As
filed with the Securities and Exchange Commission on March 22, 2005
Registration
No. 333-
WASHINGTON,
D.C. 20549
_______________
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
_______________
Asbury
Automotive Group, Inc.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
of Incorporation) |
01-0609375
(I.R.S.
Employer Identification Number) |
|
622
Third Avenue
37th
Floor
New
York, New York 10017
(212)
885-2500
(Address
of principal executive offices) | |
(Address,
including zip code, and telephone number, including area code, of registrant’s
principal executive offices)
Kenneth
B. Gilman
Chief
Executive Officer
Asbury
Automotive Group, Inc.
622
Third Avenue
37th
Floor
New
York, New York 10017
(212)
885-2500
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
Copies
to:
|
Robert
Rosenman, Esq.
Cravath,
Swaine & Moore LLP
Worldwide
Plaza
825
Eighth Avenue
New
York, New York 10019 |
Andrew
D. Soussloff, Esq.
Sullivan
& Cromwell LLP
125
Broad Street
New
York, NY 10004 |
_______________
Approximate
date of commencement of proposed sale to the public:
From time
to time after the effective date of this Registration Statement.
_______________
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following
box. o
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. x
If this
Form is filed to register additional securities for an offering pursuant to
Rule 462(b) under the Securities Act, please 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(c) 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
delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. o
CALCULATION
OF REGISTRATION FEE
|
Title
of each class of securities
to
be registered |
Amount
to be registered |
Proposed
maximum
offering
price per unit(1) |
Proposed
maximum
aggregate
offering price(1) |
Amount
of registration fee(1)(2) |
|
Common
Stock, par value $.01 per share |
23,355,445
Shares |
$14.91 |
$348,229,685 |
$40,987 |
|
(1) |
Calculated
pursuant to Rule 457(c), based on the average of the high and low prices
of the Common Stock reported on the New York Stock Exchange Composite Tape
on March 18, 2005 ($14.91 per share). |
|
(2) |
Of
this amount, $17,434 was previously paid with respect to the Registration
Statement on Form S-3 (File No. 333-112126) filed with the Securities
and Exchange Commission on January 22, 2004, as withdrawn on
July 16, 2004. Accordingly, pursuant to Rule 457(p) under the
Securities Act, the fee being paid herewith is
$23,553. |
|
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, as amended, or until
the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may
determine. |
The
information in this preliminary prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is
not an offer to sell nor does it seek an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
23,355,445
Shares
Common
Stock
_______________
The
Selling Stockholders identified in this prospectus may offer and sell, from time
to time, in one or more offerings, the common stock described herein. You should
carefully read this prospectus and the supplements before you decide to invest
in any of these securities.
Asbury
will not receive any of the proceeds from sales of the shares of common stock by
the selling stockholders covered by this prospectus.
The
distribution of the common stock by these selling stockholders may be effected
from time to time, including:
| · |
in
underwritten public offerings; |
| · |
in
ordinary brokerage transactions on securities exchanges, including the New
York Stock Exchange; |
| · |
to
or through brokers or dealers who may act as principal or agent;
or |
| · |
in
one or more negotiated transactions. |
The
brokers or dealers through or to whom the shares of common stock may be sold may
be deemed underwriters of the shares within the meaning of the Securities Act of
1933, in which event all brokerage commissions or discounts and other
compensation received by those brokers or dealers may be deemed to be
underwriting compensation. To the extent required, the names of any underwriters
and applicable commissions or discounts and any other required information with
respect to any particular sale will be set forth in an accompanying prospectus
supplement. See “Plan of Distribution” for a further description of how the
selling stockholders may dispose of the shares covered by this
prospectus.
The
common stock is listed on the New York Stock Exchange under the symbol “ABG”.
The last reported sale price of the common stock on March 18, 2005 was
$15.02 per share.
See
“Risk Factors” on page 2 to read about factors you should consider before
buying shares of the common stock.
_______________
Neither
the Securities and Exchange Commission nor any other regulatory body has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
Prospectus
dated March , 2005.
TABLE
OF CONTENTS
| Page | ||
| MANUFACTURER DISCLAIMER |
i | |
| RISK FACTORS |
2 | |
| FORWARD-LOOKING STATEMENTS |
13 | |
| USE OF PROCEEDS |
14 | |
| DESCRIPTION OF CAPITAL STOCK |
15 | |
| SELLING STOCKHOLDERS |
20 | |
| PLAN OF DISTRIBUTION |
22 | |
| AVAILABLE INFORMATION |
25 | |
| INCORPORATION BY REFERENCE |
25 | |
| VALIDITY OF THE SHARES |
26 | |
| EXPERTS |
26 |
MANUFACTURER
DISCLAIMER
No
manufacturer or distributor has been involved, directly or indirectly, in the
preparation of this prospectus, the documents incorporated by reference herein
or in the offering being made hereby. No manufacturer or distributor has been
authorized to make any statements or representations in connection with this
prospectus, and no manufacturer or distributor has any responsibility for the
accuracy or completeness of this prospectus.
i
Our
Company
We are
one of the largest automotive retailers in the United States, operating 130
franchises at 94 dealership locations as of March 9, 2005. We offer our
customers an extensive range of automotive products and services including new
and used vehicles and related financing, vehicle maintenance and repair
services, replacement parts and warranty, insurance and extended service
contracts. For the year ended December 31, 2004, our revenues were
approximately $5.3 billion and our net income was approximately $50.1 million.
_______________
Our
principal executive offices are located at 622 Third Avenue, 37th Floor,
New York, New York 10017. Our telephone number is (212) 885-2500. Information
contained on our website or that can be accessed through our website is not
incorporated by reference in this prospectus. You should not consider
information contained on our website or that can be accessed through our website
to be part of this prospectus.
1
RISK
FACTORS
You
should carefully consider the following risks and other information in this
prospectus and any prospectus supplement and information incorporated herein by
reference before deciding to invest in our common stock. If any of the following
risks and uncertainties actually occur, our business’ financial condition or
operating results may be materially and adversely affected. In this event, the
trading price of our common stock may decline and you may lose part or all of
your investment.
Risk
Factors Related To Our Dependence On Vehicle Manufacturers
If
we fail to obtain renewals of one or more of our dealer agreements on favorable
terms, if certain of our franchises are terminated, or if certain manufacturers’
rights under their agreements with us are triggered, our operations may be
adversely affected.
Each of
our dealerships operates under the terms of a dealer agreement with the
manufacturer (or manufacturer-authorized distributor) of each new vehicle brand
it carries. Our dealerships may obtain new vehicles from manufacturers, sell new
vehicles and display vehicle manufacturers’ trademarks only to the extent
permitted under dealer agreements. As a result of the terms of our dealer
agreements and our dependence on these franchise rights, manufacturers exercise
a great deal of control over our day-to-day operations and the terms of our
dealer agreements govern key aspects of our operations, acquisition strategy and
capital spending.
Most of
our dealer agreements provide the manufacturer with the right to terminate the
agreement or refuse to renew it after the expiration of the term of the
agreement under specified circumstances. We cannot assure you we will be able to
renew any of our existing dealer agreements or that we will be able to obtain
renewals on favorable terms. Specifically, many of our dealer agreements provide
that the manufacturer may terminate the agreement or direct us to divest the
subject dealership if there is a change of control of the dealership. Some of
our dealer agreements also provide the manufacturer with the right of first
refusal to purchase from us any franchise we seek to sell. Provisions such as
these may provide manufacturers with superior bargaining positions in the event
that they seek to terminate our dealer agreements or renegotiate the agreements
on terms that are disadvantageous to us. Our results of operations may be
materially and adversely affected to the extent that our franchise rights become
compromised or our operations restricted due to the terms of our dealer
agreements or if we lose franchises representing a significant source of our
revenues.
In
addition, we have agreements with Toyota which provide that in the event that
our payment obligations under our credit facility or our 9% Senior Subordinated
Notes due 2012 (the “9% Notes”) are accelerated or demand for payment is made
under our subsidiaries’ guarantees of the credit facility or our 9% Notes,
Toyota will have the right to purchase our Toyota and Lexus dealerships for cash
at their fair market value, unless the acceleration or demand is waived within a
cure period of no less than 30 days after Toyota’s notification of its
intent to exercise its right to purchase. If fair market value cannot be agreed
by the parties, it will be determined by an independent nationally recognized
and experienced appraiser. We also have an agreement with Ford that provides if
any of the lenders of our credit facility or floor plan facilities accelerate
those payment obligations, or if we are notified of any default under our credit
facility, then Ford may exercise its right to acquire our Ford, Lincoln and
Mercury dealerships for their fair market value.
Our
failure to meet manufacturer consumer satisfaction, financial or sales
performance requirements may adversely affect our ability to acquire new
dealerships and our profitability.
Many
manufacturers attempt to measure customers’ satisfaction with their experience
in our sales and service departments through rating systems that are generally
known as consumer satisfaction indexes (“CSI”), augmenting manufacturers’
monitoring of dealerships’ financial and sales performance. At the time we
acquire a dealership or enter into a new dealership or framework agreement,
several manufacturers establish certain sales or performance criteria for that
dealership, in some cases in the form of a business plan. In the event that that
dealership is unable to meet these goals, we may be prevented from making future
acquisitions, which would have an adverse effect on our ability to grow.
Manufacturers may use these performance indicators, as well as sales
2
performance
numbers, as factors in evaluating applications for acquisitions. The components
of these performance indicators have been modified by various manufacturers from
time to time in the past, and we cannot assure you that these components will
not be further modified or replaced by different systems in the future. Some of
our dealerships have had difficulty from time to time meeting these standards.
We cannot assure you that we will be able to comply with these standards in the
future. A manufacturer may refuse to consent to our acquisition of one of its
franchises if it determines our dealerships do not comply with its performance
standards. This may impede our ability to execute our acquisition strategy. In
addition, we receive payments from certain manufacturers based, in part, on CSI
scores, and future payments may be materially reduced or eliminated if our CSI
scores decline.
Manufacturers’
restrictions on acquisitions may limit our future growth.
We are
generally required to obtain manufacturer consent before we can acquire any
additional dealerships. In addition, many of our dealer agreements and the
additional provisions contained in supplemental agreements, framework
agreements, dealer addenda and manufacturers’ policies, collectively referred to
as “framework agreements”, require that we meet certain customer service and
sales performance standards as a condition to additional dealership
acquisitions. We cannot assure you that we will meet these performance standards
and that manufacturers will consent to future acquisitions, which may deter us
from being able to take advantage of market opportunities and restrict our
ability to expand our business. The process of applying for and obtaining
manufacturer consents can take a significant amount of time, generally 60 to 90
days or more. Delays in consummating acquisitions caused by this process may
negatively affect our ability to acquire dealerships that we believe will
produce acquisition synergies and integrate well to our overall growth strategy.
In addition, manufacturers
typically establish minimum capital requirements for each of their dealerships
on a case-by-case basis. As a condition to granting consent to a proposed
acquisition, a manufacturer may require us to remodel and upgrade our facilities
and capitalize the subject dealership at levels we would not otherwise choose,
causing us to divert our financial resources from uses that management believes
may be of higher long-term value to us. Furthermore,
the exercise by manufacturers of their right of first refusal to acquire a
dealership may prevent us from acquiring dealerships that we have identified as
important to our growth, thereby having an adverse affect on our
business.
Many
vehicle manufacturers place limits on the total number of franchises that any
group of affiliated dealerships may obtain. Certain manufacturers place limits
on the number of franchises or share of total brand vehicle sales maintained by
an affiliated dealership group on a national, regional or local basis.
Manufacturers may also tailor these types of restrictions to particular
dealership groups. Because of our current franchise mix, we are close to our
franchise ceilings with Toyota, Lexus, Acura and Jaguar. If we reach the
franchise limits, we may be prevented from making further acquisitions, which
could affect our growth. While we have not reached a numerical limit with Ford,
we have a dispute over whether our performance should limit additional
acquisitions at this time. However, we do not believe our inability to acquire
additional Ford dealerships will have a material affect on our
business.
If
state dealer laws are repealed, weakened or superseded by our framework
agreements with manufacturers, our dealerships will be more susceptible to
termination, non-renewal or renegotiation of their dealer
agreements.
State
dealer laws generally provide that a manufacturer may not terminate or refuse to
renew a dealer 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 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. We have framework agreements with certain of our manufacturers.
Among other provisions, these agreements attempt to limit the protections
available to dealers under 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 dealers to renew their dealer agreements upon expiration. In
addition, in some states these laws restrict the ability of automobile
manufacturers to compete directly in the retail market in the future. If
manufacturers obtain the ability to directly retail vehicles and do so
3
in our
markets, such competition could have a material adverse effect on us.
Manufacturers’
restrictions regarding a change in our stock ownership may result in the
termination or forced sale of our franchises, which could have a material
adverse effect on our ability to grow and may adversely impact the value of our
common stock.
Some of
our dealer agreements with manufacturers prohibit transfers of any ownership
interests of a dealership or, in some cases, its parent, without manufacturer
consent. Our agreements with several manufacturers provide that, under certain
circumstances, we may lose (either through termination or forced sale) the
franchise if a person or entity acquires an ownership interest in us above a
specified level (ranging from 20% to 50% depending on the particular
manufacturer’s restrictions) or if a person or entity acquires the right to vote
20% or more of our common stock without the approval of the applicable
manufacturer. This trigger level can fall to as low as 5% if another vehicle
manufacturer or a person with a criminal record is the entity acquiring the
ownership interest or voting rights.
One
manufacturer, Toyota, in addition to imposing the restrictions previously
mentioned, provides that we may be required to sell our Toyota franchises
(including Lexus) if without its consent the owners of our equity prior to our
initial public offering in March 2002 cease to control a majority of our voting
stock or if Timothy C. Collins ceases to indirectly control us.
Violations
by our stockholders of these ownership restrictions are generally outside of our
control and may result in the termination or non-renewal of our dealer and
framework agreements or forced sale of one or more franchises, which may have a
material adverse effect on us. These restrictions may also prevent or deter
prospective acquirers from acquiring control of us and, therefore, may adversely
impact the value of our common stock. We currently intend to seek the consent of
Toyota or other manufacturers before any offering of shares pursuant to this
prospectus or a prospectus supplement that, without such consent, would be a
violation of these Toyota or other manufacturers’ restrictions.
Our
dealers depend upon vehicle sales and, therefore, their success depends in large
part upon customer demand for the particular vehicle lines they
carry.
The
success of our dealerships depends in large part on the overall success of the
vehicle lines they carry. New vehicle sales generate the majority of our total
revenue and lead to sales of higher-margin products and services such as finance
and insurance products and parts and service operations. Although we have sought
to limit our dependence on any one vehicle brand, we have focused our new
vehicle sales operations in mid-line import and luxury brands.
For the
year ended December 31, 2004, brands representing 5% or more of our
revenues from new vehicle retail sales were as follows:
Brand |
%
of Total New
Vehicle
Retail Sales |
|
Honda |
18% |
|
Nissan |
10% |
|
Ford |
9% |
|
Toyota |
8% |
|
Mercedes-Benz |
7% |
|
BMW |
6% |
|
Lexus |
5% |
No other
brand accounted for more than 5% of our total new vehicle retail sales revenue
for the year ended December 31, 2004.
4
If
we fail to obtain a desirable mix of popular new vehicles from manufacturers,
our profitability will be negatively impacted.
We depend
on manufacturers to provide us with a desirable mix of popular new vehicles.
