of public market for the exchange notes |
|
The exchange notes generally are freely transferable but are
also new securities for which there is not initially a market.
Accordingly, there can be no assurance as to the development or
liquidity of any market for the exchange notes. |
|
Risk factors |
|
See Risk Factors for a discussion of some of the key
factors you should carefully consider before deciding to
exchange your old notes for exchange notes. |
7
Selected
Consolidated Financial Data
The following table sets forth our selected consolidated
financial data as of and for each of the years ended
December 31, 2006, 2005, 2004, 2003 and 2002, which have
been derived from our audited consolidated financial statements.
During the periods presented, we made a number of acquisitions,
each of which has been accounted for using the purchase method
of accounting. Accordingly, our financial statements include the
results of operations of the acquired dealerships from the date
of acquisition. As a result of the acquisitions, our
period-to-period
results of operations vary depending on the dates of the
acquisitions and this selected financial data is not necessarily
indicative of our future results. You should read this selected
consolidated financial data together with the financial
statements and related footnotes incorporated by reference into
this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2002(1)
|
|
|
2003(2)
|
|
|
2004(3)
|
|
|
2005(4)
|
|
|
2006
|
|
|
|
(In millions, except per share data)
|
|
|
Income Statement
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
$
|
5,524.1
|
|
|
$
|
6,935.8
|
|
|
$
|
8,388.0
|
|
|
$
|
9,661.4
|
|
|
$
|
11,242.3
|
|
Gross profit
|
|
|
821.4
|
|
|
|
1,022.6
|
|
|
|
1,255.3
|
|
|
|
1,473.5
|
|
|
|
1,704.5
|
|
Income from continuing operations
|
|
|
47.2
|
|
|
|
73.4
|
|
|
|
109.1
|
|
|
|
119.1
|
|
|
|
130.6
|
|
Net income
|
|
|
62.2
|
|
|
|
82.9
|
|
|
|
111.7
|
|
|
|
119.0
|
|
|
|
124.7
|
|
Ratio of earnings to fixed
charges(5)
|
|
|
1.7
|
|
|
|
2.2
|
|
|
|
2.5
|
|
|
|
2.3
|
|
|
|
2.1
|
|
Cash dividends per share
|
|
$
|
|
|
|
$
|
0.05
|
|
|
$
|
0.21
|
|
|
$
|
0.23
|
|
|
$
|
0.27
|
|
Balance Sheet Data (at each of
period):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
2,690.3
|
|
|
$
|
3,144.2
|
|
|
$
|
3,532.8
|
|
|
$
|
3,594.2
|
|
|
$
|
4,469.8
|
|
Floor plan notes payable
(including non-trade)
|
|
|
652.1
|
|
|
|
882.6
|
|
|
|
1,031.8
|
|
|
|
1,103.3
|
|
|
|
1,172.3
|
|
Long-term debt
|
|
|
665.6
|
|
|
|
651.6
|
|
|
|
586.3
|
|
|
|
580.2
|
|
|
|
1,182.1
|
|
Total stockholders equity
|
|
|
704.4
|
|
|
|
828.4
|
|
|
|
1,075.0
|
|
|
|
1,145.7
|
|
|
|
1,295.7
|
|
|
|
|
(1) |
|
Includes a $22.8 million charge, which includes the
estimated cash costs to be paid relating to employment contracts
of certain employees terminated in connection with the
streamlining of our dealership operations in the western region
of the U.S. and the cost of a non-compete agreement with a
former member of management that we determined no longer had a
continuing economic benefit. |
|
(2) |
|
Includes a $5.1 million charge ($3.1 million after
tax), or $0.04 per share, from the cumulative effect of an
accounting change related to the adoption of Emerging Issues
Task Force Issue
No. 02-16,
Accounting by a Customer (Including a Reseller) for Cash
Consideration Received from a Vendor. |
|
(3) |
|
Includes an $11.5 million ($7.2 million after tax), or
$0.08 per share, gain resulting from the sale of an
investment and an $8.4 million ($5.3 million after
tax), or $0.06 per share, gain resulting from a refund of
U.K. consumption taxes. These gains were offset in part by
non-cash charges of $7.8 million ($4.9 million after
tax), or $0.05 per share, principally in connection with
the planned relocation of certain U.K. franchises as part of our
ongoing facility enhancement program. |
|
(4) |
|
Includes $8.2 million ($5.2 million after tax), or
$0.06 per share, of earnings attributable to the sale of
all the remaining variable profits relating to the pool of
extended service contracts sold at our dealerships over the past
five years. |
|
(5) |
|
For the purpose of determining the ratio of earnings to fixed
charges, earnings consist of income from continuing operations
before minority interests, income taxes and fixed charges. Fixed
charges consist of interest expense (including amortization of
deferred financing costs), capitalized interest, and an estimate
of the interest included in rent expense. |
8
Risk
Factors
If any of the following risks actually occur, our business,
financial condition or results of operations may suffer. As a
result, we might be unable to repay the principal of, premium,
if any, and interest on the exchange notes, and you could lose
all or part of your investment.
Risks
Relating to the Exchange Notes
Our
substantial amount of debt may limit our ability to obtain
financing for acquisitions, make us more vulnerable to adverse
economic conditions and make it more difficult for us to make
payments on the notes and our other debt.
We have a substantial amount of debt. As of December 31,
2006, we had approximately $1.2 billion of total long-term
debt outstanding and $1.2 billion of floor plan notes
payable outstanding. We also had $600 million of additional
debt capacity under our U.S. credit agreement and
$107.4 million available under our U.K. credit agreement,
assuming the borrowing conditions of these facilities were met.
Effective February 13, 2007, we permanently reduced the
credit availability under the U.S. credit agreement from
$600.0 million to $250.0 million and the letter of
credit availability from $50.0 million to
$10.0 million in order to avoid certain credit availability
fees specified in the agreement. Giving effect to the reduction,
our total senior debt capacity under our U.S. and U.K. credit
agreements as of December 31, 2006 would have been
$357.4 million.
Our substantial debt could have important consequences to you.
For example, it could:
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make it more difficult for us to obtain additional financing in
the future for our acquisitions and operations, working capital
requirements, capital expenditures, debt service or other
general corporate requirements;
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require us to dedicate a substantial portion of our cash flows
from operations to the repayment of our debt and the interest
associated with our debt rather than to other areas of our
business;
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limit our operating flexibility due to financial and other
restrictive covenants, including restrictions on incurring
additional debt, creating liens on our properties, making
acquisitions and paying dividends;
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make it more difficult for us to satisfy our obligations with
respect to the notes;
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place us at a competitive disadvantage compared to our
competitors that have less debt; and
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make us more vulnerable in the event of adverse economic and
industry conditions or a downturn in our business.
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Our ability to meet our debt service obligations depends on our
future financial and operating performance, which will be
impacted by general economic conditions and by financial,
business and other competitive factors, many of which are beyond
our control. These factors could include operating difficulties,
increased operating costs, the response of competitors,
regulatory developments and delays in implementing our growth
strategies. Our ability to meet our debt service and other
obligations may depend in significant part on the extent to
which we can successfully implement our business strategy. We
may not be able to implement our business strategy and the
anticipated results of our strategy may not be realized.
If our business does not generate sufficient cash flow from
operations or future sufficient borrowings are not available to
us under our credit agreements or from other sources, we might
not be able to service our debt, including the notes, or to fund
our other liquidity needs. If we are unable to service our debt,
due to inadequate liquidity or otherwise, we may have to delay
or cancel acquisitions, sell equity securities, sell assets or
restructure or refinance our debt. We might not be able to sell
our equity securities, sell our assets or restructure or
refinance our debt on a timely basis or on satisfactory terms or
at all. In addition, the terms of our existing or future
franchise agreements, agreements with manufacturers or debt
agreements, including the indenture governing the notes and our
existing and future credit agreements, may prohibit us from
pursuing any of these alternatives.
Our debt instruments, including our credit agreements and the
indentures governing our 3.5% senior subordinated
convertible notes due 2026, or Convertible Notes, and the notes,
also permit us to incur additional debt in the future. Any such
additional debt could be senior to the notes. In addition, the
entities we may acquire in
9
the future could have significant amounts of debt outstanding,
which we could be required to assume in connection with the
acquisition, or we may incur our own significant indebtedness to
consummate an acquisition. If we or our subsidiaries incur
additional indebtedness, the related risks described above could
intensify.
To
service our debt, we will require a significant amount of cash.
Our ability to generate cash depends on many factors beyond our
control.
Our ability to make payments on our debt, including the notes,
and to refinance our debt and fund planned capital expenditures
will depend on our ability to generate cash in the future. This
ability, to some extent, is subject to general economic,
financial, competitive, legislative, regulatory and other
factors that are beyond our control.
We believe our cash flow from operating activities and our
existing capital resources, including the liquidity provided by
our credit agreements and our floor plan financing arrangements,
will be sufficient to fund our operations and commitments for
the next twelve months. We cannot assure you, however, that our
business will generate sufficient cash flow from operations or
that future borrowings will be available to us under our
revolving credit facilities in an amount sufficient to pay our
debt, including these exchange notes, or to fund our other
liquidity needs. We may need to refinance some or all of our
debt, including the notes, on or before maturity, sell assets,
reduce or delay capital expenditures or seek additional equity
financing. We cannot assure you that efforts to refinance any of
our debt will be successful.
The
exchange notes will be junior to our senior debt and the
guarantees will be junior to the subsidiary guarantors
senior debt.
The exchange notes will be unsecured senior subordinated
obligations and will be junior to all of our existing and future
senior debt, including debt under our credit facilities and
floor plan financing. As of December 31, 2006, we had
senior debt of approximately $1.3 billion and total senior
subordinated debt of approximately $1.1 billion (including
the old notes). We also had $600 million of additional debt
capacity under our U.S. credit agreement and
$107.4 million of additional debt capacity under our U.K.
credit agreement. Effective February 13, 2007, we
permanently reduced the credit availability under the
U.S. credit agreement from $600.0 million to
$250.0 million and the letter of credit availability from
$50.0 million to $10.0 million in order avoid certain
credit availability fees specified in the agreement. Giving
effect to the reduction, our total senior debt capacity under
our U.S. and U.K. credit agreements as of December 31, 2006
would have been $357.4 million.
Substantially all of our wholly owned domestic subsidiaries will
guarantee the exchange notes. These guarantees will be unsecured
senior subordinated obligations and will be junior to all
existing and future senior debt of the subsidiary guarantors. As
of December 31, 2006, the subsidiary guarantors had
outstanding $559.3 million of senior debt (not including
inter-company debt and subsidiary guarantees of debt under our
U.S. credit agreement) ranking senior to the senior
subordinated guarantees. We may also incur significant
additional senior debt under the terms of our credit facilities,
floor plan financing and Convertible Notes. If we become
bankrupt, liquidate or dissolve, our assets would be available
to pay obligations on the notes only after our senior debt has
been paid. Similarly, if one of our subsidiary guarantors
becomes bankrupt, liquidates or dissolves, that subsidiary
guarantors assets would be available to pay obligations on
its guarantee only after payments have been made on its senior
debt.
If we fail to pay any of our senior debt, we may make payments
on the notes only if either we first pay our senior debt or the
holders of certain senior debt waive the payment default.
Moreover, if any non-payment default exists under our senior
debt, we may not make any cash payments on the notes for a
period of up to 179 days in any
360-day
period, unless we cure the non-payment default, the holders of
the senior debt waive the default or rescind acceleration of the
debt or we repay the debt in full. In the event of a non-payment
default, we may not have sufficient assets to pay amounts due on
the notes.
In the event of a bankruptcy, liquidation, reorganization or
similar proceeding relating to us, holders of the notes will
participate ratably with all of our general unsecured creditors.
However, until all of our senior debt is repaid, amounts
otherwise payable to holders of the notes in a bankruptcy or
similar proceeding must be paid to holders of senior debt first.
Therefore, note holders may receive less, ratably, than our
other general unsecured
10
creditors in any such proceeding. In any of these cases, we may
not have sufficient funds to pay all of our creditors, including
the holders of the notes.
The
notes will be effectively junior to the liabilities of our
current and future non-guarantor subsidiaries.
The notes are effectively junior to all existing and future debt
and other liabilities of our subsidiaries that are not
subsidiary guarantors, including all of our foreign subsidiaries
and existing non-wholly owned domestic subsidiaries. As of
December 31, 2006, after giving effect to this offering and
the use of proceeds therefrom, our non-guarantor subsidiaries
would have had approximately $760.5 million of debt and
other liabilities outstanding, not including inter-company
liabilities and subsidiary guarantees of debt under the
U.S. credit agreement. In addition, as of December 31,
2006, our U.K. credit agreement had $107.4 million of
available capacity. In addition, our future domestic
subsidiaries may not be required to guarantee the notes until
certain conditions are met. If one of these non-guarantor
subsidiaries becomes bankrupt, liquidates or dissolves, that
non-guarantor subsidiarys assets would not be available to
us or the holders of the notes until after payments have been
made on all of its liabilities. As a result, the payment of
principal, premium and interest on the notes is effectively
subordinated in right of payment to all debt and liabilities of
the non-guarantor subsidiaries and, therefore, if our assets are
insufficient to pay the notes in full, the assets of the
non-guarantor subsidiaries may not be available to pay the notes.
The
notes will are not secured by any of our assets. However, our
credit agreements and floor plan financing are secured by
substantially all of our assets. As a result, if we become
insolvent, secured lenders will have a prior claim on our
assets.
The notes are not secured by any of our assets. However, our
floor plan financing is secured by substantially all of our
subsidiaries assets, and our credit agreements are secured
by substantially all of our assets and a pledge of the capital
stock of many of our subsidiaries. Additionally, the terms of
the indenture and our existing credit facilities permit us to
incur additional secured debt in the future. Accordingly, in
addition to the contractual subordination described elsewhere in
this prospectus, the payment of principal, premium and interest
on the notes is effectively subordinated in right of payment to
all of our secured debt with respect to the assets securing such
secured debt, and the payment under the guarantees is
effectively subordinated in right of payment to all secured debt
of the subsidiary guarantors.
If we become insolvent or are liquidated, or if payment under
any of the instruments governing our secured debt is
accelerated, the lenders under these instruments will be
entitled to exercise the remedies available to a secured lender
under applicable law and pursuant to instruments governing such
debt. In that event, because the notes are not secured by any of
our assets, it is possible that there will be no assets
remaining from which claims of holders of the notes can be
satisfied or, if any assets remain, the remaining assets might
be insufficient to satisfy those claims in full.
As of December 31, 2006, we had $132.1 million of
secured debt (not including our guarantees of subsidiary floor
plan debt), and the ability to incur up to an additional
707.4 million of secured debt under our U.S. credit
agreement and our U.K. credit agreement. As of December 31,
2006, the subsidiary guarantors had outstanding
$559.3 million of secured debt (not including subsidiary
guarantees of debt under our U.S. credit agreement).
The
agreements governing our debt contain various covenants that
limit our discretion in the operation of our business, could
prohibit us from engaging in transactions we believe to be
beneficial and could lead to the acceleration of our
debt.
Our existing and future debt agreements impose and will impose
operating and financial restrictions on our activities. These
restrictions require us to comply with or maintain certain
financial tests and ratios and restrict our ability and our
subsidiaries ability to:
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incur additional debt;
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create liens;
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make acquisitions;
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11
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redeem
and/or
prepay certain debt;
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sell preferred stock of subsidiaries or other assets;
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make certain investments;
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enter new lines of business;
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engage in consolidations, mergers and acquisitions;
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repurchase or redeem capital stock;
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guarantee obligations;
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engage in certain transactions with affiliates; and
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pay dividends and make other distributions.
|
Our credit agreements also require us to comply with certain
financial ratios that could harm our business by restricting our
ability to, among other things, take advantage of financing,
mergers and acquisitions and other corporate opportunities.
Failure
to comply with covenants to our existing or future financing
agreements could result in cross-defaults under some of our
financing agreements, which could jeopardize our ability to pay
the notes.
Various risks, uncertainties and events beyond our control could
affect our ability to comply with covenants to our existing or
future financing agreements and maintain the financial tests and
ratios required by our financing agreements. Failure to comply
with any of the covenants in our existing or future financing
agreements could result in a default under those agreements and
under other agreements containing cross-default provisions,
including the indenture governing the notes. A default would
permit lenders to cease lending to us, accelerate debt repayment
under these agreements and foreclose upon any collateral
securing that debt. Under these circumstances, we might not have
sufficient funds or other resources to satisfy all of our
obligations, including our obligations under the notes. In
addition, the limitations imposed by financing agreements on our
ability to incur additional debt and to take other actions might
significantly impair our ability to obtain other financing. We
also may amend the provisions and limitations of our credit
facilities from time to time without the consent of the holders
of the notes.
Our debt contains prepayment or acceleration rights at the
election of the holders upon a covenant default or change of
control, which acceleration rights, if exercised, could
constitute an event of default under the notes. It is possible
that we would be unable to fulfill all of these obligations and
make payments on the notes simultaneously.
We may
be unable to purchase the notes upon a change of control, which
would cause defaults under the notes and our other debt
agreements.
Holders of the notes may require us to repurchase the notes for
cash following the occurrence of a change of control at a
purchase price equal to 101% of the principal amount of the
notes, plus accrued interest. In addition, our existing
Convertible Notes similarly require us to repurchase those notes
in the event of a change of control or a fundamental change, as
the case may be, at a purchase price equal to 100% of the
principal amount of those notes, plus accrued interest. We are
limited by our U.S. credit agreement, and may be prohibited
under future financing agreements, from purchasing any of the
notes prior to their stated maturity. In such circumstances, we
will be required to repay or obtain the requisite consent from
the affected lenders to permit the repurchase of the notes. If
we are unable to repay all of such debt or are unable to obtain
the necessary consents, we will be unable to repurchase the
notes offered hereby, which would constitute an event of default
under the notes, which itself would also constitute a default
under our credit agreements, our Convertible Notes and our other
existing financing arrangements, and could constitute a default
under the terms of any future debt that we may incur. In
addition, we may not have sufficient funds available at the time
we are required to repurchase the notes offered hereby.
12
We
could enter into various transactions, such as acquisitions,
refinancings, recapitalizations or other highly leveraged
transactions, which would not constitute a change of control
under the terms of the notes, but which could nevertheless
adversely affect holders of the notes.
Under the terms of the notes, a variety of acquisition,
refinancing, recapitalization or other highly leveraged
transactions would not be considered change of control
transactions. As a result, we could enter into any such
transactions without being required to make an offer to
repurchase the notes even though the transaction could increase
the total amount of our outstanding debt, adversely affect our
capital structure or credit ratings or otherwise materially
adversely affect the holders of the notes.
We are
a holding company and, as a result, rely on payments from our
subsidiaries in order to meet our cash needs and service our
debt, including the notes. Our subsidiaries may not be able to
distribute the necessary funds to us and this could adversely
affect our ability to make payments on the exchange
notes.
As a holding company without independent means of generating
operating revenues, we depend on dividends, distributions and
other payments, including payments of management fees and
pursuant to tax sharing arrangements, from our subsidiaries to
fund our obligations and to meet our cash needs. If the
operating results of our subsidiaries at any given time are
insufficient to make distributions to us, we would be unable to
make payments on the notes. Our expenses include salaries of our
executive officers, insurance, professional fees and debt
payments. Most of our subsidiaries are subject to restrictions
on the payment of dividends under certain circumstances pursuant
to their franchise agreements, dealer agreements, other
agreements with manufacturers and floor plan agreements. For
example, most of the agreements contain minimum working capital
or net worth requirements and some manufacturers dealer
agreements specifically prohibit distribution to us if the
distribution would cause the dealership to fail to meet such
manufacturers capitalization guidelines, including net
working capital. These restrictions limit our ability to apply
profits generated from one subsidiary for use in other
subsidiaries or, in some cases, for our use. Additionally, many
of the floor plan lending agreements for our dealership
subsidiaries include limitations on the subsidiarys
ability to make distributions of its property or assets other
than in the ordinary course of business or make loans or other
advances of funds. Furthermore, our foreign subsidiaries and
existing domestic non-wholly owned subsidiaries, who are subject
to the limitations described above on their ability to
distribute or transfer funds, will not guarantee the notes and
certain future subsidiaries will not be required to guarantee
the notes until certain conditions are met. See
Description of Exchange Notes Guarantees.
Federal
and state statutes allow courts, under specific circumstances,
to void guarantees of the notes. In such event, holders of notes
would be structurally subordinated to creditors of the issuer of
the voided guarantee.
Federal and state statutes allow courts, under specific
circumstances, to void guarantees, subordinate claims under the
guarantees to the guarantors other debt or take other
action detrimental to holders of the guarantees of notes. Under
the federal bankruptcy law and comparable provisions of state
fraudulent transfer laws, the guarantees made by the subsidiary
guarantors could be voided or subordinated to other debt if,
among other things any subsidiary guarantor:
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issued the guarantee to delay, hinder or defraud present or
future creditors; or
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received less than reasonably equivalent value or fair
consideration for issuing such subsidiary guarantee and, at the
time it issued its subsidiary guarantee, any subsidiary
guarantor; or
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was insolvent or rendered insolvent by reason of such incurrence;
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was engaged in a business or transaction for which such
subsidiary guarantors remaining unencumbered assets
constituted unreasonably small capital;
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intended to incur, or believed that it would incur, debts beyond
its ability to pay such debts as they mature; or
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was a defendant in an action for money damages, or had a
judgment for money damages docketed against it if, in either
case, after final judgment, the judgment is unsatisfied.
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13
Among other things, a legal challenge of a guarantee on
fraudulent conveyance grounds may focus on the benefits, if any,
realized by subsidiary guarantor as a result of our issuance of
the notes. The measures of insolvency for purposes of these
fraudulent transfer laws will vary depending upon the law
applied in any proceeding to determine whether a fraudulent
transfer has occurred. Generally, however, a subsidiary
guarantor would be considered insolvent if, at the time it
incurred the debt,
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the sum of its debts is greater than the fair value of all of
its assets;
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the present fair saleable value of its assets was less than the
amount that would be required in order to pay its probable
liability on its existing debts and liabilities, including
contingent liabilities, as they become absolute and
mature; or
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it could not pay or is generally not paying its debts as they
become due.
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There is no way to predict with certainty what standards a court
would apply to determine whether a subsidiary guarantor was
solvent at the relevant time. It is possible that a court could
view the issuance of the guarantees as a fraudulent conveyance.
To the extent that a guarantee were to be voided as a fraudulent
conveyance or were to be held unenforceable for any other
reason, holders of the notes would cease to have any claim in
respect of the subsidiary guarantor and would be creditors
solely of ours and of the subsidiary guarantors whose guarantees
had not been avoided or held unenforceable. In this event, the
claims of the holders of the notes against the issuer of an
invalid guarantee would be subject to the prior payment in full
of all other liabilities of the guarantor thereunder. After
providing for all prior claims, there may not be sufficient
assets to satisfy the claims of the holders of the notes
relating to the voided guarantees.
The guarantees may be released under certain circumstances upon
resale, exchange or transfer by us of the stock of the related
subsidiary guarantor or all or substantially all of the assets
of the subsidiary guarantor to a non-affiliate.
Your
ability to transfer the exchange notes may be limited by the
absence of an active trading market, and there is no assurance
that any active trading market will develop for the exchange
notes.
The exchange notes will constitute a new issue of securities for
which there is no established trading market. We do not intend
to have the exchange notes listed on a national securities
exchange or to arrange for quotation on any automated dealer
quotation systems. We cannot assure you as to the development of
any trading market for the exchange notes. We also cannot assure
you that you will be able to sell your exchange notes at a
particular time or that the prices that you receive when you
sell will be favorable. We also cannot assure you as to the
level of liquidity of the trading market for the exchange notes.
The liquidity of any market for the exchange notes will depend
on a number of factors, including:
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the number of holders of exchange notes,
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our operating performance and financial condition,
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the market for similar securities,
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the interest of securities dealers in making a market in the
exchange notes, and
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prevailing interest rates.
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Historically, the market for debt securities similar to the
exchange notes has been subject to disruptions that have caused
substantial volatility in the prices of those securities. We
cannot assure you that the market, if any, for the exchange
notes will be free from similar disruptions or that any such
disruptions may not adversely affect the prices at which you may
sell your exchange notes. Therefore, we cannot assure you that
you will be able to sell your exchange notes at a particular
time or that the price you receive when you sell will be
favorable.
If you
do not exchange your old notes, they may be difficult to
resell.
It may be difficult for you to sell old notes that are not
exchanged in the exchange offer, since any old notes not
exchanged will continue to be subject to the restrictions on
transfer described in the legend on the global security
14
representing the outstanding old notes. These restrictions on
transfer exist because we issued the old notes pursuant to an
exemption from the registration requirements of the Securities
Act and applicable state securities laws. Generally, any old
notes that are not exchanged for exchange notes will remain
restricted securities. Accordingly, those old notes may not be
offered or sold, unless registered under the Securities Act and
applicable state securities laws, or except pursuant to an
exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws.
Risks
Relating to Automotive Manufacturers
Automotive
manufacturers exercise significant control over our operations
and we depend on them in order to operate our
business.
Each of our dealerships operates under franchise agreements with
automotive manufacturers or related distributors. We are
dependent on automotive manufacturers because, without a
franchise agreement, we cannot operate a new vehicle franchise
or perform manufacturer authorized service.
Manufacturers exercise a great degree of control over the
operations of our dealerships. For example, manufacturers can
require our dealerships to meet specified standards of
appearance, require individual dealerships to meet specified
financial criteria such as maintenance of minimum net working
capital and, in some cases, minimum net worth, impose minimum
customer service and satisfaction standards, set standards
regarding the maintenance of vehicle and parts inventories,
restrict the use of manufacturers names and trademarks
and, in many cases, must consent to the replacement of the
dealership principal.
Our franchise agreements may be terminated or not renewed by
automotive manufacturers for a variety of reasons, including
unapproved changes of ownership or management and other material
breaches of the franchise agreements. We have, from time to
time, not been compliant with various provisions of some of our
franchise agreements. Although we believe that we will be able
to renew at expiration all of our existing franchise agreements,
if any of our significant existing franchise agreements or a
large number of franchise agreements are not renewed or the
terms of any such renewal are materially unfavorable to us, our
results of operations, financial condition or cash flows could
be materially adversely affected. In addition, actions taken by
manufacturers to exploit their bargaining position in
negotiating the terms of renewals of franchise agreements or
otherwise could also materially adversely affect our results of
operations, financial condition or cash flows.
While U.S. franchise laws give us limited protection in
selling a manufacturers product within a given geographic
area, our franchise agreements do not give us the exclusive
right to sell vehicles within a given area and the location of a
significant number of new dealerships near our existing
dealerships could materially adversely affect our results of
operations, financial condition or cash flows.
We depend on manufacturers to provide us with a desirable mix of
popular new vehicles, which tends to produce the highest profit
margins. Manufacturers generally allocate their vehicles among
dealerships based on the sales history of each dealership. Our
inability to obtain sufficient quantities of the most popular
models, whether due to sales declines at our dealerships or
otherwise, could materially adversely affect our results of
operations, financial condition or cash flows.
Our
volumes and profitability may be adversely affected if
automotive manufacturers reduce or discontinue their incentive
programs.
Our dealerships depend on the manufacturers for sales
incentives, warranties and other programs that promote and
support vehicle sales at our dealerships. Some of these programs
include customer rebates, dealer incentives, special financing
or leasing terms and warranties. Manufacturers frequently change
their incentive programs. If manufacturers reduce or discontinue
incentive programs, our results of operations, financial
condition or cash flows could be materially adversely affected.
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Adverse
conditions affecting one or more automotive manufacturers may
negatively impact our revenues and profitability.
Our success depends on the overall success of the line of
vehicles that each of our dealerships sells. As a result, our
success depends to a great extent on the automotive
manufacturers financial condition, marketing, vehicle
design, production and distribution capabilities, reputation,
management and labor relations. For 2006, Toyota/Lexus brands,
BMW/MINI, Honda/Acura, DaimlerChrysler brands and Ford/Premier
Auto Group accounted for 21%, 18%, 16%, 11% and 10%,
respectively, of our total revenues. A significant decline in
the sale of new vehicles manufactured by these manufacturers, or
the loss or deterioration of our relationships with one or more
of these manufacturers, could materially adversely affect our
results of operations, financial condition or cash flows. No
other manufacturer accounted for more than 10% of our total
revenues for 2006.
Events such as labor strikes that may adversely affect a
manufacturer may also materially adversely affect us, especially
if these events were to interrupt the supply of vehicles or
parts to us. Similarly, the delivery of vehicles from
manufacturers at a time later than scheduled, which may occur
particularly during periods of new product introductions, has
led, and in the future could lead, to reduced sales during those
periods. In addition, any event that causes adverse publicity
involving one or more automotive manufacturers or their vehicles
may materially adversely affect our results of operations,
financial condition or cash flows.
Our
failure to meet manufacturers consumer satisfaction
requirements may adversely affect us.
Many manufacturers measure customers satisfaction with
their sales and warranty service experiences through systems
that are generally known as customer satisfaction indices, or
CSI. Manufacturers sometimes use a dealerships CSI scores
as a factor in evaluating applications for additional dealership
acquisitions. Certain of our dealerships have had difficulty
from time to time in meeting their manufacturers CSI
standards. We may be unable to meet these standards in the
future. A manufacturer may refuse to consent to a franchise
acquisition by us if our dealerships do not meet their CSI
standards. This could materially adversely affect our
acquisition strategy. In addition, because we receive payments
from the manufacturers based in part on CSI scores, future
payments could be materially reduced or eliminated if our CSI
scores decline.
Automotive
manufacturers impose limits on our ability to issue additional
equity and on the ownership of our common stock by third
parties, which may hamper our ability to meet our financing
needs.
A number of manufacturers impose restrictions on the sale and
transfer of our common stock. The most prohibitive restrictions
provide that, under specified circumstances, we may be forced to
sell or surrender franchises (1) if a competing automotive
manufacturer acquires a 5% or greater ownership interest in us
or (2) if an individual or entity that has a criminal
record in connection with business dealings with any automotive
manufacturer, distributor or dealer or who has been convicted of
a felony acquires a 5% or greater ownership interest in us.
Further, several manufacturers have the right to approve the
acquisition by a third party of 20% or more of our common stock,
and a number of manufacturers continue to prohibit changes in
ownership that may affect control of our company.
Actions by our stockholders or prospective stockholders that
would violate any of the above restrictions are generally
outside our control. If we are unable to obtain a waiver or
relief from these restrictions, we may be forced to terminate or
sell one or more franchises, which could materially adversely
affect our results of operations, financial condition or cash
flows. These restrictions also may prevent or deter prospective
acquirers from acquiring control of us and, therefore, may
adversely impact the value of our common stock. These
restrictions also may impede our ability to raise required
capital or our ability to acquire dealership groups using our
common stock.
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Risks
Relating to our Acquisition Strategy
Growth
in our revenues and earnings depends substantially on our
ability to acquire and successfully operate new
dealerships.