Typically, popular vehicles produce the highest profit margins but tend to be
the most difficult to obtain from manufacturers. Manufacturers generally
allocate their vehicles among their franchised dealerships based on the sales
history of each dealership. If our dealerships experience prolonged sales
slumps, those manufacturers will cut back their allotments of popular vehicles
to our dealerships and new vehicle sales and profits may decline.
If
automobile manufacturers discontinue incentive programs, our sales volumes may
be materially and adversely affected.
Our
dealerships depend on manufacturers for certain sales incentives, warranties and
other programs that are intended to promote and support new vehicle sales.
Manufacturers often make many changes to their incentive programs during each
year. Some key incentive programs include:
| · |
customer
rebates on new vehicles; |
| · |
dealer
incentives on new vehicles; |
| · |
special
financing or leasing terms; and |
| · |
warranties
on new and used vehicles. |
A
reduction or discontinuation of key manufacturers’ incentive programs may reduce
our new vehicle sales volume resulting in decreased vehicle sales and related
revenues.
Adverse
conditions affecting one or more manufacturers may negatively impact our
profitability.
The
success of each of our dealerships depends to a great extent on vehicle
manufacturers’:
| · |
financial
condition; |
| · |
marketing
efforts; |
| · |
vehicle
design; |
| · |
production
capabilities; |
| · |
reputation;
|
| · |
management;
and |
| · |
labor
relations. |
Adverse
conditions affecting these and other important aspects of manufacturers’
operations and public relations may adversely affect our ability to market their
automobiles to the public and, as a result, significantly and detrimentally
affect our profitability.
5
Risks
Related To Our Acquisition Strategy
If
we are unable to acquire and successfully integrate additional dealerships, we
will be unable to realize desired results from our growth through acquisition
strategy and acquired operations will drain resources from comparatively
profitable operations.
We
believe that the automobile retailing industry is a mature industry in which we
expect relatively slow growth in industry unit sales. Accordingly, we believe
that our future growth depends in large part on our ability to acquire
additional dealerships, manage expansion, control costs in our operations and
consolidate acquired dealerships into our organization. In pursuing our strategy
of acquiring other dealerships, we face risks commonly encountered with growth
through acquisitions. These risks include, but are not limited to:
| · |
failing
to obtain manufacturers’ consents to acquisitions of additional
franchises; |
| · |
incurring
significant transaction related costs for both completed and failed
acquisitions; |
| · |
incurring
significantly higher capital expenditures and operating expenses;
|
| · |
failing
to integrate the operations and personnel of the acquired dealerships;
|
| · |
incurring
undiscovered liabilities at acquired dealerships;
|
| · |
disrupting
our ongoing business and diverting our management resources;
|
| · |
impairing
relationships with employees, manufacturers and customers as a result of
changes in management; and |
| · |
incorrectly
valuing acquired entities. |
We may
not adequately anticipate all the demands that our growth will impose on our
personnel, procedures and structures, including our financial and reporting
control systems, data processing systems and management structure. Moreover, our
failure to retain qualified management personnel at any acquired dealership may
increase the risk associated with integrating the acquired dealership. If we
cannot adequately anticipate and respond to these demands, we may fail to
realize acquisition synergies and our resources will be focused on incorporating
new operations into our structure rather than on areas that may be more
profitable. If we incorrectly value acquisition targets or fail to successfully
integrate acquired businesses we may be required to take write downs of the
goodwill attributed to the acquired businesses, which could be significant. See
“Risk Factors Related to our Dependence on Vehicle Manufacturers--Manufacturers’
restrictions on acquisitions may limit our future growth.”
We
may be unable to capitalize on acquisition opportunities because of financing
constraints.
We have
substantial indebtedness and, as a result, significant debt service obligations.
Our substantial indebtedness could limit the future availability of debt
financing to fund acquisitions. We would like the ability to finance our
platform acquisitions in part by issuing shares of our common stock. The extent
to which we will be able or willing to issue common stock for acquisitions will
depend on the market value of our common stock from time to time and the
willingness of potential acquisition candidates to accept common stock as part
of the consideration for the sale of their businesses. We may also be prevented
from issuing shares of common stock to finance acquisitions because of
manufacturers’ stock ownership restrictions under our dealer agreements. See
“Risk Factors Related to our Dependence on Vehicle Manufacturers--Manufacturers’
restrictions regarding a change in our stock ownership may result in the
termination or forced sale of our franchises, which could have a material
adverse effect on our ability to grow and may adversely impact the value of our
common stock.”
6
We cannot
assure you that we will be able to obtain additional capital in the future by
issuing stock or additional debt securities, and using cash to complete
acquisitions may substantially limit our operating or financial flexibility or
our ability to meet our debt service obligations. Furthermore, if we are unable
to obtain financing on acceptable terms, we may be required to reduce the scope
of our presently anticipated expansion, which may materially and adversely
affect our growth strategy.
The
competition with other dealer groups to acquire automotive dealerships is
intense, and we may not be able to fully implement our growth through
acquisition strategy if attractive targets are acquired by competing groups or
priced out of our reach due to competitive pressures.
We
believe that the United States automotive retailing market is fragmented and
offers many potential acquisition candidates that meet our targeting criteria.
However, we compete with several other national, regional and local dealer
groups, some of which may have greater financial and other resources.
Competition with existing dealer groups and dealer groups formed in the future
for attractive acquisition targets may result in fewer acquisition opportunities
and increased acquisition costs. We will have to forego acquisition
opportunities to the extent that we cannot negotiate acquisitions on acceptable
terms.
Risks
Related To Competition
Substantial
competition in automobile sales and services may adversely affect our
profitability.
The
automotive retailing and servicing industry is highly competitive with respect
to price, service, location and selection. Our competition includes:
| · |
franchised
automobile dealerships in our markets that sell the same or similar new
and used vehicles that we offer; |
| · |
other
national or regional affiliated groups of franchised dealerships;
|
| · |
privately
negotiated sales of used vehicles; |
| · |
Internet-based
vehicle brokers that sell vehicles obtained from franchised dealers
directly to consumers; |
| · |
sales
of used vehicles by rental car companies; |
| · |
service
center chain stores; and |
| · |
independent
service and repair shops. |
We do not
have any cost advantage in purchasing new vehicles from manufacturers. We
typically rely on advertising, merchandising, sales expertise, service
reputation and dealership location to sell new and used vehicles. Our dealer
agreements do not grant us the exclusive right to sell a manufacturer’s product
within a given geographic area. Our revenues or profitability may be materially
and adversely affected if competing dealerships expand their market share or are
awarded additional franchises by manufacturers that supply our dealerships.
Risks
Related To The Automotive Industry
Our
business will be harmed if overall consumer demand suffers from a severe or
sustained downturn.
Our
business is heavily dependent on consumer demand and preferences. Our revenues
will be materially and adversely affected if there is a severe or sustained
downturn in overall levels of consumer spending. Retail vehicle sales are
cyclical and historically have experienced periodic downturns characterized by
oversupply and weak demand. These cycles are often dependent on general economic
conditions and consumer confidence, as well
7
as the
level of discretionary personal income, credit availability and interest rates.
Future recessions may have a material adverse effect on our retail business,
particularly sales of new and used automobiles. In addition, severe or sustained
increases in gasoline prices may lead to a reduction in automobile purchases or
a shift in buying patterns from luxury/SUV models (which typically provide
higher profit margins to retailers) to smaller, more economical vehicles (which
typically have lower margins).
Our
business may be adversely affected by unfavorable conditions in our local
markets, even if those conditions are not prominent
nationally.
Our
performance is also subject to local economic, competitive and other conditions
prevailing in our various geographic areas. Our dealerships currently are
located in the Atlanta, Austin, Chapel Hill, Charlotte, Charlottesville,
Dallas-Fort Worth, Fayetteville, Fort Pierce, Fresno, Greensboro, Greenville,
Houston, Jackson, Jacksonville, Little Rock, Los Angeles, Orlando, Portland,
Rancho Santa Margarita, Richmond, Sacramento, St. Louis and Tampa markets and
our results of operations therefore depend substantially on general economic
conditions and consumer spending levels in those areas.
The
seasonality of the automobile retail business magnifies the importance of our
second and third quarter results.
The
automobile industry is subject to seasonal variations in revenues. Demand for
automobiles is generally lower during the first and fourth quarters of each
year. Accordingly, we expect our revenues and operating results generally to be
lower in our first and fourth quarters than in our second and third quarters. If
conditions surface during the second or third quarters that retard automotive
sales, such as severe weather in the geographic areas in which our dealerships
operate, war, high fuel costs, depressed economic conditions or similar adverse
conditions, our revenues for the year will be disproportionately adversely
affected.
Our
business may be adversely affected by import product restrictions and foreign
trade risks that may impair our ability to sell foreign vehicles or parts
profitably.
A
significant portion of our new vehicle business involves the sale of vehicles,
parts or vehicles composed of parts that are manufactured outside the United
States. As a result, our operations are subject to customary risks of importing
merchandise, including fluctuations in the relative values of currencies, import
duties, exchange controls, trade restrictions, work stoppages and general
political and socio-economic conditions in other countries. The United States or
the countries from which our products are imported may, from time to time,
impose new quotas, duties, tariffs or other restrictions, or adjust presently
prevailing quotas, duties or tariffs, which may affect our operations and our
ability to purchase imported vehicles and/or parts at reasonable prices.
Other
Risks Related To Our Business
Our
substantial leverage could adversely affect our ability to operate our business
and adversely impact our compliance with our credit facility and other debt
covenants.
We are
highly leveraged and have significant debt service obligations. As of
December 31, 2004, we had total debt of $529.2 million, excluding floor
plan notes payable. In addition, we and our subsidiaries may incur additional
debt from time to time to finance acquisitions or capital expenditures or for
other purposes, subject to the restrictions contained in our credit facility and
the indentures governing our 9% Notes and our 8% Senior Subordinated Notes
due 2014 (the “8% Notes”). We will have substantial debt service obligations,
consisting of required cash payments of principal and interest, for the
foreseeable future.
In
addition, the operating and financial restrictions and covenants in our debt
instruments, including our credit facility and the indentures under our 9% Notes
and our 8% Notes, may adversely affect our ability to finance our future
operations or capital needs or to pursue certain business activities. In
particular, our credit facility requires us to maintain certain financial
ratios. Our ability to comply with these ratios may be affected by events beyond
our
8
control.
A breach of any of the covenants in our debt instruments or our inability to
comply with the required financial ratios could result in an event of default,
which, if not cured or waived, could have a material adverse effect on us. In
the event of any default under our credit facility, the Lenders thereunder could
accelerate the payment of all borrowings outstanding, together with accrued and
unpaid interest and other fees, and require us to apply all of our available
cash to repay these borrowings or prevent us from making debt service payments
on our 9% Notes and our 8% Notes, any of which would be an event of default
under the respective indentures for such Notes. Our substantial debt service
obligations could increase our vulnerability to adverse economic or industry
conditions.
Our
capital costs and our results of operations may be materially and adversely
affected by a rising interest rate environment.
We
generally finance our purchases of new vehicle inventory and have the ability to
finance the purchase of used vehicle inventory using floor plan credit
facilities 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 are generally associated with
increasing macroeconomic business activity and improvements in gross domestic
product. However, rising interest rates may also have the effect of depressing
demand in the interest rate sensitive aspects of our business, particularly new
and used vehicle sales, because many of our customers finance their vehicle
purchases. As a result, rising interest rates may have the effect of
simultaneously increasing our costs and reducing our revenues. Given our debt
composition as of December 31, 2004, each one percent increase in market
interest rates would increase our total annual interest expense, including floor
plan interest, by $9.0 million.
We
receive interest credit assistance from certain automobile manufacturers, which
is reflected as a reduction in the cost of inventory on the balance sheet.
Although we can provide no assurance as to the amount of future floor plan
credits, it is our expectation, based on historical experience, that an increase
in prevailing interest rates would result in increased interest credit
assistance from certain automobile manufacturers.
Governmental
regulations and environmental regulation compliance costs may adversely affect
our profitability.
We are
subject to a wide range of federal, state and local laws and regulations, such
as local licensing requirements, consumer protection and privacy laws, wage and
hour, anti-discrimination and other employment practices laws, and environmental
requirements governing, among other things, discharges into the air and water,
aboveground and underground storage of petroleum substances and chemicals,
handling and disposal of wastes and remediation of contamination arising from
spills and releases. If we or our employees at the individual dealerships
violate these laws and regulations, we may be subject to civil and criminal
penalties, or a cease and desist order may be issued against our operations that
are not in compliance. Our future acquisitions may also be subject to
governmental regulation, including antitrust reviews. Future laws and
regulations relating to our business may be more stringent than current laws and
regulations and require us to incur significant additional costs.
Our
business and financial results may be adversely affected by claims alleging
violations of laws and regulations related to our advertising, sales, and
finance and insurance activities.
Our
business is highly regulated. In the past several years, private plaintiffs and
state attorneys general have increased their scrutiny of advertising, sales, and
finance and insurance activities in the sale and leasing of motor vehicles. The
conduct of our business is subject to numerous federal, state and local laws and
regulations regarding unfair, deceptive and/or fraudulent trade practices
(including advertising, marketing, sales, insurance, repair and promotion
practices), truth-in-lending, consumer leasing, fair credit practices, equal
credit opportunity, privacy, insurance, motor vehicle finance, installment
finance, closed-end credit, usury and other installment sales. Vehicle lessors
could be subject to claims of negligent leasing in connection with their
lessees’ vehicle operation. We could be susceptible to such claims or related
actions if we fail to operate our business in accordance with practices designed
to avert such liability. Claims arising out of actual or alleged violations of
law may be asserted against us or
9
any of
our dealers by individuals, either individually or through class actions, or by
governmental entities in civil or criminal 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.
The
loss of key personnel may adversely affect our business.
Our
success depends to a significant degree upon the continued contributions of our
management team, particularly our senior management and service and sales
personnel. Manufacturer dealer agreements may require the prior approval of the
applicable manufacturer before any change is made in dealership general
managers. The loss of the services of one or more of these key employees may
materially impair the efficiency and productivity of our operations.
In
addition, we may need to hire additional managers as we expand. Potential
acquisitions are viable to us only if we are able to retain experienced managers
or obtain replacement managers should the owner/manger retire. The market for
qualified employees in the industry and in the regions in which we operate,
particularly for general managers and sales and service personnel, is highly
competitive and may subject us to increased labor costs during periods of low
unemployment. The loss of the services of key employees or the inability to
attract additional qualified managers may adversely affect the ability of our
dealerships to conduct their operations in accordance with the standards set by
our headquarters management.
We depend
on our executive officers as well as other key personnel. Not all our key
personnel are bound by employment agreements, and those with employment
agreements are bound only for a limited period of time. Further, we do not
maintain “key man” life insurance policies on any of our executive officers or
key personnel. If we are unable to retain our key personnel, we may be unable to
successfully develop and implement our business plans.
Our
principal stockholders have substantial influence over us and they may have
interests different from your interests.
Our
principal stockholders, Ripplewood Partners L.P. and Freeman Spogli & Co.,
beneficially own over 50% of our outstanding common stock. In addition, these
entities have entered into a shareholders agreement with several of our other
stockholders, who collectively owned 17.8% of our common stock as of
March 9, 2005, pursuant to which the other stockholders are required to
vote their stock with Ripplewood and Freemen Spogli. In addition, Ripplewood and
Freeman Spogli both have representatives that are members of our board of
directors. As a result, these principal stockholders have the ability to control
us and direct our affairs and business.
Although
Asbury Automotive Holdings is registering shares of common stock for sale from
time to time through this prospectus, we do not know Asbury Automotive Holdings’
specific future plans as to its holdings of our common stock and cannot give you
any assurances that its actions will not negatively affect our common stock in
the future. For example, Asbury Automotive Holdings has from time to time had
discussions with our competitors regarding potential business combinations
involving us. Any potential combination, as well as any sales of common stock
pursuant to this prospectus, could lead to a change of control if an entity or a
group of entities acquires a substantial percentage of our common stock, which
in turn may lead to defaults under our credit facility and senior subordinated
notes. If such defaults were to occur, the lenders under our credit facility and
holders of our senior subordinated notes may declare all outstanding borrowings,
together with accrued and unpaid interests on other fees, immediately due and
payable.
Pursuant
to our shareholders agreement, the signatories are required to vote their shares
in accordance with Asbury Automotive Holdings’ instructions with respect to:
10
| · |
persons
nominated by Asbury Automotive Holdings to our board of directors (and
persons nominated in opposition to Asbury Automotive Holdings’ nominees);
and |
| · |
any
matter to be voted on by the holders of our common stock, whether or not
the matter was proposed by Asbury Automotive Holdings.
|
Future
changes in financial accounting standards or practices or existing taxation
rules or practices may affect our reported results of
operations.
A change
in accounting standards or practices or a change in existing taxation rules or
practices can have a significant effect on our reported results and may affect
our reporting of transactions completed before the change is effective. New
accounting pronouncements and taxation rules and varying interpretations of
accounting pronouncements and taxation practices have occurred and may occur in
the future. Changes to existing rules or the questioning of current practices
may adversely affect our reported financial results or the way we conduct our
business. For example, any changes requiring that we record compensation expense
in the statement of operations for employee stock options using the fair value
method or changes in existing taxation rules related to stock options could have
a significant negative effect on our reported results. The Financial Accounting
Standards Board has announced a change to generally accepted accounting
principles in the United States that will require us to record charges to
earnings for employee stock option grants. This requirement will negatively
impact our earnings in the future. For example, recording a charge for employee
stock options granted through December 31, 2004 under Statement of
Financial Accounting Standards No. 123 (revised 2004) “Accounting for
Stock-Based Compensation,” would have reduced our net income by $5.1 million for
the year ended December 31, 2004.
General
Risks Related to Investing in Our Common Stock
Concentration
of voting power and anti-takeover provisions of our charter, bylaws, Delaware
law and our dealer agreements may reduce the likelihood of any potential change
of control.
Ripplewood,
through its control of Asbury Automotive Holdings, currently controls 53.8% of
our common stock. Further, under the shareholders agreement, Ripplewood
currently has the power to cause all signatories (who, together with Asbury
Automotive Holdings, collectively owned 71.6% of our common equity as of
March 9, 2005) to vote in favor of Asbury Automotive Holdings’ nominees to
our board of directors.
This
concentration of voting power and certain provisions of our charter and bylaws
may have the effect of discouraging, delaying or preventing a change in control
of us or unsolicited acquisition proposals that a shareholder might consider
favorable. These provisions include:
11
| · |
providing
that no more than one-third of the members of our board of directors stand
for re-election by the shareholders at each annual meeting;
|
| · |
permitting
the removal of a director from office only for cause and only by the
affirmative vote of the holders of at least 80% of the voting power of all
common stock outstanding; |
| · |
vesting
the board of directors with sole power to set the number of directors;
|
| · |
allowing
a special meeting of the shareholders to be called only by a majority of
the board of directors or by the chairman of our board of directors,
either on his or her own initiative or at the request of shareholders
collectively holding at least 50% of the common stock outstanding, by our
president, by our chief executive officer or by a majority of our board of
directors; |
| · |
prohibiting
shareholder action by written consent; |
| · |
requiring
the affirmative vote of the holders of at least 80% of the voting power of
all common stock outstanding to effect certain amendments to our charter
or by-laws; and |
| · |
requiring
formal advance notice for nominations for election to our board of
directors or for proposing matters that can be acted upon at shareholders’
meetings. |
In
addition, Delaware law makes it difficult for shareholders who have recently
acquired a large interest in a corporation to cause the merger or acquisition of
the corporation against the directors’ wishes. Furthermore, our board of
directors has the authority to issue shares of preferred stock in one or more
series and to fix the rights and preferences of the shares of any such series
without shareholder approval. Any series of preferred stock is likely to be
senior to the common stock with respect to dividends, liquidation rights and,
possibly, voting rights. Our board’s ability to issue preferred stock may also
have the effect of discouraging unsolicited acquisition proposals, thus
adversely affecting the market price of the common stock. Finally, restrictions
imposed by some of our dealer agreements may impede or prevent any potential
consensual or unsolicited change of control.
Under the
terms of the options granted under our 1999 option plan and our 2002 stock
option plan, many option grants will fully vest and become immediately
exercisable upon a change in control of us, which, together with severance
arrangements and other change of control provisions contained in several of our
employment agreements with our executives, may further deter a potential
acquisition bid.
Shares
eligible for future sale, including shares owned by Asbury Automotive Holdings,
may cause the market price of our common stock to drop significantly, even if
our business is doing well.
The
potential sale of substantial amounts of our common stock held by people and
entities who were owners of our equity prior to our initial public offering, as
well as our directors, officers and employees, in the public market in offerings
pursuant to this prospectus or otherwise may adversely affect the market price
of the common stock, as these sales may be viewed by the public as an indication
of an upcoming or recent occurring shortfall in the financial performance of our
company. We currently have 32,600,821 shares of common stock outstanding (net of
1,586,587 treasury shares) (based on the number of shares outstanding as of
March 9, 2005), including 17,550,743 shares owned by Asbury Automotive
Holdings. Significant sales of our common equity by Asbury Automotive Holdings
may cause the market price of our common stock to drop
significantly.
12
FORWARD-LOOKING
STATEMENTS
This
prospectus contains “forward-looking statements” as that term is defined in the
Private Securities Litigation Reform Act of 1995. The forward-looking statements
include statements relating to goals, plans and projections regarding our
financial position, results of operations, market position, product development
and business strategy under the headings “Risk Factors,” and “Plan of
Distribution.” These statements are based on management’s current expectations
and involve significant risks and uncertainties that may cause results to differ
materially from those set forth in the statements. These risks and uncertainties
include, among other things:
| · |
market
factors, |
| · |
our
relationships with vehicle manufacturers and other suppliers,
|
| · |
risks
associated with our substantial indebtedness,
|
| · |
risks
related to pending and potential future acquisitions, and
|
| · |
general
economic conditions both nationally and locally, and governmental
regulations and legislation. |
There can
be no guarantees our plans for future operations will be successfully
implemented or that they will prove to be commercially successful. We undertake
no obligation to publicly update any forward-looking statement, whether as a
result of new information, future events or otherwise.
13
USE
OF PROCEEDS
All of
the shares of our common stock offered by this prospectus will be sold by the
selling stockholders. We will not receive any of the proceeds from the sale of
these shares.
14
DESCRIPTION
OF CAPITAL STOCK
Authorized
Capital
Our
authorized capital stock consists of 90,000,000 shares of common stock, par
value $.01 per share, and 10,000,000 shares of preferred stock, par value $.01
per share. As of March 9, 2005, there were 32,600,821 shares of our common
stock outstanding (net of 1,586,587 treasury shares) and no shares of preferred
stock outstanding.
Common
Stock. Each
holder of common stock is entitled to one vote per share of record on all
matters to be voted on by the stockholders. Subject to the rights of any then
outstanding shares of preferred stock, the holders of the common stock are
entitled to such dividends as may be declared in the discretion of our board of
directors out of funds legally available therefor. Holders of common stock are
entitled to share ratably in our net assets upon liquidation after payment or
provision for all liabilities and any preferential liquidation rights of any
preferred stock then outstanding. The holders of common stock have no preemptive
rights to purchase shares of our stock. Shares of our common stock are not
subject to any redemption provisions and are not convertible into any other of
our securities. All outstanding shares of common stock are, and the shares of
common stock to be issued pursuant to the offering will be upon payment
therefor, fully paid and non-assessable.
Preferred
Stock. From
time to time, our board of directors may authorize the issuance of preferred
stock in one or more series. Subject to the provisions of our charter and
limitations prescribed by law, the board of directors is expressly authorized to
adopt resolutions
| · |
to
issue the shares, |
| · |
to
fix the number of shares and to change the number of shares constituting
any series, and |
| · |
to
provide for or change the voting powers, designations, preferences and
relative participating, optional or other special rights, qualifications,
limitations or restrictions thereof, including dividend rights (including
whether dividends are cumulative), dividend rates, terms of redemption
(including sinking fund provisions), redemption prices, conversion rights
and liquidation preferences of the shares constituting any series of the
preferred stock, in each case without any further action or vote by the
shareholders. |
One of
the effects of having undesignated preferred stock is to enable the board of
directors to render more difficult or to discourage an attempt to obtain control
of us by means of a tender offer, proxy contest, merger or otherwise, and
protect the continuity of our management. Although it presently has no intention
to do so, the board of directors could authorize the issuance of preferred stock
that may adversely affect the rights of the holders of common stock. For
example, preferred stock issued by us may rank prior to the common stock as to
dividend rights, liquidation preference or both, may have full or limited voting
rights and may be convertible into shares of common stock. Accordingly, the
issuance of shares of preferred stock may discourage bids for the common stock
or may otherwise adversely affect the market price of the common stock.
Certain
Anti-takeover and Other Provisions of the Charter and
Bylaws
Limitations
on Removal of Directors.
Shareholders may remove a director only for cause upon the affirmative vote of
holders of at least 80% of the voting power of the outstanding shares of common
stock. Our board of directors, and not our shareholders, have the right to
appoint persons to fill vacant seats on our board of directors. In addition, our
certificate of incorporation provides for a classified board of directors and
the inability of stockholders to vote cumulatively for directors.
Our
Shareholders May Not Act by Written Consent. Our
corporate charter provides that any action required or permitted to be taken by
our shareholders must be taken at a duly called annual or special shareholders’
meeting. Special meetings of the shareholders may be called only by a majority
of the board of directors or by the
15
chairman
of our board of directors, either on his or her own initiative or at the request
of shareholders collectively holding at least 50% of the outstanding common
stock.
Advance
Notice Procedures. Our
by-laws establish an advance notice procedure for shareholders to make
nominations of candidates for election as directors or to bring other business
before an annual meeting of our shareholders. Our shareholder notice procedure
provides that only persons who are nominated by, or at the direction of, our
board of directors, or by a shareholder who has given timely written notice to
our secretary prior to the meeting at which directors are to be elected, will be
eligible for election as our directors. Our shareholder notice procedure also
provides that at an annual meeting only such business may be conducted as has
been brought before the meeting by, or at the direction of, our board of
directors, or by a shareholder who has given timely written notice to our
secretary of such shareholder’s intention to bring such business before such
meeting. Under our shareholder notice procedure, for notice of shareholder
nominations to be made at an annual meeting to be timely, such notice must be
received by our secretary not later than the close of business on the 90th
calendar day nor earlier than the 120th calendar day prior to the first
anniversary of the preceding year’s annual meeting, except that, in the event
that the date of our annual meeting of shareholders is more than 30 calendar
days before or more than 60 calendar days after such anniversary date, notice by
the shareholder to be timely must be so delivered not earlier than the close of
business on the 120th calendar day prior to such annual meeting and not later
than the close of business on the later of the 90th calendar day prior to such
annual meeting or the 10th calendar day following the day on which public
announcement of such annual meeting is first made by us.
Notwithstanding
the foregoing, in the event that the number of directors to be elected to our
board of directors is increased and there is no public announcement by us naming
all of the nominees for director or specifying the size of our increased board
of directors at least 100 calendar days prior to the first anniversary of the
preceding year’s annual meeting, a shareholder’s notice also will be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to our secretary not later than the close of
business on the 10th calendar day following the day on which such public
announcement is first made by us. Under our shareholder notice procedure, for
notice of a shareholder nomination to be made at a special meeting at which
directors are to be elected to be timely, such notice must be received by us not
earlier than the close of business on the 120th calendar day prior to such
special meeting and not later than the close of business on the later of the
90th calendar day prior to such special meeting or the 10th calendar day
following the day on which public announcement is first made of the date of the
special meeting and of the nominees proposed by our board of directors to be
elected at such meeting.
In
addition, under our shareholder notice procedure, a shareholder’s notice to us
proposing to nominate a person for election as a director or relating to the
conduct of business other than the nomination of directors must contain the
information required by our by-laws.
Notwithstanding
the above, if the shareholder (or a qualified representative of the shareholder)
does not appear at the annual or special meeting of shareholders to present a
nomination or business, the nomination will be disregarded and the proposed
business will not be transacted, notwithstanding that proxies in respect of the
vote may have been received by us.
Amendment. Our
charter provides that the affirmative vote of the holders of at least 80% of our
voting stock then outstanding, voting together as a single class, is required to
amend provisions of the charter relating to:
16
| · |
the
number, election and term of our directors;
|
| · |
the
nomination of director candidates and the proposal of business by
shareholders; |
| · |
the
filling of vacancies; and |
| · |
the
removal of directors. |
Our
charter further provides that the related by-laws described above, including the
shareholder notice procedure, may be amended only by our board of directors or
by the affirmative vote of the holders of at least 80% of the voting power of
the outstanding shares of voting stock, voting together as a single class.
Business
Combinations under Delaware Law. We are a
Delaware corporation and are subject to Section 203 of the Delaware General
Corporation Law. In general, Section 203 prevents an “interested
shareholder” (defined generally as a person owning 15% or more of our
outstanding voting stock) from engaging in a merger, acquisition or other
“business combination” (as defined in Section 203) with us for three years
following the time that person becomes an interested shareholder unless:
| · |
before
that person became an interested shareholder, our board of directors
approved the transaction in which the interested shareholder became an
interested shareholder or approved the business combination;
|
| · |
upon
completion of the transaction that resulted in the interested shareholder
becoming an interested shareholder, the interested shareholder owned at
least 85% of the voting stock outstanding at the time the transaction
commenced (excluding stock held by our directors who are also officers and
by employee stock plans that do not provide employees with the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer); or
|
| · |
following
the transaction in which that person became an interested shareholder, the
business combination was approved by our board of directors and authorized
at a meeting of shareholders by the affirmative vote of the holders of at
least two-thirds of the outstanding voting stock not owned by the
interested shareholder. Under Section 203, these restrictions also do
not apply to specified types of business combinations proposed by an
interested shareholder if: |
| · |
the
business combination proposed by the interested shareholder follows the
announcement or notification of an extraordinary transaction involving us
and a third person who was not an interested shareholder during the
previous three years or who became an interested shareholder with the
approval of a majority of our directors;
and |
| · |
the
extraordinary transaction is approved or not opposed by a majority of the
directors who were directors before any person became an interested
shareholder in the previous three years or who were recommended for
election or elected to succeed such directors by a majority of such
directors then in office. |
Shareholders
Agreement. We are
party to a shareholder agreement with Asbury Automotive Holdings and some of the
former owners of our dealership groups and members of their management teams.