While we expect to acquire new dealerships, we cannot guarantee
that we will be able to identify and acquire additional
dealerships in the future. Moreover, acquisitions involve a
number of risks, including:
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integrating the operations and personnel of the acquired
dealerships;
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operating in new markets with which we are not familiar;
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incurring unforeseen liabilities at acquired dealerships;
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disruption to our existing businesses;
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failure to retain key personnel of the acquired dealerships;
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impairment of relationships with employees, manufacturers and
customers; and
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incorrectly valuing acquired entities.
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In addition, integrating acquired dealerships into our existing
mix of dealerships may result in substantial costs, diversion of
our management resources or other operational or financial
problems. Unforeseen expenses, difficulties and delays
frequently encountered in connection with the integration of
acquired entities and the rapid expansion of operations could
inhibit our growth, result in our failure to achieve acquisition
synergies and require us to focus resources on integration
rather than other more profitable areas.
Acquired entities may subject us to unforeseen liabilities that
we are unable to detect prior to completing the acquisition, or
liabilities that turn out to be greater than those we had
expected. These liabilities may include liabilities that arise
from non-compliance with environmental laws by prior owners for
which we, as a successor owner, will be responsible. Until we
assume operating control of acquired entities, we may not be
able to ascertain the actual value of the acquired entity.
We may be unable to identify acquisition candidates that would
result in the most successful combinations, or complete
acquisitions on acceptable terms on a timely basis. The
magnitude, timing, pricing and nature of future acquisitions
will depend upon various factors, including the availability of
suitable acquisition candidates, the negotiation of acceptable
terms, our financial capabilities, the availability of skilled
employees to manage the acquired companies and general economic
and business conditions. Further, covenants contained in our
debt instruments impose limitations on our ability to acquire
additional dealerships and future debt instruments may impose
additional restrictions. Furthermore, we have sold and may in
the future sell dealerships based on numerous factors, which may
impact our future revenues and earnings, particularly if we do
not make acquisitions to replace such revenues and earnings.
Manufacturers
restrictions on acquisitions may limit our future
growth.
Our future growth via acquisition of automotive dealerships will
depend on our ability to obtain the requisite manufacturer
approvals. The relevant manufacturer must consent to any
franchise acquisition and it may not consent in a timely fashion
or at all. In addition, under many franchise agreements or under
local law, a manufacturer may have a right of first refusal to
acquire a dealership that we seek to acquire.
Certain manufacturers limit the total number of their
dealerships that we may own in a particular geographic area and,
in some cases, the total number of their vehicles that we may
sell as a percentage of that manufacturers overall sales.
Manufacturers may also limit the ownership of stores in
contiguous markets and the dueling of a franchise with another
brand. To date, we have only reached these ceilings with two
manufacturers. If additional manufacturers impose or expand
these types of restrictions, our acquisition strategy and
results of operations, financial condition or cash flows could
be materially adversely affected.
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Other
Business Risks
Our
business is susceptible to adverse economic conditions,
including changes in consumer confidence, fuel prices and credit
availability.
We believe that the automotive retail industry is influenced by
general economic conditions and particularly by consumer
confidence, the level of personal discretionary spending,
interest rates, fuel prices, weather conditions, unemployment
rates and credit availability. Historically, unit sales of motor
vehicles, particularly new vehicles, have been cyclical,
fluctuating with general economic cycles. During economic
downturns, new vehicle retail sales tend to experience periods
of decline characterized by oversupply and weak demand. The
automotive retail industry may experience sustained periods of
decline in vehicle sales in the future. Any decline or change of
this type could materially adversely affect our results of
operations, financial condition or cash flows.
Some of our operations are regionally concentrated such as those
in Arizona, California, the Northeastern United States and the
United Kingdom. Adverse regional economic and competitive
conditions in these areas could materially adversely affect our
results of operations, financial condition or cash flows.
Substantial
competition in automotive sales and services may adversely
affect our profitability.
The automotive retail industry is highly competitive. Depending
on the geographic market, we compete with:
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franchised automotive dealerships in our markets that sell the
same or similar makes of new and used vehicles that we offer;
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private market buyers and sellers of used vehicles;
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Internet-based vehicle brokers that sell vehicles obtained from
franchised dealers directly to consumers;
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vehicle rental companies that sell their used rental vehicles;
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service center chain stores; and
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independent service and repair shops.
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In addition, automotive manufacturers may directly enter the
retail market in the future, which could materially adversely
affect our results of operations, financial condition or cash
flows. Some of our competitors may have greater financial,
marketing and personnel resources and lower overhead and sales
costs than us. We do not have any cost advantage over other
franchised automotive dealerships in purchasing new vehicles
from the automotive manufacturers.
In addition to competition for vehicle sales, our dealerships
compete with franchised dealerships to perform warranty repairs
and with other automotive dealers, independent service center
chains, independent garages and others, for non-warranty repair,
routine maintenance and parts business. A number of regional or
national chains offer selected parts and services at prices that
may be lower than our dealerships prices. We also compete
with a broad range of financial institutions in arranging
financing for our customers vehicle purchases.
The Internet is a significant part of the sales process in our
industry. We believe that customers are using the Internet as
part of the sales process to compare pricing for cars and
related finance and insurance services, which may reduce gross
profit margins for new and used cars and profits generated from
the sale of finance and insurance products. Some websites offer
vehicles for sale over the Internet without the benefit of
having a dealership franchise, although they must currently
source their vehicles from a franchised dealer. If Internet new
vehicle sales are allowed to be conducted without the
involvement of franchised dealers, or if dealerships are able to
effectively use the Internet to sell outside of their markets,
our business could be materially adversely affected. We could
also be materially adversely affected to the extent that
Internet companies acquire dealerships or ally themselves with
our competitors dealerships.
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Our
capital costs and our results of operations may be adversely
affected by a rising interest rate environment.
We finance our purchases of new and, to a lesser extent, used
vehicle inventory using floor plan financing arrangements under
which we are charged interest at floating rates. In addition, we
obtain capital for general corporate purposes, dealership
acquisitions and real estate purchases and improvements under
predominantly floating interest rate credit facilities.
Therefore, excluding the potential mitigating effects from
interest rate hedging techniques, our interest expenses will
rise with increases in interest rates. Rising interest rates may
also have the affect of depressing demand in the interest rate
sensitive aspects of our business, particularly new and used
vehicles sales, because many of our customers finance their
vehicle purchases. As a result, rising interest rates may have
the affect of simultaneously increasing our costs and reducing
our revenues, which could materially adversely affect our
results of operations, financial condition or cash flows.
Our
inability to raise capital, if needed, could adversely affect
us.
We require substantial capital in order to acquire and renovate
automotive dealerships. This capital might be raised through
public or private financing, including through the issuance of
debt or equity securities, sale-leaseback transactions and other
sources. Availability under our credit agreements may be limited
by the covenants and conditions of those facilities. We may not
be able to raise additional funds. If we raise additional funds
by issuing equity securities, dilution to then existing
stockholders may result.
If adequate funds are not available, we may be required to
significantly curtail our acquisition and renovation programs,
which could materially and adversely affect our growth strategy.
We depend to a significant extent on our ability to finance the
purchase of inventory in the form of floor plan financing. Floor
plan financing is financing from a vehicle manufacturer secured
by the vehicles we sell. Our dealerships borrow money to buy a
particular vehicle from the manufacturer and pay off the floor
plan financing when they sell the particular vehicle, paying
interest during the interim period. Our floor plan financing is
secured by substantially all of the assets of our automotive
dealership subsidiaries. Our remaining assets are pledged to
secure our credit facilities. This may impede our ability to
borrow from other sources. Most of our floor plan lenders are
associated with manufacturers with whom we have franchise
agreements. Consequently, the deterioration of our relationship
with a manufacturer could adversely affect our relationship with
the affiliated floor plan lender and vice versa. Any inability
to obtain floor plan financing on customary terms, or the
termination of our floor plan financing arrangements by our
floor plan lenders, could materially adversely affect our
results of operations, financial condition or cash flows.
Property
loss, business interruptions or other liabilities at some of our
dealerships could impact our operating results.
The automotive retail business is subject to substantial risk of
property loss due to the significant concentration of property
values at dealership locations, including vehicles and parts. We
have historically experienced business interruptions at several
of our dealerships due to adverse weather conditions or other
extraordinary events, such as wild fires in California or
hurricanes in Florida. Other potential liabilities arising out
of our operations involve claims by employees, customers or
third parties for personal injury or property damage and
potential fines and penalties in connection with alleged
violations of regulatory requirements. To the extent we
experience future similar events, our results of operations,
financial condition or cash flows may be materially adversely
impacted.
If we
lose key personnel or are unable to attract additional qualified
personnel, our business could be adversely
affected.
We believe that our success depends to a significant extent upon
the efforts and abilities of our executive management and key
employees, including, in particular, Roger S. Penske, our
Chairman and Chief Executive Officer. Additionally, our business
is dependent upon our ability to continue to attract and retain
qualified personnel, such as managers, as well as retaining
dealership management in connection with acquisitions. We
generally have not entered into employment agreements with our
key personnel. The loss of the services of one or more members
of our senior management team, including, in particular, Roger
S. Penske, could have a material
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adverse effect on us and materially impair the efficiency and
productivity of our operations. We do not have key man insurance
for any of our executive officers or key personnel. The loss of
any of our key employees or the failure to attract qualified
managers could have a material adverse effect on our business.
Our
quarterly operating results may fluctuate due to seasonality and
other factors.
The automotive industry typically experiences seasonal
variations in vehicle revenues. Demand for automobiles is
generally lower during the winter months than in other seasons,
particularly in regions of the United States that may have
severe winters. In the United States, a higher number of vehicle
sales generally occurs in the second and third quarters of each
year, due in part to consumer buying trends and the introduction
of new vehicle models. Therefore, if conditions exist in the
second or third quarters that depress or affect automotive
sales, such as high fuel costs, depressed economic conditions or
similar adverse conditions, our revenues for the year may be
disproportionately adversely affected.
In addition, the U.K. retail automotive industry typically
experiences peak sales activity during March and September of
each year. This seasonality results from the perception in the
United Kingdom that the resale value of a vehicle may be
determined by the date that the vehicle is registered. Because
new vehicle registration periods begin on March 1 and
September 1 each year, vehicles with comparable mileage
that were registered in March may have an equivalent used
vehicle value to vehicles registered in August of the same year.
Our
business may be adversely affected by import product
restrictions and foreign trade risks that may impair our ability
to sell foreign vehicles profitably.
A significant portion of our new vehicle business involves the
sale of vehicles, vehicle parts or vehicles composed of parts
that are manufactured outside the region in which they are sold.
As a result, our operations are subject to customary risks
associated with imported merchandise, including fluctuations in
the relative value of currencies, import duties, exchange
controls, differing tax structures, trade restrictions,
transportation costs, work stoppages and general political and
economic conditions in foreign countries.
The locations in which we operate may, from time to time, impose
new quotas, duties, tariffs or other restrictions, or adjust
presently prevailing quotas, duties or tariffs on imported
merchandise. Any of those impositions or adjustments could
materially affect our operations and our ability to purchase
imported vehicles and parts at reasonable prices, which could
materially adversely affect our business.
Our
automotive dealerships are subject to substantial regulation and
related claims and proceedings, any of which could adversely
affect our profitability.
A number of regulations affect our business of marketing,
selling, financing and servicing automobiles. Under the laws of
states in U.S. locations in which we currently operate, we
typically must obtain a license in order to establish, operate
or relocate a dealership or operate an automotive repair
service, including dealer, sales, finance and insurance-related
licenses. These laws also regulate our conduct of business,
including our advertising, operating, financing, employment and
sales practices. In addition, our foreign operations are subject
to regulations in their respective jurisdictions.
Our financing activities with customers are subject to
truth-in-lending,
consumer leasing, equal credit opportunity and similar
regulations as well as motor vehicle finance laws, installment
finance laws, insurance laws, usury laws and other installment
sales laws. Some jurisdictions regulate finance fees that may be
paid as a result of vehicle sales. In recent years, private
plaintiffs and state attorneys general in the U.S. have
increased their scrutiny of advertising, sales, and finance and
insurance activities in the sale and leasing of motor vehicles.
These activities have led many lenders to limit the amounts that
may be charged to customers as fee income for these activities.
If these or similar activities were significantly to restrict
our ability to generate revenue from arranging financing for our
customers, we could be adversely affected.
We could also be susceptible to claims or related actions if we
fail to operate our business in accordance with these laws.
Claims arising out of actual or alleged violations of law may be
asserted against us or any of our dealers by individuals, either
individually or through class actions, or by governmental
entities in civil or criminal
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investigations and proceedings. Such actions may expose us to
substantial monetary damages and legal defense costs, injunctive
relief and criminal and civil fines and penalties, including
suspension or revocation of our licenses and franchises to
conduct dealership operations.
We will generally continue to be involved in legal proceedings
in the ordinary course of business. A significant judgment
against us, the loss of a significant license or permit or the
imposition of a significant fine could have a material adverse
effect on our business, financial condition and future prospects.
If
state dealer laws in the United States are repealed or weakened,
our dealership franchise agreements will be more susceptible to
termination, non-renewal or renegotiation.
State dealer laws in the United States generally provide that an
automotive manufacturer may not terminate or refuse to renew a
franchise agreement unless it has first provided the dealer with
written notice setting forth good cause and stating the grounds
for termination or non-renewal. Some state dealer laws allow
dealers to file protests or petitions or to attempt to comply
with the manufacturers criteria within the notice period
to avoid the termination or non-renewal. Though unsuccessful to
date, manufacturers lobbying efforts may lead to the
repeal or revision of state dealer laws. If dealer laws are
repealed in the states in which we operate, manufacturers may be
able to terminate our franchises without providing advance
notice, an opportunity to cure, or a showing of good cause.
Without the protection of state dealer laws, it may also be more
difficult for our dealerships to renew their franchise
agreements upon expiration. Jurisdictions outside the United
States generally do not have these laws and, as a result,
operate without these protections.
Our
dealerships are subject to environmental regulations that may
result in claims and liabilities which could be
material.
We are subject to a wide range of environmental laws and
regulations, including those governing discharges into the air
and water, the operation and removal of storage tanks and the
use, storage and disposal of hazardous substances. Our
dealerships and service, parts and body shop operations in
particular use, store and contract for recycling or disposal of
hazardous materials. Any non-compliance with these regulations
could result in significant fines and penalties which could
adversely affect our results of operations, financial condition
or cash flows. Further, investigation or remediation may be
necessary in the event of leaks or other discharges from current
or former underground or aboveground storage tanks.
In the U.S., we may also have liability in connection with
materials that were sent to third-party recycling, treatment,
and/or
disposal facilities under federal and state statutes, which
impose liability for investigation and remediation of
contamination without regard to fault or the legality of the
conduct that contributed to the contamination. Similar to many
of our competitors, we have incurred and will continue to incur,
capital and operating expenditures and other costs in complying
with such laws and regulations.
Soil and groundwater contamination is known to exist at some of
our current or former properties. In connection with our
acquisitions, it is possible that we will assume or become
subject to new or unforeseen environmental costs or liabilities,
some of which may be material. In connection with dispositions
of businesses, or dispositions previously made by companies we
acquire, we may retain exposure for environmental costs and
liabilities, some of which may be material. Environmental laws
and regulations are complex and subject to change. Compliance
with new or more stringent laws or regulations, stricter
interpretations of existing laws or the future discovery of
environmental conditions could require additional expenditures
by us which could materially adversely affect our results of
operations, financial condition or cash flows.
Our
principal stockholders have substantial influence over us and
may make decisions with which you disagree.
Penske Corporation through various affiliates beneficially owns
39% of our outstanding common stock. In addition, Penske
Corporation and its affiliates have entered into a stockholders
agreement with our second largest stockholder, Mitsui &
Co., Ltd. and one of its affiliates, pursuant to which they have
agreed to vote together as to the election of our directors.
Collectively, these two groups beneficially own 56% of our
outstanding stock. As a result,
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these persons have the ability to control the composition of our
board of directors and therefore they may be able to control the
direction of our affairs and business.
This concentration of ownership, as well as various provisions
contained in our agreements with manufacturers, our certificate
of incorporation and bylaws and the Delaware General Corporation
Law, could have the affect of discouraging, delaying or
preventing a change in control of us or unsolicited acquisition
proposals. These provisions include the stock ownership limits
imposed by various manufacturers and our ability to issue
blank check preferred stock and the interested
stockholder provisions of Section 203 of the Delaware
General Corporation Law.
Some
of our directors and officers may have conflicts of interest
with respect to certain related party transactions and other
business interests.
Some of our executive officers also hold executive positions at
other companies affiliated with our largest stockholder. Roger
S. Penske, our Chairman and Chief Executive Officer, is also
Chairman and Chief Executive Officer of Penske Corporation, a
diversified transportation services company. Robert H.
Kurnick, Jr., our Vice Chairman and a director, is also
President of Penske Corporation, and Paul F. Walters, our
Executive Vice President Human Resources and Hiroshi
Ishikawa, our Executive Vice President International
Business Development, serve in similar capacities for Penske
Corporation. Much of the compensation of these officers is paid
by Penske Corporation and not by us, and while these officers
have historically devoted a substantial amount of their time to
our matters, these officers are not required to spend any
specific amount of time on our matters. In addition, one of our
directors, Richard J. Peters and our President, Roger
Penske, Jr., each serves as a director of Penske
Corporation. In addition, Penske Corporation owns Penske
Automotive Group, a privately held automotive dealership company
with operations in southern California. Finally, we are a tenant
under a number of non-cancelable leases with Automotive Group
Realty, LLC (AGR), a wholly owned subsidiary of Penske
Corporation, and have sold substantial amounts of real property
and improvements to AGR, which we have then leased. Due to their
relationships with these related entities,
Messrs. Ishikawa, Kurnick, Penske, Penske, Jr., Peters
and Walters may have a conflict of interest in making any
decision related to transactions between their related entities
and us, or with respect to allocations of corporate
opportunities.
Our
operations outside the United States subject us to foreign
currency translation risk and exposure to changes in exchange
rates.
In recent years, between 25% and 35% of our revenues have been
generated outside the U.S., predominately in the United Kingdom.
As a result, we are exposed to the risks involved in foreign
operations, including:
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changes in international tax laws and treaties, including
increases of withholding and other taxes on remittances and
other payments by subsidiaries;
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currency and exchange risks;
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tariffs, trade barriers, and restrictions on the transfer of
funds between nations;
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changes in international governmental regulations;
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the impact of local economic and political conditions;
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the impact of European Commission regulation and the
relationship between the United Kingdom and continental
Europe; and
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increased competition and the impact from limited franchise
protection in the United Kingdom.
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If our operations outside the U.S. fail to perform as
expected, we will be adversely impacted. In addition, our
results of operations and financial position are reported in
local currency and are then translated into U.S. dollars at
the applicable foreign currency exchange rate for inclusion in
our consolidated financial statements. As exchange rates
fluctuate, particularly between the U.S. and U.K., the
translation effect of such fluctuations may have a material
effect on our results of operations or financial position as
reported in U.S. dollars.
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Use of
Proceeds
We will not receive cash proceeds from the issuance of the
exchange notes under the exchange offer. In consideration for
issuing the exchange notes in exchange for old notes as
described in this prospectus, we will receive old notes of equal
principal amount. The old notes surrendered in exchange for the
exchange notes will be retired and cancelled.
Exchange
Offer
In connection with the issuance of the old notes on
December 7, 2006, we entered into a registration rights
agreement with the initial purchasers, which provides for the
exchange offer. The exchange offer will permit eligible holders
of old notes to exchange the old notes for the exchange notes,
which are identical in all material respects to the old notes,
except that:
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the exchange notes have been registered under the
U.S. federal securities laws and will not bear any legend
restricting their transfer;
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the exchange notes bear a different CUSIP number than the old
notes;
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the exchange notes will not be subject to transfer restrictions
or entitled to registration rights; and
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the holders of the exchange notes will not be entitled to
certain rights under the registration rights agreement.
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The exchange notes will evidence the same debt as the old notes.
Holders of exchange notes will be entitled to the benefits of
the indenture, under which the old notes were issued.
General
We are making the exchange offer to comply with our contractual
obligations under the registration rights agreement. Except
under limited circumstances, upon completion of the exchange
offer, our obligations with respect to the registration of the
old notes will terminate.
We agreed, pursuant to the registration rights agreement, to use
our commercially reasonable best efforts to:
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cause the exchange offer registration statement to become
effective as soon as practicable, but in no event later than
August 3, 2007, and
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have the exchange offer registration statement remain effective
until as long as 180 days after the last day the exchange
offer is open for use by one or more participating
broker-dealers.
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For each old note surrendered to us pursuant to the exchange
offer, the holder of such old note will receive an exchange note
having a principal amount equal to that of the surrendered old
note. Interest on each exchange note will accrue from the last
interest payment date on which interest was paid on the old note
surrendered in exchange therefore or, if no interest has been
paid on the old note, from the date of its original issue.
In connection with the issuance of the old notes, we arranged
for the old notes to be issued in the form of global notes
through the facilities of DTC acting as depositary. The exchange
notes will also be issued in the form of global notes registered
in the name of DTC or its nominee and each beneficial
owners interest in it will be transferable in book-entry
form through DTC.
Old notes that are not tendered for exchange or are tendered but
not accepted in connection with the exchange offer will remain
outstanding and be entitled to the benefits of the indenture
under which they were issued, including accrual of interest,
but, subject to a limited exception, will not be entitled to any
registration rights under the applicable registration rights
agreement. See Consequences of Failure to
Tender.
We will be deemed to have accepted validly tendered old notes
when and if we have given oral or written notice to the exchange
agent of our acceptance. The exchange agent will act as agent
for the tendering holders for the purpose of receiving the
exchange notes from us. If any tendered old notes are not
accepted for exchange because of an invalid tender, the
occurrence of other events described in this prospectus or
otherwise, we will return the
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certificates for any unaccepted old notes, at our expense, to
the tendering holder as promptly as practicable after the
expiration of the exchange offer.
The exchange offer is not being made to, nor will we accept
tenders for exchange from, holders of the old notes in any
jurisdiction in which the exchange offer or its acceptance would
not be in compliance with the securities or blue sky laws of
that jurisdiction.
Eligibility;
Transferability
We are making this exchange offer in reliance on interpretations
of the staff of the SEC set forth in several no-action letters.
However, we have not sought our own no-action letter. Based upon
these interpretations, we believe that you, or any other person
receiving exchange notes, may offer for resale, resell or
otherwise transfer such exchange notes without complying with
the registration and prospectus delivery requirements of the
U.S. federal securities laws, if:
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you are, or the person or entity receiving such exchange notes
is, acquiring such exchange notes in the ordinary course of
business;
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you do not, nor does any such person or entity, have an
arrangement or understanding with any person or entity to
participate in any distribution of the exchange notes (within
the meaning of the Securities Act);
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you are not, nor is any such person or entity, our affiliate, as
such term is defined under Rule 405 under the Securities
Act; and
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you are not acting on behalf of any person or entity who could
not truthfully make these statements.
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To participate in the exchange offer, you must represent as the
holder of old notes that each of these statements is true.
Any holder of old notes who is our affiliate or who intends to
participate in the exchange offer for the purpose of
distributing the exchange notes:
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will not be able to rely on the interpretation of the staff of
the SEC set forth in the no-action letters described above; and
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must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale
or transfer of the exchange notes, unless the sale or transfer
is made pursuant to an exemption from those requirements.
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Each broker-dealer that receives exchange notes in exchange for
old notes acquired for its own account through market-making or
other trading activities must acknowledge that it will deliver a
prospectus in connection with any resale of the exchange notes.
The letter of transmittal states that by acknowledging that it
will deliver, and by delivering, a prospectus, a broker-dealer
will not be deemed to admit that it is an underwriter within the
meaning of the Securities Act. This prospectus, as it may be
amended or supplemented from time to time, may be used by a
broker-dealer in connection with resale of the exchange notes
received in exchange for the old notes where such old notes were
acquired by such broker-dealer as a result of market-making
activities or other trading activities. We have agreed that, for
a period of as long as 180 days after the expiration date
of the exchange offer, we will amend or supplement this
prospectus in order to expedite or facilitate the disposition of
any exchange notes by such broker-dealers.
Expiration
of the Exchange Offer; Extensions; Amendments
The exchange offer will expire at 5:00 p.m., New York City
time, on
[ ],
2007, or the expiration date, unless we extend the exchange
offer. To extend the exchange offer, we will notify the exchange
agent and issue a press release regarding such extension before
9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date. We reserve the
right to extend the exchange offer, delay accepting any tendered
old notes or, if any of the conditions described below under the
heading Conditions has not been
satisfied, to terminate the exchange offer. We also reserve the
right to amend the terms of the exchange offer in any
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manner. We will give oral or written notice of such delay,
extension, termination or amendment to the exchange agent.
If we amend the exchange offer in a manner that we consider
material, we will disclose such amendment by means of a
prospectus supplement, and we will extend the exchange offer for
a period of five to ten business days.
If we determine to make a public announcement of any delay,
extension, amendment or termination of the exchange offer, we
will do so by making a timely release through an appropriate
news agency.
If we delay accepting any old notes or terminate the exchange
offer, we promptly will return any old notes deposited, pursuant
to the exchange offer as required by
Rule 14e-1(c)
under the Exchange Act.
Conditions
Notwithstanding any other term of the exchange offer, we will
not be required to accept for exchange, or issue any exchange
notes for, any old notes, and may terminate or amend the
exchange offer before the acceptance of the old notes, if:
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we determine that the exchange offer violates any law, statute,
rule, regulation or interpretation by the staff of the SEC or
any order of any governmental agency or court of competent
jurisdiction; or
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any action or proceeding is instituted or threatened in any
court or by or before any governmental agency relating to the
exchange offer which, in our judgment, could reasonably be
expected to impair our ability to proceed with the exchange
offer.
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The conditions listed above are for our sole benefit and may be
asserted by us regardless of the circumstances giving rise to
any of these conditions. We may waive these conditions in our
reasonable discretion in whole or in part at any time and from
time to time prior to the expiration date. The failure by us at
any time to exercise any of the above rights shall not be
considered a waiver of such right, and such right shall be
considered an ongoing right which may be asserted at any time
and from time to time.
In addition, we will not accept for exchange any old notes
tendered, and no exchange notes will be issued in exchange for
those old notes, if at any time any stop order is threatened or
issued with respect to the registration statement of which this
prospectus is a part for the exchange offer and the exchange
notes or the qualification of the indenture under the
Trust Indenture Act of 1939. In any such event, we must use
commercially reasonable best efforts to obtain the withdrawal of
any stop order as soon as practicable.
In addition, we will not be obligated to accept for exchange the
old notes of any holder that has not made to us the
representations described under Eligibility;
Transferability and Plan of Distribution.
Procedures
for Tendering
We have forwarded to you, along with this prospectus, a letter
of transmittal relating to this exchange offer. A holder need
not submit a letter of transmittal if the holder tenders old
notes in accordance with the procedures mandated by DTCs
ATOP. To tender old notes without submitting a letter of
transmittal, the electronic instructions sent to DTC and
transmitted to the exchange agent must contain your
acknowledgment of receipt of, and your agreement to be bound by
and to make all of the representations contained in the letter
of transmittal. In all other cases, a letter of transmittal must
be manually executed and delivered as described in this
prospectus.
Only a holder of record of old notes may tender old notes in the
exchange offer. To tender in the exchange offer, a holder must
comply with all applicable procedures of DTC and either:
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complete, sign and date the letter of transmittal, or a
facsimile of the letter of transmittal, have the signature on
the letter of transmittal guaranteed if the letter of
transmittal so requires and deliver the letter of transmittal or
facsimile to the exchange agent prior to the expiration date, or
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in lieu of delivering a letter of transmittal, instruct DTC to
transmit on behalf of the holder a computer-generated message to
the exchange agent in which the holder of the old notes
acknowledges and agrees to be
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bound by the terms of the letter of transmittal, which
computer-generated message must be received by the exchange
agent prior to 5:00 p.m., New York City time, on the
expiration date.
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In addition, either:
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the exchange agent must receive the old notes along with the
letter of transmittal,
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with respect to the old notes, the exchange agent must receive,
before expiration of the exchange offer, timely confirmation of
book-entry transfer of old notes into the exchange agents
account at DTC, according to the procedure for book-entry
transfer described below under
DTC Book Entry Transfer, or
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the holder must comply with the guaranteed delivery procedures
described below.
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To be tendered effectively, the exchange agent must receive any
physical delivery of the letter of transmittal and other
required documents at the address set forth below under
Exchange Agent before expiration of the
exchange offer. To receive confirmation of valid tender of old
notes, a holder should contact the exchange agent at the
telephone number listed under Exchange
Agent.
The tender by a holder that is not withdrawn before expiration
of the exchange offer will constitute an agreement between that
holder and us in accordance with the terms and subject to the
conditions set forth in this prospectus and the letter of
transmittal. If a holder completing a letter of transmittal
tenders less than all of the old notes held by this holder, this
tendering holder should fill in the applicable box of the letter
of transmittal. The amount of old notes delivered to the
exchange agent will be deemed to have been tendered unless
otherwise indicated.
The method of delivery of old notes and the letter of
transmittal and all other required documents to the exchange
agent is at the election and sole risk of the holder. Instead of
delivery by mail, you should use an overnight or hand delivery
service. In all cases, you should allow for sufficient time to
ensure delivery to the exchange agent before the expiration of
the exchange offer. You may request your broker, dealer,
commercial bank, trust company or nominee to effect these
transactions for you.
You should not send any note, letter of transmittal or other
required document to us.
Any beneficial owner whose old notes are registered in the name
of a broker, dealer, commercial bank, trust company or other
nominee and who wishes to tender should contact the registered
holder promptly and instruct it to tender on the owners
behalf. If the beneficial owner wishes to tender on its own
behalf, it must, prior to completing and executing the letter of
transmittal and delivering its old notes, either:
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make appropriate arrangements to register ownership of the old
notes in the owners name, or
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obtain a properly completed bond power from the registered
holder of old notes.
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The transfer of registered ownership may take considerable time
and may not be completed prior to the expiration date.
If the applicable letter of transmittal is signed by the record
holder(s) of the old notes tendered, the signature must
correspond with the name(s) written on the face of the old notes
without alteration, enlargement or any change whatsoever. If the
applicable letter of transmittal is signed by a participant in
DTC, the signature must correspond with the name as it appears
on the security position listing as the holder of the old notes.
Generally, a signature on a letter of transmittal or a notice of
withdrawal must be guaranteed by an eligible guarantor
institution. Eligible guarantor institutions include banks,
brokers, dealers, municipal securities dealers, municipal
securities brokers, government securities dealers, government
securities brokers, credit unions, national securities
exchanges, registered securities associations, clearing agencies
and savings associations. The signature need not be guaranteed
by an eligible guarantor institution if the old notes are
tendered:
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by a registered holder who has not completed the box entitled
Special Issuance Instructions or Special
Delivery Instructions on the letter of transmittal, or
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for the account of an eligible institution.