Asbury Automotive Holdings currently owns 53.8% of our common stock. The other
parties to the shareholders agreement (who, together with Asbury Automotive
Holdings, collectively own 71.6% of our common stock) are required to vote their
shares in accordance with Asbury Automotive Holdings’ instructions with respect
to:
17
| · |
persons
nominated by Asbury Automotive Holdings to our board of directors (and
persons nominated in opposition to Asbury Automotive Holdings’ nominees);
and |
| · |
any
matter to be voted on by the holders of our common stock, whether or not
the matter was proposed by Asbury Automotive Holdings.
|
These
other parties have the right to cause Asbury Automotive Holdings to vote for at
least one nominee of theirs to the board of directors if the total number of
directors (excluding directors that are our employees) on the board of directors
is six or less and at least two such nominees if such number of directors is
more than six.
Ripplewood’s
representatives on our Board of Directors are Timothy C. Collins and Ian K.
Snow. We were formed in 1994 by then-current management and Ripplewood (formerly
known as Ripplewood Holdings L.L.C.), the general partner of Ripplewood.
Mr. Collins founded Ripplewood in 1995 and continues to serve as its senior
managing director and chief executive officer. Mr. Snow joined Ripplewood
in 1995 and he is currently a managing director. Mr. Collins and
Mr. Snow expressly disclaim beneficial ownership of any shares held by
Ripplewood except to the extent of their pecuniary interest in them.
Mr. Collins has served as a member of our Board of Directors since 1996 and
Mr. Snow has served as member of our Board of Directors and the
Chairman of our Compensation Committee since 1996 and as a member of the
Governance and Nominating Committee since February 2005. Mr. Collins
and Mr. Snow do not receive a retainer or fees for service on our Board of
Directors or Compensation Committee.
Each of
the voting obligations in favor of Asbury Automotive Holdings and the certain
other owners of our equity described above will terminate on the first to occur
of:
| · |
March 13,
2007, the fifth anniversary of the date of our initial public offering;
|
| · |
two
years after the first date on which Asbury Automotive Holdings’ share of
the ownership of our outstanding common stock falls below 20%; and
|
| · |
the
first date on which Asbury Automotive Holdings’ share of the ownership of
our outstanding common stock falls below 5%.
|
Pursuant
to the shareholders agreement, we granted Asbury Automotive Holdings certain
registration rights, in which we agreed that, subject to certain limitations, we
would register for resale under the Securities Act of 1933, as amended, the
shares of our common stock owned by them. This prospectus covers the offer and
sale of up to 17,550,743 shares of our common stock by Asbury Automotive
Holdings and 5,748,055 shares by other parties to the shareholders agreement.
Pursuant
to those registration rights provisions, we agreed to indemnify the selling
stockholders against liabilities arising out of any actual or alleged material
misstatements or omissions in the registration statement that we have filed
relating to this offering or in this prospectus, other than liabilities arising
from information supplied by the selling stockholders for use in connection with
the registration statement or this prospectus. The selling stockholders have
agreed to indemnify us against liabilities arising out of any actual or alleged
material misstatements or omissions in the registration statement or in this
prospectus to the extent that the misstatements or omissions were made in
reliance upon written information furnished to us or by the selling stockholders
expressly for use in connection with the registration statement or this
prospectus.
Under
those registration rights provisions, in general, we are responsible for paying
the expenses of registration (other than underwriting discounts and commissions
on the sale of shares), including the fees and reasonable expenses of counsel to
the selling stockholders.
18
Limitation
of Liability of Officers and Directors—Indemnification
Delaware
law authorizes corporations to limit or eliminate the personal liability of
officers and directors to corporations and their shareholders for monetary
damages for breach of officers’ and directors’ fiduciary duties of care. The
duty of care requires that, when acting on behalf of the corporation, officers
and directors must exercise an informed business judgment based on all material
information reasonably available to them. Absent the limitations authorized by
Delaware law, officers and directors are accountable to corporations and their
shareholders for monetary damages for conduct constituting gross negligence in
the exercise of their duty of care. Delaware law enables corporations to limit
available relief to equitable remedies such as injunction or rescission. The
charter limits the liability of our officers and directors to us or our
shareholders to the fullest extent permitted by Delaware law. Specifically, our
officers and directors will not be personally liable for monetary damages for
breach of an officer’s or director’s fiduciary duty in such capacity, except for
liability (i) for any breach of the officer’s or director’s duty of loyalty
to us or its shareholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(iii) for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the officer and director
derived an improper personal benefit.
Transfer
Agent and Registrar
The
transfer agent and registrar of the common stock is EquiServe Trust Company,
N.A.
19
SELLING
STOCKHOLDERS
The
following table sets forth, as of the date of this prospectus, the names of the
persons that may be selling stockholders under this prospectus and the maximum
number of shares of common stock that each such person may sell using this
prospectus based on the number of shares they owned on March 9, 2005. Each
sale of shares by any selling stockholder may, if required, be accompanied by a
supplement to this prospectus setting forth the name of the selling stockholder
using that prospectus supplement, the number of shares being sold and a
supplemental plan of distribution describing the specific manner of sales of
those shares.
We have
prepared the table based on information given to us by, or on behalf of, the
selling stockholders on or before March 9, 2005. Because the selling
stockholders may offer, pursuant to this prospectus, all or some portion of the
common stock listed below, no estimate can be given as to the amount of common
stock that will be held by the selling stockholders upon consummation of any
sales.
|
Common
Stock
Covered
by this Prospectus |
|||||
|
Name
of Beneficial Owner |
Shares |
Percent(15) |
|||
|
Ripplewood
Partners L.P.(1) |
8,954,900 |
27.5% |
|||
|
Freeman
Spogli & Co.(2)(3) |
8,595,843 |
26.4% |
|||
|
Asbury
Automotive Holdings (1)(2) |
17,550,743 |
53.8% |
|||
|
John R.
Capps |
383,200 |
1.2% |
|||
|
Charles (C.B.)
Tomm & Anita deSaussere Tomm, Tenants by the Entireties
(4) |
125,100 |
* |
|||
|
Luther W.
Coggin Revocable Trust u/a/d 12/13/94, Luther Coggin,
Trustee(5) |
249,756 |
* |
|||
|
Michael
Kearney(6) |
56,647 |
* |
|||
|
Noel
Daniels(7) |
38,750 |
* |
|||
|
SLT/TAG
Inc.(8) |
385,900 |
1.2% |
|||
|
DMCD
Autos Irving, Inc.(9) |
754,867 |
2.3% |
|||
|
DMCD
Autos Houston, Inc.(9) |
174,326 |
* |
|||
|
Robert E.
Gray |
329,378 |
1.0% |
|||
|
Gibson
Family Partnership LP(10) |
33,840 |
* |
|||
|
Steven
Inzinna |
19,375 |
* |
|||
|
JIW
Enterprises, Inc(11). |
1,280,037 |
3.9% |
|||
|
JIW
Fund I LLC(11) |
117,554 |
* |
|||
|
Thomas F.
McLarty III(12) |
454,114 |
1.4% |
|||
|
C.V.
Nalley III(13) |
1,035,759 |
3.2% |
|||
|
Clarence V.
Nalley III(13) |
225,000 |
* |
|||
|
The
2004 Nalley Annuity Trust(13) |
100,000 |
* |
|||
|
Nancy D.
Noble(14) |
41,099 |
* |
|||
|
* |
Less
than 1%. |
|
(1) |
Represents
shares owned by Asbury Automotive Holdings. Ripplewood Partners L.P. is
the owner of approximately 51% of the membership interests of Asbury
Automotive Holdings and is deemed to be a member of a group that owns the
shares of Asbury Automotive Holdings, and is a party to the shareholders
agreement described in “Description of Capital Stock—Certain Anti-takeover
and Other Provisions of the Charter and Bylaws—Shareholders Agreement”.
The address of Ripplewood Partners, L.P. is One Rockefeller Plaza, 32nd
Floor, New York, NY 10020. Under the terms of the Shareholders Agreement,
Ripplewood |
20
| Partners L.P., through its control over Asbury Automotive L.L.C., has voting control over 71.6% of our outstanding common stock prior to any offering pursuant to this prospectus. |
|
(2) |
Represents
shares owned by Asbury Automotive Holdings, FS Equity Partners III, L.P.,
FS Equity Partners International L.P. and FS Equity Partners IV,
L.P., investment funds affiliated with Freeman Spogli & Co., are
the owners of approximately 49% of the membership interests of Asbury
Automotive Holdings and are deemed to be members of a group that own the
shares of Asbury Automotive Holdings, and are parties to the shareholders
agreement described in “Description of Capital Stock—Certain Anti-takeover
and Other Provisions of the Charter and Bylaws—Shareholders Agreement.”
The business address of Freeman Spogli & Co., FS Equity
Partners III, FS Equity Partners IV is 11100 Santa Monica Boulevard, Suite
1900, Los Angeles, California 90025. The business address of FS
Equity Partners International L.P. is c/o Paget-Brown &
Company, Ltd., West Winds Building, Third Floor, Grand Cayman, Cayman
Islands, British West Indies. |
|
(3) |
Address:
c/o Freeman Spogli & Co. Inc. at 11100 Santa Monica
Boulevard, Suite 1900, Los Angeles, California 90025.
|
|
(4) |
Does
not include 83,939 shares issuable upon the exercise of options, all of
which are exercisable within 60 days of March 9, 2005. Mr. Tomm is
one of our directors. |
|
(5) |
Represents
249,756 shares held by a family trust for the benefit of Luther W.
Coggin. Charles B. Tomm is the trustee of this trust and disclaims
any beneficial ownership of the shares held by the trust. The address of
The Luther W. Coggin Revocable Trust is c/o Coggin Automotive Group,
4306 Pablo Oaks Court, Jacksonville, Florida
32224. |
|
(6) |
Does
not include 83,939 shares issuable upon the exercise of options, all of
which are exercisable within 60 days of March 9, 2005. Mr.
Kearney’s address is c/o Crown Automotive Group, 3633-C West Wendover
Avenue, Greensboro, North Carolina 27407. |
|
(7) |
Does
not include 6,894 shares issuable upon the exercise of options, all of
which are exercisable within 60 days of March 9,
2005. |
|
(8) |
Address:
c/o Morris Galen, Tonkon Torp L.L.P., 1600 Pioneer Tower, 888 SW
Fifth Ave., Portland, Oregon 97204. |
|
(9) |
Includes
754,867 shares of common stock held by DMCD Autos Irving, Inc. and 174,326
shares of common stock held by DMCD Autos Houston, Inc. Address: c/o
McDavid Auto Group, 3600 West Airport Freeway, Irving, Texas,
75062. |
|
(10) |
Thomas R.
Gibson and Sophie H. Gibson are general partners of Gibson Family
Partnership, L.P. Does not include 90,909 shares issuable to Mr. Gibson,
individually, upon exercise of options, all of which are exercisable
within 60 days of March 9, 2005. |
|
(11) |
Represents
117,554 shares owned by JIW Fund I LLC and 1,280,037 shares
owned by JIW Enterprises, Inc. Jeffrey I. Wooley, one of our
directors, is a principal of JIW Fund I LLC and JIW Enterprises,
Inc., and beneficially owns the shares held by these
entities. |
|
(12) |
Mr.
McLarty is one of our directors. |
|
(13) |
Represents
1,260,759 shares owned by Clarence V. Nalley, III as an individual
and 100,000 shares owned by The 2004 Nalley Annuity Trust, of which Mr.
Nalley is the trustee. The address of Mr. Nalley and The 2004 Nalley
Annuity Trust is c/o Nalley Companies, 87 West Paces Ferry Road, Atlanta,
Georgia 30305. |
|
(14) |
Does
not include 12,606 shares issuable upon the exercise of options, all of
which are exercisable within 60 days of March 9,
2005. |
|
(15) |
Based
on 32,600,821 shares of our common stock outstanding (net of
1,586,587 treasury shares) as of March 9, 2005.
|
21
PLAN
OF DISTRIBUTION
The
selling stockholders may offer and sell, from time to time, some or all of the
shares of common stock covered by this prospectus. Registration of the shares of
common stock covered by this prospectus does not mean, however, that those
shares necessarily will be offered or sold. We will not receive any proceeds
from any sale by the selling stockholders of the securities. See "Use of
Proceeds". We will pay all costs, expenses and fees in connection with the
registration of the shares of common stock, including fees of our counsel and
accountants, fees payable to the SEC and reasonable fees of counsel to the
selling stockholders. We estimate those fees and expenses to be approximately
$750,000. The selling stockholders will pay all underwriting discounts and
commissions and similar selling expenses, if any, attributable to the sale of
the shares of common stock covered by this prospectus.
The
selling stockholders may sell the shares of common stock covered by this
prospectus from time to time, at market prices prevailing at the time of sale,
at prices related to market prices, at a fixed price or prices subject to change
or at negotiated prices, by a variety of methods including the
following:
| · |
in
privately negotiated transactions; |
| · |
through
broker-dealers, who may act as agents or principals;
|
| · |
in
a block trade in which a broker-dealer will attempt to sell a block of
shares of common stock as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
|
| · |
through
one or more underwriters on a firm commitment or best-efforts
basis; |
| · |
directly
to one or more purchasers; |
| · |
through
agents; or |
| · |
in
any combination of the above. |
In
effecting sales, brokers or dealers engaged by the selling stockholders may
arrange for other brokers or dealers to participate. Broker-dealer transactions
may include:
| · |
purchases
of the shares of common stock by a broker-dealer as principal and resales
of the shares of common stock by the broker-dealer for its account
pursuant to this prospectus; |
| · |
ordinary
brokerage transactions; or |
| · |
transactions
in which the broker-dealer solicits
purchasers. |
At any
time a particular offer of the shares of common stock covered by this prospectus
is made, a revised prospectus or prospectus supplement, if required, will be
distributed which will set forth the aggregate amount of shares of common stock
covered by this prospectus being offered and the terms of the offering,
including the name or names of any underwriters, dealers, brokers or agents, any
discounts, commissions, concessions and other items constituting compensation
from the selling stockholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers. Such prospectus supplement, and, if
necessary, a post-effective amendment to the registration statement of which
this prospectus is a part, will be filed with the SEC to reflect the disclosure
of additional information with respect to the distribution of the shares of
common stock covered by this prospectus.
In
connection with the sale of the shares of common stock covered by this
prospectus through underwriters, underwriters may receive compensation in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of shares of common stock for whom they may act as agent.
Underwriters may sell to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for whom they may act as
agent.
22
Any
underwriters, broker-dealers or agents participating in the distribution of the
shares of common stock covered by this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, and any
commissions received by any of those underwriters, broker-dealers or agents may
be deemed to be underwriting commissions under the Securities Act of 1933.
The
selling stockholders may enter into derivative transactions with third parties,
or sell shares of common stock not covered by this prospectus to third parties
in privately negotiated transactions. If the applicable prospectus supplement
indicates, in connection with those derivatives, the third parties may sell
shares of common stock covered by this prospectus and the applicable prospectus
supplement, including in short sale transactions. If so, the third party may use
shares of common stock pledged by the selling stockholders or borrowed from the
selling stockholders or others to settle those sales or to close out any related
open borrowings of stock, and may use shares of common stock received from the
selling stockholders in settlement of those derivatives to close out any related
open borrowings of stock. The third party in such sale transactions will be an
underwriter and, if not identified in this prospectus, will be identified in the
applicable prospectus supplement (or a post-effective amendment).