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If the letter of transmittal is signed by a person other than
the registered holder of any old notes, the old notes must be
endorsed or accompanied by a properly completed bond power. The
bond power must be signed by the registered holder as the
registered holders name appears on the old notes and an
eligible guarantor institution must guarantee the signature on
the bond power.
If the letter of transmittal or any old notes or bond powers are
signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in
a fiduciary or representative capacity, these persons should so
indicate when signing. Unless we waive this requirement, they
should also submit evidence satisfactory to us of their
authority to deliver the letter of transmittal.
We will determine in our sole discretion all questions as to the
validity, form, eligibility, including time of receipt,
acceptance and withdrawal of the tendered old notes. Our
determination will be final and binding. We reserve the absolute
right to reject any old notes not properly tendered or any old
notes the acceptance of which would, in the opinion of our
counsel, be unlawful. We also reserve the right to waive any
defects, irregularities or conditions of tender as to particular
old notes. Our interpretation of the terms and conditions of the
exchange offer, including the instructions in the letter of
transmittal, will be final and binding on all parties.
Unless waived, any defects or irregularities in connection with
tenders of old notes must be cured within the time that we
determine. Although we intend to notify holders of defects or
irregularities with respect to tenders of old notes, neither we,
the exchange agent nor any other person will incur any liability
for failure to give such notification. Tenders of old notes will
not be deemed made until those defects or irregularities have
been cured or waived. Any old notes received by the exchange
agent that are not properly tendered and as to which the defects
or irregularities have not been cured or waived will be returned
by the exchange agent without cost to the tendering holder,
unless otherwise provided in the letter of transmittal, as soon
as practicable following the expiration date.
In all cases, we will issue exchange notes for old notes that we
have accepted for exchange under the exchange offer only after
the exchange agent timely receives:
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the old notes or a timely book-entry confirmation that the old
notes have been transferred into the exchange agents
account at DTC, and
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a properly completed and duly executed letter of transmittal and
all other required documents or a properly transmitted
agents message.
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Holders should receive copies of the applicable letter of
transmittal with the prospectus. A holder may obtain copies of
the applicable letter of transmittal for the old notes from the
exchange agent at its offices listed under
Exchange Agent.
By signing the letter of transmittal, or causing DTC to transmit
an agents message to the exchange agent, each tendering
holder of old notes will, among other things, make the
representations in the letter of transmittal described under
Eligibility; Transferability.
DTC
Book-Entry Transfer
The exchange agent will make a request to establish an account
with respect to the old notes at DTC for purposes of the
exchange offer within three business days after the date of this
prospectus.
With respect to the old notes, the exchange agent and DTC have
confirmed that any financial institution that is a participant
in DTC may utilize the DTC ATOP procedures to tender old notes.
With respect to the old notes, any participant in DTC may make
book-entry delivery of old notes by causing DTC to transfer the
old notes into the exchange agents account in accordance
with DTCs ATOP procedures for transfer.
However, the exchange for the old notes so tendered will only be
made after a book-entry confirmation of such book-entry transfer
of old notes into the exchange agents account, and timely
receipt by the exchange agent of an agents message and any
other documents required by the letter of transmittal. The term
agents message means a message, transmitted by
DTC and received by the exchange agent and forming part of a
book-entry confirmation, which states that DTC has received an
express acknowledgment from a participant tendering old notes
that are the
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subject of the book-entry confirmation that the participant has
received and agrees to be bound by the terms of the letter of
transmittal, and that we may enforce that agreement against the
participant.
Guaranteed
Delivery Procedures
Holders wishing to tender their old notes but whose old notes
are not immediately available or who cannot deliver their old
notes, the letter of transmittal or any other required documents
to the exchange agent or cannot comply with the applicable
procedures described above before expiration of the exchange
offer may tender if:
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the tender is made through an eligible guarantor institution, as
described above under Procedures for
Tendering,
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before expiration of the exchange offer, the exchange agent
receives from the eligible guarantor institution either a
properly completed and duly executed notice of guaranteed
delivery, by facsimile transmission, mail or hand delivery, or a
properly transmitted agents message and notice of
guaranteed delivery, in each case:
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setting forth the name and address of the holder and the
registered number(s) and the principal amount of old notes
tendered,
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stating that the tender is being made by guaranteed delivery, and
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guaranteeing that, within three New York Stock Exchange trading
days after expiration of the exchange offer, the letter of
transmittal, or facsimile thereof, together with the old notes
or a book-entry transfer confirmation and any other documents
required by the letter of transmittal, will be deposited by the
eligible guarantor institution with the exchange agent, and
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the exchange agent receives the properly completed and executed
letter of transmittal, or facsimile thereof, as well as all
tendered old notes in proper form for transfer or a book-entry
transfer confirmation, and all other documents required by the
letter of transmittal, within three New York Stock Exchange
trading days after expiration of the exchange offer.
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Upon request to the exchange agent, a notice of guaranteed
delivery will be sent to holders who wish to tender their old
notes according to the guaranteed delivery procedures set forth
above.
Withdrawal
of Tenders
Except as otherwise provided in this prospectus, holders of old
notes may withdraw their tenders at any time before expiration
of the exchange offer.
For a withdrawal to be effective, the exchange agent must
receive a computer-generated notice of withdrawal transmitted by
DTC on behalf of the holder in accordance with the standard
operating procedures of DTC, or a written notice of withdrawal,
which may be by facsimile transmission or letter, at one of the
addresses set forth below under Exchange
Agent.
Any notice of withdrawal must:
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specify the name of the person having tendered the old notes to
be withdrawn,
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identify the old notes to be withdrawn (including the
certificate number(s) of the outstanding notes physically
delivered) and principal amount of such notes, or, in the case
of notes transferred by book-entry transfer, the name of the
account at DTC, and
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be signed by the holder in the same manner as the original
signature on the letter of transmittal by which such old notes
were tendered, with any required signature guarantees, or be
accompanied by documents of transfer sufficient to have the
trustee with respect to the old notes register the transfer of
such old notes into the name of the person withdrawing the
tender.
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If old notes have been tendered pursuant to the procedure for
book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at DTC to be
credited with the withdrawn old notes and otherwise comply with
the procedures of the facility.
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We will determine in our sole discretion all questions as to the
validity, form and eligibility, including time of receipt, of
notices of withdrawal, and our determination shall be final and
binding on all parties. We will deem any old notes so withdrawn
not to have been validly tendered for exchange for purposes of
the exchange offer. We will return any old notes that have been
tendered for exchange but that are not exchanged for any reason
to their holder without cost to the holder. In the case of old
notes tendered by book-entry transfer into the exchange
agents account at DTC according to the procedures
described above, the old notes will be credited to an account
maintained with DTC, for old notes, as soon as practicable after
withdrawal, rejection of tender or termination of the exchange
offer. You may retender properly withdrawn old notes by
following one of the procedures described under
Procedures for Tendering above at any
time on or before expiration of the exchange offer.
A holder may obtain a form of the notice of withdrawal from the
exchange agent at its offices listed under
Exchange Agent.
Exchange
Agent
The Bank of New York Trust Company, N.A. has been appointed
as exchange agent for the exchange offer. You should direct
questions and requests for assistance, requests for additional
copies of this prospectus or the letter of transmittal and
requests for the notice of guaranteed delivery or notice of
withdrawal to the exchange agent addressed as follows:
To: The Bank of New York Trust Company, N.A. (as
Exchange Agent)
By Mail, Overnight Courier or Hand:
The Bank of New York
101 Barclay Street 7 East
New York, N.Y. 10286
Attn: Mrs. Evangeline R. Gonzales, Corporate
Trust Operations/Reorganization Unit
By Facsimile Transmission (for Eligible Institutions Only):
(212) 298-1915
Confirm by Telephone:
(212) 815-3687
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN
AS SHOWN ABOVE OR TRANSMISSION VIA FACSIMILE OTHER THAN AS SET
FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF THE LETTER
OF TRANSMITTAL.
Fees and
Expenses
We will bear the expenses of soliciting tenders. The principal
solicitation is being made by mail. However, we may make
additional solicitations by telephone or in person by our and
our affiliates officers and regular employees.
We have not retained any dealer-manager in connection with the
exchange offer and will not make any payments to broker-dealers
or others soliciting acceptances of the exchange offer. We will,
however, pay the exchange agent reasonable and customary fees
for its services and reimburse it for its related reasonable
out-of-pocket
expenses.
Transfer
Taxes
We will pay all transfer taxes, if any, applicable to the
exchange of old notes under the exchange offer. The tendering
holder, however, will be required to pay any transfer taxes,
whether imposed on the registered holder or any other person, if:
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exchange notes are to be delivered to, or issued in the name of,
any person other than the registered holder of the old notes so
exchanged,
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tendered old notes are registered in the name of any person
other than the person signing the letter of transmittal, or
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a transfer tax is imposed for any reason other than the exchange
of old notes under the exchange offer.
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If satisfactory evidence of payment of transfer taxes imposed as
a result of any of the circumstances listed above is not
submitted with the letter of transmittal, the amount of any
transfer taxes will be billed to the tendering holder.
Accounting
Treatment
We will record the exchange notes at the same carrying value as
the old notes as reflected in our accounting records on the date
of the exchange. Accordingly, we will not recognize any gain or
loss for accounting purposes upon completion of the exchange
offer.
Consequences
of Failure to Tender
All untendered old notes will remain subject to the restrictions
on transfer provided for in the old notes and the indenture.
Generally, the old notes that are not exchanged for exchange
notes pursuant to the exchange offer will remain restricted
securities. Accordingly, such old notes may be resold only:
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to us (upon redemption thereof or otherwise),
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pursuant to a registration statement that has been declared
effective under the Securities Act,
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for so long as the old notes are eligible for resale pursuant to
Rule l44A, to a person the holder of the old notes and any
person acting on its behalf reasonably believes is a
qualified institutional buyer as defined in
Rule l44A, that purchases for its own account or for the
account of another qualified institutional buyer, in each case
to whom notice is given that the transfer is being made in
reliance on Rule l44A, or
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pursuant to any other available exemption from the registration
requirements of the Securities Act (in which case we and the
trustee shall have the right to require the delivery of an
opinion of counsel, certifications and/or other information
satisfactory to us and the trustee), in each case subject to
compliance with any applicable foreign, state or other
securities laws.
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Upon completion of the exchange offer, due to the restrictions
on transfer of the old notes and the absence of such
restrictions applicable to the exchange notes, it is likely that
the market, if any, for old notes will be relatively less liquid
than the market for exchange notes. Consequently, holders of old
notes who do not participate in the exchange offer could
experience significant diminution in the value of their old
notes, compared to the value of the exchange notes. The holders
of old notes not tendered will have no further registration
rights, except that, under limited circumstances, we may be
required to file a shelf registration statement for a continuous
offer of old notes.
Governing
Law
The indenture, the exchange notes and old notes are governed by,
and construed in accordance with, the laws of the State of New
York.
Description
of Exchange Notes
You can find the definitions of certain terms used in this
description under the subheading Certain
Definitions. In this description, the word
Company refers only to United Auto Group, Inc. and
not to any of its subsidiaries., the term old notes
refers to the outstanding 7.75% senior subordinated notes due
2016, the term Exchange Notes or exchange
notes refers to the notes offered hereby and the term
notes or Notes refers to the old notes
and the exchange notes.
The Company issued the old notes, and will issue the exchange
notes, under an Indenture (the Indenture) among
itself, the Guarantors and The Bank of New York
Trust Company, N.A., as trustee (the Trustee).
The terms
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of the Exchange Notes include those stated in the Indenture and
those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (the
Trust Indenture Act).
The following description is a summary of the material
provisions of the Indenture. It does not restate those
agreements in their entirety. We urge you to read the Indenture
because it, and not this description, defines your rights as
holders of the Exchange Notes. Certain defined terms used in
this description but not defined below under the caption
Certain Definitions have the meanings
assigned to them in the Indenture.
Brief
Description of the Notes and Guarantees
The
Notes
The Notes:
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were initially issued in the aggregate principal amount of
$375.0 million;
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are general unsecured obligations of the Company;
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are subordinated in right of payment to all existing and future
Senior Debt of the Company;
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are pari passu in right of payment with any existing and
future senior subordinated Debt of the Company, including the
Companys existing 3.5% Senior Subordinated Convertible
Notes due 2026 (the 3.5% Notes); and
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are guaranteed by the Guarantors.
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The
Guarantees
The Notes are fully and unconditionally guaranteed, jointly and
severally, on a senior subordinated basis by all of the direct
and indirect, wholly owned Domestic Subsidiaries of the Company
as of the Issue Date. The Companys existing non-wholly
owned Domestic Subsidiaries do not guarantee the Notes. Future
Domestic Subsidiaries that guarantee other Debt of the Company
and its Subsidiaries will guarantee the Notes; provided
that certain future Domestic Subsidiaries will not need to
guarantee the Notes if the Consolidated Tangible Assets of all
such non-guarantors do not exceed 1% of the Consolidated
Tangible Assets of the Company. In addition, the Companys
Foreign Subsidiaries will not guarantee the Notes. Each
Guarantee will rank equally with the Guarantors existing
and future unsecured senior subordinated Debt, including any
guarantee by such Guarantor of the 3.5% Notes, as described
under Note Guarantees.
Each Guarantee of the Notes:
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is a general unsecured obligation of the Guarantor;
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is subordinated in right of payment to all existing and future
Senior Guarantor Debt of the Guarantor; and
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is pari passu in right of payment with all existing and future
senior subordinated Debt of the Guarantor.
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Under the circumstances described below under the caption
Certain Covenants Designation
of Restricted and Unrestricted Subsidiaries, the
Company will be permitted to designate certain of its
Subsidiaries as Unrestricted Subsidiaries.
Unrestricted Subsidiaries will not be subject to any of the
restrictive covenants in the Indenture. Unrestricted
Subsidiaries will not guarantee the Notes.
Principal,
Maturity and Interest
The Notes will mature on December 15, 2016, were initially
issued in $375.0 million aggregate principal amount, and
are unsecured senior subordinated obligations of the Company.
Each Note bears interest at 7.75% from the date of issuance or
from the most recent interest payment date to which interest has
been paid, payable semiannually in arrears on June 15 and
December 15 in each year, commencing June 15, 2007, to the
Person in whose name the Note (or any predecessor Note) is
registered at the close of business on the June 1 or December 1
next preceding such interest payment date. Interest will be
computed on the basis of a
360-day year
comprised of twelve
30-day
months.
31
The Company may from time to time, without notice to or the
consent of the holders of Notes, create and issue further Notes
ranking equally with the Notes in all respects, subject to the
limitations described under the caption Certain
Covenants Limitations on Debt. Any
further Notes may be consolidated and form a single series with
the Notes, vote together with the Notes and have the same terms
as to status, redemption or otherwise as the Notes. References
to Notes in this Description of the Exchange Notes
include these additional Notes, unless the context requires
otherwise.
Issuance
and Methods of Receiving Payments on the Notes
Principal of, premium, if any, and interest on the Notes will be
payable, and the Notes will be exchangeable and transferable, at
the office or agency of the Company maintained for such purposes
(which initially will be the corporate trust office of the
Trustee); provided, however, that payment of interest may
be made at the option of the Company by check mailed to the
Person entitled to it as shown on the security register. The
Notes will be issued only in fully registered form without
coupons, in minimum denominations of $2,000 and any integral
multiple of $1,000 in excess thereof. No service charge will be
made for any registration of transfer, exchange or redemption of
Notes, except in certain circumstances for any tax or other
governmental charge that may be imposed in connection with the
transfer, exchange or redemption.
Paying
Agent and Registrar for the Notes
The Trustee will initially act as Paying Agent and Registrar.
The Company may change the Paying Agent or Registrar without
prior notice to the Holders, and the Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
Transfer
and Exchange
Each Note may be transferred or exchanged in accordance with the
Indenture. The Registrar and the Trustee may require a holder of
Notes, among other things, to furnish appropriate endorsements
and transfer documents and the Company may require a holder to
pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange
any Note selected for redemption. Also, the Company is not
required to transfer or exchange any Note for a period of
15 days before a selection of Notes to be redeemed.
The registered holder of a Note will be treated as the owner of
it for all purposes.
Note Guarantees
Payment of the Notes is guaranteed by the Guarantors jointly and
severally, fully and unconditionally, on a senior subordinated
basis. The Guarantors are comprised of all of the direct and
indirect wholly owned Domestic Subsidiaries of the Company as of
the Issue Date. The Companys non-wholly owned Domestic
Subsidiaries will not guarantee the Notes. Future Domestic
Subsidiaries that guarantee other Debt of the Company and its
Subsidiaries will guarantee the Notes; provided that
certain future Domestic Subsidiaries will not need to guarantee
the Notes if the Consolidated Tangible Assets of all such
non-guarantors do not exceed 1% of the Consolidated Tangible
Assets of the Company. In addition, the Companys Foreign
Subsidiaries have not and will not guarantee the Notes.
Substantially all of the Companys operations are conducted
through its Subsidiaries. If the Company defaults in payment of
the principal of, premium, if any, or interest on the Notes,
each of the Guarantors will be fully and unconditionally,
jointly and severally obligated to duly and punctually pay it.
The obligations of each Guarantor under its Guarantee are
limited to the maximum amount which, after (1) giving
effect to all other contingent and fixed liabilities of such
Guarantor, and (2) giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect
of the obligations of such other Guarantor under its Guarantee
or pursuant to its contribution obligations under the Indenture,
will result in the obligations of such Guarantor under its
Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under Federal or state law. Each Guarantor that makes a
payment or distribution under its Guarantee shall be entitled to
a contribution from any other Guarantor in a pro rata
amount based on the net assets of each Guarantor determined
in accordance with GAAP. See Risk Factors
Federal and state statutes allow courts, under specific
32
circumstances, to void guarantees of the exchange notes. In
such event, holders of exchange notes would be structurally
subordinated to creditors of the issuer of the voided
guarantee.
Notwithstanding the foregoing, in certain circumstances a
Guarantee of a Guarantor may be released pursuant to the
provisions of subsection (c) under the caption
Certain Covenants Future
Guarantees. The Company also may be required to cause
a future Restricted Subsidiary to become a Guarantor by
executing and delivering a supplemental indenture providing for
the guarantee of payment of the Notes by such Restricted
Subsidiary on the basis provided in the Indenture. See
Certain Covenants Future
Guarantees.
Optional
Redemption
At any time prior to December 15, 2011, the Company may
redeem the Notes, in whole or in part, on not less than 30 nor
more than 60 days prior notice, in amounts of $2,000
or an integral multiple of $1,000 in excess thereof, at a
redemption price equal to 100% of the principal amount thereof
plus the Applicable Premium as of, and accrued and unpaid
interest thereon, if any, to, the date of redemption (subject to
the rights of holders of record on relevant record dates to
receive interest due on an interest payment date).
The Notes will be subject to redemption at any time on or after
December 15, 2011, at the option of the Company, in whole
or in part, on not less than 30 nor more than 60 days
prior notice, in amounts of $2,000 or an integral multiple of
$1,000 in excess thereof, at the following redemption prices
(expressed as percentages of the principal amount), if redeemed
during the
12-month
period beginning December 15 of the years indicated below:
|
|
|
|
|
|
|
Redemption
|
|
Year
|
|
price
|
|
|
2011
|
|
|
103.875
|
%
|
2012
|
|
|
102.583
|
%
|
2013
|
|
|
101.292
|
%
|
and thereafter at 100% of the principal amount, in each case,
together with accrued and unpaid interest, if any, to the
redemption date (subject to the rights of holders of record on
relevant record dates to receive interest due on an interest
payment date).
In addition, at any time prior to December 15, 2009, the
Company, at its option, may use the net cash proceeds of one or
more Equity Offerings to redeem up to an aggregate of 40% of the
aggregate principal amount of the Notes issued under the
Indenture at a redemption price equal to 107.750% of the
aggregate principal amount of the Notes redeemed, plus accrued
and unpaid interest, if any, to the redemption date (subject to
the rights of holders of record on relevant record dates to
receive interest due on an interest payment date). At least 60%
of the aggregate principal amount of Notes issued under the
Indenture must remain outstanding immediately after the
occurrence of such redemption. In order to effect this
redemption, the Company must mail a notice of redemption no
later than 30 days after the closing of the related Equity
Offering and must complete such redemption within 60 days
of the closing of the Equity Offering.
If less than all of the Notes are to be redeemed, the Trustee
shall select the Notes or portions of them to be redeemed in
compliance with the requirements of the principal national
security exchange, if any, on which the Notes are listed. If the
Notes are not so listed, the Trustee shall select them on a pro
rata basis, by lot or by any other method the Trustee shall deem
fair and reasonable; provided, that Notes redeemed in
part shall be redeemed only in amounts of $2,000 or integral
multiples of $1,000 in excess thereof (subject to the procedures
of The Depository Trust Company or any other Depositary).
Mandatory
Redemption
The Company is not required to make mandatory redemption or
sinking fund payments with respect to the Notes.
33
Purchase
of Notes Upon a Change of Control
General
If a Change of Control shall occur at any time, then each holder
of Notes shall have the right to require that the Company
purchase such holders Notes in whole or in part in amounts
of $2,000 or integral multiples of $1,000 in excess thereof, at
a purchase price (the Change of Control Purchase
Price) in cash in an amount equal to 101% of the principal
amount of such Notes, plus accrued and unpaid interest, if any,
to the date of purchase (the Change of Control Purchase
Date), pursuant to the offer described below (the
Change of Control Offer) and in accordance with the
other procedures set forth in the Indenture.
Procedure
Within 30 days of any Change of Control or, at the
Companys option, prior to such Change of Control but after
it is publicly announced, the Company shall notify the Trustee
and give written notice of the Change of Control to each holder
of Notes, by first-class mail, postage prepaid, at his address
appearing in the security register. The notice will state, among
other things,
(1) that a Change of Control has occurred or will occur and
the date of the event;
(2) the circumstances and relevant facts regarding such
Change of Control (including, but not limited to, information
with respect to pro forma historical income, cash flow and
capitalization after giving effect to such Change of Control);
(3) the purchase price and the purchase date which shall be
fixed by the Company on a business day no earlier than
30 days nor later than 60 days from the date such
notice is mailed, or such later date as is necessary to comply
with requirements under the Exchange Act; provided that the
purchase date may not occur prior to the Change of Control;
(4) that any Note not tendered will continue to accrue
interest;
(5) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Purchase Date; and
(6) certain other procedures that a holder of Notes must
follow to accept a Change of Control Offer or to withdraw such
acceptance.
Stipulations
If a Change of Control Offer is made, there can be no assurance
that the Company will have available funds sufficient to pay the
Change of Control Purchase Price for all or any of the Notes
that might be delivered by holders of the Notes seeking to
accept the Change of Control Offer. See
Ranking. The failure of the Company to
make or consummate the Change of Control Offer or pay the Change
of Control Purchase Price when due will give the Trustee and the
holders of the Notes the rights described under the caption
Events of Default.
In addition to the obligations of the Company under the
Indenture with respect to the Notes in the event of a
change of control, the Credit Agreement also
contains an event of default upon a change of
control as defined in the Credit Agreement which obligates
the Company to repay amounts outstanding under such agreement
upon an acceleration of the Debt incurred under the Credit
Agreement. The Credit Agreement also prohibits the Company from
repurchasing the Notes upon a Change of Control or otherwise. In
addition, some of the Restricted Subsidiaries Floor Plan
Facilities contain an event of default upon a change of
control (as defined in those facilities) of the Company or
the relevant Restricted Subsidiary which obligates such
Restricted Subsidiaries to repay amounts outstanding under such
agreements upon such a change of control. In addition, a change
of control could result in a termination or nonrenewal of one or
more of the Companys franchise agreements or its other
agreements with Manufacturers.
The term all or substantially all as used in the
definition of Change of Control has not been
interpreted under New York law, the governing law of the
Indenture, to represent a specific quantitative test. As a
consequence,
34
in the event the holders of the Notes elected to exercise their
rights under the Indenture and the Company elected to contest
such election, it is unclear how a court interpreting New York
law would interpret the phrase.
The existence of a holders right to require the Company to
repurchase the holders Notes upon a Change of Control may
deter a third party from acquiring the Company in a transaction
which constitutes a Change of Control.
The provisions of the Indenture will not afford holders of the
Notes the right to require the Company to repurchase the Notes
in the event of a highly leveraged transaction or certain
transactions with the Companys management or its
Affiliates, including a reorganization, restructuring, merger or
similar transaction (including, in certain circumstances, an
acquisition of the Company by management or its affiliates)
involving the Company that may adversely affect holders of the
Notes, if such transaction is not a transaction defined as a
Change of Control. A transaction involving the Companys
management or its Affiliates, or a transaction involving a
recapitalization of the Company, will result in a Change of
Control if it is the type of transaction specified by such
definition.
The Company will comply with the applicable tender offer rules,
including
Rule 14e-1
under the Exchange Act, and any other applicable securities laws
or regulations in connection with a Change of Control Offer.
The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change
of Control Offer in the manner, at the times and otherwise in
compliance with the requirements described in the Indenture
applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
Ranking
General
The payment of the Indenture Obligations will be subordinated,
as set forth in the Indenture, in right of payment, to the prior
payment in full in cash (or as otherwise agreed to by the
holders of Senior Debt) of all Senior Debt. The Notes are senior
subordinated Debt of the Company ranking pari passu with
all other existing and future senior subordinated Debt of the
Company and senior to all existing and future Subordinated Debt
of the Company. The Notes are subordinated to all secured Debt
of the Company and effectively subordinated to all of the
liabilities of the Companys Subsidiaries that do not
guarantee the Notes.
The Companys non-wholly owned Domestic Subsidiaries, on
the Issue Date have not and will not guarantee the Notes. Future
Domestic Subsidiaries that guarantee other Debt of the Company
and its Subsidiaries will guarantee the Notes; provided
that certain future Domestic Subsidiaries will not need to
guarantee the Notes if the Consolidated Tangible Assets of all
such non-guarantors do not exceed 1% of the Consolidated
Tangible Assets of the Company. In addition, the Companys
Foreign Subsidiaries have not and will not guarantee the Notes.
See Note Guarantees. At December 31, 2006, the
Company and its Subsidiaries had approximately $1.2 billion
of total long-term Debt outstanding and $1.2 billion of
floor plan notes payable outstanding. The Company also had
$600 million of additional Debt capacity under the
U.S. Credit Agreement and $107.4 million of additional
Debt capacity under the U.K. Credit Agreement. Effective
February 13, 2007, the Company permanently reduced the
credit availability under the U.S. credit agreement from
$600.0 million to $250.0 million and the letter of
credit availability from $50.0 million to
$10.0 million in order to enable us to avoid certain credit
availability fees specified in the agreement. Giving effect to
the reduction, our total senior debt capacity under our U.S. and
U.K. credit agreements would have been $357.4 million as of
December 31, 2006. In addition, the Guarantors had
outstanding $559.3 million of Senior Guarantor Debt (not
including inter-company Debt and subsidiary guarantees of Debt
under the Credit Agreement). The Companys non-guarantor
subsidiaries had approximately $760.5 million of Debt and
other liabilities (not including inter-company liabilities and
subsidiary guarantees of Debt under the Credit Agreement).
Payment
Stoppages
Upon the occurrence and during the continuance of any default in
the payment of any Designated Senior Debt (whether upon
maturity, mandatory prepayment, acceleration or otherwise)
beyond any applicable grace period, no payment (other than
payments previously made or set aside pursuant to the provisions
described under the caption Defeasance or
Covenant Defeasance) or distribution of any assets of the
Company or any Subsidiary of any
35
kind or character (excluding certain Permitted Junior Payments)
may be made on account of the Indenture Obligations or on
account of the purchase, redemption, defeasance or other
acquisition of or in respect of, the Indenture Obligations
unless and until such default shall have been cured or waived or
shall have ceased to exist or such Designated Senior Debt shall
have been discharged or paid in full in cash or as otherwise
agreed to by the holders of Designated Senior Debt after which
the Company shall resume making any and all required payments in
respect of the Indenture Obligations, including any missed
payments.
Upon the occurrence and during the continuance of any
non-payment default or non-payment event of default with respect
to any Designated Senior Debt pursuant to which the maturity
thereof may then be accelerated (a Non-payment
Default) and after the receipt by the Trustee (1) if
Debt is outstanding under the Credit Agreement, from the agent
thereunder and (2) if no Debt is outstanding under the
Credit Agreement, from a representative of holders of any
Designated Senior Debt, in each case, referred to as a
Senior Representative, of written notice of such
Non-Payment Default, no payment (other than payments previously
made or set aside pursuant to the provisions described under the
caption Defeasance or Covenant
Defeasance) or distribution of any assets of the Company
of any kind or character (excluding any Permitted Junior
Payment) may be made by the Company or any Subsidiary on account
of the Indenture Obligations or on account of the purchase,
redemption, defeasance or other acquisition of, or in respect
of, the Indenture Obligations for the period specified below
(the Payment Blockage Period).
The Payment Blockage Period shall commence upon the receipt of
notice of the Non-payment Default by the Trustee and the Company
from a Senior Representative and shall end on the earliest of:
(1) the 179th day after such commencement;
(2) the date on which such Non-payment Default (and all
other Non-payment Defaults as to which notice is given after
such Payment Blockage Period is initiated) is cured, waived or
ceases to exist or on which such Designated Senior Debt is
discharged or paid in full in cash or as otherwise agreed to by
the holders of Designated Senior Debt; or
(3) the date on which such Payment Blockage Period (and all
Non-payment Defaults as to which notice is given after such
Payment Blockage Period is initiated) shall have been terminated
by written notice to the Company or the Trustee from the Senior
Representative initiating such Payment Blockage Period.
After the occurrence of any of the dates set forth in
clauses (1), (2) or (3), the Company will promptly
resume making any and all required payments in respect of the
Notes, including any missed payments. In no event will a Payment
Blockage Period extend beyond 179 days from the date of the
receipt by the Company and the Trustee of the notice initiating
such Payment Blockage Period (such
179-day
period referred to as the Initial Period). Any
number of notices of Non-payment Defaults may be given during
the Initial Period; provided that during any period of
360 consecutive days only one Payment Blockage Period, during
which payment of principal of, premium, if any, or interest on,
the Notes may not be made, may commence and the duration of such
period may not exceed 179 days. No Non-payment Default with
respect to Designated Senior Debt that existed or was continuing
on the date of the commencement of any Payment Blockage Period
will be, or can be, made the basis for the commencement of a
second Payment Blockage Period, whether or not within a period
of 360 consecutive days, unless such default has been cured or
waived for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action or any breach of a
financial covenant for a period ending after the date of
commencement of such Payment Blockage Period that, in either
case, would give rise to an event of default pursuant to any
provision under which an event of default previously existed or
was continuing shall constitute a new event of default for this
purpose).
If the Company fails to make any payment on the Notes when due
or within any applicable grace period, whether or not on account
of the payment blockage provisions referred to above, such
failure would constitute an Event of Default under the Indenture
and would enable the holders of the Notes to accelerate the
maturity thereof. See Events of Default.