We may
authorize underwriters, dealers and agents to solicit from third parties offers
to purchase shares of common stock under contracts providing for payment and
delivery on future dates. The applicable prospectus supplement will describe the
material terms of these contracts, including any conditions to the purchasers’
obligations, and will include any required information about commissions we may
pay for soliciting these contracts.
Underwriters,
dealers, agents and other persons may be entitled, under agreements that they
may enter into with us and the selling stockholders, to indemnification by us
and the selling stockholders against certain liabilities, including liabilities
under the Securities Act.
In
connection with the offering, the underwriters may purchase and sell shares of
common stock in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Shorts sales involve the sale by the underwriters of a greater number of
shares than they are required to purchase in the offering. “Covered” short sales
are sales made in an amount not greater than the underwriters’ option to
purchase additional shares from the Company in the offering. The underwriters
may close out any covered short position by either exercising their option to
purchase additional shares or purchasing shares in the open market. In
determining the source of shares to close out the covered short position, the
underwriters will consider, among other things, the price of shares available
for purchase in the open market as compared to the price at which they may
purchase shares through the overallotment option. “Naked” short sales are any
sales in excess of such option. The underwriters must close out any naked short
position by purchasing shares in the open market. A naked short position is more
likely to be created if the underwriters are concerned that there may be
downward pressure on the price of the common stock in the open market after
pricing that could adversely affect investors who purchase in the offering.
Stabilizing transactions consist of various bids for or purchases of common
stock made by the underwriters in the open market prior to the completion of the
offering.
The
underwriters may also impose a penalty bid. This occurs when a particular
underwriter repays to the underwriters a portion of the underwriting discount
received by it because the representatives have repurchased shares sold by or
for the account of such underwriter in stabilizing or short covering
transactions.
Purchases
to cover a short position and stabilizing transactions may have the effect of
preventing or retarding a decline in the market price of the Company’s stock,
and together with the imposition of the penalty bid, may stabilize, maintain or
otherwise affect the market price of the common stock. As a result, the price of
the common stock may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be discontinued at any
time. These transactions may be effected on the New York Stock Exchange, in the
over-the-counter market or otherwise.
Certain
of the underwriters or their affiliates have provided from time to time, and may
provide in the future, investment, commercial banking, derivatives and financial
advisory services to Asbury and its affiliates in the ordinary course of
business, for which they have received and may continue to receive customary
fees and
23
commissions.
Some of
the shares of common stock covered by this prospectus may be sold in private
transactions or under Rule 144 under the Securities Act of 1933 rather than
pursuant to this prospectus.
24
AVAILABLE
INFORMATION
We have
filed with the Securities and Exchange Commission a registration statement on
Form S-3 with respect to the common stock offered in this prospectus. This
prospectus does not contain all of the information set forth in the registration
statement and the exhibits to that registration statement. For further
information with respect to us and the common stock, we refer you to the
registration statement and its exhibits. We also file annual, quarterly and
current reports, proxy statements and other information with the Securities and
Exchange Commission. Our Securities and Exchange Commission filings are
available to the public over the Internet at the Securities and Exchange
Commission’s website at www.sec.gov. You may
also read and copy any document we file with the Securities and Exchange
Commission at the Securities and Exchange Commission’s Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. Please call the Securities and
Exchange Commission at 1-800-SEC-0330 for further information on the public
reference room. We maintain a website at www.asburyauto.com. With the
exception of the documents we file with the Securities and Exchange Commission,
the information contained on our website is not incorporated by reference in
this prospectus and you should not consider it a part of this prospectus.
INCORPORATION
BY REFERENCE
We are
incorporating by reference the information that we
file with the SEC, which means that we are disclosing important information to
you in those documents. The information incorporated by reference is an
important part of this prospectus, and the information that we subsequently file
with the SEC will automatically update and supercede information in this
prospectus and in our other filings with the SEC. We incorporate by reference
the documents listed below, which we have already filed with the SEC, and any
future filings we make with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934 (other than information furnished
pursuant to Item 9 or Item 12 of any Current Report on Form 8-K)
until all of the shares of common stock offered by this prospectus are sold. We
are not, however, incorporating by reference any documents or portions thereof,
whether specifically listed below or filed in the future, that are not deemed
“filed” with the SEC, including any information furnished pursuant to
Items 9 or 12 of Form 8-K.
| · |
Annual
Report on Form 10-K for the year ended December 31, 2004 filed
on March 15, 2005; |
| · |
Current
Reports on Form 8-K filed on January 13, 2005, February 4,
2005, February 28, 2005, March 16, 2005 and March 22, 2005;
and |
| · |
The
description of our capital stock is contained in the Registration
Statement on Form S-1 dated March 13, 2002.
|
Any
statement contained in this prospectus, or in a document all or a portion of
which is incorporated by reference in this prospectus, will be deemed to be
modified or superceded for purposes of this prospectus to the extent that a
statement contained in this prospectus modifies or supercedes the statement. Any
such statement or document so modified or superceded will not be deemed, except
as so modified or superceded, to constitute a part of this prospectus.
You may
request a copy of these filings, at no cost, by writing or telephoning us at the
following address and telephone number:
Asbury
Automotive Group, Inc.
622 Third
Avenue
37th
Floor
New York,
New York 10017
Telephone:
(212) 885-2500
25
VALIDITY
OF THE SHARES
The
validity of the shares of common stock offered hereby will be passed upon for us
by Lynne A. Burgess, our general counsel.
EXPERTS
The
consolidated financial statements and management’s report on the effectiveness
of internal control over financial reporting incorporated in this prospectus by
reference from the Company’s Annual Report on Form 10-K for the year ended
December 31, 2004, have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their report dated
March 14, 2005, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
26
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.1
|
Registration
Fee |
$40,987
|
|
Legal
Fees and Expenses |
480,000
|
|
Accountants’
Fees and Expenses |
50,000 |
|
Printing
and Engraving |
115,000 |
|
Miscellaneous |
64,013 |
|
Total |
$750,000 |
___________
|
(1) |
All
amounts, other than the registration fee, are estimated and are subject to
future contingencies. |
Item
15. Indemnification of Directors and Officers.
The
Certificate of Incorporation (the “Certificate”) of the Company provides that a
director or officer of the Company will not be personally liable to the Company
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except, if required by the Delaware General Corporation Law (the
“DGCL”) as amended from time to time, for liability (i) for any breach of
the director’s duty of loyalty to the Company or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, which
concerns unlawful payments of dividends, stock purchases or redemptions, or
(iv) for any transaction from which the director derived an improper
personal benefit. Neither the amendment nor repeal of such provision will
eliminate or reduce the effect of such provision in respect of any matter
occurring, or any cause of action, suit or claim that, but for such provision,
would accrue or arise prior to such amendment or repeal.
The
Certificate provides that each person who was or is made a party to or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a “proceeding”), by reason of the fact that such person, or a
person of whom such person is the legal representative, is or was a director or
officer of the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged action
in an official capacity as a director, officer, employee or agent or in any
other capacity while serving as a director, officer, employee or agent, will be
indemnified and held harmless by the Company to the fullest extent authorized by
the DGCL, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the Company
to provide broader indemnification rights than said law permitted the Company to
provide prior to such amendment), against all expense, liability and loss
reasonably incurred or suffered by such person in connection therewith. Such
right to indemnification includes the right to have the Company pay the expenses
incurred in defending any such proceeding in advance of its final disposition,
subject to the provisions of the DGCL. Such rights are not exclusive of any
other right which any person may have or hereafter acquire under any statute,
provision of the Certificate, By-laws, agreement, vote of stockholders or
disinterested directors or otherwise. No repeal or modification of such
provision will in any way diminish or adversely affect the rights of any
director, officer, employee or agent of the Company thereunder in respect of any
occurrence or matter arising prior to any such repeal or modification.
The
Section 145 of the DGCL, provides, in pertinent part, that a corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as the director, officer, employee or agent of
another corporation,
27
partnership,
joint venture, trust or other enterprise, against expenses (including attorneys’
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful. In
addition, the indemnification of expenses (including attorneys’ fees) is allowed
in derivative actions, except no indemnification is allowed in respect to any
claim, issue or matter as to which any such person has been adjudged to be
liable to the corporation, unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought decides that
indemnification is proper. To the extent that any such person succeeds on the
merits or otherwise, he shall be indemnified against expenses (including
attorneys’ fees) actually and reasonably incurred by him in connection
therewith. The determination that the person to be indemnified met the
applicable standard of conduct, if not made by a court, is made by the directors
of the corporation by a majority vote of the directors not party to such an
action, suit or proceeding even though less than a quorum, by a Committee of
such directors designated by a majority vote of such directors even though less
than a quorum, or, if there are no such directors, or if such directors so
direct, by independent legal counsel in a written opinion or by the
stockholders. Expenses may be paid in advance upon the receipt, in the case of
officers and directors, of undertakings to repay such amount if it shall
ultimately be determined that the person is not entitled to be indemnified by
the corporation as authorized in this section. A corporation may purchase
indemnity insurance.
The above
described indemnification and advancement of expenses, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and inure to the benefit of such person’s
heirs, executors and administrators.
The
Company has also entered into indemnification agreements with its directors and
certain of its officers that require it, among other things, to indemnify them
against certain liabilities that may arise by reason of their status or service
as directors or officers to the fullest extent permitted by law. The Company
also maintains liability insurance for the benefit or its officers and
directors.
Item
16. Exhibits.
The
following exhibits are filed herewith or
incorporated herein by reference.
|
Exhibit
Number |
Description |
|
1 |
Form
of Underwriting Agreement |
|
5 |
Opinion
of Lynne Burgess, General Counsel of Asbury Automotive Group as to the
legality of the Registrant’s common stock being registered
hereby* |
|
23.1 |
Consent
of Lynne Burgess, General Counsel of Asbury Automotive Group with respect
to the legality of securities being registered (contained in
Exhibit 5)* |
|
23.2 |
Consent
of Deloitte & Touche LLP |
|
24 |
Power
of Attorney |
* To be
filed by amendment.
Item
17. Undertakings.
The
undersigned registrant hereby undertakes:
|
(a) |
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this |
28
| 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 set forth 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 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee”
table in the effective registration statement;
(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;
Provided,
however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference 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.
|
(b) |
That
for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant’s annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan’s
annual report 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.
|
|
(c) |
To
deliver or cause to be delivered with the prospectus, to each person to
whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or
Rule 14c-3 under the Securities Exchange Act of 1934; and, where
interim financial information required to be presented by Article 3
of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or
given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
|
|
(d) |
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 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
|
29
|
the
final adjudication of such issue.
|
|
(e) |
That
for purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective. |
|
(f) |
That
for the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus
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. |
30
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in New York
City, State of New York, on March 22, 2005.
|
ASBURY
AUTOMOTIVE GROUP, INC.,
|
|
/s/
Kenneth B. Gilman |
|
Kenneth
B. Gilman
Chief
Executive Officer and President |
POWER
OF ATTORNEY
Each
person whose signature appears below hereby constitutes and appoints
Kenneth B. Gilman and Ian K. Snow each as his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this registration statement, and any registration statement related to the
offerings contemplated by this registration statement that is to be effective
upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and
to file the same, with all exhibits thereto, and all other documents in
connection therewith, with the Securities and Exchange Commission and any state
or other securities authority, granting unto each said attorney-in-fact and
agent full power and authority to do and perform each and every act in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
either of them or their or his substitute or substitutes may lawfully 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.
|
Signature |
Title |
Date | |
|
/s/
Kenneth B. Gilman |
|||
|
(Kenneth
B. Gilman)
/s/
J. Gordon Smith |
Chief
Executive Officer, President and Director |
March 22,
2005 | |
|
(J.
Gordon Smith)
/s/
Brett Hutchinson |
Senior
Vice President and Chief Financial Officer
|
March 22,
2005
| |
|
(Brett
Hutchinson)
/s/
Michael J. Durham |
Vice
President, Controller and Chief Accounting Officer
|
March 22,
2005
| |
|
(Michael
J. Durham)
/s/
Timothy C. Collins |
Chairman
of the Board
|
March 22,
2005
| |
|
(Timothy
C. Collins)
/s/
John M. Roth |
Director
|
March 22,
2005
| |
|
(John
M. Roth)
/s/
Ian K. Snow |
Director |
March 22,
2005 | |
|
(Ian
K. Snow)
/s/
Thomas C. Israel |
Director
|
March 22,
2005
| |
|
(Thomas
C. Israel)
/s/
Vernon E. Jordan, Jr. |
Director
|
March 22,
2005
| |
|
(Vernon
E. Jordan, Jr.)
|
Director
|
March 22,
2005
|
31
| Signature | Title | Date | |
|
/s/
Philip F. Maritz |
|||
|
(Philip
F. Maritz)
/s/
Thomas F. “Mack” McLarty |
Director
|
March 22,
2005
| |
|
(Thomas
F. “Mack” McLarty)
/s/
Jeffrey I. Wooley |
Director
|
March 22,
2005
| |
|
(Jeffrey
I. Wooley)
|
Director
|
March 22,
2005
| |
32
EXHIBIT
INDEX
|
Exhibit
Number |
Description |
|
1 |
Form
of Underwriting Agreement |
|
5 |
Opinion
of Lynne Burgess, General Counsel of Asbury Automotive Group as to the
legality of the Registrant’s common stock being registered
hereby* |
|
23.1 |
Consent
of Lynne Burgess, General Counsel of Asbury Automotive Group with respect
to the legality of securities being registered (contained in
Exhibit 5)* |
|
23.2 |
Consent
of Deloitte & Touche LLP |
|
24 |
Power
of Attorney |
* To be
filed by amendment.
33
Exhibit 1
ASBURY
AUTOMOTIVE GROUP, INC.
Common
Stock (par value $0.01 per share)
_______________
Underwriting
Agreement
l, 2005
[Co-Representative(s)]
As
representatives of the several Underwriters
named in
Schedule I hereto
c/o .
Ladies
and Gentlemen:
Certain
stockholders named in Schedule II hereto (the “Selling Stockholders”) of Asbury
Automotive Group, Inc., a Delaware corporation (the “Company”), propose, subject
to the terms and conditions stated herein, to sell to the firms named in
Schedule I hereto (the “Underwriters”) an aggregate of [●] shares (the “Firm
Shares”) and, at the election of the Underwriters, up to [●] additional shares
(the “Optional Shares”) of Common Stock, par value $.01 per share (“Stock”) of
the Company (the Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 2 hereof are herein
collectively called the “Shares”).