Liquidation/Insolvency
The Indenture will provide that in the event of any insolvency
or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding
in connection therewith, relative to the Company or its assets,
or liquidation, dissolution or other winding up of the Company,
whether voluntary or
36
involuntary, or whether or not involving insolvency or
bankruptcy, or any assignment for the benefit of creditors or
other marshaling of assets or liabilities of the Company, then
and in any such event all amounts due or to become due on or in
respect of the Senior Debt must first be paid in full in cash
(or as otherwise agreed to by the holders of Senior Debt) before
any payment or distribution, excluding Permitted Junior
Payments, is made on account of the Indenture Obligations or on
account of the purchase, redemption, defeasance or other
acquisition of or in respect of the Indenture Obligations (other
than payments previously made or set aside pursuant to the
provisions described under the caption
Defeasance or Covenant Defeasance).
By reason of such subordination, in the event of liquidation or
insolvency, creditors of the Company may recover more, ratably,
than the holders of the Notes. Funds which would be otherwise
payable to the holders of the Notes will be paid to the holders
of the Senior Debt to the extent necessary to pay the Senior
Debt in full in cash (or as otherwise agreed to by the holders
of Senior Debt) and the Company may be unable to meet its
obligations fully with respect to the Notes.
Guarantees
Each Guarantee of a Guarantor is an unsecured senior
subordinated obligation of such Guarantor, ranking pari passu
with, or senior in right of payment to, all other existing
and future Debt of such Guarantor that is expressly subordinated
to Senior Guarantor Debt. The Debt evidenced by the Guarantees
is subordinated to Senior Guarantor Debt to substantially the
same extent as the Notes are subordinated to Senior Debt and
during any period when payment on the Notes is blocked by
Designated Senior Debt, payment on the Guarantees is similarly
blocked.
Related
Definitions
Senior Debt means the principal of, premium, if any,
and interest (including interest accruing after the filing of a
petition initiating any proceeding under any state, federal or
foreign bankruptcy law, whether or not such interest is allowed
or allowable under such proceeding) on any Debt of the Company
and all other monetary obligations of every kind or nature
(including but not limited to fees, indemnities and expenses)
due on or in connection with any such Debt (other than as
otherwise provided in this definition), whether outstanding on
the Issue Date or thereafter created, incurred or assumed, and
whether at any time owing, actually or contingent, unless, in
the case of any particular Debt, the instrument creating or
evidencing the same or pursuant to which the same is outstanding
expressly provides that such Debt shall not be senior in right
of payment to the Notes. Notwithstanding the foregoing,
Senior Debt shall (x) include the Credit
Agreement and the Floor Plan Facilities and any Interest Rate
Agreement, Currency Hedging Agreement and Commodity Price
Protection Agreement of the Company to the extent the Company is
a party thereto and (y) not include:
(1) Debt evidenced by the Notes;
(2) Debt that, by its express terms or by the express terms
of the agreement or instrument creating or evidencing the same
or pursuant to which the same is outstanding, is subordinate or
junior in right of payment to any Debt of the Company;
(3) Debt which when incurred and without respect to any
election under Section 1111(b) of Title 11 United
States Code, is without recourse to the Company;
(4) Debt which is represented by Redeemable Capital Stock;
(5) any liability for foreign, federal, state, local or
other taxes owed or owing by the Company to the extent such
liability constitutes Debt;
(6) Debt of the Company to a Subsidiary or any other
Affiliate of the Company (other than Mitsui & Co.
(USA), Inc. and Mitsui & Co., Ltd. and any of their
affiliates) or any of such Affiliates Subsidiaries;
(7) to the extent it might constitute Debt, amounts owing
for goods, materials or services purchased in the ordinary
course of business (other than Floor Plan Facilities) or
consisting of trade accounts payable owed or owing by the
Company, and amounts owed by the Company for compensation to
employees or services rendered to the Company;
37
(8) that portion of any Debt which at the time of issuance
is issued in violation of the Indenture; and
(9) Debt evidenced by any guarantee of any Subordinated
Debt or Pari Passu Debt.
Designated Senior Debt means (1) all Senior
Debt under the Credit Agreement or Floor Plan Facilities and
(2) any other Senior Debt which at the time of
determination has an aggregate principal amount outstanding of
at least $25 million and which is specifically designated
in the instrument evidencing such Senior Debt or the agreement
under which such Senior Debt arises as Designated Senior
Debt by the Company.
Senior Guarantor Debt means the principal of,
premium, if any, and interest (including interest accruing after
the filing of a petition initiating any proceeding under any
state, federal or foreign bankruptcy law, whether or not such
interest is allowed or allowable under such proceeding) on any
Debt of any Guarantor and all other monetary obligations of
every kind or nature (including but not limited to fees,
indemnities and expenses) due on or in connection with any such
Debt (other than as otherwise provided in this definition),
whether outstanding on the Issue Date or thereafter created,
incurred or assumed, and whether at any time owing, actually or
contingent, without giving effect to any reduction in the amount
of such Debt necessary to render the obligation of any Guarantor
with respect thereto (as obligor, guarantor or otherwise) not
voidable or avoidable under applicable law, unless, in the case
of any particular Debt, the instrument creating or evidencing
the same or pursuant to which the same is outstanding expressly
provides that such Debt shall not be senior in right of payment
to any Guarantee. Notwithstanding the foregoing, Senior
Guarantor Debt shall (x) include all borrowings of
each Guarantor under, and all guarantees by each Guarantor of,
the Credit Agreement and the Floor Plan Facilities and any
Interest Rate Agreement, Currency Hedging Agreement and
Commodity Price Protection Agreement of such Guarantor and
(y) not include:
(1) Debt evidenced by the Guarantees or the Guarantees with
respect to the Notes;
(2) Debt that, by its express terms or by the express terms
of the agreement or instrument creating or evidencing the same
or pursuant to which the same is outstanding, is subordinated or
junior in right of payment to any Debt of such Guarantor;
(3) Debt which when incurred and without respect to any
election under Section 1111(b) of Title 11 United
States Code, is without recourse to such Guarantor;
(4) Debt which is represented by Redeemable Capital Stock;
(5) any liability for foreign, federal, state, local or
other taxes owed or owing by such Guarantor to the extent such
liability constitutes Debt;
(6) Debt of such Guarantor to a Subsidiary or any other
Affiliate of the Company (other than Mitsui & Co.
(USA), Inc. and Mitsui & Co., Ltd. and any of their
affiliates) or any of such Affiliates Subsidiaries;
(7) to the extent it might constitute Debt, amounts owing
for goods, materials or services purchased in the ordinary
course of business (other than Floor Plan Facilities) or
consisting of trade accounts payable owed or owing by such
Guarantor, and amounts owed by such Guarantor for compensation
to employees or services rendered to such Guarantor;
(8) that portion of any Debt which at the time of issuance
is issued in violation of the Indenture; and
(9) Debt evidenced by any guarantee of any Subordinated
Debt or Pari Passu Debt.
Certain
Covenants
The Indenture contains, among others, the following covenants:
Limitation
on Debt
(a) The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, create, issue, incur, assume,
guarantee or otherwise in any manner become directly or
indirectly liable for the payment of or otherwise incur,
contingently or otherwise (collectively, incur), any
Debt (including any Acquired Debt), unless such Debt is incurred
by the Company or any Guarantor and, in each case, the
Companys Consolidated Fixed
38
Charge Coverage Ratio for the most recent four full fiscal
quarters for which financial statements are available
immediately preceding the incurrence of such Debt taken as one
period is at least equal to or greater than 2.00:1.
(b) Notwithstanding the foregoing, the Company and, to the
extent specifically set forth below, the Restricted Subsidiaries
may incur each and all of the following (collectively, the
Permitted Debt):
(1) Debt of the Company or any Restricted Subsidiary under
the Credit Agreement, any Credit Facility or the U.K. Credit
Agreement, in an aggregate principal amount at any one time
outstanding not to exceed $1.25 billion in any case under
these agreements or in respect of letters of credit under these
agreements;
(2) Debt of the Company or any Restricted Subsidiary under
any Inventory Facility;
(3) Debt of the Company pursuant to the Notes and Debt of
any Guarantor pursuant to a Guarantee of the Notes;
(4) Debt of the Company or any Restricted Subsidiary
outstanding on the Issue Date and not otherwise referred to in
this definition of Permitted Debt;
(5) Debt of the Company owing to a Restricted Subsidiary;
provided that any Debt of the Company owing to a
Restricted Subsidiary that is not a Guarantor is unsecured and
is subordinated in right of payment from and after such time as
the Notes shall become due and payable (whether at Stated
Maturity, acceleration or otherwise) to the payment and
performance of the Companys obligations under the Notes;
provided, further, that any disposition, pledge or
transfer of any such Debt to a Person (other than a disposition,
pledge or transfer to a Restricted Subsidiary or a pledge to a
lender under a Credit Facility, provided that such lender has
not commenced an enforcement action with respect thereto) shall
be deemed to be an incurrence of such Debt by the Company or
other obligor not permitted by this clause (5);
(6) Debt of a Restricted Subsidiary owing to the Company or
another Restricted Subsidiary; provided that any
disposition, pledge or transfer of any such Debt to a Person
(other than a disposition, pledge or transfer to the Company or
a Restricted Subsidiary or a pledge to a lender under a Credit
Facility, provided that such lender has not commenced an
enforcement action with respect thereto) shall be deemed to be
an incurrence of such Debt by the obligor not permitted by this
clause (6);
(7) guarantees of any Restricted Subsidiary made in
accordance with the provisions of the covenant described under
the caption Future Guarantees;
(8) obligations of the Company or any Restricted Subsidiary
(a) pursuant to Interest Rate Agreements as long as such
obligations do not exceed the aggregate principal amount of such
Debt then outstanding, (b) under any Currency Hedging
Agreements; provided, however, that such Currency Hedging
Agreements do not increase the Debt or other obligations of the
Company or any Restricted Subsidiary outstanding other than as a
result of fluctuations in foreign currency exchange rates or by
reason of fees, indemnities and compensation payable under such
Currency Hedging Agreements or (c) under any Commodity
Price Protection Agreements which do not increase the amount of
Debt or other obligations of the Company or any Restricted
Subsidiary outstanding other than as a result of fluctuations in
commodity prices or by reason of fees, indemnities and
compensation payable under such Commodity Price Protection
Agreements, and guarantees by Guarantors in respect thereof;
provided that in the case of each of clauses (a),
(b) and (c) such agreements are not entered into for
speculative purposes;
(9) Debt of the Company or any Restricted Subsidiary
represented by Capital Lease Obligations or Purchase Money
Obligations or other Debt incurred or assumed in connection with
the acquisition or development of real or personal, movable or
immovable, property in each case incurred for the purpose of
financing or refinancing all or any part of the purchase price
or cost of construction or improvement of property used in the
business of the Company, in an aggregate principal amount
pursuant to this clause (9) not to exceed the greater of
(i) $75 million and (ii) 2% of the Companys
Consolidated Total Assets outstanding at any time; provided
that the principal amount of any Debt permitted under this
clause (9) did not in each case at the time of incurrence
exceed the Fair Market Value, as determined by the Company in
good faith, of the acquired or constructed asset or improvement
so financed;
39
(10) obligations arising from agreements by the Company or
a Restricted Subsidiary to provide for indemnification,
customary purchase price closing adjustments, earn-outs or other
similar obligations, in each case, incurred in connection with
the acquisition or disposition of any business or assets of a
Restricted Subsidiary;
(11) Debt incurred by the Company or any Restricted
Subsidiary constituting reimbursement obligations with respect
to letters of credit, including letters of credit in respect of
workers compensation claims, or other Debt with respect to
reimbursement type obligations regarding workers
compensation claims; provided that upon the drawing of
such letters of credit, such obligations are reimbursed within
30 days following such drawing or incurrence or supported
under the Credit Agreement, the U.K. Credit Agreement or any
Credit Facility;
(12) Debt of Foreign Subsidiaries in the aggregate amount
outstanding pursuant to this clause (12) at any time
not to exceed (x) $300 million, plus (y) 5% of
the Consolidated Tangible Assets of the Company, provided
that Foreign Subsidiaries may not incur Debt pursuant to
this clause (y) unless the Company can incur $1.00 of
additional Debt (other than Permitted Debt) under
paragraph (a) of this covenant after giving effect to
such incurrence;
(13) guarantees by the Company or a Restricted Subsidiary
of Debt of a Restricted Subsidiary that was permitted to be
incurred under this covenant;
(14) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a
refinancing) of any Debt incurred pursuant to
paragraph (a) above or clauses (3), (4) and
this clause (14) of this definition of Permitted
Debt, including any successive refinancings so long as the
borrower under such refinancing is the Company or, if not the
Company, the same as the borrower of the Debt being refinanced
and the aggregate principal amount of Debt represented thereby
(or if such Debt provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity of such Debt, the original issue
price of such Debt plus any accreted value attributable thereto
since the original issuance of such Debt) does not exceed the
initial principal amount of such Debt plus the lesser of
(I) the stated amount of any premium or other payment
required to be paid in connection with such a refinancing
pursuant to the terms of the Debt being refinanced or
(II) the amount of premium or other payment actually paid
at such time to refinance the Debt, plus, in either case, the
amount of the expenses of the Company incurred in connection
with such refinancing and (A) in the case of any
refinancing of Debt that is Subordinated Debt, such new Debt is
made subordinated to the Notes at least to the same extent as
the Debt being refinanced and (B) in the case of Pari
Passu Debt or Subordinated Debt, as the case may be, such
refinancing does not reduce the Average Life to Stated Maturity
or the Stated Maturity of such Debt;
(15) Debt of the Company or any of its Restricted
Subsidiaries arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business;
provided, however, that such Debt is extinguished within
five business days of incurrence;
(16) obligations in respect of performance, bid, appeal and
surety bonds and completion guarantees and similar obligations
provided by the Company or any Restricted Subsidiary in the
ordinary course of business;
(17) the incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt; provided, that after
giving effect to such acquisition and the incurrence of such
Acquired Debt, either (A) the Company can incur $1.00 of
additional Debt (other than Permitted Debt) under
paragraph (a) of this covenant, or (B) the
Companys Consolidated Fixed Charge Coverage Ratio would be
equal to or greater than immediately prior to such acquisition;
(18) Debt of the Company to the extent the net proceeds
thereof are promptly deposited to defease the Notes as described
below under Defeasance or Covenant Defeasance;
(19) shares of Preferred Stock of a Restricted Subsidiary
issued to the Company or a Restricted Subsidiary of the Company;
provided that any subsequent transfer of any such shares
of Preferred Stock (except to the Company or a Restricted
Subsidiary or a pledge to a lender under a Credit Facility,
provided that
40
such lender has not commenced an enforcement action with respect
thereto) shall be deemed to be an issuance of Preferred Stock
that was not permitted by this clause (19); and
(20) Debt of the Company and its Restricted Subsidiaries,
in addition to that described in clauses (1) through
(19) above, and any renewals, extensions, substitutions,
refinancings or replacements of such Debt, so long as the
aggregate principal amount of all such Debt shall not exceed
$50 million outstanding at any one time in the aggregate.
For purposes of determining compliance with this covenant, in
the event that an item of Debt meets the criteria of more than
one of the types of Debt described in clauses (1) through
(20) above or is entitled to be incurred pursuant to the
paragraph (a) of this covenant, the Company in its
sole discretion may classify or reclassify such item of Debt and
only be required to include the amount of such Debt as one of
such types. Accrual of interest, accretion or amortization of
original issue discount and the payment of interest on any Debt
in the form of additional Debt with the same terms, and the
payment of dividends on any Redeemable Capital Stock or
Preferred Stock in the form of additional shares of the same
class of Redeemable Capital Stock or Preferred Stock will not be
deemed to be an incurrence of Debt for purposes of this covenant
provided, in each such case, that the amount thereof as
accrued over time is included in the Consolidated Fixed Charge
Coverage Ratio of the Company.
Debt permitted by this Limitation on Debt covenant
need not be permitted solely by reference to one provision
permitting such Debt but may be permitted in part by one such
provision and in part by one or more other provisions of this
covenant permitting such Debt.
For purposes of determining compliance with any
U.S. dollar-denominated restriction on the incurrence of
Debt denominated in a foreign currency, the
U.S. dollar-equivalent principal amount of such Debt
incurred pursuant thereto shall be calculated based on the
relevant currency exchange rate in effect on the date that such
Debt was incurred, in the case of term debt, or first committed,
in the case of revolving credit debt; provided that if
such Debt is incurred to extend, replace, refund, refinance,
renew or defease other Debt denominated in a foreign currency,
and such extension, replacement, refunding, refinancing, renewal
or defeasance would cause the applicable
U.S. dollar-denominated restriction to be exceeded if
calculated at the relevant currency exchange rate in effect on
the date of such extension, replacement, refunding, refinancing,
renewal or defeasance, such U.S. dollar-denominated
restriction shall be deemed not to have been exceeded so long as
the principal amount of such refinancing Debt does not exceed
the principal amount of such Debt being extended, replaced,
refunded, refinanced, renewed or defeased.
Except as provided in the prior paragraph, the principal amount
of any Debt incurred to extend, replace, refund, refinance,
renew or defease other Debt, if incurred in a different currency
from the Debt being extended, replaced, refunded, refinanced,
renewed or defeased, shall be calculated based on the currency
exchange rate applicable to the currencies in which such
respective Debt is denominated that is in effect on the date of
such extension, replacement, refunding, refinancing, renewal or
defeasance.
Limitation
on Restricted Payments
(a) The Company will not, and will not cause or permit any
Restricted Subsidiary to, directly or indirectly:
(1) pay any dividend on, or make any distribution to
holders of, any shares of the Companys Capital Stock
(other than dividends or distributions payable solely in shares
of its Qualified Capital Stock or in options, warrants or other
rights to acquire shares of such Qualified Capital Stock);
(2) purchase, redeem, defease or otherwise acquire or
retire for value, directly or indirectly, Capital Stock of the
Company or any direct or indirect parent of the Company or
options, warrants or other rights to acquire such Capital Stock;
(3) make any principal payment on, or repurchase, redeem,
defease, retire or otherwise acquire for value, prior to any
scheduled principal payment, sinking fund payment or maturity,
any Subordinated Debt, except a repurchase, redemption,
defeasance or retirement within one year of final maturity
thereof;
41
(4) pay any dividend or distribution on any Capital Stock
of any Restricted Subsidiary to any Person (other than:
(a) to the Company or any of its Wholly Owned Restricted
Subsidiaries; or
(b) dividends or distributions made by a Restricted
Subsidiary:
(1) organized as a partnership, limited liability company
or similar pass-through entity to the holders of its Capital
Stock in amounts sufficient to satisfy the tax liabilities
arising from their ownership of such Capital Stock; or
(2) on a pro rata basis to all stockholders of such
Restricted Subsidiary); or
(5) make any Investment in any Person (other than any
Permitted Investments)
(any of the foregoing actions described in clauses (1)
through (5), other than any such action that is a Permitted
Payment (as defined below), collectively, Restricted
Payments) (the amount of any such Restricted Payment, if
other than cash, shall be the Fair Market Value of the assets
proposed to be transferred), unless
(1) immediately after giving effect to such proposed
Restricted Payment on a pro forma basis, no Default or Event of
Default shall have occurred and be continuing;
(2) immediately after giving effect to such Restricted
Payment on a pro forma basis, the Company could incur $1.00 of
additional Debt (other than Permitted Debt) under the provisions
of the covenant described under the caption
Limitation on Debt; and
(3) after giving effect to the proposed Restricted Payment,
the aggregate amount of all such Restricted Payments declared or
made after March 18, 2002 and all Designation Amounts does
not exceed the sum of:
(A) 50% of the aggregate Consolidated Net Income of the
Company accrued on a cumulative basis during the period
beginning on January 1, 2002 and ending on the last day of
the Companys last fiscal quarter ending prior to the date
of the Restricted Payment, or, if such aggregate cumulative
Consolidated Net Income shall be a loss, minus 100% of such loss;
(B) the aggregate net proceeds (including the Fair Market
Value of property other than cash) received after March 18,
2002 by the Company either (x) as capital contributions in
the form of common equity to the Company or (y) from the
issuance or sale (other than to any of its Subsidiaries) of
Qualified Capital Stock of the Company or any options, warrants
or rights to purchase such Qualified Capital Stock (except, in
each case, for transactions described in clause (C) or
(D) of this paragraph (a) and to the extent such
proceeds are used to purchase, redeem or otherwise retire
Capital Stock or Subordinated Debt as set forth below in
clause (2) or (3) of paragraph (b) below)
(and excluding the Net Cash Proceeds from the issuance of
Qualified Capital Stock financed, directly or indirectly, using
funds borrowed from the Company or any Subsidiary until and to
the extent such borrowing is repaid);
(C) the aggregate Net Cash Proceeds received after
March 18, 2002 by the Company (other than from any of its
Subsidiaries) upon the exercise of any options, warrants or
rights to purchase Qualified Capital Stock of the Company (and
excluding the Net Cash Proceeds from the exercise of any
options, warrants or rights to purchase Qualified Capital Stock
financed, directly or indirectly, using funds borrowed from the
Company or any Subsidiary until and to the extent such borrowing
is repaid);
(D) the aggregate Net Cash Proceeds received after
March 18, 2002 by the Company from the conversion or
exchange, if any, of debt securities or Redeemable Capital Stock
of the Company or its Restricted Subsidiaries into or for
Qualified Capital Stock of the Company plus, to the extent such
debt securities or Redeemable Capital Stock were issued after
March 18, 2002, upon the conversion or exchange of such
debt securities or Redeemable Capital Stock, the aggregate of
Net Cash Proceeds from their original issuance (and excluding
the Net Cash Proceeds from the conversion or exchange of debt
securities or Redeemable Capital Stock financed, directly or
indirectly, using funds borrowed from the Company or any
Subsidiary until and to the extent such borrowing is repaid);
42
(E) (a) in the case of the disposition or repayment of
any Investment constituting a Restricted Payment made after
March 18, 2002, an amount (to the extent not included in
Consolidated Net Income) equal to the lesser of the return of
capital with respect to such Investment and the initial amount
of such Investment, in either case, less the cost of the
disposition of such Investment and net of taxes, and (b) in
the case of the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary (as long as the designation of such
Subsidiary as an Unrestricted Subsidiary was deemed a Restricted
Payment), the Fair Market Value of the Companys interest
in such Subsidiary, provided that such amount shall not
in any case exceed the amount of the Restricted Payment deemed
made at the time the Subsidiary was designated as an
Unrestricted Subsidiary; and
(F) any amount which previously qualified as a Restricted
Payment on account of any Guarantee entered into by the Company
or any Restricted Subsidiary; provided that such Guarantee has
not been called upon and the obligation arising under such
Guarantee no longer exists.
(b) Notwithstanding the foregoing, and in the case of
clauses (2) through (14) below, so long as no Default
or Event of Default is continuing or would arise therefrom, the
foregoing provisions shall not prohibit the following actions
(each of clauses (1) through (14) being referred to as
a Permitted Payment):
(1) the payment of any dividend within 60 days after
the date of declaration thereof, if at such date of declaration
such payment was permitted by the provisions of
paragraph (a) of this covenant and such payment shall
have been deemed to have been paid on such date of declaration
and shall not have been deemed a Permitted Payment
for purposes of the calculation required by
paragraph (a) of this covenant;
(2) the repurchase, redemption, or other acquisition or
retirement for value of any shares of any class of Capital Stock
of the Company in exchange for, including any such exchange
pursuant to the exercise of a conversion right or privilege in
connection with which cash is paid in lieu of the issuance of
fractional shares or scrip, or out of the Net Cash Proceeds of a
substantially concurrent issuance and sale for cash (other than
to a Subsidiary) of, other shares of Qualified Capital Stock of
the Company; provided that the Net Cash Proceeds from the
issuance of such shares of Qualified Capital Stock are excluded
from clause (3)(B) of paragraph (a) of this
covenant;
(3) the repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any
Subordinated Debt or Redeemable Capital Stock in exchange for,
or in an amount not in excess of the Net Cash Proceeds of, a
substantially concurrent issuance and sale for cash (other than
to any Subsidiary of the Company) of any Qualified Capital Stock
of the Company, provided that the Net Cash Proceeds from
the issuance of such shares of Qualified Capital Stock are
excluded from clause (3)(B) of paragraph (a) of
this covenant;
(4) the repurchase, redemption, defeasance, retirement,
refinancing, acquisition for value or payment of principal of
any Subordinated Debt (other than Redeemable Capital Stock) (a
refinancing) through the substantially concurrent
issuance of new Subordinated Debt of the Company, but only to
the extent that any such new Subordinated Debt:
(A) shall be in a principal amount that does not exceed the
principal amount so refinanced (or, if such Subordinated Debt
provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration thereof,
then such lesser amount as of the date of determination), plus
the lesser of (i) the stated amount of any premium or other
payment required to be paid in connection with such a
refinancing pursuant to the terms of the Debt being refinanced
or (ii) the amount of premium or other payment actually
paid at such time to refinance the Debt, plus, in either case,
the amount of expenses of the Company incurred in connection
with such refinancing;
(B) has an Average Life to Stated Maturity greater than the
remaining Average Life to Stated Maturity of the Notes;
(C) has a Stated Maturity for its final scheduled principal
payment later than the Stated Maturity for the final scheduled
principal payment of the Notes; and
43
(D) is expressly subordinated in right of payment to the
Notes at least to the same extent as the Subordinated Debt to be
refinanced;
(5) the purchase, redemption, or other acquisition or
retirement for value of any class of Capital Stock of the
Company from employees, former employees, directors or former
directors of the Company or any Restricted Subsidiary in an
amount not to exceed $5.0 million in the aggregate in any
calendar year (and any portion of such $5.0 million not
used in any calendar year may be carried forward to the next
succeeding fiscal year); provided that such amount may be
increased by an amount not to exceed the cash proceeds from the
sale of Capital Stock of the Company to directors, officers,
employees or consultants of the Company or any of its
Subsidiaries that occurs after the Issue Date (provided
that the amount of such cash proceeds utilized for any such
purchase, repurchase, redemption, retirement or other
acquisition will not increase the amount available for
Restricted Payments under clause (3) of the immediately
preceding paragraph), plus
(6) the repurchase, redemption or other acquisition or
retirement for value of Capital Stock of the Company issued
pursuant to acquisitions by the Company to the extent required
by or needed to comply with the requirements of any of the
Manufacturers with which the Company or a Restricted Subsidiary
is a party to a franchise agreement;
(7) the payment of the contingent purchase price of an
acquisition to the extent such payment would be deemed a
Restricted Payment;
(8) the payment of the deferred purchase price or
earn-outs, including holdbacks (and the receipt of any
corresponding consideration therefor), of an acquisition to the
extent such payment would have been permitted by the Indenture
at the time of such acquisition;
(9) the repurchase of Capital Stock of the Company issued
to sellers of businesses acquired by the Company or its
Restricted Subsidiaries, in an amount not to exceed
$10 million during the term of the Indenture;
(10) the payment of dividends on the Companys shares
of Common Stock in the aggregate amount per fiscal year equal to
$0.56 per share for each share of Common Stock (or any
securities convertible into Common Stock to the extent they are
entitled to such a dividend) of the Company outstanding as of
the applicable record date for such dividends (as such $0.56
shall be adjusted for specified changes in the capitalization of
the Company upon recapitalizations, reclassifications, stock
splits, stock dividends, reverse stock splits, stock
consolidations and similar transactions);
(11) the repurchase of Capital Stock deemed to occur upon
(a) exercise of stock options to the extent that shares of
such Capital Stock represent a portion of the exercise price of
such options and (b) the withholding of a portion of such
Capital Stock to pay taxes associated therewith, and the
purchase of fractional shares of Capital Stock of the Company or
any Restricted Subsidiary arising out of stock dividends, splits
or combinations or business combinations;
(12) the payment of dividends or distributions by
(a) UAG Connecticut I, LLC pursuant to the First
Amended and Restated LLC Agreement, dated April 1, 2003,
relating to UAG Connecticut I, LLC, or (b) any
Restricted Subsidiary of the Company pursuant to the Joint
Venture Formation Agreement, dated January 31, 1998, among
the Company, UAG Young, Inc. and the other parties named therein
(the Joint Venture Partners) based on the percentage
ownership interest of such Joint Venture Partners in such
Restricted Subsidiary (which cannot exceed 25%) plus one fifth
of such ownership interest;
(13) the payment of cash in lieu of the issuance of Capital
Stock in connection with the conversion, retirement, repurchase
or redemption of the 3.5% Notes; and
(14) other Restricted Payments in an amount which, when
taken together with all other Restricted Payments made pursuant
to this clause (14), does not exceed $25 million.
For purposes of determining compliance with this covenant, in
the event that a Restricted Payment permitted pursuant to this
covenant or a Permitted Investment meets the criteria of more
than one of the categories of Restricted Payment described in
clauses (1) through (14) above or one or more clauses
of the definition of Permitted
44
Investments, the Company shall be permitted to classify such
Restricted Payment or Permitted Investment on the date it is
made, or later reclassify all or a portion of such Restricted
Payment or Permitted Investment, in any manner that complies
with this covenant, and such Restricted Payment or Permitted
Investment shall be treated as having been made pursuant to only
one of such clauses of this covenant or of the definition of
Permitted Investments.
Limitation
on Transactions with Affiliates
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into
any transaction or series of related transactions involving
aggregate consideration in excess of $2.5 million
(including, without limitation, the sale, purchase, exchange or
lease of assets, property or services) with or for the benefit
of any Affiliate of the Company (other than the Company or a
Restricted Subsidiary) unless such transaction or series of
related transactions is entered into in good faith and in
writing and:
(a) such transaction or series of related transactions is
on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that would
be available in a comparable transaction in arms-length
dealings with an unrelated third party;
(b) with respect to any transaction or series of related
transactions involving aggregate value in excess of
$10 million either (1) the Company delivers an
officers certificate to the Trustee certifying that such
transaction or series of related transactions complies with
clause (a) above or (2) such transaction or series of
related transactions is approved by either (x) a majority
of the Disinterested Directors of the board of directors of the
Company, or in the event there is only one Disinterested
Director, by such Disinterested Director, or (y) the audit
committee of the board of directors of the Company, which shall
consist entirely of Disinterested Directors; and
(c) with respect to any transaction or series of related
transactions involving aggregate value in excess of
$25 million, either (1) such transaction or series of
related transactions has been approved by either (x) a
majority of the Disinterested Directors of the board of
directors of the Company, or in the event there is only one
Disinterested Director, by such Disinterested Director, or
(y) the audit committee of the board of directors of the
Company, which shall consist entirely of Disinterested
Directors, or (2) the Company delivers to the Trustee a
written opinion of an investment banking firm of national
standing or other recognized independent expert with experience
appraising the terms and conditions of the type of transaction
or series of related transactions for which an opinion is
required stating that the transaction or series of related
transactions is fair to the Company or such Restricted
Subsidiary from a financial point of view;
provided, however, that this provision shall not apply to:
(1) compensation and employee benefit arrangements with any
officer or director of the Company, including under any stock
option or stock incentive plans, entered into in the ordinary
course of business;
(2) any transaction permitted as a Restricted Payment or
Permitted Investment pursuant to the covenant described under
the caption Limitation on Restricted
Payments;
(3) the payment of customary fees to directors of the
Company and its Restricted Subsidiaries;
(4) any transaction with any officer or member of the board
of directors of the Company involving indemnification
arrangements;
(5) loans or advances to officers of the Company in the
ordinary course of business not to exceed $1 million in any
calendar year;
(6) agreements and transactions with customers, clients,
suppliers or purchasers and sellers of goods or services, in
each case in the ordinary course of business and otherwise in
compliance with the Indenture, which are fair to the Company or
its Restricted Subsidiaries, or are on terms, taken as a whole,
at least as favorable as might reasonably have been obtained at
that time from a Person who is not an Affiliate of the Company;
(7) transactions with joint ventures entered into in the
ordinary course of business, provided that no other
Affiliate of the Company (other than a Subsidiary thereof)
directly or indirectly holds any Capital Stock of such joint
venture; and
45
(8) any transactions undertaken pursuant to any contractual
obligations in existence on the Issue Date (as in effect on the
Issue Date) or otherwise disclosed in the offering memorandum
relating to the offer and sale of the old notes and any
renewals, replacements or modifications of such obligations
(pursuant to new transactions or otherwise) on terms no less
favorable than could be received from an unaffiliated third
party.
Limitation
on Liens
The Company will not, and will not cause or permit any
Restricted Subsidiary to, directly or indirectly,
(1) create, incur or affirm any Lien of any kind securing
any Pari Passu Debt or Subordinated Debt, including any
assumption, guarantee or other liability with respect thereto by
any Restricted Subsidiary, upon any property or assets
(including any inter-company notes) of the Company or any
Restricted Subsidiary owned on the Issue Date or acquired after
the Issue Date, or (2) assign or convey any right to
receive any income or profits from such Liens, unless the Notes
or a Guarantee in the case of Liens of a Guarantor are directly
secured equally and ratably with (or, in the case of
Subordinated Debt, prior or senior thereto, with the same
relative priority as the Notes shall have with respect to such
Subordinated Debt) the obligation or liability secured by such
Lien except for Permitted Liens.
Notwithstanding the foregoing, any Lien securing the Notes
granted pursuant to this covenant shall be automatically and
unconditionally released and discharged upon the release by the
holders of the Pari Passu Debt or the Subordinated Debt
described above of their Lien on the property or assets of the
Company or any Restricted Subsidiary (including any deemed
release upon payment in full of all obligations under such
Debt), at such time as the holders of all such Debt also release
their Lien on the property or assets of the Company or such
Restricted Subsidiary, or upon any sale, exchange or transfer to
any Person not an Affiliate of the Company of the property or
assets secured by such Lien, or of all of the Capital Stock held
by the Company or any Restricted Subsidiary in, or all or
substantially all the assets of, any Restricted Subsidiary
creating such Lien.
Limitation
on Sale of Assets
(a) The Company will not, and will not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly,
consummate an Asset Sale unless (1) at least 75% of the
consideration from such Asset Sale consists of:
(A) cash or Cash Equivalents,
(B) the assumption of Senior Debt or Senior Guarantor Debt
or other liabilities (other than Subordinated Debt) by the party
acquiring the assets from the Company or any Restricted
Subsidiary,
(C) Replacement Assets,
(D) Designated Noncash Consideration, or
(E) a combination of any of the foregoing; and
(2) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to
the Fair Market Value of the shares or assets subject to such
Asset Sale; provided that any notes, securities or other
obligations received by the Company or any such Restricted
Subsidiary from any transferee of assets from the Company or
such Restricted Subsidiary that are converted by the Company or
such Restricted Subsidiary into cash at Fair Market Value within
90 days after receipt shall be deemed to be cash for
purposes of this provision.
(b) If:
(A) all or a portion of the Net Cash Proceeds of any Asset
Sale are not applied to (1) the permanent repayment of any
term Senior Debt or Senior Guarantor Debt then outstanding,
(2) the repayment of any outstanding borrowings under any
revolving credit facilities constituting Senior Debt or Senior
Guarantor Debt and the corresponding reduction of commitments
with respect thereto, or (3) the permanent reduction of
Debt of a Restricted Subsidiary that is not a Guarantor; or
(B) if no such Senior Debt or Senior Guarantor Debt which
requires prepayment is then outstanding (or such prepayment is
waived);
46
then the Company or a Restricted Subsidiary may within
365 days of the Asset Sale invest the Net Cash Proceeds in
Replacement Assets. The amount of such Net Cash Proceeds not
used to prepay Senior Debt or Senior Guarantor Debt or invested
within 365 days of the Asset Sale as set forth in this
paragraph constitutes Excess Proceeds. The Company
or such Restricted Subsidiary will be deemed to have complied
with its obligations under this paragraph (b) if it
enters into a binding commitment to acquire Replacement Assets
prior to 365 days after the receipt of the applicable Net
Cash Proceeds and such acquisition of Replacement Assets is
consummated prior to 545 days after the date of receipt of
the applicable Net Cash Proceeds; provided that upon any
abandonment or termination of such commitment, the Net Cash
Proceeds not so applied shall constitute Net Cash Proceeds and
be applied as set forth below.
(c) When the aggregate amount of Excess Proceeds exceeds
$25 million or more, the Company will apply the Excess
Proceeds to the repayment of the Notes and any other Pari
Passu Debt outstanding with similar provisions requiring the
Company to make an offer to purchase such Debt with the proceeds
from any Asset Sale as follows:
(A) the Company will make an offer to purchase (an
Offer) from all holders of the Notes in accordance
with the procedures set forth in the Indenture in the maximum
principal amount (expressed in amounts of $2,000 or integral
multiples of $1,000 in excess thereof) of Notes that may be
purchased out of an amount (the Note Amount)
equal to the product of such Excess Proceeds multiplied by a
fraction, the numerator of which is the outstanding principal
amount of the Notes, and the denominator of which is the sum of
the outstanding principal amount of the Notes and such Pari
Passu Debt (subject to proration in the event such amount is
less than the aggregate Offered Price (as defined herein) of all
Notes tendered); and
(B) to the extent required by such Pari Passu Debt
to permanently reduce the principal amount of such Pari Passu
Debt, the Company will make an offer to purchase or
otherwise repurchase or redeem Pari Passu Debt (a
Pari Passu Offer) in an amount (the
Pari Passu Debt Amount) equal to the excess
of the Excess Proceeds over the Note Amount. However, in no
event will the Company be required to make a Pari Passu
Offer in a Pari Passu Debt Amount exceeding the
principal amount of such Pari Passu Debt plus the amount
of any premium required to be paid to repurchase such Pari
Passu Debt. The offer price for the Notes will be payable in
cash in an amount equal to 100% of the principal amount of the
Notes plus accrued and unpaid interest, if any, to the date (the
Offer Date) such Offer is consummated (the
Offered Price), in accordance with the procedures
set forth in the Indenture. To the extent that the aggregate
Offered Price of the Notes tendered pursuant to the Offer is
less than the Note Amount relating to the tendered Notes or
the aggregate amount of Pari Passu Debt that is purchased
in a Pari Passu Offer is less than the Pari Passu
Debt Amount, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate
principal amount of Notes and Pari Passu Debt surrendered
by holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata
basis. Upon the completion of the purchase of all the Notes
tendered pursuant to an Offer and the completion of a Pari
Passu Offer, the amount of Excess Proceeds, if any, shall be
reset at zero.
(d) If the Company becomes obligated to make an Offer
pursuant to clause (c) above, the Notes (in amounts of
$2,000 and integral multiples of $1,000 in excess thereof), and
the Pari Passu Debt shall be purchased by the Company, at
the option of the holders thereof, in whole or in part, on a
date that is not earlier than 30 days and not later than
60 days from the date the notice of the Offer is given to
holders, or such later date as may be necessary for the Company
to comply with the requirements under the Exchange Act.
(e) The Indenture will provide that the Company will comply
with the applicable tender offer rules, including
Rule 14e-1
under the Exchange Act, and any other applicable securities laws
or regulations in connection with an Offer.
Future
Guarantees
(a) The Company shall not cause any future Domestic
Subsidiary, other than a Guarantor, directly or indirectly, to
become a guarantor or an obligor with respect to any other Debt
of the Company or any Subsidiary thereof incurred in the United
States, unless such Subsidiary (a Future Guarantor)
becomes a Guarantor under the Indenture at the times set forth
below, except that (1) if such Debt is by its terms Senior
Debt, any such assumption, guarantee or other liability of such
Subsidiary with respect to such Debt shall be senior to such
Subsidiarys
47
Guarantee of the Notes to the same extent as such Senior Debt is
senior to the Notes; and (2) if such Debt is by its terms
expressly subordinated to the Notes, any such assumption,
guarantee or other liability of such Subsidiary with respect to
such Debt shall be subordinated to such Subsidiarys
Guarantee of the Notes at least to the same extent as such Debt
is subordinated to the Notes.
(b) Notwithstanding paragraph (a) above, any
Non-Guarantor Restricted Subsidiary shall not be required to
become a Future Guarantor under the Indenture if the
Consolidated Tangible Assets of such Non-Guarantor Restricted
Subsidiary, together with the Consolidated Tangible Assets of
all other Non-Guarantor Restricted Subsidiaries, as of the date
of the most recent quarterly or annual financial statements of
the Company which are available, does not exceed, in the
aggregate, 1% of the Consolidated Tangible Assets of the
Company. To the extent that the collective Consolidated Tangible
Assets of the Non-Guarantor Restricted Subsidiaries, as of the
date of the creation of, acquisition of or Investment in a
Non-Guarantor Restricted Subsidiary or as of the date of the
most recent quarterly or annual financial statements of the
Company which are available, exceeds 1% of the Consolidated
Tangible Assets of the Company, the Company shall cause one or
more of such Non-Guarantor Restricted Subsidiaries to become a
Future Guarantor under the Indenture in accordance with the
provisions of this covenant, such that the collective
Consolidated Net Tangible Assets of all remaining Non-Guarantor
Restricted Subsidiaries does not exceed 1% of the Consolidated
Tangible Assets of the Company.
(c) The Company shall not be required to cause any Future
Guarantors to become Guarantors until the earlier of such time
as (A) the aggregate Consolidated Equity of all such future
Domestic Subsidiaries who have not become Guarantors, but are
required to become Future Guarantors pursuant to
paragraph (a) or (b) above, equals or exceeds
$50.0 million and (B) twelve months shall have elapsed
since the Company last caused Future Guarantors to become
Guarantors under the Indenture. Up to a maximum of once per
fiscal quarter, the Company shall cause each Subsidiary thereof
that is required to become a Future Guarantor pursuant to
paragraph (a) or (b) above to (1) execute
and deliver to the Trustee a supplemental indenture in a form
reasonably satisfactory to the Trustee pursuant to which such
Subsidiary shall become a party to the Indenture and thereby
unconditionally guarantee all of the Companys obligations
under the Exchange Notes and the Indenture on the terms set
forth therein and (2) deliver to the Trustee an Opinion of
Counsel that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary of the
Company and constitutes a valid, binding and enforceable
obligation of such Subsidiary (which opinion may be subject to
customary assumptions and qualifications). Thereafter, such
Subsidiary of the Company shall (unless released in accordance
with the terms of the Indenture) be a Guarantor for all purposes
of the Indenture.
(d) Notwithstanding the foregoing, each Guarantee by a
Guarantor of the Notes shall provide by its terms that it shall
be automatically and unconditionally released and discharged
upon:
(1) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Companys Capital
Stock in, or all or substantially all the assets of, such
Guarantor, which transaction is in compliance with the terms of
the Indenture and pursuant to which transaction such Guarantor
is released from all guarantees, if any, by it of other Debt of
the Company or any of its Subsidiaries;
(2) the release by the holders of the other Debt of the
Company of their guarantee of Debt by such Subsidiary (including
any deemed release upon payment in full of all obligations under
such Debt), at such time as (A) no other Debt of the
Company has been guaranteed by such Subsidiary, or (B) the
holders of all such other Debt of the Company or another
Subsidiary which is guaranteed by such Subsidiary also release
their guarantee by such Subsidiary (including any deemed release
upon payment in full of all obligations under such Debt);
(3) the Company properly designating such Guarantor as a
Non-Guarantor Restricted Subsidiary; provided that such
Restricted Subsidiary is not required to issue a Guarantee of
the Notes pursuant to paragraph (a) or (b) above;
(4) the Company properly designating such Subsidiary as an
Unrestricted Subsidiary in accordance with the applicable
provisions of the Indenture; or
48
(5) the Company exercising its legal defeasance option or
covenant defeasance option as described under Defeasance
or Covenant Defeasance or the Companys obligations
under the Indenture being discharged in accordance with the
terms of the Indenture as described under Satisfaction and
Discharge.
Limitation
on Senior Subordinated Debt
The Company will not, and will not permit or cause any Guarantor
to, directly or indirectly, incur or otherwise permit to exist
any Debt that is subordinate in right of payment to any Debt of
the Company or such Guarantor, as the case may be, unless such
Debt is also pari passu with the Notes or the Guarantee
of such Guarantor or subordinated in right of payment to the
Notes or such Guarantee at least to the same extent as the Notes
or such Guarantee are subordinated in right of payment to Senior
Debt or Senior Debt of such Guarantor, as the case may be, as
set forth in the Indenture. For purposes of the foregoing, no
Debt shall be deemed to be subordinated in right of payment to
any other Debt solely by virtue of being unsecured or secured by
a junior priority lien or by virtue of the fact that the holders
of such Debt have entered into intercreditor agreements or other
arrangements giving one or more such holders priority over the
other holders in the collateral held by them.
Limitation
on Dividends and Other Payment Restrictions Affecting
Subsidiaries
The Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distribution on its
Capital Stock or any other interest or participation in or
measured by its profits,
(2) pay any Debt owed to the Company or any other
Restricted Subsidiary,
(3) make any Investment in the Company or any other
Restricted Subsidiary, or
(4) transfer any of its properties or assets to the Company
or any other Restricted Subsidiary;
except:
(a) any encumbrance or restriction pursuant to an agreement
in effect on the Issue Date (including without limitation the
Credit Agreement and U.K. Credit Agreement in effect on the
Issue Date);
(b) any encumbrance or restriction, with respect to a
Restricted Subsidiary that is not a Restricted Subsidiary of the
Company on the Issue Date in existence at the time such Person
becomes a Restricted Subsidiary of the Company and not incurred
in connection with, or in contemplation of, such Person becoming
a Restricted Subsidiary, provided that such encumbrances
and restrictions are not applicable to the Company or any
Restricted Subsidiary or the properties or assets of the Company
or any Restricted Subsidiary other than such Subsidiary which is
becoming a Restricted Subsidiary;
(c) customary provisions contained in an agreement that has
been entered into for the sale or other disposition of all or
substantially all of the Capital Stock or assets of a Restricted
Subsidiary; provided, however that the restrictions are
applicable only to such Restricted Subsidiary or assets;
(d) any encumbrance or restriction existing under or by
reason of applicable law or any requirement of any regulatory
body;
(e) customary provisions restricting subletting or
assignment of any lease governing any leasehold interest of any
Restricted Subsidiary;
(f) covenants in agreements with Manufacturers customary
for agreements in the automobile industry;
(g) any encumbrance or restriction contained in any
Purchase Money Obligations for property to the extent such
restriction or encumbrance restricts the transfer of such
property;
(h) any encumbrances or restrictions in security agreements
securing Debt of a Subsidiary (including any Inventory Facility)
(to the extent that such Liens are otherwise incurred in
accordance with the covenant
49
described under the caption Limitation on
Liens) that restrict the transfer of property subject
to such agreements, provided that any such encumbrance or
restriction is released to the extent the underlying Lien is
released or the related Debt is repaid;
(i) covenants in Inventory Facilities customary for
inventory and floor plan financing in the automobile retailing
industry;
(j) any encumbrance related to assets acquired by or merged
into or consolidated with the Company or any Restricted
Subsidiary so long as such encumbrance was not entered into in
contemplation of the acquisition, merger or consolidation
transaction;
(k) customary non-assignment provisions contained in
(a) any lease governing a leasehold interest or
(b) any supply, license or other agreement entered into in
the ordinary course of business of the Company or any of its
Restricted Subsidiaries;
(l) Liens securing Debt otherwise permitted to be incurred
under the provisions of the covenant described above under the
caption Limitation on Liens that limit the
right of the debtor to dispose of the assets subject to such
Liens;
(m) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the
ordinary course of business;
(n) restrictions contained in other Debt or Preferred Stock
of the Company or any Restricted Subsidiary permitted to be
incurred after the Issue Date pursuant to the provisions of the
covenant described under Limitation on
Debt, provided that such restrictions will not
materially affect the ability of the Company to make principal
and interest payments on the Notes, as determined in good faith
by a senior officer or the board of directors of the Company;
(o) any encumbrance or restriction existing under any
agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in the
foregoing clauses (a), (b), (j) and (p) or in
this clause (o), provided that the terms and conditions
of any such encumbrances or restrictions are no more restrictive
in any material respect than those under or pursuant to the
agreement evidencing the Debt so extended, renewed, refinanced
or replaced;
(p) restrictions related solely to Foreign Subsidiaries and
created in connection with Debt of such Foreign Subsidiaries
incurred pursuant to clauses (12) and (20) of
paragraph (b) of the covenant described under the
caption Limitation on Debt;
(q) encumbrances pursuant to the subordination provisions
of any Debt permitted to be incurred by clause (5) of
paragraph (b) of the covenant described under the
caption Limitation on
Debt; and
(r) customary provisions in joint venture agreements and
other similar agreements relating solely to such joint venture.
Limitation
on Unrestricted Subsidiaries
The Company may designate after the Issue Date any Subsidiary as
an Unrestricted Subsidiary under the Indenture (a
Designation) only if:
(a) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation;
(b) the Company would be permitted to make an Investment
(other than a Permitted Investment) at the time of Designation
(assuming the effectiveness of such Designation) pursuant to the
first paragraph of the covenant described under the caption
Limitation on Restricted Payments
above in an amount (the Designation Amount)
equal to the greater of (1) the net book value of the
Companys interest in such Subsidiary calculated in
accordance with GAAP or (2) the Fair Market Value of the
Companys interest in such Subsidiary as determined in good
faith by the Companys board of directors;
50
(c) the Company would be permitted under the Indenture to
incur $1.00 of additional Debt (other than Permitted Debt)
pursuant to the covenant described under the caption
Limitation on Debt at the time of
such Designation (assuming the effectiveness of such
Designation);
(d) such Unrestricted Subsidiary does not own any Capital
Stock in any Restricted Subsidiary of the Company which is not
simultaneously being designated an Unrestricted Subsidiary;
(e) such Unrestricted Subsidiary is not liable, directly or
indirectly, with respect to any Debt other than Unrestricted
Subsidiary Debt, provided that an Unrestricted Subsidiary
may provide a Guarantee for the Exchange Notes; and
(f) such Unrestricted Subsidiary is not a party to any
agreement, contract, arrangement or understanding at such time
with the Company or any Restricted Subsidiary unless the terms
of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company or, in the event
such condition is not satisfied, the value of such agreement,
contract, arrangement or understanding to such Unrestricted
Subsidiary shall be deemed a Restricted Payment.
In the event of any such Designation, the Company shall be
deemed to have made an Investment constituting a Restricted
Payment pursuant to the covenant described under the caption
Limitation on Restricted Payments
for all purposes of the Indenture in the Designation Amount.
The Indenture will also provide that the Company shall not and
shall not cause or permit any Restricted Subsidiary to at any
time (x) provide credit support for, or subject any of its
property or assets, other than the Capital Stock of any
Unrestricted Subsidiary, to the satisfaction of, any Debt of any
Unrestricted Subsidiary, including any undertaking, agreement or
instrument evidencing such Debt (other than Permitted
Investments in Unrestricted Subsidiaries) or (y) be
directly or indirectly liable for any Debt of any Unrestricted
Subsidiary. For purposes of the foregoing, the Designation of a
Subsidiary of the Company as an Unrestricted Subsidiary shall be
deemed to be the Designation of all of the Subsidiaries of such
Subsidiary.
The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a Revocation) if:
(a) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and
(b) all Liens and Debt of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if
incurred at such time, have been permitted to be incurred for
all purposes of the Indenture.
All Designations and Revocations must be evidenced by a
resolution of the board of directors of the Company delivered to
the Trustee certifying compliance with the foregoing provisions.
Provision
of Financial Statements
(a) Whether or not the Company is subject to
Section 13(a) or 15(d) of the Exchange Act, the Company and
each Guarantor (only to the extent such Guarantor is required
under Section 13(a) or 15(d) of the Exchange Act), as the
case may be, shall deliver to the Trustee on behalf of, and upon
request make available to, the holders of Exchange Notes, within
30 days after the date by which the Company and such
Guarantor would have been required by the SECs rules and
regulations to file such documents if the Company and such
Guarantor were so subject, copies of all annual reports,
quarterly reports and other documents which the Company and such
Guarantor would have been required to file with the SEC pursuant
to Sections 13(a) or 15(d) if the Company or such Guarantor
were so subject; provided that any such reports and
documents filed with the SEC pursuant to its Electronic Data
Gathering, Analysis and Retrieval system shall be deemed to be
delivered to the Trustee and the holders of Notes.
(b) Delivery of such reports and documents to the Trustee
is for informational purposes only and the Trustees
receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information
contained therein, including the Companys or any
Guarantors, as the case may be, compliance with any of its
covenants under the Indenture (as to which the Trustee is
entitled to rely exclusively on officers
51
certificates of the Company). The Trustee may assume that any
reports required to be filed under paragraph (a) above
have been filed with the SEC and shall have no obligation to
verify any such filing.
(c) So long as any of the Notes remain outstanding, if at
any time the Company is not subject to Section 13 or 15(d)
under the Exchange Act, the Company will make available to any
prospective purchaser of Notes or beneficial owner of Notes in
connection with any sale thereof the information required by
Rule 144A(d)(4) under the Securities Act, until such time
as the Company has either exchanged the Notes for securities
identical in all material respects which have been registered
under the Securities Act or until such time as the holders of
the Old Notes have disposed of such Notes pursuant to an
effective registration statement under the Securities Act or
until such time when the holders of the Notes, other than
holders that are Affiliates of the Company, are able to sell all
such Notes immediately without restriction pursuant to the
provisions of Rule 144 under the Securities Act or any
successor thereto.
Additional
Covenants
The Indenture also contains covenants with respect to the
following matters:
(1) payment of principal, premium and interest;
(2) maintenance of an office or agency;
(3) arrangements regarding the handling of money held in
trust;
(4) maintenance of corporate existence;
(5) payment of taxes and other claims;
(6) maintenance of properties; and
(7) maintenance of insurance.
Consolidation,
Merger, Sale of Assets
The
Company
The Company will not, in a single transaction or through a
series of related transactions, (x) consolidate with or
merge with or into any other Person; (y) sell, assign,
convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or
group of Persons; or (z) permit any of its Restricted
Subsidiaries to enter into any such transaction or series of
related transactions if such transaction or series of related
transactions, in the aggregate, would result in a sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company
and its Restricted Subsidiaries on a Consolidated basis to any
other Person or group of Persons, unless at the time and after
giving effect thereto:
(1) either (a) the Company will be the continuing
corporation (in the case of a consolidation or merger involving
the Company) or (b) the Person (if other than the Company)
formed by such consolidation or into which the Company is merged
or the Person which acquires by sale, assignment, conveyance,
transfer, lease or disposition all or substantially all of the
properties and assets of the Company and its Restricted
Subsidiaries on a Consolidated basis (the Surviving
Entity) will be a corporation, limited liability company,
partnership or limited liability partnership duly organized and
validly existing under the laws of the United States of America,
any state of the United States of America or the District of
Columbia and such Person expressly assumes, by a supplemental
indenture, in a form reasonably satisfactory to the Trustee, all
of the obligations of the Company under the Notes and the
Indenture and the Registration Rights Agreement (as that term is
defined under Exchange Offer; Registration Rights),
as the case may be, and the Notes and the Indenture and the
Registration Rights Agreement will remain in full force and
effect as so supplemented;
(2) immediately after giving effect to such transaction on
a pro forma basis (and treating any Debt not previously an
obligation of the Company or any of its Restricted Subsidiaries
which becomes the obligation of the Company or any of its
Restricted Subsidiaries as a result of such transaction as
having been incurred at the time of such transaction), no
Default or Event of Default will have occurred and be continuing;
52
(3) immediately after giving effect to such transaction on
a pro forma basis (on the assumption that the transaction
occurred on the first day of the four-quarter period for which
financial statements are available ending immediately prior to
the consummation of such transaction with the appropriate
adjustments with respect to the transaction being included in
such pro forma calculation), either (A) the Company (or the
Surviving Entity if the Company is not the continuing obligor
under the Indenture) could incur $1.00 of additional Debt (other
than Permitted Debt) under the covenant described under the
caption Certain Covenants
Limitation on Debt; or (B) the Consolidated
Fixed Charge Coverage Ratio for the Company (or the Surviving
Entity if the Company is not the continuing obligor under the
Indenture) would be greater than such ratio for the Company
immediately prior to such transaction;
(4) at the time of the transaction, each Guarantor, if any,
unless it is the other party to the transactions described
above, will have by supplemental indenture confirmed that its
Guarantee shall apply to such Persons obligations under
the Indenture and under the Notes;
(5) at the time of the transaction if any of the property
or assets of the Company or any of its Restricted Subsidiaries
would thereupon become subject to any Lien, the provisions of
the covenant described under the caption
Certain Covenants Limitation on
Liens are complied with;
(6) if the Surviving Entity is not organized as a
corporation after such transaction, a Restricted Subsidiary
shall be a co-obligor of the Notes pursuant to a supplemental
indenture to the Indenture in a form reasonably satisfactory to
the Trustee; and
(7) at the time of the transaction the Company or the
Surviving Entity will have delivered, or caused to be delivered,
to the Trustee, in form and substance reasonably satisfactory to
the Trustee, an officers certificate and an opinion of
counsel, each to the effect that such consolidation, merger,
sale, assignment, conveyance, transfer, lease or other
transaction and the supplemental indenture in respect of such
transaction comply with the Indenture and that all conditions
precedent in the Indenture provided for relating to such
transaction have been complied with.
An assumption of our obligations under the Notes and the
Indenture by any such Persons might be deemed for
U.S. federal income tax purposes to be an exchange of the
Notes for new Notes by the beneficial owners thereof, resulting
in recognition of gain or loss for such purposes and possibly
other adverse tax consequences to the beneficial owner. You
should consult your own tax advisors regarding the tax
consequences of such an assumption.
The
Guarantors
Each Guarantor will not, and the Company will not permit a
Guarantor to, in a single transaction or through a series of
related transactions, (x) consolidate with or merge with or
into any other Person (other than the Company or any Guarantor);
(y) sell, assign, convey, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets
on a Consolidated basis to any Person or group of Persons (other
than the Company or any Guarantor); or (z) permit any of
its Restricted Subsidiaries to enter into any such transaction
or series of transactions if such transaction or series of
transactions under (x), (y) or (z) above, in the
aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of
the properties and assets of the Guarantor and its Restricted
Subsidiaries on a Consolidated basis to any other Person or
group of Persons (other than the Company or any Guarantor),
unless at the time and after giving effect thereto:
(1) either (a) the Guarantor will be the continuing
corporation, in the case of a consolidation or merger involving
the Guarantor or (b) the Person (if other than the
Guarantor) formed by such consolidation or into which such
Guarantor is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition all or
substantially all of the properties and assets of the Guarantor
and its Restricted Subsidiaries on a Consolidated basis (the
Surviving Guarantor Entity) is duly organized and
validly existing under the laws of the United States of America,
any state of the United States of America or the District of
Columbia and such Person expressly assumes, by a supplemental
indenture, in a form reasonably satisfactory to the Trustee, all
the obligations of such Guarantor under its Guarantee of the
Notes, the Indenture and the Registration Rights Agreement and
such Guarantee, Indenture and Registration Rights Agreement will
remain in full force and effect;
53
(2) immediately after giving effect to such transaction on
a pro forma basis, no Default or Event of Default will have
occurred and be continuing; and
(3) at the time of the transaction such Guarantor or the
Surviving Guarantor Entity will have delivered, or caused to be
delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an officers certificate and
an opinion of counsel, each to the effect that such
consolidation, merger, transfer, sale, assignment, conveyance,
lease or other transaction and the supplemental indenture in
respect thereof comply with the Indenture and that all
conditions precedent therein provided for relating to such
transaction have been complied with.
However, the foregoing limitations do not apply to any Guarantor
whose Guarantee of the Exchange Notes is unconditionally
released and discharged in accordance with
paragraph (c) under the provisions of the covenant
described under the caption Certain
Covenants Future Guarantees.
In the event of any transaction (other than a transfer by lease)
described in and complying with the conditions listed in the two
immediately preceding subsections in which the Company or any
Guarantor, as the case may be, and the Company or any Guarantor,
as the case may be, shall be discharged from all obligations and
covenants under the Indenture and the Notes or its Guarantee, as
the case may be.
Notwithstanding clauses (2) and (3) of the paragraph
under The Company and
clause (2) of the paragraph under The
Guarantors, (a) any Restricted Subsidiary may
consolidate with or merge into or transfer all or part of its
properties and assets to the Company, and (b) the Company
or any of the Guarantors may consolidate with or merge into an
Affiliate incorporated in the United States solely for the
purpose of changing the entitys jurisdiction of
incorporation or tax status.
An assumption of the obligations of a Guarantor under its
Guarantee by a successor Person might be deemed for
U.S. federal income tax purposes to cause an exchange of
the Notes for new Notes by the beneficial owners thereof,
resulting in recognition of gain or loss for such purposes and
possibly other adverse tax consequences to the beneficial owner.
You should consult your own tax advisors regarding the tax
consequences of such an assumption.