1. (a) The
Company represents and warrants to, and agrees with, each of the Underwriters
that:
(i) A
registration statement on Form S-3 (File No. 333-#) (the “Initial Registration
Statement”) in respect of the Shares has been filed with the Securities and
Exchange Commission (the “Commission”); the Initial Registration Statement and
any post-effective amendment thereto, each in the form heretofore delivered or
to be delivered to you for each of the Underwriters, excluding exhibits thereto
but including all documents incorporated by reference in the prospectus
contained therein, have been declared effective by the Commission in such form;
other than a registration statement, if any, increasing the size of the offering
(a “Rule 462(b) Registration Statement”), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the “Act”), which became effective upon
filing, no other document with respect to the Initial Registration Statement or
document incorporated by reference therein has heretofore been filed, or
transmitted for filing, with the Commission (other than prospectuses filed
pursuant to Rule 424(b) of the rules and regulations of the Commission under the
Act, each in the form heretofore delivered to the Representatives); and no stop
order suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration Statement, if
any, has been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any Preliminary Prospectus included in the Initial
Registration Statement or filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the Act, is hereinafter called
a “Preliminary Prospectus”; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in the Initial Registration Statement at the time such part of the
Initial Registration
Statement
became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the “Registration Statement”; the prospectus
relating to the Shares, in the form which it has most recently been filed, or
transmitted for filing, with the Commission on or prior to the date of this
Agreement, is hereinafter called the “Prospectus”; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as amended or
supplemented in relation to the applicable Shares in the form in which it is
filed with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing;
(ii) No order
preventing or suspending the use of any Preliminary Prospectus has been issued
by the Commission, and each Preliminary Prospectus, at the time of filing
thereof, conformed in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder, and did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through
expressly for use therein or by a Selling Stockholder expressly for use in the
preparation of the answers therein to Item 7 of Form S-3;
(iii) The
documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in
all material respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder, and none
of such documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through
expressly for use in the Prospectus as amended or supplemented relating to such
Shares;
(iv) The
Registration Statement and the Prospectus conform, and any further amendments or
supplements to the Registration Statement or the Prospectus will conform, in all
material respects to the requirements of the Act and the rules and regulations
of the Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto and as
of the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company by
an Underwriter through
expressly for use therein or by a Selling
2
Stockholder
expressly for use in the Prospectus as amended or supplemented relating to such
Shares in the preparation of the answers therein to Item 7 of Form
S-3;
(v) Neither
the Company nor any of its subsidiaries has sustained since the date of the
latest audited financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock, short-term debt
or long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(vi) The
Company and each of its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus (including, without
limitation, such liens as are imposed under the First Amended and Restated
Credit Agreement, dated as of June 6, 2003, among the Company, Asbury Automotive
Group Holdings, Inc., Ford Motor Credit Company, DaimlerChrysler Services North
America LLC and General Motors Acceptance Corporation and the other Lenders
parties thereto (the “Credit Facility”)) or such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by the Company and each of its subsidiaries; and any real
property and buildings held under lease by the Company and each of its
subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and each
of its subsidiaries, subject, as to enforcement, to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, and to general equity
principles;
(vii) The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction; each “significant subsidiary” (as such term is defined in
Rule 1-02 of Regulation S-X promulgated under the Act) of the Company that is a
corporation has been duly incorporated and is validly existing as a corporation
in good standing under the laws of its jurisdiction of incorporation; each
significant subsidiary of the Company that is a limited liability company has
been duly formed and is validly existing as a limited liability company in good
standing under the laws of its jurisdiction of formation; and each significant
subsidiary of the Company that is a limited partnership has been duly formed and
is validly existing as a limited partnership in good standing under the laws of
its jurisdiction of formation;
(viii) The
Company has an authorized capitalization as set forth in the Prospectus, and all
of the issued shares of capital stock of the Company, including the Shares, have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus under
the caption “Description of Capital Stock”; and all of the issued shares of
capital stock, all of the issued membership interests and limited partnership
interests of each subsidiary of the Company have been duly and validly
authorized and issued, are, in the case of shares of capital stock, fully paid
and non-assessable and (except for directors' qualifying shares) are owned
directly or indirectly by the Company and, except as described in the
Prospectus, are owned free and clear of all liens, encumbrances, equities or
claims;
3
(ix) The
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, Franchise Agreement (as defined herein), framework franchise
agreement or other material agreement or instrument to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws of
the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the sale of the Shares or the
consummation by the Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters;
(x) Neither
the Company nor any subsidiary of the Company that is a corporation is in
violation of its respective Certificate of Incorporation or By-laws; no
subsidiary of the Company that is a limited liability company is in violation of
its respective Certificate of Formation or Limited Liability Company Agreement;
no subsidiary of the Company that is a limited partnership is in violation of
its respective Certificate of Limited Partnership or Limited Partnership
Agreement; and neither the Company nor any of its subsidiaries is in default in
the performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease, Franchise Agreement, framework franchise agreement or other material
agreement or instrument to which it is a party or by which it or any of its
properties may be bound;
(xi) The
statements set forth in the Prospectus under the caption “Description of Capital
Stock”, insofar as they purport to constitute a summary of the terms of the
Stock, and under the caption “Underwriting”, insofar as they purport to describe
the provisions of the laws and documents referred to therein, are accurate,
complete and fair;
(xii) Other
than as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity, members’ equity, partners’ equity or results of operations of the
Company or any of its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(xiii) Neither
the Company nor any of its subsidiaries is and, after giving effect to the
offering and sale of the Shares, will be an “investment company”, as such term
is defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”);
(xiv) Deloitte
& Touche LLP, who have certified certain financial statements of the Company
and its subsidiaries and have audited the Company’s internal control over
financial reporting and management’s assessment thereof are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xv) The
Company maintains a system of internal control over financial reporting (as such
term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the
requirements of the Exchange Act and has been designed by the Company’s
principal executive officer and principal financial officer, or under their
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted
4
accounting
principles. The Company’s internal control over financial reporting is
effective, and the Company is not aware of any material weaknesses in its
internal control over financial reporting.
(xvi) Since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus, there has been no change in the Company’s internal
control over financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.
(xvii) The
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-15(e) of the Exchange Act) that comply with the requirements of the
Exchange Act, such disclosure controls and procedures have been designed to
ensure that material information relating to the Company and its subsidiaries is
made known to the Company’s principal executive officer and principal financial
officer by others within those entities. Such disclosure controls and procedures
are effective.
(xviii) The
Company and its subsidiaries have obtained all environmental permits, licenses
and other authorizations required by federal, state and local law in order to
conduct their businesses as described in the Prospectus, except where failure to
do so would not have a material adverse effect on the current or future
consolidated financial position, stockholders' equity, members’ equity,
partners’ equity or results of operations of the Company or any of its
subsidiaries (a “Material Adverse Effect”); the Company and its subsidiaries are
conducting their businesses in compliance with such permits, licenses and
authorizations and with applicable environmental laws, except where the failure
to be in compliance would not, individually or in the aggregate, have a Material
Adverse Effect; and neither the Company nor any of its subsidiaries are in
violation of any Federal or state law or regulation relating to the storage,
handling, disposal, release or transportation of hazardous or toxic materials,
which violation would subject the Company or any of its subsidiaries to any
liability or disability, except where such violations would not, individually or
in the aggregate, have a Material Adverse Effect;
(xix) The
Company and each of its subsidiaries have all licenses, franchises, permits,
authorizations, approvals and orders and other concessions of and from all
governmental or regulatory authorities that are necessary to own or lease their
properties and conduct their businesses as described in the Prospectus, except
for such licenses, franchises, permits, authorizations, approvals and orders the
failure of which to obtain would not, individually or in the aggregate, have a
Material Adverse Effect;
(xx) The
Company and each of its subsidiaries are conducting business in compliance with
all applicable statutes, rules, regulations, standards, guides and orders
administered or issued by any governmental or regulatory authority in the
jurisdictions in which it is conducting business, except where the failure to be
so in compliance would not, individually or in the aggregate, have a Material
Adverse Effect;
(xxi) The
Company or a wholly-owned direct or indirect subsidiary (except in the case of
Asbury St. Louis LR L.L.C. d/b/a Plaza Land Rover St. Louis, which is indirectly
minority owned by the Company) has entered into a franchise agreement or a
framework franchise agreement with each of the manufacturers listed on Schedule
III hereto (collectively, the “Franchise Agreements”, and each a “Franchise
Agreement”), each of which has been duly authorized, executed and delivered by
the Company or such subsidiary, is in full force and effect and constitutes the
valid and binding agreement between the parties thereto, enforceable in
accordance with its terms, subject to applicable Federal and state franchise
laws and subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights, and to general equity principles; the Franchise Agreements
permit the Company or a subsidiary or subsidiaries to operate a vehicle sales
franchise at the locations indicated on Schedule III; the Company and its
subsidiaries are in compliance with all material terms and conditions of the
Franchise Agreements, and, to the best knowledge of the Company, there has not
occurred any material default under any of the Franchise Agreements or any event
that with the giving of notice or the lapse of time would constitute a material
default thereunder; and
5
(xxii) Except as
provided in the Shareholders Agreement dated as of March 1, 2002, as amended by
the First Amendment to the Shareholders Agreement dated as of March 19, 2004,
[and the Second Amendment to the Shareholders Agreement dated February [●],
2005,] among the Company, Asbury Automotive Holdings L.L.C. and the stockholders
listed therein, no holders of any securities of the Company have any rights to
require the Company to register any securities of the Company under the
Act.
(b)
Each of
the Selling Stockholders, severally and not jointly, represents and warrants to,
and agrees with, each of the Underwriters and the Company that:
(i) All
consents, approvals, authorizations and orders necessary for the execution and
delivery by such Selling Stockholder of this Agreement and the Power of Attorney
and the Custody Agreement hereinafter referred to, and for the sale and delivery
of the Shares to be sold by such Selling Stockholder hereunder have been
obtained, except the registration under the Act of the Shares and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws, as to which no representation or
warranty is given; and such Selling Stockholder has full right, power and
authority to enter into this Agreement, the Power-of-Attorney and the Custody
Agreement and to sell, assign, transfer and deliver the Shares to be sold by
such Selling Stockholder hereunder;
(ii) The sale
of the Shares to be sold by such Selling Stockholder hereunder and the
compliance by such Selling Stockholder with all of the provisions of this
Agreement, the Power of Attorney and the Custody Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any statute, indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to which
any of the property or assets of such Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of such Selling Stockholder if such Selling Stockholder
is a corporation, the partnership agreement if such Selling Stockholders is a
partnership or the Certificate of Formation or Limited Liability Company
Agreement of such Selling Stockholder if such Selling Stockholder is a limited
liability company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over such Selling Stockholder
or the property of such Selling Stockholder, except the registration under the
Act of the Shares and such consents; approvals, authorizations, registrations or
qualifications as may be required under state securities laws or Blue Sky laws,
as to which to representation or warranty is given;
(iii) Assuming
that the Shares to be sold by such Selling Stockholder have been validly issued
to such Selling Stockholder by the Company, such Selling Stockholder shall have,
immediately prior to the First Time of Delivery (as defined in Section 4
hereof), good and valid title to the Shares to be sold by such Selling
Stockholder hereunder, free and clear of all liens, encumbrances, equities or
claims; and, upon delivery of such Shares and payment therefor pursuant hereto,
good and valid title to such Shares, free and clear of all liens, encumbrances,
equities or claims, will pass to the several Underwriters;
(iv) Such
Selling Stockholder shall not, during the period beginning from the date hereof
and continuing to and including the date (a) 90 days after the date of the
Prospectus with respect to Asbury Automotive Holdings L.L.C. and the Selling
Stockholders listed on Schedule
IV and (b)
[●] days after the date of the Prospectus with respect to the Selling
Stockholders that are not listed on Schedule
IV, offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the Shares,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement), (A)
provided however, that such Selling Stockholder may transfer the Selling
Stockholder’s shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the Selling
Stockholder or the immediate family of the Selling Stockholder, provided that
the trustee of the trust agrees to be bound in writing by the
6
restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value, or (iii) with the prior written consent of
,
(B) provided further, that if the First Time of Delivery does not occur on or
prior to [●], the obligations of the Selling Stockholders under this section
shall thereupon terminate, (C) provided further, that if the Selling Stockholder
is a limited liability company, the limited liability company may transfer Stock
held by such limited liability company to the members of such limited liability
company; provided, however, that in any such case, it shall be a condition to
the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding such Stock subject to the provisions of this
section and the agreement referenced in Section 7(k) hereof and there shall be
no further transfer of such Stock, except in accordance with this section and
the agreement referenced in Section 7(k) hereof, and provided further that any
such transfer shall not involve a disposition for value;
(v) Such
Selling Stockholder has not taken and will not take, directly or indirectly, any
action which is designed to or which has constituted or which might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Shares;
(vi) To the
extent that any statements or omissions made in the Registration Statement, the
Preliminary Prospectus, any preliminary prospectus supplement, the Prospectus or
any amendment or supplement thereto are made in reliance upon and in conformity
with written information furnished to the Company by such Selling Stockholder
expressly for use therein, such Preliminary Prospectus and the Registration
Statement did, and the Prospectus and any further amendments or supplements to
the Registration Statement and the Prospectus, when they become effective or are
filed with the Commission, as the case may be, will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading;
(vii) In order
to avoid backup withholding of U.S. Federal income tax on the cash received in
connection with the transactions herein contemplated, such Selling Stockholder
will deliver to you prior to or at the First Time of Delivery (as hereinafter
defined) a properly completed and executed United States Internal Revenue
Service Form W-9 (or other applicable form or statement specified by applicable
regulations of the United States Department of the Treasury in lieu
thereof);
(viii) Certificates
in negotiable form representing all of the Shares to be sold by such Selling
Stockholder hereunder have been placed in custody under a Custody Agreement, in
the form heretofore furnished to you (the “Custody Agreement”), duly executed
and delivered by such Selling Stockholder to [Ian K. Snow] [●] and [Tony W. Lee]
[●] as custodian (the “Custodian”), and such Selling Stockholder has duly
executed and delivered a Power of Attorney, in the form heretofore furnished to
you (the “Power of Attorney”), appointing [Ian K. Snow] [●] and [Tony W. Lee]
[●] as such Selling Stockholder's attorneys-in-fact (the “Attorneys-in-Fact”)
with authority to execute and deliver this Agreement on behalf of such Selling
Stockholder (subject to the limitations set forth in such Power of Attorney), to
determine the purchase price to be paid by the Underwriters to the Selling
Stockholders as provided in Section 2 hereof, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement to the extent set forth
therein; and
(ix) The
Shares represented by the certificates held in custody for such Selling
Stockholder under the Custody Agreement are subject to the interests of the
Underwriters hereunder; the arrangements made by such Selling Stockholder for
such custody, and the appointment by such Selling Stockholder of the
Attorneys-in-Fact by the Power of Attorney, are to that extent irrevocable; the
obligations of the Selling Stockholders hereunder to the extent permitted by
applicable law shall not be terminated by operation of law, whether by the death
or incapacity of any individual Selling Stockholder or, in the case of an estate
or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event; if any individual Selling Stockholder or any such
7
executor
or trustee should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation should be
dissolved, or if any other such event should occur, before the delivery of the
Shares hereunder, certificates representing the Shares shall be delivered by or
on behalf of the Selling Stockholders in accordance with the terms and
conditions of this Agreement and of the Custody Agreements; and actions taken by
the Attorneys-in-Fact pursuant to the Powers of Attorney to the extent permitted
by applicable law shall be as valid as if such death, incapacity, termination,
dissolution or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other
event.
2. Subject
to the terms and conditions herein set forth, (a) each of the Selling
Stockholders agrees, severally and not jointly, to sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from each of the Selling Stockholders, at a purchase price per share of
$[●], the number of Firm Shares (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying the aggregate number of Firm Shares
to be sold by each of the Selling Stockholders as set forth opposite their
respective names in Schedule II hereto by a fraction, the numerator of which is
the aggregate number of Firm Shares to be purchased by such Underwriter as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Firm Shares to be purchased by
all of the Underwriters from all of the Selling Stockholders hereunder and (b)
in the event and to the extent that the Underwriters shall exercise the election
to purchase Optional Shares as provided below, each of the Selling Stockholders
agrees, severally and not jointly, to sell to each of the Underwriters, and each
of the Underwriters agrees, severally and not jointly, to purchase from each of
the Selling Stockholders, at the purchase price per share set forth in clause
(a) of this Section 2, that portion of the number of Optional Shares as to which
such election shall have been exercised (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying such number of Optional
Shares by a fraction the numerator of which is the maximum number of Optional
Shares which such Underwriter is entitled to purchase as set forth opposite the
name of such Underwriter in Schedule I hereto and the denominator of which is
the maximum number of Optional Shares that all of the Underwriters are entitled
to purchase hereunder.
The
Selling Stockholders, as and to the extent indicated in Schedule II hereto,
hereby grant, severally and not jointly, to the Underwriters the right to
purchase at their election up to [●] Optional Shares, at the purchase price per
share set forth in the paragraph above, for the sole purpose of covering sales
of shares in excess of the number of Firm Shares. Any such election to purchase
Optional Shares shall be made in proportion to the number of Optional Shares to
be sold by each Selling Stockholder. Any such election to purchase Optional
Shares may be exercised only by written notice from you to the
Attorneys-in-Fact, given within a period of [30] calendar days after the date of
this Agreement and setting forth the aggregate number of Optional Shares to be
purchased and the date on which such Optional Shares are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and the Attorneys-in-Fact otherwise
agree in writing, earlier than two or later than ten business days after the
date of such notice.
3. Upon the
authorization by you of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set
forth in the Prospectus as amended or supplemented.
4. (a) The
Shares to be purchased by each Underwriter hereunder, in definitive form, and in
such authorized denominations and registered in such names as
may request upon at least forty-eight hours’ prior notice to the Selling
Stockholders shall be delivered by or on behalf of the Selling Stockholders to
,
through the facilities of the Depository Trust Company (“DTC”), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Custodian on behalf of each of the Selling
Stockholders, as their interests may appear, to
at least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of
,
,
(the “Designated Office”). The time and date of such delivery and payment shall
be, with respect to the Firm Shares, 9:30 a.m., New York time, on ●, 2005 or
such other time and date as
and the Selling Stockholders may agree upon in writing, and, with respect to the
Optional Shares, 9:30 a.m., New York time,
8
on the
date specified by
in the written notice given by
of the Underwriters’ election to purchase such Optional Shares (which notice
shall be in accordance with Section 2 hereof), or such other time and date as
and the Selling Stockholders may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the “First Time of Delivery”, such
time and date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called the “Second Time of Delivery”, and each such time and
date for delivery is herein called a “Time of Delivery”.
(b)
The
documents to be delivered at each Time of Delivery by or on behalf of the
parties hereto pursuant to Section 7 hereof, including the cross receipt for the
Shares and any additional documents requested by the Underwriters pursuant to
Section 7(m), will be delivered at the offices of Sullivan & Cromwell LLP,
125 Broad Street, New York, New York 10004 (the “Closing Location”), and the
Shares will be delivered at the Designated Office, all at such Time of Delivery.
A meeting will be held at the Closing Location at 1:00 p.m., New York City time,
on the New York Business Day next preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4 and Section 5, “New York Business Day” shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The
Company agrees with each of the Underwriters:
(a)
To
prepare the Prospectus as amended and supplemented in relation to the applicable
Shares in a form approved by you and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement, or,
if applicable, such earlier time as may be required by Rule 424(b) under the
Act; to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly of any such amendment or supplement after any
Time of Delivery for the Shares and furnish you with copies thereof; to file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of the Shares and
during such same period; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of any
prospectus relating to the Shares, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification, promptly
to use its best efforts to obtain the withdrawal of such order;
(b)
Promptly from time to time to take such action as you may reasonably request to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of the Shares, provided that in
connection therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) As
soon as practicable on the New York Business Day next succeeding the date of
this Agreement and from time to time, to furnish the Underwriters with written
and electronic copies of the Prospectus as amended or supplemented in New York
City in such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Prospectus as amended or supplemented in connection
with the offering or sale of the Shares and if at such time any events shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for
9
any other
reason it shall be necessary during such period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the prospectus in order to comply with the Act or the Exchange Act,
to notify you and upon your request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many written and electronic copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of any
of the Shares at any time nine months or more after the time of issue of the
Prospectus as amended or supplemented , upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To
make generally available to the Company’s stockholders as soon as practicable,
but in any event not later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(e)
During the period beginning from the date hereof and continuing to and including
the date 90 days after the date of the Prospectus, not to offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder, any securities of
the Company that are substantially similar to the Shares, including but not
limited to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than (A) pursuant to employee stock option plans existing on,
or upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement or (B) in connection with
acquisitions, provided that such securities shall not exceed in the aggregate
10% of the Stock to be outstanding immediately following the offering
contemplated hereby and provided, further, that the recipients of such
securities agree to be bound by this Section 5(e) for the duration of the 90 day
period), without the prior written consent of
;
(f) To
furnish to the Company’s stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to the Company’s stockholders
consolidated summary financial information of the Company and its subsidiaries
for such quarter in reasonable detail;
(g) To
the extent such documents are not furnished to or filed with the Commission,
during a period of three years from the effective date of the Registration
Statement, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders of the Company, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to the
Company’s stockholders generally or to the Commission); and
(h) If
the Company elects to rely upon Rule 462(b), the Company shall file a Rule
462(b) Registration Statement with the Commission in compliance with Rule 462(b)
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the
Company shall at the time of filing either pay to the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable instructions for
the payment of such fee pursuant to Rule 111(b) under the Act.
6. The
Company and each of the Selling Stockholders covenant and agree with one another
and with the several Underwriters that (a) the Company will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the
10
Act
and all other expenses in connection with the preparation, printing and filing
of the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum,
closing documents (including any compilations thereof) and any other documents
in connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all fees and expenses in connection with listing the Shares on the
Exchange; (v) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) the cost of preparing stock
certificates; (vii) the cost and charges of any transfer agent or registrar,
(viii) the fees and expenses of the Attorneys-in-Fact and the Custodian; (ix)
any reasonable fees and expenses of counsel for the Selling Stockholders as set
forth opposite such Selling Stockholder’s name on Schedule II hereto and (x) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder which are not otherwise specifically provided for in this
Section; and (b) each Selling Stockholder will pay or cause to be paid all
costs and expenses incident to the performance of such Selling Stockholder's
obligations hereunder which are not otherwise specifically provided for in this
Section, including any fees and expenses of counsel, other than the fees and
expenses described in clause (ix) above, for such Selling Stockholder, capital
gains, income or transfer taxes attributable to the sale and delivery of the
Shares to be sold by such Selling Stockholder to the Underwriters hereunder. It
is understood, however, that the Company shall bear, and the Selling
Stockholders shall not be required to pay or to reimburse the Company for, the
cost of any other matters not directly relating to the sale and purchase of the
Shares pursuant to this Agreement, and that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, stock transfer taxes on
resale of any of the Shares by them, and any advertising expenses connected with
any offers they may make.
7. The
obligations of the Underwriters hereunder, as to the Shares to be delivered at
each Time of Delivery, shall be subject, in their discretion, to the condition
that all representations and warranties and other statements of the Company and
of the Selling Stockholders herein are, at and as of such Time of Delivery, true
and correct, the condition that the Company and the Selling Stockholders shall
have performed all of its and their obligations hereunder theretofore to be
performed, and the following additional conditions:
(a)
The
Prospectus as amended or supplemented in relation to the Shares shall have been
filed with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations under the Act and
in accordance with Section 5(a) hereof; if the Company has elected to rely upon
Rule 462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b)
Sullivan & Cromwell LLP, counsel for the Underwriters, shall have furnished
to you such written opinion or opinions, dated such Time of Delivery, with
respect to the incorporation of the Company, the validity of the Shares, the
Registration Statement, the Prospectus and such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c)
Cravath, Swaine & Moore LLP, counsel for the Company, shall have furnished
to you, in form and substance satisfactory to you, (i) their written opinion,
dated such Time of Delivery, to the effect that:
(A) The
Company has been duly incorporated and, based solely on a certificate of good
standing from the Secretary of State of the State of Delaware, is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with full
11
corporate
power and authority to own, lease and operate its properties and conduct its
business as described in the Prospectus as amended or
supplemented;
(B) The
Company has an authorized capitalization as set forth in the Prospectus as
amended or supplemented, and all of the issued shares of capital stock of the
Company (including the Shares being delivered at such Time of Delivery) have
been duly and validly authorized and issued and are fully paid and
non-assessable; and the Shares conform to the description of the Stock contained
in the Prospectus as amended or supplemented;
(C) This
Agreement has been duly authorized, executed and delivered by the
Company;
(D) The
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under (x) the Credit Facility, the Senior Note Indenture,
dated as of June 5, 2002, among the Company,
,
Salomon, Smith Barney, Inc., and the Bank of New York (as amended by the First
Supplemental Indenture dated as of March 19, 2003), or the Indenture, dated as
of December 23, 2003, among the Company, the subsidiary guarantors listed on
Schedule I thereto, and the Bank of New York, or (y) any loan agreement
with a financial institution, material mortgage, deed of trust or other
agreement or instrument, in the case of the agreements and instruments described
in clause (y), known to such counsel, to which the Company or any of its
significant subsidiaries is a party or by which the Company or any of its
significant subsidiaries is bound or to which any of the property or assets of
the Company or any of its significant subsidiaries is subject (excluding the
Franchise Agreements), nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or any of its
significant subsidiaries or any of their properties;
(E) No
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the
consummation by the Company of the transactions contemplated by this Agreement,
except the registration under the Act of the Shares, and such consents,
approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters; provided, that such opinion may
be limited to the laws of the United States, the laws of the State of New York
and the General Corporation Law of the State of Delaware;
(F) The
statements set forth in the Prospectus under the caption “Description of Capital
Stock”, insofar as they purport to constitute a summary of the terms of the
Stock, and under the caption “Underwriting” insofar as they purport to describe
the provisions of the laws and documents referred to therein, accurately and
fairly summarize the matters therein described; and
(G) The
Company is not an “investment company”, or an entity “controlled” by an
“investment company” as such term is defined in the Investment Company Act;
and
(ii) their
letter, dated such Time of Delivery, to the effect that the Registration
Statement and the Prospectus and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery (other than the financial
statements and other information of an accounting or financial nature therein,
as to which such counsel need not express any view) appears on its face to
be
12
appropriately
responsive in all material respects to the requirements of the Act and the
applicable rules and regulations thereunder; although they do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus, except for those
referred to in the opinion in subsection (i)(F) of this Section 7(c), they have
no reason to believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to such Time of
Delivery (including the documents or portions of documents incorporated by
reference therein and except for the financial statements and other information
of an accounting or financial nature therein, as to which such counsel need not
express any view) included an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date or as of the date of
such letter, the Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (including the documents or
portions of documents incorporated by reference therein and except for the
financial statements and other information of an accounting or financial nature
therein, as to which such counsel need not express any view) included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d)
Lynne A.
Burgess, General Counsel of the Company or other counsel of the Company
satisfactory to you shall have furnished to you, in form and substance
satisfactory to you, (i) her written opinion, dated such Time of Delivery, to
the effect that:
(A) The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with full corporate power
and authority to own, lease and operate its properties and conduct its
businesses as described in the Prospectus as amended or
supplemented;
(B) The
Company has an authorized capitalization as set forth in the Prospectus as
amended or supplemented, and all of the issued shares of capital stock of the
Company (including the Shares being delivered at such Time of Delivery) have
been duly and validly authorized and issued and are fully paid and
non-assessable; and the Shares conform to the description of the Stock contained
in the Prospectus as amended or supplemented;
(C) The
Company has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such counsel
being entitled to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates of officers of
the Company, provided that such counsel shall state that they believe that both
you and they are justified in relying upon such opinions and
certificates);
(D) Each
significant subsidiary (as defined in Rule 1-02 of Regulation S-X promulgated
under the Act) of the Company has been duly formed and is validly existing as a
limited liability company, a limited partnership or a corporation in good
standing under the laws of its jurisdiction of formation; and all of the issued
membership interests, partnership interests or shares of each such subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims (such counsel being
entitled to (i) rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying upon such opinions
and certificates, and (ii) exclude from such opinion such liens and encumbrances
as are imposed under the terms of the Credit Facility) and the floor
plan
13
arrangements
with Ford Motor Credit Company, General Motors Acceptance Corporation and
Chrysler Financial Company, L.L.C. (now DaimlerChrysler Services North America
LLC) contemplated by the Wholesale Agreement dated January 17, 2001 between such
parties (the “Wholesale Agreement”));
(E) To such
counsel's knowledge and other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(F) This
Agreement has been duly authorized, executed and delivered by the
Company;
(G)(x)
The Company is not in violation of its Amended and Restated Certificate of
Incorporation or Amended and Restated By-laws, nor is it in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
or lease or agreement or other instrument to which it is a party or by which it
or any of its properties may be bound; and
(y) To
such counsel’s knowledge, none of the subsidiaries or significant subsidiaries
of the Company that are corporations are in violation of their respective
Certificates of Incorporation or By-laws, none of the subsidiaries or
significant subsidiaries of the Company that are limited liability companies are
in violation of their respective Certificates of Formation or Limited Liability
Company Agreements, none of the significant subsidiaries of the Company that are
limited partnerships are in violation of their respective Certificates of
Limited Partnership or Limited Partnership Agreements, and no such subsidiary or
significant subsidiary is in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement, or lease or agreement or
other material instrument to which it is a party or by which it or any of its
properties may be bound;
provided
that such counsel may exclude from such opinion (i) the Franchise Agreements and
(ii) such violations and defaults that would not have a Material
Adverse Effect;
(ii) her
letter dated such Time of Delivery, to the effect that (A) the documents
incorporated by reference in the Prospectus or any further amendment or
supplement thereto made by the Company prior to such Time of Delivery (other
than the financial statements and other information of an accounting or
financial nature therein, as to which such counsel need not express any view),
when they were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder; and (B) the Registration Statement and
the Prospectus and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (including the documents or portions of
documents incorporated by reference therein and except for the financial
statements and other information of an accounting or financial nature therein,
as to which such counsel need not express any view) appears on its face to be
appropriately responsive in all material respects to the requirements of the Act
and the applicable rules and regulations thereunder; she has no reason to
believe that, as of its effective date, the Registration Statement or any
further amendment thereto made by the Company prior to such Time of Delivery
(including the documents or portions of documents incorporated by reference
therein and except for the financial statements and other information of an
accounting or financial nature therein, as to which such counsel need not
express any
14
view)
included an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that, as of its date or as of the date of such letter, the
Prospectus or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (including the documents or portions of documents
incorporated by reference therein and except for the financial statements and
other information of an accounting or financial nature therein, as to which such
counsel need not express any view) included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(e)
With
respect to the First Time of Delivery, the respective counsel for each of the
Selling Stockholders, as indicated in Schedule
II hereto,
each shall have furnished to you their written opinion with respect to each of
the Selling Stockholders for whom they are acting as counsel in substantially
the form attached hereto as Annex
II, dated
such Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) A
Power-of-Attorney and a Custody Agreement have been duly executed and delivered
by such Selling Stockholder and constitute valid and binding agreements of such
Selling Stockholder enforceable against such Selling Stockholder in accordance
with their respective terms;
(ii) This
Agreement has been duly executed and delivered by or on behalf of such Selling
Stockholder; and the sale of the Shares to be sold by such Selling Stockholder
pursuant to this Agreement and the compliance by such Selling Stockholder with
all of the applicable provisions of this Agreement, the Power-of-Attorney and
the Custody Agreement and the consummation of the transactions herein and
therein contemplated will not (a) to such counsel’s knowledge, conflict with or
result in a breach or violation of any terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which such Selling Stockholder is a party or
by which such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject or (b) result in any violation of
the provisions of the Certificate of Incorporation or By-laws of such Selling
Stockholder if such Selling Stockholder is a corporation, the Partnership
Agreement if such Selling Stockholder is a partnership or the Certificate of
Formation or Limited Liability Company Agreement of such Selling Stockholder if
such Selling Stockholder is a limited liability company or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(iii) No
consent, approval, authorization or order of any court or governmental agency or
body is required for the consummation of the transactions contemplated by this
Agreement in connection with the Shares to be sold by such Selling Stockholder
hereunder, except for those consents that have been duly obtained and are in
full force and effect, such as have been obtained under the Act, and except that
no opinion is being given hereunder regarding any requisite approvals by any
stock exchange or the National Associations of Securities Dealers,
Inc.;
(iv) Assuming
that the Shares to be sold by such Selling Stockholder have been validly issued
to such Selling Stockholder by the Company and are fully paid and
non-assessable, immediately prior to such Time of Delivery, such Selling
Stockholder had good and valid title to such Shares, free and clear of all
liens, encumbrances or claims, and full right, power and authority to sell,
assign, transfer and deliver the Shares to be sold by such Selling Stockholder
hereunder; and
(v) Upon
payment for the Shares to be sold by such Selling Stockholders as provided in
this Agreement, delivery of such Shares, as directed by the Underwriters, to
Cede & Co. or such other nominee as may be designated by DTC, registration
of such shares in the name of Cede & Co. or such other nominee and the
crediting of such Shares on the records of DTC to securities accounts of the
Underwriters, (i) DTC shall be a “protected purchaser” of such Shares within the
meaning of Section 8-303 of the UCC, (ii) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such Shares
and (iii) assuming that each Underwriter does not have “notice of an adverse
claim” (within the meaning of Section 8-105 of the UCC) to such Shares, no
action based on any “adverse claim” (within the
15
meaning
of Section 8-102 of the UCC) to such Shares may be asserted against the
Underwriters with respect to such security entitlement.