Events of
Default
An Event of Default will occur under the Indenture if:
(1) there shall be a default in the payment of any interest
on any Note when it becomes due and payable, and such default
shall continue for a period of 30 days, whether or not
prohibited by the subordination provisions of the Indenture;
(2) there shall be a default in the payment of the
principal of (or premium, if any, on) any Note at its Maturity
(upon acceleration, optional or mandatory redemption, if any,
required repurchase or otherwise), whether or not prohibited by
the subordination provisions of the Indenture;
(3) (a) there shall be a default in the performance,
or breach, of any covenant or agreement of the Company or any
Guarantor under the Indenture or any Guarantee (other than a
default in the performance, or breach, of a covenant or
agreement which is specifically dealt with in clause (1),
(2) or in clause (b) of this clause (3)) and such
default or breach shall continue for a period of 60 days
after written notice has been given, by certified mail,
(x) to the Company by the Trustee or (y) to the
Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Notes; or
(b) there shall be a default in the performance or breach
of the provisions described under the caption
Consolidation, Merger, Sale of Assets;
(4) one or more defaults, individually or in the aggregate,
shall have occurred under any of the agreements, indentures or
instruments under which the Company or any Restricted Subsidiary
then has outstanding Debt in excess of $25 million in
principal amount, individually or in the aggregate, and either
(a) such default results from the failure to pay such Debt
at its stated final maturity or (b) such default or
defaults resulted in the acceleration of the final stated
maturity of such Debt;
54
(5) any Guarantee by any Significant Restricted Subsidiary
shall for any reason cease to be, or shall for any reason be
asserted in writing by any Guarantor or the Company not to be,
in full force and effect and enforceable in accordance with its
terms, except to the extent contemplated by the Indenture and
any such Guarantee;
(6) one or more final judgments, orders or decrees (not
subject to appeal) of any court or regulatory or administrative
agency for the payment of money in excess of $25 million,
either individually or in the aggregate (exclusive of any
portion of any such payment covered by insurance), shall be
rendered against the Company, any Guarantor or any Restricted
Subsidiary or any of their respective properties and shall not
be discharged or fully bonded and there shall have been a period
of 60 consecutive days during which a stay of enforcement of
such judgment or order, by reason of an appeal or otherwise,
shall not be in effect;
(7) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect
of the Company or any Significant Restricted Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy
Law or (b) a decree or order:
(i) adjudging the Company or any Significant Restricted
Subsidiary bankrupt or insolvent;
(ii) seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Restricted Subsidiary under any applicable federal or state law;
(iii) appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of
the Company or any Significant Restricted Subsidiary or of any
substantial part of their respective properties;
(iv) ordering the winding up or liquidation of their
respective affairs,
and any such decree or order for relief shall continue to be in
effect, or any such other decree or order shall be unstayed and
in effect, for a period of 60 consecutive days; or
(8) (a) the Company or any Significant Restricted
Subsidiary commences a voluntary case or proceeding under any
applicable Bankruptcy Law or any other case or proceeding to be
adjudicated bankrupt or insolvent,
(b) the Company or any Significant Restricted Subsidiary
consents to the entry of a decree or order for relief in respect
of the Company or such Significant Restricted Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy
Law or to the commencement of any bankruptcy or insolvency case
or proceeding against it,
(c) the Company or any Significant Restricted Subsidiary
files a petition or answer or consent seeking reorganization or
relief under any applicable federal or state law,
(d) the Company or any Significant Restricted Subsidiary:
(i) consents to the filing of such petition or the
appointment of, or taking possession by, a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official
of the Company or such Significant Restricted Subsidiary or of
any substantial part of their respective properties,
(ii) makes an assignment for the benefit of creditors,
(iii) admits in writing its inability to pay its debts
generally as they become due; or
(e) the Company or any Significant Restricted Subsidiary
takes any corporate action in furtherance of any such actions in
this clause (8).
Result of
Events of Default
If an Event of Default (other than as specified in
clauses (7) and (8) of the prior paragraph with
respect to the Company) shall occur and be continuing with
respect to the Indenture, the Trustee or the holders of not less
than 25% in aggregate principal amount of the Notes then
outstanding may, and the Trustee at the request of such holders
shall, declare all unpaid principal of, premium, if any, and
accrued interest on all Notes to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if
given by the holders of the Notes). Upon
55
any such declaration, such principal, premium, if any, and
interest (1) shall become due and payable immediately or
(2) if the Credit Agreement is in effect, shall become due
and payable upon the first to occur of an acceleration under the
Credit Agreement or five business days after receipt of written
notice of such declaration by the Company and the Senior
Representative with respect to the Credit Agreement. If an Event
of Default specified in clause (7) or (8) of the prior
paragraph with respect to the Company occurs and is continuing,
then all the Notes shall ipso facto become and be due and
payable immediately in an amount equal to the principal amount
of the Notes, together with accrued and unpaid interest, if any,
to the date the Notes become due and payable, without any
declaration or other act on the part of the Trustee or any
holder. Thereupon, the Trustee may, at its discretion, proceed
to protect and enforce the rights of the holders of Notes by
appropriate judicial proceedings.
After a declaration of acceleration, but before a judgment or
decree for payment of the money due has been obtained by the
Trustee, the holders of a majority in aggregate principal amount
of Notes outstanding, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a
sum sufficient to pay:
(1) all sums paid or advanced by the Trustee under the
Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel,
(2) all overdue interest on all Notes then outstanding,
(3) the principal of and premium, if any, on any Exchange
Notes then outstanding which have become due otherwise than by
such declaration of acceleration and interest thereon at the
rate borne by the Notes, and
(4) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes;
(b) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction; and
(c) all Events of Default, other than the non-payment of
principal of, premium, if any, and interest on the Notes which
have become due solely by such declaration of acceleration, have
been cured or waived as provided in the Indenture. No such
rescission shall affect any subsequent default or impair any
right consequent thereon.
Waiver
of Default by Noteholders
The holders of not less than a majority in aggregate principal
amount of the Notes outstanding may on behalf of the holders of
all outstanding Notes waive any past default under the Indenture
and its consequences, except a default (i) in the payment
of the principal of, premium, if any, or interest on any Note,
which may only be waived with the consent of each holder of
Notes affected or (ii) in respect of a covenant or
provision which under the Indenture cannot be modified or
amended without the consent of the holders of either 75% or all
Notes affected by such modification or amendment.
Legal
Rights of Noteholders
No holder of any of the Notes has any right to institute any
proceedings with respect to the Indenture or any remedy
thereunder, unless:
(1) the holders of at least 25% in aggregate principal
amount of the outstanding Notes have made written request, and
offered reasonable indemnity, to the Trustee to institute such
proceeding as Trustee under the Notes and the Indenture;
(2) the Trustee has failed to institute such proceeding
within 15 days after receipt of such notice; and
(3) the Trustee, within such
15-day
period, has not received directions inconsistent with such
written request by holders of a majority in aggregate principal
amount of the outstanding Notes.
56
Such limitations do not, however, apply to a suit instituted by
a holder of a Note for the enforcement of the payment of the
principal of, premium, if any, or interest on such Note on or
after the respective due dates expressed in such Note.
Notice
to the Trustee
The Company is required to notify the Trustee within five
business days of the obtaining knowledge of any Default. The
Company is required to deliver to the Trustee, on or before a
date not more than 120 days after the end of each fiscal
year, a written statement as to compliance with the Indenture,
including whether or not any Default has occurred.
No
Personal Liability of Directors, Officers, Employees and
Stockholders
No director, officer, employee or stockholder of the Company or
any Guarantor, as such, will have any liability for any
obligations of the Company or the Guarantors under the Notes,
the Indenture, the Guarantees, the Registration Rights Agreement
or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Notes by accepting
a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
The waiver may not be effective to waive liabilities under the
federal securities laws.
Defeasance
or Covenant Defeasance
The Company may, at its option and at any time, elect to have
the obligations of the Company, any Guarantor and any other
obligor upon the Notes discharged with respect to the
outstanding Notes (defeasance). Such defeasance
means that the Company, any such Guarantor and any other obligor
under the Indenture shall be deemed to have paid and discharged
the entire Debt represented by the outstanding Notes, except for:
(i) the rights of holders of such outstanding Notes to
receive payments in respect of the principal of, premium, if
any, and interest on such Notes when such payments are due,
(ii) the Companys obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes,
mutilated, destroyed, lost or stolen Notes, and the maintenance
of an office or agency for payment and money for security
payments held in trust,
(iii) the rights, powers, trusts, duties and immunities of
the Trustee, and
(iv) the defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company and any Guarantor
released with respect to certain covenants that are described in
the Indenture (covenant defeasance) and thereafter
any omission to comply with such obligations shall not
constitute a Default or an Event of Default with respect to the
Notes. In the event covenant defeasance occurs, certain events
(not including non-payment, bankruptcy and insolvency events)
described under Events of Default will
no longer constitute an Event of Default with respect to the
Notes.
In order to exercise either defeasance or covenant defeasance,
(i) the Company must irrevocably deposit with the Trustee,
in trust, for the benefit of the holders of the Notes, cash in
United States dollars, U.S. Government Obligations (as
defined in the Indenture), or a combination of cash and
U.S. Government Obligations, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of
independent public accountants or a nationally recognized
investment banking firm, to pay and discharge the principal of,
premium, if any, and interest on the outstanding Notes on the
Stated Maturity (or on any date after December 15, 2011
(such date being referred to as the Defeasance
Redemption Date), if at or prior to electing either
defeasance or covenant defeasance, the Company has delivered to
the Trustee an irrevocable notice to redeem all of the
outstanding Notes on the Defeasance Redemption Date);
(ii) in the case of defeasance, the Company shall have
delivered to the Trustee an opinion of independent counsel in
the United States stating that (A) the Company has received
from, or there has been published by,
57
the Internal Revenue Service a ruling or (B) since the
Issue Date, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based
thereon such opinion of independent counsel in the United States
shall confirm that, the beneficial owners of the outstanding
Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such defeasance and will be subject
to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such
defeasance had not occurred;
(iii) in the case of covenant defeasance, the Company shall
have delivered to the Trustee an opinion of independent counsel
in the United States to the effect that the beneficial owners of
the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred;
(iv) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or insofar as
clauses (7) or (8) with respect to the Company under
the first paragraph under the caption Events
of Default are concerned, at any time during the period
ending on the 91st day after the date of deposit (other
than a Default which results from the borrowing of amounts to
finance the defeasance and which borrowing does not result in a
breach or violation of, or constitute a default under, any other
material agreement or instrument to which the Company or any
Restricted Subsidiary is a party or to which it is bound);
(v) such defeasance or covenant defeasance shall not cause
the Trustee for the Notes to have a conflicting interest as
defined in the Indenture and for purposes of the Trust Indenture
Act with respect to any securities of the Company or any
Guarantor;
(vi) such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a Default
under, the Indenture or any other material agreement or
instrument to which the Company, any Guarantor or any Restricted
Subsidiary is a party or by which it is bound;
(vii) the Company will have delivered to the Trustee an
opinion of independent counsel in the United States to the
effect that (assuming that no holder of any Notes would be
considered an insider of the Company under any applicable
bankruptcy or insolvency law and assuming no intervening
bankruptcy or insolvency of the Company between the date of
deposit and the 91st day following the deposit) after the
91st day following the deposit, the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors rights
generally;
(viii) the Company shall have delivered to the Trustee an
officers certificate stating that the deposit was not made
by the Company with the intent of preferring the holders of the
Notes or any Guarantee over the other creditors of the Company
or any Guarantor with the intent of defeating, hindering,
delaying or defrauding creditors of the Company, any Guarantor
or others;
(ix) no event or condition shall exist that would prevent
the Company from making payments of the principal of, premium,
if any, and interest on the Notes on the date of such deposit or
at any time ending on the 91st day after the date of such
deposit; and
(x) the Company will have delivered to the Trustee an
officers certificate and an opinion of independent
counsel, each stating that all conditions precedent provided for
relating to either the defeasance or the covenant defeasance, as
the case may be, have been complied with.
Modifications
and Amendments
With
Noteholder Consent
Modifications and amendments of the Indenture may be made by the
Company, each Guarantor, if any, and the Trustee with the
consent of the holders of at least a majority in aggregate
principal amount of the Exchange Notes
58
then outstanding; provided, however, that no such modification
or amendment may, without the consent of the holder of each
outstanding Note affected thereby:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, or change to an earlier date any
redemption date of, or waive a default in the payment of the
principal of, premium, if any, or interest on, any such Note or
reduce the principal amount thereof or the rate of interest
thereon or any premium payable upon the redemption thereof, or
change the coin or currency in which the principal of any such
Note or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any
such payment after the Stated Maturity thereof (or, in the case
of redemption, on or after the redemption date);
(ii) reduce the percentage in principal amount of such
outstanding Notes, the consent of whose holders is required for
any such supplemental indenture, or the consent of whose holders
is required for any waiver or compliance with certain provisions
of the Indenture;
(iii) modify any of the provisions relating to supplemental
indentures requiring the consent of holders or relating to the
waiver of past defaults or relating to the waiver of certain
covenants, except to increase the percentage of such outstanding
Notes required for such actions or to provide that certain other
provisions of the Indenture cannot be modified or waived without
the consent of the holder of each such Note affected thereby;
(iv) except as otherwise permitted under the caption
Consolidation, Merger, Sale of Assets,
consent to the assignment or transfer by the Company or any
Guarantor of any of its rights and obligations under the
Indenture;
(v) amend or modify any of the provisions of the Indenture
relating to the subordination of the Notes or any Guarantee in
any manner adverse to the holders of the Notes or any
Guarantee; or
(vi) after the Companys obligation to purchase Notes
arises under the Indenture, amend, change or modify in any
material respect the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of
Control in accordance with the covenant described under the
caption Purchase of Notes Upon a Change
of Control or make and consummate an Offer with respect to
any Asset Sale or Asset Sales in accordance with the covenant
described under the caption Certain
Covenants Limitation on Sale of Assets,
including, in each case, amending, changing or modifying any
definitions related thereto, but only to the extent such
definitions relate thereto.
Without
Noteholder Consent
Notwithstanding the foregoing, without the consent of any
holders of the Notes, the Company, any Guarantor, any other
obligor under the Notes and the Trustee may modify or amend the
Indenture:
(a) to evidence the succession of another Person to the
Company or a Guarantor or any other obligor upon the Notes, and
the assumption by any such successor of the covenants of the
Company or such Guarantor or obligor in the Indenture and in the
Notes and in any Guarantee in accordance with the covenant
described under the caption Consolidation,
Merger, Sale of Assets;
(b) to add to the covenants of the Company, any Guarantor
or any other obligor upon the Notes for the benefit of the
holders of the Notes or to surrender any right or power
conferred upon the Company or any Guarantor or any other obligor
upon the Notes, as applicable, in the Indenture, in the Notes or
in any Guarantee;
(c) to cure any ambiguity, or to correct or supplement any
provision in the Indenture or in any supplemental indenture, the
Notes or any Guarantee which may be defective or inconsistent
with any other provision in the Indenture, the Notes or any
Guarantee;
(d) make any other provisions with respect to matters or
questions arising under the Indenture, the Notes or any
Guarantee; provided that, in each case, such provisions
shall not adversely affect the interest of the holders of the
Notes in any material respect;
(e) to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the
Trust Indenture Act;
59
(f) to add a Guarantor under the Indenture;
(g) to evidence and provide the acceptance of the
appointment of a successor Trustee under the Indenture;
(h) to mortgage, pledge, hypothecate or grant a security
interest in favor of the Trustee for the benefit of the holders
of the Notes as additional security for the payment and
performance of the Companys and any Guarantors
obligations under the Indenture, in any property, or assets,
including any of which are required to be mortgaged, pledged or
hypothecated, or in which a security interest is required to be
granted to the Trustee pursuant to the Indenture or otherwise;
(i) provide for the issuance of additional Notes under the
Indenture in accordance with the limitations set forth in the
Indenture;
(j) provide for the issuance of exchange notes pursuant to
the terms of the Indenture and the Registration Rights Agreement;
(k) comply with the rules of any applicable securities
depositary; or
(l) conform the text of the Indenture or the Notes to any
provision of this Description of Exchange Notes
section of this prospectus.
The holders of a majority in aggregate principal amount of the
Notes outstanding may waive compliance with certain restrictive
covenants and provisions of the Indenture.
No amendment, modification or waiver of the Indenture shall
adversely affect the rights of any holder of Senior Debt or
Senior Guarantor Debt under the subordination provisions of the
Indenture without the consent of such holder.
Satisfaction
and Discharge
The Indenture will be discharged and will cease to be of further
effect (except as to surviving rights of registration of
transfer or exchange of the Notes as expressly provided for in
the Indenture) as to all outstanding Notes under the Indenture
when:
(a) either (i) all such Notes previously authenticated
and delivered (except lost, stolen or destroyed Notes which have
been replaced or paid or Notes whose payment has been deposited
in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust
as provided for in the Indenture) have been delivered to the
Trustee for cancellation or (ii) all Notes not previously
delivered to the Trustee for cancellation;
(x) have become due and payable,
(y) will become due and payable at their Stated Maturity
within one year, or
(z) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense of the Company;
and the Company or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust
an amount in United States dollars sufficient to pay and
discharge the entire Debt on the Notes not theretofore delivered
to the Trustee for cancellation, including the principal of,
premium, if any, and accrued interest on, such Notes at such
Maturity, Stated Maturity or redemption date;
(b) the Company or any Guarantor has paid or caused to be
paid all other sums payable under the Indenture by the Company
and any Guarantor; and
(c) the Company has delivered to the Trustee an
officers certificate and an opinion of independent counsel
in form and substance reasonably satisfactory to the Trustee
each stating that (i) all conditions precedent under the
Indenture relating to the satisfaction and discharge of such
Indenture have been complied with and (ii) such
satisfaction and discharge will not result in a breach or
violation of, or constitute a default
60
under, the Indenture or any other material agreement or
instrument to which the Company, any Guarantor or any Subsidiary
is a party or by which the Company, any Guarantor or any
Subsidiary is bound.
Governing
Law
The Indenture, the Notes and any Guarantee will be governed by,
and construed in accordance with, the laws of the State of New
York, without giving effect to the conflicts of law principles
thereof.
Concerning
the Trustee
The Indenture contains certain limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain
payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or
otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest
it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as Trustee with such conflict
or resign as Trustee.
The holders of a majority in principal amount of the then
outstanding Notes will have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy
available to the Trustee, subject to certain exceptions. The
Indenture provides that in case an Event of Default occurs,
which has not been cured, the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent
man in the conduct of his own affairs. Subject to such
provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request
of any holder of Notes unless such holder shall have offered to
the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
Certain
Definitions
Acquired Debt means Debt of a Person:
(1) existing at the time such Person becomes a Restricted
Subsidiary, or
(2) assumed in connection with the acquisition of assets
from such Person, in each case, other than Debt incurred in
connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary or such acquisition, as the case may be
and is not recourse to any Person or assets other than such
Person or its assets (including its Subsidiaries and their
assets).
Acquired Debt shall be deemed to be incurred on the date of the
related acquisition of assets from any Person or the date the
acquired Person becomes a Restricted Subsidiary, as the case may
be.
Affiliate means, with respect to any specified
Person, any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with
such specified Person. For the purposes of this definition,
control when used with respect to any specified
Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through ownership
of voting securities, by contract or otherwise; and the terms
controlling and controlled have meanings
correlative to the foregoing.
Applicable Premium means, with respect to any Note
on any redemption date, the greater of:
(1) 1.0% of the principal amount of such Note; and
(2) the excess, if any, of:
(a) the present value at such redemption date of
(i) the redemption price of such Note at December 15,
2011 (such redemption price being set forth in the table
appearing above under Optional Redemption), plus
(ii) all scheduled interest payments due on such Note from
the redemption date through December 15, 2011 (excluding
accrued but unpaid interest to the redemption date), computed
using a discount rate equal to the Treasury Rate at such
redemption date, plus 50 basis points over
(b) the principal amount of such Note.
61
Asset Sale means any sale, issuance, conveyance,
transfer, lease or other disposition, including, without
limitation, by way of merger, consolidation or sale and
leaseback transaction (collectively, a transfer),
directly or indirectly, in one or a series of related
transactions, of:
(1) any Capital Stock of any Restricted Subsidiary (other
than directors qualifying shares and transfers of Capital
Stock required by a Manufacturer to the extent the Company does
not receive cash or Cash Equivalents for such Capital Stock);
(2) all or substantially all of the properties and assets
of any division or line of business of the Company or any
Restricted Subsidiary; or
(3) any other properties or assets of the Company or any
Restricted Subsidiary other than in the ordinary course of
business.
For the purposes of this definition, the term Asset
Sale shall not include any transfer of properties and
assets:
(A) that is governed by the provisions described under the
caption Consolidation, Merger, Sale of
Assets,
(B) that is by the Company to any Restricted Subsidiary, or
by any Restricted Subsidiary to the Company or any Restricted
Subsidiary in accordance with the terms of the Indenture,
(C) that is of obsolete or unusable equipment or assets
that are not useful in the business,
(D) that consists of defaulted receivables for collection
or any sale, transfer or other disposition of defaulted
receivables for collection,
(E) the Fair Market Value of which in the aggregate does
not exceed $5 million in any transaction or series of
related transactions,
(F) any Restricted Payment permitted under the caption
Certain Covenants Limitation on Restricted
Payments,
(G) any disposition that constitutes a Change of
Control,
(H) the sale or other disposition of cash or Cash
Equivalents, or
(I) any sale of Capital Stock in, or Debt or other
securities of, an Unrestricted Subsidiary.
Average Life to Stated Maturity means, as of the
date of determination with respect to any Debt, the quotient
obtained by dividing (i) the sum of the products of
(a) the number of years from the date of determination to
the date or dates of each successive scheduled principal payment
of such Debt multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal
payments.
Bankruptcy Law means Title 11, United States
Bankruptcy Code of 1978, as amended, or any similar United
States federal or state law or foreign law relating to
bankruptcy, insolvency, receivership, winding up, liquidation,
reorganization or relief of debtors or any amendment to,
succession to or change in any such law.
Capital Lease Obligation of any Person means any
obligation of such Person and its Restricted Subsidiaries on a
Consolidated basis under any capital lease of real or personal
property which, in accordance with GAAP, is required to be
recorded as a capitalized lease obligation on the books of the
lessee.
Capital Stock of any Person means any and all
shares, interests, participations, rights in or other
equivalents, however designated, of such Persons capital
stock or other equity interests, partnership interests (whether
general or limited), any other interest or participation that
confers on a Person that right to receive a share of the profits
and losses of, or distributions of assets of (other than a
distribution in respect of Debt), the issuing Person and any
rights (other than debt securities convertible into Capital
Stock), warrants or options exchangeable for or convertible into
such Capital Stock.
62
Cash Equivalent means:
(1) United States Dollars or such local currencies held by
the Company or any Restricted Subsidiary from time to time in
the ordinary course of business;
(2) any evidence of Debt, maturing not more than one year
after the date of acquisition, issued by the United States of
America, or an instrumentality or agency thereof, and guaranteed
fully as to principal, premium, if any, and interest by the
United States of America;
(3) certificates of deposit, time deposits and eurodollar
time deposits with maturities of one year or less from the date
of acquisition, bankers acceptances with maturities not
exceeding one year and overnight bank deposits, in each case
with any commercial bank having capital and surplus of not less
than $500 million in the case of U.S. banks and
$100 million (or the U.S. dollar equivalent as of the
date of determination) in the case of
non-U.S. banks;
(4) commercial paper, maturing not more than one year after
the date of acquisition, issued by a corporation (other than an
Affiliate or Subsidiary of the Company) organized and existing
under the laws of the United States of America with a rating, at
the time as of which any investment therein is made, of
P-1
(or higher) according to Moodys or
A-1
(or higher) according to S&P;
(5) any money market deposit accounts issued or offered by
a domestic commercial bank having capital and surplus in excess
of $500 million or a
non-U.S. bank
having capital and surplus in excess of $100 million;
provided that the short term debt of such commercial bank
has a rating, at the time of Investment, of
P-1
(or higher) according to Moodys or
A-1
(or higher) according to S&P;
(6) in the case of any investment by a Foreign Subsidiary
or investments made in a country outside the United States of
America, Cash Equivalents will also include direct
obligations of the sovereign nation (or any agency thereof) in
which such Foreign Subsidiary is organized and is conducting
business or obligations fully and unconditionally guaranteed by
such sovereign nation (or agency thereof);
(7) any repurchase agreement entered into with
DaimlerChrysler Financial Services Americas LLC (or with a
commercial banking institution of the stature referred to in
clause (3) above) which (A) is secured by a fully
perfected security interest in any obligation of the type
described in any of clauses (2) through (4) above and
(B) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of DaimlerChrysler Financial Services
Americas LLC (or such commercial banking institution) thereunder;
(8) repurchase obligations for underlying securities of the
types described in clauses (2) and (3) entered into
with any financial institution meeting the qualifications
specified in clause (3) above; and
(9) shares of money market mutual funds within the
definition of
Rule 2a-7
issued by the SEC under the Investment Company Act of 1940.
Change of Control means the occurrence of any of the
following events:
(1) any person or group (as such
terms are used in Sections 13(d) and 14(d) of the Exchange
Act or any successor provisions) other than the Company, any of
its subsidiaries, any of its employee benefit plans, any of the
Permitted Holders or any holding company which owns, directly or
indirectly, 100% of the Voting Stock of the Company (so long as
no Change of Control would otherwise have occurred in respect of
the Voting Stock of such holding company), is or becomes the
beneficial owner, directly or indirectly, through a purchase,
merger or other acquisition transaction, of 50% or more of the
total voting power of all classes of Voting Stock of the Company;
(2) the Company consolidates with, or merges with or into,
another person (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) or any person consolidates with or
merges with or into the
63
Company, or the Company conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any person
(other than a direct or indirect wholly owned subsidiary of the
Company), other than:
(a) any transaction pursuant to which holders of the
Companys capital stock immediately prior to the
transaction have the entitlement to exercise, directly or
indirectly, 50% or more of the total voting power of all classes
of Voting Stock of (i) the continuing or surviving person
immediately after the transaction or (ii) any holding
company which owns, directly or indirectly, 100% of the Voting
Stock of the continuing or surviving person immediately after
the transaction (so long as no Change of Control would otherwise
have occurred in respect of the Voting Stock of such holding
company); or
(b) any merger solely for the purpose of changing the
Companys jurisdiction of formation and resulting in a
reclassification, conversion or exchange of outstanding shares
of common stock solely into shares of common stock of the
surviving entity;
(3) during any consecutive two-year period, individuals who
at the beginning of that two-year period constituted the board
of directors of the Company (together with any new directors
whose election to such board of directors, or whose nomination
for election by stockholders, was approved by a vote of a
majority of the directors then in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for
any reason (other than death) to constitute a majority of the
board of directors of the Company then in office; or
(4) the Company approves a plan of liquidation or
dissolution.
Beneficial ownership will be determined in accordance with
Rule 13d-3
promulgated by the SEC under the Exchange Act. The term
person includes any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of
the Exchange Act.
SEC means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act,
or if at any time after the execution of the Indenture such SEC
is not existing and performing the duties now assigned to it
under the Securities Act, Exchange Act and Trust Indenture Act
then the body performing such duties at such time.
Commodity Price Protection Agreement means any
forward contract, commodity swap, commodity option or other
similar financial agreement or arrangement relating to, or the
value of which is dependent upon, fluctuations in commodity
prices.
Common Stock means the Companys voting common
stock, par value $0.0001, or any successor common stock thereto.
Company means United Auto Group, Inc., a corporation
incorporated under the laws of Delaware, until a successor
Person shall have become such pursuant to the applicable
provisions of the Indenture, and thereafter Company
shall mean such successor Person.
Consolidated Equity of any Person means (a) the
Consolidated Tangible Assets of such Person, less (b) the
amount of any Debt of such Person incurred pursuant to a Floor
Plan Facility.
Consolidated Fixed Charge Coverage Ratio of any
Person means, for any period, the ratio of:
(a) the sum of Consolidated Net Income (Loss), and in each
case to the extent deducted in computing Consolidated Net Income
(Loss) for such period, Consolidated Interest Expense,
Consolidated Income Tax Expense and Consolidated Non-cash
Charges for such period, of such Person and its Restricted
Subsidiaries on a Consolidated basis, all determined in
accordance with GAAP, less all noncash items increasing
Consolidated Net Income for such period in any prior period to
(b) the sum of Consolidated Interest Expense for such
period and cash dividends paid on any Preferred Stock of such
Person during such period,
64
in each case after giving pro forma effect to:
(i) the incurrence of the Debt giving rise to the need to
make such calculation and (if applicable) the application of the
net proceeds therefrom, including to refinance other Debt, as if
such Debt was incurred, and the application of such proceeds
occurred, on the first day of such period;
(ii) the incurrence, repayment or retirement of any other
Debt by the Company and its Restricted Subsidiaries since the
first day of such period as if such Debt was incurred, repaid or
retired at the beginning of such period (except that, in making
such computation, the amount of Debt under any revolving credit
facility shall be computed based upon the average daily balance
of such Debt during such period);
(iii) in the case of Acquired Debt or any acquisition
occurring at the time of the incurrence of such Debt, the
related acquisition (and any Consolidated Net Income (Loss) of
such Person), assuming such acquisition had been consummated on
the first day of such period; and
(iv) any acquisition or disposition by the Company and its
Restricted Subsidiaries of any company or any business or any
assets (including the Consolidated Net Income (Loss) of such
Person), whether by merger, stock purchase or sale or asset
purchase or sale, or any related repayment of Debt, in each case
since the first day of such period, assuming such acquisition or
disposition had been consummated on the first day of such
period, including giving effect to any Pro Forma Cost Savings;
provided that
(i) in making such computation, the Consolidated Interest
Expense attributable to interest on any Debt computed on a pro
forma basis and (A) bearing a floating interest rate shall
be computed as if the rate in effect on the date of computation
had been the applicable rate for the entire period (subject to
any applicable Interest Rate Agreement) and (B) which was
not outstanding during the period for which the computation is
being made but which bears, at the option of such Person, a
fixed or floating rate of interest, shall be computed by
applying at the option of such Person either the fixed or
floating rate and
(ii) in making such computation, the Consolidated Interest
Expense of such Person attributable to interest on any Debt
under a revolving credit facility computed on a pro forma basis
shall be computed based upon the average daily balance of such
Debt during the applicable period.
Consolidated Income Tax Expense of any Person means,
for any period, the provision for federal, state, local and
foreign income taxes of such Person and its Consolidated
Restricted Subsidiaries for such period as determined in
accordance with GAAP.
Consolidated Interest Expense of any Person means,
without duplication, for any period, the sum of
(a) the interest expense of such Person and its Restricted
Subsidiaries for such period, on a Consolidated basis (other
than interest expense under any Inventory Facility), including,
without limitation,
(1) amortization of debt discount,
(2) the net cash costs paid under Interest Rate Agreements
(including amortization of discounts),
(3) the interest portion of any deferred payment obligation,
(4) all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers acceptance
financing, and
(5) accrued interest, plus
(b) (1) the interest component of the Capital Lease
Obligations paid, accrued
and/or
scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period and (2) all
capitalized interest of such Person and its Restricted
Subsidiaries; plus
(c) the interest expense under any Guaranteed Debt of such
Person and any Restricted Subsidiary to the extent not included
under clause (a)(4) above, whether or not paid by such
Person or its Restricted Subsidiaries,
65
but excluding, in the case of (a), (b) and (c), the
amortization or write-off of deferred financing costs, plus
(d) dividend requirements of the Company and the Restricted
Subsidiaries with respect to Redeemable Capital Stock, and with
respect to Preferred Stock of Restricted Subsidiaries, in each
case whether in cash or otherwise (except dividends payable
solely in shares of Capital Stock (other than any Preferred
Stock or Redeemable Capital Stock) of the Company or any
Restricted Subsidiary).
Consolidated Net Income (Loss) of any Person means,
for any period, the Consolidated net income (or loss) of such
Person and its Restricted Subsidiaries for such period on a
Consolidated basis as determined in accordance with GAAP,
adjusted, to the extent included in calculating such net income
(or loss), by excluding, without duplication,
(1) all extraordinary, non-recurring or unusual gains or
losses net of taxes (less all fees and expenses relating
thereto),
(2) the portion of net income (or loss) of such Person and
its Restricted Subsidiaries on a Consolidated basis allocable to
minority interests in unconsolidated Persons or Unrestricted
Subsidiaries to the extent that cash dividends or distributions
have not actually been received by such Person or one of its
Consolidated Restricted Subsidiaries,
(3) any impairment charge or asset write-off pursuant to
Financial Accounting Standards Board Statement No. 142 and
No. 144 and the amortization of intangibles arising
pursuant to No. 141,
(4) any gain or loss, net of taxes, realized upon the
termination of any employee pension benefit plan,
(5) the cumulative effect of a change in accounting
principles;
(6) gains or losses, net of taxes (less all fees and
expenses relating thereto), in respect of dispositions of assets
other than in the ordinary course of business,
(7) solely for purposes of the covenant described under
Certain Covenants Limitation on
Restricted Payments, the net income of any Restricted
Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that
income is not at the time permitted, directly or indirectly, by
operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary
or its stockholders,
(8) non-cash gains and losses due solely to fluctuations in
currency values or unrealized gains and losses with respect to
hedging obligations or other derivative instruments pursuant to
Financial Accounting Standards Board Statement No. 133 or
otherwise,
(9) any non-cash compensation charge arising from the grant
of or issuance of stock, stock options or other equity based
awards;
(10) any restoration to net income of any contingency
reserve, except to the extent provision for such reserve was
made out of income accrued at any time following the Issue Date,
(11) the amortization or write-off of deferred financing
fees and any expenses of bridge or other financing fees;
(12) any net gain arising from the acquisition of any
securities or extinguishment, under GAAP, of any Debt of such
Person.
For the sake of clarity, any amounts restated for discontinued
operations in the Companys consolidated financial
statements shall not be recalculated under this definition.
Consolidated Non-cash Charges of any Person means,
for any period, the aggregate depreciation, amortization and
other non-cash charges of such Person and its subsidiaries on a
Consolidated basis for such period, as determined in accordance
with GAAP, excluding any non-cash charge which requires an
accrual or reserve for cash charges for any future period.
Consolidated Tangible Assets of any Person means
(a) all the Consolidated Total Assets of such Person, less
(b) the amount thereof constituting goodwill and other
intangible assets as calculated in accordance with GAAP.
66
Consolidated Total Assets of any Person means all
amounts that would be shown as assets on a consolidated balance
sheet of such Person and its Restricted Subsidiaries prepared in
accordance with GAAP.
Consolidation means, with respect to any Person, the
consolidation of the accounts of such Person and each of its
subsidiaries if and to the extent the accounts of such Person
and each of its subsidiaries would normally be consolidated with
those of such Person, all in accordance with GAAP. The term
Consolidated shall have a similar meaning.
Credit Agreement means the Second Amended and
Restated Credit Agreement, dated as of September 8, 2004,
among United Auto Group, Inc., various financial institutions,
and DaimlerChrysler Financial Services Americas LLC as agent for
the lenders, as amended, as such agreement, in whole or in part,
may have been or may be amended, renewed, extended, increased,
substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time, including, without
limitation, any successive renewals, extensions, substitutions,
refinancings, restructurings, replacements, supplementations or
other modifications of the foregoing.
Credit Facility means one or more debt facilities
(including, without limitation, the Credit Agreement and the
U.K. Credit Agreement), financings, commercial paper facilities
or other debt instruments, indentures or agreements providing
for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders
against such receivables), exchange notes or letters of credit,
bank products or other debt obligations and, in each case, as
such agreements may be amended, amended and restated,
supplemented, modified, renewed, refunded, refinanced, replaced
or otherwise restructured, in whole or in part from time to time
(including increasing the amount of available borrowings
thereunder or adding Restricted Subsidiaries of the Company as
additional borrowers or guarantors thereunder) with respect to
all or any portion of the Debt under such agreement or
agreements or any successor or replacement agreement or
agreements and whether by the same or any other agent, lender or
group of lenders or other party.
Currency Hedging Agreements means one or more of the
following agreements which shall be entered into by one or more
financial institutions: foreign exchange contracts, currency
swap agreements or other similar agreements or arrangements
designed to protect against the fluctuations in currency values.
Debt means, with respect to any Person, without
duplication,
(1) all debt of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any
trade payables and other accrued current liabilities arising in
the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit issued under
letter of credit facilities, acceptance facilities or other
similar facilities,
(2) all obligations of such Person evidenced by bonds,
exchange notes, debentures or other similar instruments,
(3) all debt created or arising under any conditional sale
or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the
seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of
business,
(4) all net obligations of such Person under Interest Rate
Agreements, Currency Hedging Agreements or Commodity Price
Protection Agreements of such Person,
(5) all Capital Lease Obligations of such Person,
(6) all Debt referred to in clauses (1) through
(5) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the
holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien, upon or with respect to
property, including, without limitation, accounts and contract
rights owned by such Person, even though such Person has not
assumed or become liable for the payment of such Debt,
(7) all Guaranteed Debt of such Person,
67
(8) all Redeemable Capital Stock issued by such Person
valued at the greater of its voluntary or involuntary maximum
fixed repurchase price plus accrued and unpaid dividends,
(9) Preferred Stock of any Restricted Subsidiary of the
Company which is not a Guarantor, and
(10) any amendment, supplement, modification, deferral,
renewal, extension, refunding or refinancing of any liability of
the types referred to in clauses (1) through (9) above.
For purposes hereof, the maximum fixed repurchase
price of any Redeemable Capital Stock which does not have
a fixed repurchase price shall be calculated in accordance with
the terms of such Redeemable Capital Stock as if such Redeemable
Capital Stock were purchased on any date on which Debt shall be
required to be determined pursuant to the Indenture, and if such
price is based upon, or measured by, the Fair Market Value of
such Redeemable Capital Stock, such Fair Market Value to be
determined in good faith by the board of directors of the issuer
of such Redeemable Capital Stock.
Default means any event which is, or after notice or
passage of time or both would be, an Event of Default.
Designated Noncash Consideration means the Fair
Market Value of non-cash consideration received by the Company
or any of its Restricted Subsidiaries in connection with an
Asset Sale that is so designated pursuant to an officers
certificate, setting forth the basis of the valuation. The
aggregate Fair Market Value of the Designated Noncash
Consideration, taken together with the Fair Market Value at the
time of receipt of all other Designated Noncash Consideration
received, may not exceed $35 million in the aggregate
outstanding at any one time (with the Fair Market Value being
measured at the time received and without giving effect to
subsequent changes in value).
Disinterested Director means, with respect to any
transaction or series of related transactions, a member of the
board of directors of the Company who does not have any material
direct or indirect financial interest in or with respect to such
transaction or series of transactions.
Domestic Subsidiary means any Restricted Subsidiary
that is not a Foreign Subsidiary.
Equity Offering means an offering by the Company of
its common stock, Preferred Stock (other than Redeemable Capital
Stock) or options, warrants or rights with respect to its common
stock or Preferred Stock (other than Redeemable Capital Stock)
in excess of $25 million (other than offerings registered
on
Form S-8
or issuances to a Subsidiary of the Company).
Exchange Act means the Securities Exchange Act of
1934, as amended, or any successor statute, and the rules and
regulations promulgated by the SEC thereunder.
Exchange Notes means the 7.75% Senior
Subordinated Exchange Notes due 2016 to be issued in the
Exchange Offer.
Fair Market Value means, with respect to any asset
or property, the sale value that would be obtained in an
arms-length free market transaction between an informed
and willing seller under no compulsion to sell and an informed
and willing buyer under no compulsion to buy. Fair Market Value
for transactions in excess of $25 million shall be
determined by the Companys board of directors acting in
good faith and shall be evidenced by a resolution of the board
of directors or a committee thereof.
Floor Plan Facility means an agreement from Ford
Motor Credit Company, General Motors Acceptance Corporation,
DaimlerChrysler Financial Services Americas LLC, Toyota Motor
Credit Corporation, World Omni Financial Corp., BMW Financial
Services NA, LLC or any other bank or asset-based lender
pursuant to which the Company or any Restricted Subsidiary
incurs Debt substantially all of the net proceeds of which are
used to purchase, finance or refinance vehicles
and/or
vehicle parts and supplies to be sold in the ordinary course of
business of the Company and its Restricted Subsidiaries and
which may not be secured except by a Lien that does not extend
to or cover any property other than the property of the
dealership(s) which use the proceeds of the Floor Plan
Facilities or other dealerships who have incurred Debt from the
same lender.
Foreign Subsidiary means any Restricted Subsidiary
that (x) is not organized under the laws of the United
States of America or any state thereof or the District of
Columbia or (y) was organized under the laws of the United
68
States of America or any State thereof or the District of
Columbia that has no material assets other than Capital Stock of
one or more foreign entities of the type described in
clause (x) above.
Generally Accepted Accounting Principles or
GAAP means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession, which are in effect (i) with
respect to periodic reporting requirements, from time to time,
and (ii) otherwise on the date of the Indenture.
Guarantee means the guarantee by any Guarantor of
the Companys Indenture Obligations.
Guaranteed Debt of any Person means, without
duplication, all Debt of any other Person referred to in the
definition of Debt guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement:
(1) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt,
(2) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or
to assure the holder of such Debt against loss,
(3) to supply funds to, or in any other manner invest in,
the debtor (including any agreement to pay for property or
services without requiring that such property be received or
such services be rendered),
(4) to maintain working capital or equity capital of the
debtor, or otherwise to maintain the net worth, solvency or
other financial condition of the debtor or to cause such debtor
to achieve certain levels of financial performance or
(5) otherwise to assure a creditor against loss;
provided that the term guarantee shall not
include endorsements for collection or deposit, in either case
in the ordinary course of business.
Guarantor means any Subsidiary which is a guarantor
of the Notes, including any Person that is required after the
Issue Date to execute a guarantee of the Notes pursuant to the
covenant described under the caption Certain
Covenants Future Guarantees until a
successor replaces such party pursuant to the applicable
provisions of the Indenture and, thereafter, shall mean such
successor.
Indenture Obligations means the obligations of the
Company and any other obligor under the Indenture or under the
Notes, including any Guarantor, to pay principal of, premium, if
any, and interest when due and payable, and all other amounts
due or to become due under or in connection with the Indenture
and the Notes (including Additional Interest) and the
performance of all other obligations to the Trustee and the
holders under the Indenture and the Notes and the Registration
Rights Agreement, according to the respective terms thereof;
provided that the term Indenture Obligations shall
not include the compensation, expenses or indemnity of the
Trustee, its affiliates or its counsel.
Interest Rate Agreements means one or more of the
following agreements which shall be entered into by one or more
financial institutions: interest rate protection agreements
(including, without limitation, interest rate swaps, caps,
floors, collars and similar agreements)
and/or other
types of interest rate hedging agreements from time to time.
Inventory Facility means any Floor Plan Facility or
any other agreement, including pursuant to a commercial paper
program, pursuant to which the Company or any Restricted
Subsidiary incurs Debt, the net proceeds of which are used to
purchase, finance or refinance vehicles
and/or
vehicle parts and supplies to be sold in the ordinary course of
business of the Company and its Restricted Subsidiaries and
which may not be secured except by a Lien that does not extend
to or cover any property other than the property of the
dealership(s) which use the proceeds of the Inventory Facility
or other dealerships who have incurred Debt from the same lender.
Investment means, with respect to any Person,
directly or indirectly, any advance, loan, including guarantees,
or other extension of credit or capital contribution to (by
means of any transfer of cash or other property to
69
others or any payment for property or services for the account
or use of others), or any purchase, acquisition or ownership by
such Person of any Capital Stock, bonds, notes, debentures or
other securities issued or owned by any other Person and all
other items that would be classified as investments on a balance
sheet prepared in accordance with GAAP. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes
of any Capital Stock of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any
such sale or disposition, such Person is no longer a Restricted
Subsidiary of the Company (other than the sale of all of the
outstanding Capital Stock of such Restricted Subsidiary), of the
Company will be deemed to have made an Investment on the date of
such sale or disposition equal to the Fair Market Value of the
Companys Investments in such Subsidiary that were not sold
or disposed.
Issue Date means December 7, 2006.
Lien means any mortgage or deed of trust, charge,
pledge, lien (statutory or otherwise), privilege, security
interest, assignment, deposit, easement, hypothecation, claim,
preference, priority or other encumbrance upon or with respect
to any property of any kind (including any conditional sale,
capital lease or other title retention agreement, any leases in
the nature thereof, and any agreement to give any security
interest), real or personal, movable or immovable, now owned or
hereafter acquired. A Person will be deemed to own subject to a
Lien any property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, Capital Lease Obligation or other title retention
agreement.
Manufacturer means a vehicle manufacturer which is a
party to an agreement with the Company or any Restricted
Subsidiary.
Maturity means, when used with respect to the Notes,
the date on which the principal of the Exchange Notes becomes
due and payable as provided in the Notes or as provided in the
Indenture, whether at Stated Maturity, the Offer Date or the
redemption date and whether by declaration of acceleration,
Offer in respect of Excess Proceeds, Change of Control Offer in
respect of a Change of Control, call for redemption or otherwise.
Net Cash Proceeds means
(a) with respect to any Asset Sale by any Person, the
proceeds from that sale (without duplication in respect of all
Asset Sales) in the form of cash or Cash Equivalents including
by way of sale or discounting of a note, installment receivable
or other receivable (but excluding any other consideration
received (x) in the form of assumption by the acquirer of
Debt or other obligations relating to such properties or assets
or (y) in any other cash form), including payments in
respect of deferred payment obligations when received in the
form of, or stock or other assets when disposed of for, cash or
Cash Equivalents (except to the extent that such obligations are
financed or sold with recourse to the Company or any Restricted
Subsidiary) net of:
(1) brokerage commissions and other reasonable fees and
expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale,
(2) provisions for all taxes payable as a result of such
Asset Sale,
(3) payments made to retire Debt where payment of such Debt
is secured by the assets or properties the subject of such Asset
Sale,
(4) amounts required to be paid to any Person (other than
the Company or any Restricted Subsidiary) owning a beneficial
interest in the assets subject to the Asset Sale, and
(5) appropriate amounts to be provided by the Company or
any Restricted Subsidiary, as the case may be, as a reserve, in
accordance with GAAP, against any liabilities associated with
such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as reflected in an
officers certificate delivered to the Trustee, and
(b) with respect to any issuance or sale of Capital Stock
or options, warrants or rights to purchase Capital Stock, or
debt securities or Capital Stock that have been converted into
or exchanged for Capital Stock as referred to under the caption
Certain Covenants Limitation on
Restricted Payments, the proceeds of
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such issuance or sale in the form of cash or Cash Equivalents
including payments in respect of deferred payment obligations
when received in the form of, or stock or other assets when
disposed of for, cash or Cash Equivalents (except to the extent
that such obligations are financed or sold with recourse to the
Company or any Restricted Subsidiary), net of attorneys
fees, accountants fees and brokerage, consultation,
underwriting and other fees and expenses actually incurred in
connection with such issuance or sale and net of taxes paid or
payable as a result of such issuance or sale.
Non-Guarantor Restricted Subsidiary means any future
Restricted Subsidiary that is designated by the Company as a
Non-Guarantor Restricted Subsidiary, as evidenced by an
officers certificate of the Company.
Pari Passu Debt means (a) any
Debt of the Company that is pari passu in right of
payment to the Notes, including, without limitation, the
3.5% Notes and the 9.625% senior subordinated notes,
and (b) with respect to any Guarantee, Debt which ranks
pari passu in right of payment to such Guarantee,
including, without limitation, the Guarantees with respect to
the 3.5% Notes and the 9.625% senior subordinated
notes.
Permitted Holders means:
(1) Mr. Roger S. Penske, his estate, guardians,
conservators, administrators, committees or personal
representatives;
(2) immediate family members and lineal descendants of
Mr. Roger S. Penske and their respective guardians,
conservators, administrators, committees or personal
representatives;
(3) trusts or other entities created for the benefit of any
of the persons listed in (1) or (2) above or for the
benefit of a trust covered by this clause (3);
(4) any of Penske Capital Partners LLC, International Motor
Car Group I LLC, International Motor Car Group II LLC,
Penske Corporation, Penske Automotive Holdings Corp. and their
respective subsidiaries, in each case so long as the persons or
entities covered by clauses (1), (2) or (3), directly
or indirectly, control such entities;
(5) entities that are, directly or indirectly, controlled
by any of the persons or entities listed in clauses (1)
through (4) above; and
(6) Mitsui & Co., U.S.A., Inc. and
Mitsui & Co., Ltd and any of their affiliates.
For purposes of this definition, control when used
with respect to any entity means the power to direct the
management and policies of such entity, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise, and the terms controlling and
controlled have meanings correlative to the
foregoing.
Permitted Investment means:
(1) Investments in any Restricted Subsidiary or any Person
which, as a result of such Investment, (a) becomes a
Restricted Subsidiary or (b) is merged or consolidated with
or into, or transfers or conveys substantially all of its assets
to, or is liquidated into, the Company or any Restricted
Subsidiary;
(2) Debt of the Company or a Restricted Subsidiary
described under clauses (1), (2), (5), (6), (7) and
(8) of the definition of Permitted Debt;
(3) Investments in any of the Exchange Notes or the
Exchange Notes;
(4) Investments in cash and Cash Equivalents;
(5) Investments acquired by the Company or any Restricted
Subsidiary in connection with an asset sale permitted under the
caption Certain Covenants
Limitation on Sale of Assets to the extent such
Investments are non-cash proceeds as permitted under such
covenant;
(6) any Investment to the extent the consideration therefor
consists of Qualified Capital Stock of the Company or any
Unrestricted Subsidiary;
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(7) Investments representing Capital Stock or obligations
issued to the Company or any Restricted Subsidiary in the course
of the good faith settlement of claims against any other Person
by reason of a composition or readjustment of debt or a
reorganization of any debtor or any Restricted Subsidiary;
(8) prepaid expenses advanced to employees in the ordinary
course of business or other loans or advances to employees in
the ordinary course of business not to exceed $1 million in
the aggregate at any one time outstanding;
(9) Investments in existence on the Issue Date and an
Investment in any Person to the extent such Investment replaces
or refinances an Investment in such Person existing on the Issue
Date in an amount not exceeding the amount of the Investment
being replaced or refinanced;
(10) Investments in Unrestricted Subsidiaries and joint
ventures, not to exceed 2% of the Companys Consolidated
Total Assets at any one time outstanding;
(11) deposits, including interest-bearing deposits,
maintained in the ordinary course of business in banks or with
floor plan lenders; trade receivables and prepaid expenses, in
each case arising in the ordinary course of business;
provided, however, that such receivables and prepaid
expenses would be recorded as assets of such Person in
accordance with GAAP; endorsements for collection or deposit in
the ordinary course of business by such Person of bank drafts
and similar negotiable instruments of such other Person received
as payment for ordinary course of business trade receivables;
(12) Investments acquired with the Net Cash Proceeds
received by the Company after the date of the Indenture from the
issuance and sale of Capital Stock (other than Redeemable Stock
or Preferred Stock); provided that such Net Cash Proceeds
are used to make such Investment within 10 days of the
receipt thereof and the amount of all such Net Cash Proceeds
will be excluded from clause (3)(B) of the first paragraph
of the covenant described under the caption
Certain Covenants Limitation on
Restricted Payments;
(13) Investments acquired in connection with (and not
created in anticipation of) an acquisition otherwise permitted
by the Indenture;
(14) Investments in prepaid expenses, negotiable
instruments held for collection and lease, utility and
workers compensation, performance and other similar
deposits provided to third parties in the ordinary course of
business;
(15) any Investment acquired by the Company or any
Restricted Subsidiary (a) in exchange for any other
Investment or accounts receivable held by the Company or any
such Restricted Subsidiary in connection with or as a result of
a bankruptcy, workout, reorganization or recapitalization of the
Person in which such other Investment is made or which is the
obligor with respect to such accounts receivable, or (b) as
a result of a foreclosure by the Company or any Restricted
Subsidiary with respect to any secured Investment or other
transfer of title with respect to any secured Investment in
default;
(16) consumer loans and leases entered into, purchased or
otherwise acquired by the Company or its Subsidiaries, as
lender, lessor or assignee, as applicable, in the ordinary
course of business; and
(17) in addition to the Investments described in
clauses (1) through (16) above, Investments in an
amount not to exceed 2.5% of Consolidated Tangible Assets.
In connection with any assets or property contributed or
transferred to any Person as an Investment, such property and
assets shall be equal to the Fair Market Value at the time of
Investment.
Permitted Junior Payment means any payment or other
distribution to the holders of the Exchange Notes of securities
of the Company or any other corporation that are equity
securities (other than Preferred Stock or Redeemable Capital
Stock) or are subordinated in right of payment to all Senior
Debt, to substantially the same extent as, or greater extent
than, the holders of the Indenture Obligations are so
subordinated.
Permitted Liens means, with respect to any Person:
(1) Liens securing any Debt which became Debt pursuant to a
transaction permitted under the caption
Consolidation, Merger, Sale of Assets or
securing Acquired Debt which was created prior to (and not
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created in connection with, or in contemplation of) the
incurrence of such Debt (including any assumption, guarantee or
other liability with respect thereto by any Restricted
Subsidiary) and which Debt is permitted under the provisions of
the covenant described under the caption
Certain Covenants Limitation on
Debt;
(2) Liens securing Debt in the aggregate amount outstanding
at any time not to exceed 1% of the Companys Consolidated
Tangible Assets;
(3) Liens imposed by law, including carriers,
warehousemens and mechanics Liens, in each case for
sums not yet due or being contested in good faith by appropriate
proceedings if a reserve or other appropriate provisions, if
any, as shall be required by GAAP shall have been made in
respect thereof;
(4) Liens for taxes, assessments or other governmental
charges not yet subject to penalties for non-payment or which
are being contested in good faith by appropriate proceedings
provided appropriate reserves required pursuant to GAAP have
been made in respect thereof;
(5) Liens under the Companys joint collateral
accounts, concentration accounts, deposit accounts or other
funds maintained with a depositary institution or bank;
provided that such deposit account is not a dedicated
cash collateral account and is not subject to restrictions
against access by the Company in excess of those set forth by
regulations issued by the Federal Reserve Board;
(6) Liens on property at the time the Company or a
Restricted Subsidiary acquired the property, including any
acquisition by means of a merger or consolidation with or into
the Company or any Restricted Subsidiary; provided, however,
that such Liens are not created, incurred or assumed in
connection with, or in contemplation of, such acquisition;
provided further, however, that such Liens may not extend
to any other property owned by the Company or any Restricted
Subsidiary;
(7) encumbrances, ground leases, easements or reservations
of, or rights of others for, licenses, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar
purposes, or zoning, building codes or other restrictions
(including, without limitation, minor defects or irregularities
in title and similar encumbrances) as to the use of real
properties or liens incidental to the conduct of the business of
such Person or to the ownership of its properties which do not
in the aggregate materially adversely affect the value of said
properties or materially impair their use in the operation of
the business of such Person;
(8) leases, licenses, subleases and sublicenses of assets
(including, without limitation, real property and intellectual
property rights) which do not materially interfere with the
ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries;
(9) Liens existing on the Issue Date;
(10) pledges or deposits by such Person under
workmens compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Debt) or
leases to which such Person is a party, or deposits to secure
public or statutory obligations of such Person or deposits of
cash or United States government bonds to secure surety or
appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import or customs duties or for
the payment of rent, in each case incurred in the ordinary
course of business;
(11) judgment Liens not giving rise to an Event of Default
so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the
review of such judgment have not been finally terminated or the
period within which such proceedings may be initiated has not
expired; and
(12) Liens securing Debt incurred to refinance Debt that
was previously so secured, provided that any such Lien is
limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions
in respect thereof) that secured (or, under the written
arrangements under which the original Lien arose, could secure)
the Debt being refinanced or is in respect of property that is
the security for a Permitted Lien hereunder.
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Person means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Preferred Stock means, with respect to any Person,
any Capital Stock of any class or classes, however designated,
which is preferred as to the payment of dividends or
distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such
Person, over the Capital Stock of any other class in such Person.
Pro Forma Cost Savings means, with respect to any
period, the reductions in costs that (1) occurred during
the period that are attributable to an asset or stock
acquisition and calculated on a basis that is consistent with
Article 11 of
Regulation S-X
under the Securities Act or (2) are implemented, committed
to be implemented, the commencement of implementation of which
has begun or reasonably expected to be implemented in good faith
with respect to the Company and the business that was the
subject of any such asset or stock acquisition within twelve
months of the date of the asset or stock acquisition and that
are quantifiable, as if, in the case of each of clauses (1)
and (2), all such reductions in costs had been effected as of
the beginning of such period, decreased by any non-one-time
incremental cash expenses incurred or to be incurred during the
period in order to achieve such reduction in costs.
Purchase Money Obligation means any Debt secured by
a Lien on assets related to the business of the Company and any
additions and accessions thereto, which are purchased or
constructed by the Company at any time after the Issue Date of
the Notes; provided that
(1) the security agreement or conditional sales or other
title retention contract pursuant to which the Lien on such
assets is created (collectively a Purchase Money Security
Agreement) shall be entered into within 180 days
after the purchase or substantial completion of the construction
of such assets and shall at all times be confined solely to the
assets so purchased or acquired, any additions and accessions
thereto and any proceeds therefrom,
(2) at no time shall the aggregate principal amount of the
outstanding Debt secured thereby be increased, except in
connection with the purchase of additions and accessions thereto
and except in respect of fees and other obligations in respect
of such Debt, and
(3) (A) the aggregate outstanding principal amount of
Debt secured thereby (determined on a per asset basis in the
case of any additions and accessions) shall not at the time such
Purchase Money Security Agreement is entered into exceed 100% of
the purchase price or cost of construction to the Company of the
assets subject to such purchase or construction, or
(B) the Debt secured thereby shall be with recourse solely
to the assets so purchased, acquired or constructed, any
additions and accessions thereto and any proceeds therefrom.
Qualified Capital Stock of any Person means any and
all Capital Stock of such Person other than Redeemable Capital
Stock.
Redeemable Capital Stock means any Capital Stock
that, either by its terms or by the terms of any security into
which it is convertible or exchangeable or otherwise,
(1) is or upon the happening of an event or passage of time
would be, required to be redeemed prior to the final Stated
Maturity of the principal of the Notes,
(2) is redeemable at the option of the holder of such
Capital Stock at any time prior to such final Stated Maturity
(other than upon a change of control of the Company in
circumstances where the holders of the Notes would have similar
rights), or
(3) is convertible into or exchangeable for debt securities
at any time prior to such final Stated Maturity at the option of
the holder of such Capital Stock.
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Replacement Assets means properties and assets
(other than cash or any Capital Stock or other security) that
will be used in a business of the Company or its Restricted
Subsidiaries existing on the Issue Date or in a business
reasonably related thereto.
Restricted Subsidiary means any Subsidiary of the
Company that has not been designated by the board of directors
of the Company by a board resolution delivered to the Trustee as
an Unrestricted Subsidiary pursuant to and in compliance with
the covenant described under the caption
Certain Covenants Limitation on
Unrestricted Subsidiaries.
Securities Act means the Securities Act of 1933, as
amended, or any successor statute, and the rules and regulations
promulgated by the SEC under that act.
Significant Restricted Subsidiary means any
Subsidiary that would be a significant subsidiary as
defined in Article 1,
Rule 1-02
of
Regulation S-X,
promulgated pursuant to the Securities Act, as such regulation
is in effect on the date of the Indenture.
Stated Maturity means, when used with respect to any
Debt or any installment of interest on such Debt, the dates
specified in such Debt as the fixed date on which the principal
of such Debt or such installment of interest, as the case may
be, is due and payable.
Subordinated Debt means Debt of the Company or a
Guarantor subordinated in right of payment to the Exchange Notes
or the Guarantee of such Guarantor, as the case may be.
Subsidiary of a Person means:
(1) any corporation more than 50% of the outstanding voting
power of the Voting Stock of which is owned or controlled,
directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more
other Subsidiaries of such Person,
(2) any limited partnership of which such Person or any
Subsidiary of such Person is a general partner, or
(3) any other Person in which such Person, or one or more
other Subsidiaries of such Person, or such Person and one or
more other Subsidiaries, directly or indirectly, has more than
50% of the outstanding partnership or similar interests or has
the power, by contract or otherwise, to direct or cause the
direction of the policies, management and affairs of such Person.
Treasury Rate means, with respect to any redemption
date, the yield to maturity at the time of computation of United
States Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Statistical
Release H.15(519) that has become publicly available at least
two business days prior to such redemption date (or, if such
Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to
the period from such redemption date to December 15, 2011;
provided, however, that if the period from such
redemption date to December 15, 2011 is not equal to the
constant maturity of a United States Treasury security for which
a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of United
States Treasury securities for which such yields are given,
except that if the period from such redemption date to
December 15, 2011 is less than one year, the weekly average
yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
Trust Indenture Act means the Trust Indenture Act of
1939, as amended, or any successor statute.
U.K. Credit Agreement means the credit facility,
dated as of August 31, 2006, between Sytner Group Limited
and Royal Bank of Scotland plc, as agent for National
Westminster Bank plc, as such agreement, in whole or in part,
may have been or may be amended, renewed, extended, increased,
substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time, including, without
limitation, any successive renewals, extensions, substitutions,
refinancings, restructurings, replacements, supplementations or
other modifications of the foregoing.
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Unrestricted Subsidiary means any Subsidiary of the
Company (other than a Guarantor) designated as such pursuant to
and in compliance with the covenant described under the caption
Certain Covenants Limitation on
Unrestricted Subsidiaries.
Unrestricted Subsidiary Debt of any Unrestricted
Subsidiary means Debt of such Unrestricted Subsidiary:
(i) as to which neither the Company nor any Restricted
Subsidiary is directly or indirectly liable (by virtue of the
Company or any such Subsidiary being the primary obligor on,
guarantor of, or otherwise liable in any respect to, such Debt),
except Guaranteed Debt of the Company or any Restricted
Subsidiary to any Affiliate, in which case (unless the
incurrence of such Guaranteed Debt resulted in a Restricted
Payment at the time of incurrence) the Company shall be deemed
to have made a Restricted Payment equal to the principal amount
of any such Debt to the extent guaranteed at the time such
Subsidiary is designated an Unrestricted Subsidiary; and
(ii) which, upon the occurrence of a default with respect
to such Debt, does not result in, or permit any holder of any
Debt of the Company or any Restricted Subsidiary to declare, a
default on such Debt of the Company or any Restricted Subsidiary
or cause the payment of such Debt to be accelerated or payable
prior to its Stated Maturity;
provided that notwithstanding the foregoing any Unrestricted
Subsidiary may guarantee the Exchange Notes.
Voting Stock means Capital Stock of the class or
classes pursuant to which the holders of such Capital Stock have
the general voting power under ordinary circumstances to elect
at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the
time Capital Stock of any other class or classes shall have or
might have voting power by reason of the happening of any
contingency).
Wholly Owned Restricted Subsidiary means a
Restricted Subsidiary all the Capital Stock of which is owned by
the Company or another Wholly Owned Restricted Subsidiary.
Book-entry
Settlement and Clearance
The
Global Exchange Notes
The exchange notes will be issued in the form of several
registered exchange notes in global form, without interest
coupons (the global exchange notes).
Upon issuance, each of the global exchange notes will be
deposited with the Trustee as custodian for DTC and registered
in the name of Cede & Co., as nominee of DTC.
Ownership of beneficial interests in each global exchange note
will be limited to persons who have accounts with DTC (DTC
participants) or persons who hold interests through DTC
participants. We expect that under procedures established by DTC:
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upon deposit of each global exchange note with DTCs
custodian, DTC will credit portions of the principal amount of
each global exchange note to the accounts of the DTC
participants designated by the exchange agent; and
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ownership of beneficial interests in each global exchange note
will be shown on, and transfer of ownership of those interests
will be effected only through, records maintained by DTC (with
respect to interests of DTC participants) and the records of DTC
participants (with respect to other owners of beneficial
interests in any of the global exchange notes).
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Beneficial interests in the global exchange notes may not be
exchanged for exchange notes in physical, certificated form
except in the limited circumstances described below under
Certificated Exchange Notes.
Each global note and beneficial interests in each global note
will be subject to restrictions on transfer as described below.
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Book-entry
Procedures for the Global Exchange Notes
All interests in the global exchange notes will be subject to
the operations and procedures of DTC. We provide the following
summary of those operations and procedures solely for the
convenience of investors. DTC controls its own operations and
procedures and may change them at any time. Neither we nor
anyone else are responsible for those operations or procedures.
DTC has advised us that it is:
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a limited purpose trust company organized under the laws of the
State of New York;
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a banking organization within the meaning of the New
York State Banking Law;
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a member of the Federal Reserve System;
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a clearing corporation within the meaning of the
Uniform Commercial Code; and
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a clearing agency registered under Section 17A
of the Securities Exchange Act of 1934.
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DTC was created to hold securities for its participants and to
facilitate the clearance and settlement of securities
transactions between its participants through electronic
book-entry changes to the accounts of its participants.
DTCs participants include securities brokers and dealers;
banks and trust companies; clearing corporations and other
organizations. Indirect access to DTCs system is also
available to others such as banks, brokers, dealers and trust
companies; these indirect participants clear through or maintain
a custodial relationship with a DTC participant, either directly
or indirectly. Investors who are not DTC participants may
beneficially own securities held by or on behalf of DTC only
through DTC participants or indirect participants in DTC.
So long as DTCs nominee is the registered owner of an
exchange global note, that nominee will be considered the sole
owner or holder of the exchange notes represented by that
exchange global note for all purposes under the indenture.
Except as provided below, owners of beneficial interests in an
exchange global note:
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will not be entitled to have exchange notes represented by the
exchange global note registered in their names;
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will not receive or be entitled to receive physical,
certificated exchange notes; and
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will not be considered the owners or holders of the exchange
notes under the indenture for any purpose, including with
respect to the giving of any direction, instruction or approval
to the Trustee under the indenture.
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As a result, each investor who owns a beneficial interest in an
exchange global note must rely on the procedures of DTC to
exercise any rights of a holder of exchange notes under the
indenture (and, if the investor is not a participant or an
indirect participant in DTC, on the procedures of the DTC
participant through which the investor owns its interest).
Payments of principal, premium (if any) and interest with
respect to the exchange notes represented by an exchange global
note will be made by the Trustee to DTCs nominee as the
registered holder of the exchange global note. Neither we nor
the Trustee will have any responsibility or liability for the
payment of amounts to owners of beneficial interests in a global
note, for any aspect of the records relating to or payments made
on account of those interests by DTC, or for maintaining,
supervising or reviewing any records of DTC relating to those
interests.
Payments by participants and indirect participants in DTC to the
owners of beneficial interests in an exchange global note will
be governed by standing instructions and customary industry
practice and will be the responsibility of those participants or
indirect participants and DTC.
Transfers between participants in DTC will be effected under
DTCs procedures and will be settled in
same-day
funds.
DTC has agreed to the above procedures to facilitate transfers
of interests in the global exchange notes among participants in
its settlement system. However, DTC is not obligated to perform
these procedures and may discontinue or change these procedures
at any time. Neither we nor the Trustee or exchange agent will
have any
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responsibility for the performance by DTC or its direct or
indirect participants of their obligations under the rules and
procedures governing their operations.
Certificated
exchange notes
Except as set forth above, exchange notes in physical,
certificated form will be issued and delivered to each person
that DTC identifies as a beneficial owner of the related
exchange notes only if:
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DTC notifies us at any time that it is unwilling or unable to
continue as depositary for the global exchange notes and a
successor depositary is not appointed within 90 days;
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DTC ceases to be registered as a clearing agency under the
Securities Exchange Act of 1934 and a successor depositary is
not appointed within 90 days;
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we, at our option, notify the Trustee that we elect to cause the
issuance of certificated exchange notes; or
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certain other events provided in the indenture should occur.
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Material
United States Federal Income Tax Considerations
The following discussion summarizes the material
U.S. federal income tax considerations relating to the
exchange of old notes for exchange notes pursuant to the
exchange offer. This summary applies only to those persons
holding old notes and exchange notes as capital assets and does
not address considerations that may be relevant to you if you
are an investor that is subject to special tax rules, such as a
bank, thrift, real estate investment trust, regulated investment
company, insurance company, dealer in securities or currencies,
trader in securities or commodities that elects mark to market
treatment, a person that holds old notes or exchange notes as a
position in a straddle, conversion or other
integrated transaction, tax-exempt organization, partnership or
other entity classified as a partnership for U.S. federal
income tax purposes, certain former citizens and residents, a
person who is liable for the alternative minimum tax, or a
person whose functional currency is not the
U.S. dollar. If an entity that is treated as a partnership
for U.S. federal income tax purposes holds the notes, the
tax treatment of a partner generally will depend on the status
of the partner and the activities of the partnership. If you own
an interest in such an entity, you should consult your tax
advisor. In addition, this discussion does not describe any tax
consequences arising out of the tax laws of any state, local or
foreign jurisdiction, or any possible applicability of
U.S. federal gift or estate tax.
This summary is based on laws, regulations, rulings and
decisions now in effect, all of which may change. Any change
could apply retroactively and could affect the continued
validity of this summary.
You should consult your tax advisor about the tax consequences
of purchasing or holding old notes and exchange notes, including
the relevance to your particular situation of the considerations
discussed below, as well as the relevance to your particular
situation of state, local, foreign or other tax laws.
The exchange of old notes for exchange notes in the exchange
offer generally will not constitute a taxable exchange for
U.S. federal income tax purposes. As a result, (1) you
will not recognize taxable gain or loss as a result of
exchanging your old notes for exchange notes in the exchange
offer; (2) the holding period of your exchange notes will
include the holding period of your old notes; and (3) the
tax basis of the exchange notes you receive will be the same as
the tax basis of your old notes.
THE PRECEDING PARAGRAPH DOES NOT DESCRIBE ALL OF THE
U.S. FEDERAL INCOME TAX CONSEQUENCES THAT MAY BE RELEVANT
TO A HOLDER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES OR TO
HOLDERS SUBJECT TO SPECIAL RULES. IF YOU ARE CONSIDERING AN
EXCHANGE OF YOUR OLD NOTES FOR THE EXCHANGE NOTES, YOU
SHOULD CONSULT YOUR OWN TAX ADVISOR(S) CONCERNING THE TAX
CONSEQUENCES ARISING UNDER U.S. FEDERAL, STATE, LOCAL, OR
FOREIGN LAWS OF SUCH AN EXCHANGE.
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Plan of
Distribution
Any broker-dealer who holds old notes that were acquired for its
own account as a result of market-making activities or other
trading activities (other than old notes acquired directly from
us), may exchange such old notes pursuant to the exchange offer;
however, such broker-dealer may be deemed to be an
underwriter within the meaning of the Securities Act
and must, therefore, deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resales of the exchange notes received by such broker-dealer in
the exchange offer, which prospectus delivery requirement may be
satisfied by such broker-dealer by delivering this prospectus.
We have agreed that, for a period of as long as 180 days
after the expiration date of the exchange offer, we will amend
or supplement this prospectus in order to expedite or facilitate
the disposition of any exchange notes by such broker-dealers. In
addition, until up to 180 days after the effective date of
the exchange offer registration statement, all dealers effecting
transactions in the exchange notes may be required to deliver a
prospectus.
We will not receive any proceeds from any sale of exchange notes
by broker-dealers. Exchange notes received by broker-dealers for
their own account in the exchange offer may be sold from time to
time in one or more transactions in the
over-the-counter
market, in negotiated transactions, through the writing of
options on the exchange notes or a combination of these methods
of resale. These resales may be made at market prices prevailing
at the time of resale, at prices related to these prevailing
market prices or negotiated prices. Any resale may be made
directly to purchasers or to or through brokers or dealers who
may receive compensation in the form of commissions or
concessions from any broker-dealer
and/or the
purchasers of any of the exchange notes. Any broker-dealer that
resells exchange notes that were received by it for its own
account in the exchange offer and any broker or dealer that
participates in a distribution of the exchange notes may be
deemed to be an underwriter within the meaning of the Securities
Act, and any profit on the resale of exchange notes and any
commission or concessions received by those persons may be
deemed to be underwriting compensation under the Securities Act.
Any such broker-dealer must comply with the registration and
prospectus delivery requirements of the Securities Act in
connection with any resale transaction, including the delivery
of a prospectus that contains information with respect to any
selling holder required by the Securities Act in connection with
any resale of the exchange notes. By delivering a prospectus,
however, a broker-dealer will not be deemed to admit that it is
an underwriter within the meaning of the Securities Act.
Furthermore, any broker-dealer that acquired any of its old
notes directly from us:
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may not rely on the applicable interpretations of the staff of
the SEC contained in Exxon Capital Holdings Corp., SEC no-action
letter (April 13, 1988), Morgan, Stanley & Co.
Inc., SEC no-action letter (June 5, 1991) and
Shearman & Sterling, SEC no-action letter (July 2,
1993); and
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must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale
of the exchange notes.
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We have agreed to pay all expenses incident to the performance
of our obligations in relation to the exchange offer other than
commissions or concessions of any brokers or dealers. We will
indemnify the holders of the exchange notes against certain
liabilities, including liabilities under the Securities Act.
Legal
Matters
The validity of the securities offered hereby will be passed
upon for us by Shane M. Spradlin, Esq., our Vice President
and Senior Corporate Counsel.
EXPERTS
The financial statements of United Auto Group, Inc. and its
consolidated subsidiaries (the Company), except UAG
UK Holdings Limited and its subsidiaries, the related financial
statement schedule, and the related managements report on
the effectiveness of internal control over financial reporting,
incorporated in this prospectus by reference from the
Companys Annual Report on
Form 10-K
(the
Form 10-K)
for the year ended December 31, 2006, have been audited by
Deloitte & Touche LLP, an independent registered public
accounting
79
firm, as stated in their reports which are incorporated herein
by reference (which reports (1) express an unqualified
opinion on the financial statements and financial statement
schedule based on their audits and the report of other auditors
and include an explanatory paragraph referring to the
Companys election of the application of Staff Accounting
Bulletin No. 108, Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in
Current Year Financial Statements, (2) express an
unqualified opinion on managements assessment regarding
the effectiveness of internal control over financial reporting,
and (3) express an unqualified opinion on the effectiveness
of internal control over financial reporting).
The consolidated balance sheets of UAG UK Holdings Limited (a
consolidated subsidiary of the Company) and its
subsidiaries (not presented separately in the
Form 10-K)
as of December 31, 2006 and 2005 and the related
consolidated statements of income, stockholders equity,
comprehensive income and cash flows for each of the three years
in the period ended December 31, 2006, and the related
managements report on the effectiveness of internal
control over financial reporting as of December 31, 2006
have been audited by KPMG Audit Plc, an independent registered
public accounting firm, as stated in their reports incorporated
by reference in this prospectus from the Companys annual
report on
Form 10-K,
which reports include an explanatory paragraph referring to the
Companys election of the application of Staff Accounting
Bulletin No. 108, Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in
Current Year Financial Statements.
Such financial statements of the Company and UAG UK Holdings
Limited, the financial statement schedule and reports of the
independent registered public accounting firms are incorporated
herein in reliance upon the respective reports of such firms
given upon their authority as experts in accounting and auditing.
Where You
Can Find Additional Information
We file annual, quarterly and current reports, proxy statements
and other information with the SEC under the Exchange Act. You
may read and copy this information at the following location of
the SEC:
Public Reference Room
100 F Street, N.E.
Washington, D.C. 20549
You may obtain information on the operation of the Public
Reference Room by calling the SEC at
(800) SEC-0330.
The SEC also maintains an Internet site that contains reports,
proxy statements and other information about issuers, like us,
who file electronically with the SEC. The address of that
website is www.sec.gov. Our SEC filings and other information
are available at our website, www.unitedauto.com. The
information contained on our website is not incorporated by
reference in this prospectus and you should not consider it part
of this prospectus.
Incorporation
of Certain Documents By Reference
We can disclose important information to you by referring to
other documents filed separately with the SEC. The information
that we incorporate by reference is considered to be part of
this prospectus, and later information that we file with the SEC
automatically updates and supersedes this information.
Specifically, we incorporate by reference (except to the extent
the information contained therein has been updated or superceded
by the information contained in this prospectus):
1. Our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2006 filed on
March 1, 2007 (including those portions of our definitive
proxy statement, dated March 29, 2007, incorporated by
reference therein);
2. Our current reports on
Form 8-K
filed on January 31, 2007, February 14, 2007, and
March 21, 2007; and
3. All documents we file with the SEC pursuant to
Sections 13(a) of the Exchange Act after the date of this
prospectus and prior to the termination of the offering of the
exchange notes offered by this prospectus.
80
We will provide, at no cost to you, a copy of all documents
incorporated by reference into this prospectus to each person,
including any beneficial owner, to whom we deliver this
prospectus, upon written or oral request. You may request a copy
of these filings by writing or telephoning us at the following
address or telephone number:
Shane M. Spradlin
United Auto Group, Inc.
2555 Telegraph Road
Bloomfield Hills, MI 48302
(240) 648-2500
You should rely only on the information contained in this
prospectus directly or incorporated by reference. We have
authorized no one to provide you with different information. We
are not making an offer of these securities in any state where
the offer is not permitted. You should not assume that the
information in this prospectus is accurate as of any date other
than the date on the front of this prospectus. Statements
contained in this prospectus as to the contents of any contract
or other documents are not necessarily complete, and in each
instance, investors are referred to the copy of the applicable
contract or other document, and each such statement is qualified
in all respects by such reference.
81
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification
of Directors and Officers.
The following summary is qualified in its entirety by reference
to the complete text of the statutes referred to below and the
Restated Certificate of Incorporation and the Bylaws of United
Auto Group, Inc. (the Registrant).
Section 145 of the Delaware General Corporation Law
provides that a corporation may indemnify directors and
officers, as well as other employees and individuals, against
expenses, including attorneys fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by
such person in connection with any threatened, pending or
completed actions, suits or proceedings in which such person is
made a party by reason of such person being or having been a
director, officer, employee or agent of such corporation. The
Delaware General Corporation Law provides that Section 145
is not exclusive of other rights to which those seeking
indemnification may be entitled under any certificate of
incorporation, bylaws, agreement, vote of stockholders or
disinterested directors or otherwise.
Section 102(b)(7) of the Delaware General Corporation Law
permits a corporation to provide in its certificate of
incorporation that a director of the corporation shall not be
personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the
directors duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation
of law, (iii) for payments of unlawful dividends or
unlawful stock repurchases, redemptions or other distributions,
or (iv) for any transactions from which the director
derived an improper personal benefit.
The Restated Certificate of Incorporation and the By-laws of the
Registrant provides that the Registrant will indemnify its
directors and officers to the fullest extent permitted by law
and that no director shall be liable for monetary damages to the
Registrant or its stockholders for any breach of fiduciary duty,
except to the extent provided by applicable law. The Registrant
maintains standard policies of directors and
officers liability insurance.
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Item 21.
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Exhibits
and Financial Statement Schedules
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The following exhibits are being furnished herewith or
incorporated by reference herein:
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Exhibit
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Number
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Description
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4
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.1
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Indenture regarding our
7.75% senior subordinated notes due 2016 dated
December 7, 2006, by and among us, as Issuer, the
subsidiary guarantors named therein and The Bank of New York
Trust Company, N.A., as trustee (incorporated by reference to
exhibit 4.1 to our current report on
Form 8-K
filed on December 12, 2006)
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4
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.2
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Registration Rights Agreement,
dated December 7, 2006, by and among us, the subsidiary
guarantors named therein, J.P. Morgan Securities Inc., Banc
of America Securities LLC, Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Wachovia Capital
Markets, LLC, relating to the 7.75% senior subordinated notes
due 2016 (incorporated by reference to exhibit 4.3 to our
current report on
Form 8-K
filed on December 12, 2006)
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5
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Opinion of Shane M. Spradlin, Vice
President and Senior Corporate Counsel of United Auto Group, Inc.
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12
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Computation of Ratio of Earnings
to Fixed Charges
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23
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.1
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Consent of Deloitte &
Touche LLP
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23
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.2
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Consent of KPMG Audit plc
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23
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.3
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Consent of Shane M. Spradlin, Vice
President and Senior Corporate Counsel of United Auto Group,
Inc. (contained in the Opinion filed as Exhibit 5 hereto)
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24
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Power of Attorney (contained on
the signature pages hereto)
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25
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Form of T-1 Statement of
Eligibility of the Trustee under the Indenture
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II-1
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Exhibit
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Number
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Description
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99
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.1
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Form of Letter of Transmittal
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99
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.2
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Form of Notice of Guaranteed
Delivery
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99
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.3
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Form of Letter from United Auto
Group, Inc. to Brokers, Dealers
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99
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.4
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Form of Letter to Clients
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The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering; and
(4) That, for purposes of determining any liability under
the Securities Act of 1933 to any purchaser, if the registration
is subject to Rule 430C, each prospectus filed pursuant to
Rule 424(b) as part of a registration statement relating to
an offering, other than registration statement relying on
Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in
the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or
prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
The undersigned registrants hereby undertake that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrants annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit
plans annual report
II-2
pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
The undersigned registrants hereby undertake to respond to
requests for information that is incorporated by reference into
the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to
send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the
registration statement through the date of responding to the
request.
The undersigned registrant hereby undertake to supply by means
of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration
statement when it became effective.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
United Auto Group, Inc.
Roger S. Penske
Chairman of the Board and Chief Executive Officer
POWER OF
ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Roger S.
Penske and Shane M. Spradlin, and each of them acting
individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons
in the capacities and on the dates indicated:
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Signature
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Title
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Date
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/s/ Roger
S. Penske
Roger
S. Penske
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Chairman of the Board and
Chief Executive Officer
(Principal Executive Officer)
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March 30, 2007
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/s/ Robert
OShaughnessy
Robert
OShaughnessy
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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March 30, 2007
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/s/ John
D. Barr
John
D. Barr
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Director
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March 30, 2007
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/s/ Michael
R. Eisenson
Michael
R. Eisenson
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Director
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March 30, 2007
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/s/ Hiroshi
Ishikawa
Hiroshi
Ishikawa
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Director
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March 30, 2007
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/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
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Director
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March 30, 2007
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/s/ William
J. Lovejoy
William
J. Lovejoy
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Director
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March 30, 2007
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II-4
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Signature
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Title
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Date
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/s/ Kimberly
J. McWaters
Kimberly
J. McWaters
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Director
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March 30, 2007
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/s/ Eustace
W. Mita
Eustace
W. Mita
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Director
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March 30, 2007
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/s/ Lucio
A. Noto
Lucio
A. Noto
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Director
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March 30, 2007
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/s/ Richard
J. Peters
Richard
J. Peters
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Director
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March 30, 2007
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/s/ Ronald
G. Steinhart
Ronald
G. Steinhart
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Director
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March 30, 2007
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/s/ H.
Brian Thompson
H.
Brian Thompson
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Director
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March 30, 2007
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II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
Auto Mall Payroll Services, Inc.
Classic Auto Group, Inc.
Classic Enterprises, LLC
Classic Imports, Inc.
Classic Motor Sales, LLC
Classic Nissan of Turnersville, LLC
Classic Turnersville, Inc.
DiFeo Partnership LLC
Florida Chrysler Plymouth, Inc.
Gene Reed Chevrolet, Inc.
JS Imports, LLC
Michael Chevrolet-Oldsmobile, Inc.
Palm Auto Plaza, LLC
Peachtree Nissan, Inc.
Somerset Motors, Inc.
UAG Atlanta H1, LLC
UAG Atlanta IV Motors, Inc.
UAG Chantilly AU, LLC
UAG Hudson CJD, LLC
UAG Royal Palm M1, LLC
UAG-Caribbean, Inc.
UAG Carolina, Inc.
UAG Central Florida Motors, LLC
UAG CHCC, Inc.
UAG Chevrolet, Inc.
UAG Citrus Motors, LLC
UAG Classic, Inc.
UAG Connecticut, LLC
UAG Duluth, Inc.
UAG Hudson, Inc.
UAG Kissimmee Motors, Inc.
UAG Nanuet I, LLC
UAG Nanuet II, LLC
UAG Northeast, LLC
UAG Royal Palm, LLC
UAG Turnersville Motors, LLC
UAG West Bay AM, LLC
UAG West Bay FM, LLC
UAG West Bay IA, LLC
UAG West Bay IAU, LLC
UAG West Bay IB, LLC
UAG West Bay II, LLC
UAG West Bay IL, LLC
UAG West Bay IM, LLC
UAG West Bay IN, LLC
UAG West Bay IP, LLC
II-6
UAG West Bay IV, LLC
UAG West Bay IW, LLC
United Nissan, Inc. (GA)
United Nissan, Inc. (TN)
West Palm Auto Mall, Inc.
West Palm Nissan, LLC
West Palm S1, LLC
Westbury Superstore, Ltd.
By:
/s/ Roger
S. Penske, Jr.
Roger S. Penske, Jr.,
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
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Signature
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Title
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Date
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/s/ Roger
S.
Penske, Jr.
Roger
S. Penske, Jr.
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Chairman of the Board
(Principal Executive Officer)
Assistant Treasurer and Director
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March 30, 2007
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/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
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(Principal Accounting Officer
and
Principal Financial Officer)
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March 30, 2007
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/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
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Director
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March 30, 2007
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II-7
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
City of Bloomfield Hills, State of Michigan, on March 30,
2007.
Classic Management Company, Inc.
UAG Southeast, Inc.
By:
/s/ Roger
S. Penske, Jr.
Roger S. Penske, Jr.,
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
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Signature
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Title
|
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Date
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/s/ Roger
S.
Penske, Jr.
Roger
S. Penske, Jr.
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President
(Principal Executive Officer)
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March 30, 2007
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/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
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Assistant Treasurer and
Director
(Principal Accounting Officer and
Principal Financial Officer)
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March 30, 2007
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/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
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Director
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March 30, 2007
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II-8
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
County Auto Group Partnership
Danbury Auto Partnership
DiFeo Chrysler Plymouth Jeep Eagle Partnership
DiFeo Hyundai Partnership
DiFeo Leasing Partnership
DiFeo Nissan Partnership
DiFeo Tenafly Partnership
OCT Partnership
By: DiFeo Partnership, LLC
By:
/s/ Roger
S. Penske, Jr.
Roger S. Penske, Jr.
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
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|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Roger
S.
Penske, Jr.
Roger
S. Penske, Jr.
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and
Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
Hudson Motors Partnership
By: DiFeo Partnership, LLC
By:
/s/ Roger
S. Penske, Jr.
Roger S. Penske, Jr.
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
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|
|
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|
Signature
|
|
Title
|
|
Date
|
|
/s/ Roger
S.
Penske, Jr.
Roger
S. Penske, Jr.
|
|
Chairman of the Board
(Principal Executive Officer)Assistant Treasurer and Director
(Principal Accounting Officer
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and
Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
Somerset Motors Partnership
DiFeo Partnership, LLC
By:
/s/ Roger
S. Penske, Jr.
Roger S. Penske, Jr.
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Roger
S.
Penske, Jr.
Roger
S. Penske, Jr.
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and
Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG East, LLC
By:
/s/ Roger
S. Penske, Jr.
Roger S. Penske, Jr.,
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Roger
S.
Penske, Jr.
Roger
S. Penske, Jr.
|
|
President
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
Late Acquisition I, LLC
|
|
|
|
By:
|
/s/ Walter
P. Czarnecki, Jr.
|
Walter P. Czarnecki, Jr.,
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Walter
P.
Czarnecki, Jr.
Walter
P. Czarnecki, Jr.
|
|
President
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG International Holdings, Inc.
Roger S. Penske
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Roger
S. Penske
Roger
S. Penske
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
President and Director
|
|
March 30, 2007
|
II-14
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG Realty, LLC
Roger S. Penske
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Roger
S. Penske
Roger
S. Penske
|
|
President and Chairman of the
Board (Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-15
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG Northeast Body Shop, Inc.
UAG Turnersville Realty, LLC
|
|
|
|
By:
|
/s/ Roger
S. Penske, Jr.
|
Roger S. Penske, Jr.,
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Roger
S.
Penske, Jr.
Roger
S. Penske, Jr.
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-16
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
Brett Morgan Chevrolet -Geo, Inc.
Central Ford Center, Inc.
CJNS, LLC
Dealer Accessories, LLC
Europa Auto Imports, Inc.
FRN of Tulsa, LLC
GMG Motors, Inc.
Goodson North, LLC
Goodson Pontiac-GMC, LLC
Goodson Spring Branch, LLC
HT Automotive, Ltd.
KMPB, LLC
KMT/UAG, Inc.
Landers Auto Sales, LLC
Landers Buick-Pontiac, Inc.
Landers Ford North, Inc.
Late Acquisition II, LLC
LMNS, LLC
LRP, Ltd.
National City Ford, Inc.
PMRC, LLC
Relentless Pursuit Enterprises, Inc.
SA Automotive, Ltd.
SAU Automotive, Ltd.
Scottsdale 101 Management, LLC
Scottsdale Ferrari, LLC
Scottsdale Jaguar, Ltd.
Scottsdale Management Group, Ltd.
Scottsdale Paint & Body, LLC
Sigma Motors, Inc.
SK Motors, Ltd.
SL Automotive, Ltd.
Sun Motors, Ltd.
Tri-City Leasing, Inc.
UAG Arkansas FLM, LLC
UAG Capitol, Inc.
UAG Cerritos, LLC
UAG Clovis, Inc.
UAG Escondido A1, Inc.
UAG Escondido H1, Inc.
UAG Escondido M1, Inc.
UAG Fayetteville I, LLC
UAG Fayetteville II, LLC
UAG Fayetteville III, LLC
UAG Landers Springdale, LLC
UAG Los Gatos, Inc.
UAG Marin, Inc.
II-17
UAG Nevada Land, LLC
UAG Phoenix VC, LLC
UAG San Diego A1, Inc.
UAG San Diego AU, Inc.
UAG San Diego H1, Inc.
UAG San Diego JA, Inc.
UAG San Diego Management, Inc.
UAG Spring, LLC
UAG Stevens Creek II, Inc.
UAG Sunnyvale, Inc.
UAG Texas II, Inc.
UAG Texas, LLC
UAG Torrance, Inc.
UAG Tulsa JLM, LLC
UAG Tulsa VC, LLC
UAG VC II, LLC
UAG VK, LLC
UAG West, LLC
UAG/PFS, Inc.
United Ford Broken Arrow, LLC
United Ford North, LLC
United Ford South, LLC
United Ranch Automotive, LLC
UnitedAuto Dodge of Shreveport, Inc.
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick,
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-18
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
Landers United Auto Group No. 2, Inc.
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick,
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-19
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG Tulsa Holdings, LLC
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-20
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
United Auto Scottsdale Property Holdings, LLC
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick,
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
President
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T. OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG Houston Acquisition, Ltd.
Shannon Automotive, Ltd.
By: UAG Texas, LLC
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and
Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-22
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG GD, Ltd.
By: UAG Spring, LLC
Its: General Partner
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|
|
|
By:
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/s/ George
W. Brochick
|
George W. Brochick
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
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|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-23
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG GN, Ltd.
By: Goodson North, LLC
Its: General Partner
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|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-24
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG GP, Ltd.
By: Goodson Pontiac-GMC, LLC
Its: General Partner
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-25
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
UAG GW, Ltd.
By: Goodson Spring Branch, LLC
Its: General Partner
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-26
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
WTA Motors, Ltd.
By: Late Acquisition II, LLC
Its: General Partner
|
|
|
|
By:
|
/s/ George
W. Brochick
|
George W. Brochick
Chairman of the Board
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ George
W. Brochick
George
W. Brochick
|
|
Chairman of the Board
(Principal Executive Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
T.
OShaughnessy
Robert
T. OShaughnessy
|
|
Assistant Treasurer and Director
(Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
|
|
|
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
Director
|
|
March 30, 2007
|
II-27
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
United Auto Licensing, LLC
|
|
|
|
By:
|
/s/ Robert
H. Kurnick, Jr.
|
Robert H. Kurnick, Jr.
President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Robert
H. Kurnick, Jr. and Shane M. Spradlin, and each of them
acting individually, as his
attorney-in-fact,
each with full power of substitution, for him in any and all
capacities, to sign any and all amendments to this registration
statement of
Form S-4
(including post-effective amendments), and to file the same,
with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneys-in-fact,
or any substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following
persons in the capacities indicated and on the dates indicated.
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
/s/ Robert
H.
Kurnick, Jr.
Robert
H. Kurnick, Jr.
|
|
President, Treasurer and Director
(Principal Executive Officer,
Principal Accounting Officer and
Principal Financial Officer)
|
|
March 30, 2007
|
II-28
SIGNATURES
Pursuant to the requirements of the Securities Act, each of the
Registrants has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Bloomfield Hills, State of Michigan,
on March 30, 2007.
Covington Pike Dodge, Inc.
Dan Young Chevrolet, Inc.
Landers Ford, Inc.
Landers Nissan, LLC
Motorcars Acquisition II, LLC
Motorcars Acquisition III, LLC
Motorcars Acquisition IV, LLC
Motorcars Acquisition V, LLC
Motorcars Acquisition VI, LLC
Motorcars Acquisition, LLC
Nissan of North Olmsted, LLC
The New Graceland Dodge, Inc.
UAG Central Region Management, LLC
UAG Gracel