In
rendering the opinion in paragraph (iv), such counsel may rely upon a
certificate of such Selling Stockholder in respect of matters of fact as to
ownership of, and liens, encumbrances or claims on, the Shares sold by such
Selling Stockholder, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such certificate. In
rendering such opinions such counsel may qualify such opinions by noting that no
opinion is expressed as to the validity or enforceability of any provision which
purports to provide that the powers granted under a power of attorney will
survive the death of the principal. Such counsel may also note that it is not
expressing any opinion with respect to the accuracy or completeness of any
representation or warranty made by the Selling Stockholder or any other party in
the Registration Statement, this Agreement or any document or instrument
executed in connection with the transactions contemplated thereby;
16
(f)
On the
date of the Prospectus as amended or supplemented at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
Deloitte & Touche LLP shall have furnished to you a letter or letters, dated
the respective dates of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex
I
hereto;
(g)(i)
Neither the Company nor any of its subsidiaries shall have sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus as amended or supplemented any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus
as amended or supplemented, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented there shall
not have been any change in the capital stock, short-term debt or long-term debt
of the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the Company
and any of its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to proceed with
the public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus as
amended or supplemented;
(h) On or
after the date hereof (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities by any “nationally recognized statistical
rating organization”, as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(i) On or
after the date hereof there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
Exchange; (ii) a suspension or material limitation in trading in the Company’s
securities on the Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war; or (v) the occurrence of any other calamity or crisis
or any change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in clause (iv) or
(v) in the judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner contemplated
in the Prospectus as amended or supplemented relating to the
Shares;
(j) The
Shares at such Time of Delivery shall have been duly listed, subject to notice
of issuance, on the Exchange;
(k) The
Company has obtained and delivered to the Underwriters executed copies of an
agreement from each of (i) Asbury Automotive Holdings L.L.C., (ii) the persons
listed on Schedule
IV (such
persons, the “Designated Persons”), and (iii) the persons and entities listed on
Schedule
V (the
“Registered Stockholders”), substantially to the effect that during the period
beginning from the date hereof and continuing to and including the date, (x) in
the case of Asbury Automotive Holdings L.L.C. and each Designated Person, 90
days after the date of the Prospectus, or (y) in the case of the Registered
Stockholders, [●] days after the date of the Prospectus, subject to the
exceptions set forth in paragraph four of such agreement, such persons shall not
offer, sell, contract to sell or otherwise dispose of any Stock or securities of
the Company that are substantially similar to the Shares, including but not
limited to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee stock option plans existing on, or
upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without the prior written
consent of
,
provided, however, if the First Time of Delivery does not occur on or prior to
[●], the obligations of the parties to such agreement shall thereupon
terminate;
17
(l) The
Company shall have complied with the provisions of Section 5(c) hereof with
respect to the furnishing of prospectuses on the New York Business Day next
succeeding the date of this Agreement;
(m) The
Company and the Selling Stockholders shall have furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of the
Company and of the Selling Stockholders, respectively, satisfactory to you as to
the accuracy of the representations and warranties of the Company and the
Selling Stockholders, respectively, herein at and as of such Time of Delivery,
as to the performance by the Company and the Selling Stockholders of all of
their respective obligations hereunder to be performed at or prior to such Time
of Delivery, and as to such other matters as you may reasonably request, and the
Company shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (g) of this
Section;
and
(n) Akin,
Gump, Strauss, Hauer & Feld, L.L.P., special counsel to the Company, shall
have furnished to you, in form and substance satisfactory to you, their written
opinion, dated such Time of Delivery, to the effect that the offer and sale of
the Shares will not result in a breach of the Franchise Agreements with the
franchisors named in such opinion.
8. (a)
The
Company will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any preliminary prospectus supplement,
the Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the shares, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through
expressly for use in the Prospectus as amended or supplemented relating to such
Shares;
(b)
Each of the
Selling Stockholders will severally and not jointly, indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus, as amended or
supplemented and any other prospectus relating to the Shares or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus, as amended or supplemented, and any other prospectus relating to
the Shares or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Selling
Stockholder expressly for use in the Prospectus as amended or supplemented
relating to the Shares; and will severally and not jointly reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that such Selling
Stockholder shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through
expressly for use therein; and provided further that no Selling Stockholder
shall be liable under this Section 8(b) in an aggregate amount greater than the
product of (x) the number
18
of Shares
purchased by the Underwriters from such Selling Stockholder under Section 2
hereof, times (y) the
initial public offering price per Share as set forth on the front cover of the
Prospectus.
(c) Each
Underwriter will indemnify and hold harmless the Company and each Selling
Stockholder against any losses, claims, damages or liabilities to which the
Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented or any other prospectus relating to the Shares or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through
expressly for use therein; and will reimburse the Company and each Selling
Stockholder for any legal or other expenses reasonably incurred by the Company
or such Selling Stockholder in connection with investigating or defending any
such action or claim as such expenses are incurred.
(d)
Promptly after receipt by an indemnified party under subsection (a), (b) or (c)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnified party shall have reasonably concluded
(with the advice of counsel) that there may be defenses available to it which
are different from those or in addition to those available to the indemnifying
party, in which case, the indemnifying party shall be responsible for the fees
and expenses of counsel for the indemnified party it being understood, however,
that the Company and the Selling Stockholders shall not be responsible for the
fees and expenses of more than one separate firm of attorneys for the
Underwriters or controlling persons in any one action or series of related
actions. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.
(e) If
the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (d) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one
19
hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Stockholders on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company and the Selling Stockholders bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus as amended or
supplemented. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Selling Stockholders in question on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, each of the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e)(i) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission and (ii) no Selling
Stockholder subject to Section 8(b) shall be required to contribute any amount
greater than the product of (x) the number of Shares purchased by the
Underwriters from such Selling Stockholder under Section 2 hereof, times (y) the
initial public offering price per Share as set forth on the front cover of the
Prospectus. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (e) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(f) The
obligations of the Company and the Selling Stockholders under this Section 8
shall be in addition to any liability which the Company and the respective
Selling Stockholders may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of
the Company) and to each person, if any, who controls the Company or any Selling
Stockholder within the meaning of the Act.
9. (a) If
any Underwriter shall default in its obligation to purchase the Shares which it
has agreed to purchase hereunder at a Time of Delivery, you may in your
discretion arrange for you or another party or other parties to purchase such
Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Selling Stockholders shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
reasonably satisfactory to you to purchase such Shares on such terms. In the
event that, within the respective prescribed periods, you notify the Selling
Stockholders that you have so arranged for the purchase of such Shares, or the
Selling Stockholders notify you that they have so arranged for the purchase of
such Shares, you or the Selling Stockholders shall have the right to postpone
Time of Delivery for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments to the Registration Statement or the
Prospectus which in your opinion may thereby be made necessary. The term
“Underwriter” as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b)
If, after
giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by you and the Selling Stockholders as provided in
subsection (a) above, the aggregate
20
number of
such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Selling Stockholders shall have the right to require each
non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If,
after giving effect to any arrangements for the purchase of the Shares of a
defaulting Underwriter or Underwriters by you and the Selling Stockholders as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all of the
Shares to be purchased at such Time of Delivery, or if the Selling Stockholders
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Selling
Stockholders to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Company or the
Selling Stockholders, except for the expenses to be borne by the Company and the
Selling Stockholders and the Underwriters as provided in Section 6 hereof and
the indemnity and contribution agreements in Section 8 hereof (provided that if
such default occurs with respect to Optional Shares after the First Time of
Delivery, this Agreement will not terminate as to the Firm Shares or any
Optional Shares purchased prior to such default); but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
11. If this
Agreement shall be terminated pursuant to Section 9 hereof, neither the Company
nor the Selling Stockholders shall then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any other
reason any Shares are not delivered by or on behalf of the Selling Stockholders
as provided herein, the Company will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered,
but the Company and the Selling Stockholders shall then be under no further
liability to any Underwriter in respect of the Shares not so delivered except as
provided in Sections 6 and 8.
12. In all
dealings hereunder, you shall act on behalf of each of the Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by
on behalf of you as the representatives; and in all dealings with any Selling
Stockholder hereunder, you and the Company shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of such Selling
Stockholder made or given by any or all of the Attorneys-in-Fact for such
Selling Stockholder.
All
statements, requests, notices and agreements hereunder shall be in writing, and
if to the Underwriters shall be delivered or sent by mail, telex or facsimile
transmission to you as the representatives in care of
,
,
,
Attention: Registration Department; if to any Selling Stockholder shall be
delivered or sent by mail, telex or facsimile transmission to counsel for such
Selling Stockholder at its address set forth in Schedule
II hereto;
and if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(d) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire or telex
21
constituting
such Questionnaire, which address will be supplied to the Company or the Selling
Stockholders by you on request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This
Agreement shall be binding upon, and inure solely to the benefit of, the
Underwriters, the Company and the Selling Stockholders and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such
purchase.
14. Time
shall be of the essence of this Agreement. As used herein, the term “business
day” shall mean any day when the Commission's office in Washington, D.C. is open
for business.
15. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.
16. This
Agreement may be executed by any one or more of the parties hereto in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
17. The
Company and the Selling Stockholders are authorized, subject to applicable law,
to disclose any and all aspects of this potential transaction that are necessary
to support any U.S. federal income tax benefits expected to be claimed with
respect to such transaction, and all materials of any kind (including tax
opinions and other tax analyses) without the Underwriters imposing any
limitation of any kind.
If the
foregoing is in accordance with your understanding, please sign and return to us
ten (10) counterparts hereof, and upon the acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement among each of the Underwriters, the Company and
each of the Selling Stockholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company and the Selling Stockholders for examination, upon
request, but without warranty on your part as to the authority of the signers
thereof.
[The
remainder of this page has been left blank intentionally]
22
Any person executing and
delivering this Agreement as Attorney-in-Fact for a Selling Stockholder
represents by so doing that he has been duly appointed as Attorney-in-Fact by
such Selling Stockholder pursuant to a validly existing and binding
Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very
truly yours,
Asbury
Automotive Group, Inc.
By:
_____________________
Name: Kenneth B.
Gilman
Title: Chief Executive
Officer
[Selling
Stockholders]
By:_______________________
Name:
Title:
As
Attorney-in-Fact acting on behalf of each of
the Selling Stockholders named in
Schedule II to this Agreement
23
Accepted
as of the date hereof
at New
York, New York
[Co-Representative(s)]
By:___________________________
( )
On behalf
of each of the Underwriters
24
SCHEDULE
I
|
Underwriter
|
Total
Number
of
Firm Shares
to
be Purchased
|
Number
of Optional Shares
to
be Purchased if
Maximum
Option Exercised
|
|
. |
● |
● |
|
[Co-Representative(s)] |
● |
● |
|
● |
● | |
|
● |
● | |
|
Total |
● |
● |
Schedule
I - 1
SCHEDULE
II
|
Selling
Stockholders1
|
Total
Number
of
Firm Shares
to
be Sold
|
Number
of
Optional Shares
to
be Sold if Maximum Option
Exercised
|
|
[Selling
Stockholders] |
||
_____________________
(1) Each
Selling Stockholder has appointed [Ian K. Snow] [●] and [Tony W. Lee] [●], and
each of them as Attorneys-in-Fact.
Schedule
II - 1
SCHEDULE
III
|
Dealership
|
Franchise
|
Address
|
City
|
State
|
Schedule
III - 1
SCHEDULE
IV
|
Kenneth
B. Gilman
J.
Gordon Smith
Robert
D. Frank, Jr.
Lynne
A. Burgess
Philip
R. Johnson
Thomas
F. McLarty, III
Michael
J. Durham
Timothy
C. Collins
John
M. Roth
Ian
K. Snow
Jeffrey
I. Wooley
Thomas
C. Israel
Vernon
E. Jordan, Jr.
Philip
F. Maritz
|
Schedule
IV - 1
SCHEDULE
V
|
[List
of Registered Stockholders who: (a) do not serve in the capacity of
officer or director of the Company; and (b) have agreed to sign the
agreements referenced in Section 7(k)]
| |
Schedule
V - 1
ANNEX
I
Pursuant
to Section 7(d) of the Underwriting Agreement, Deloitte & Touche LLP shall
furnish letters to the Underwriters to the effect that:
(i) They are
independent certified public accountants with respect to the Company and its
subsidiaries within the meaning of the Act and the applicable published rules
and regulations thereunder;
(ii) In their
opinion, the financial statements and any supplementary financial information
and schedules (and, if applicable, financial forecasts and/or pro forma
financial information) examined by them and included or incorporated by
reference in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of the Act or
the Exchange Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public Accountants
of the consolidated interim financial statements, selected financial data and/or
condensed financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their reports
thereon, copies of which have been [separately]
furnished to the representatives of the Underwriters (the
“Representatives”)[and
are attached hereto];
(iii) They have
audited management’s assessment, included in the [title of management’s report]
accompanying the company’s annual report on Form 10-K for the year ended [ ],
and incorporated in the registration statement that the company [maintained]
[did not maintain] effective internal control over financial reporting as of [
], based on [criteria established in Internal
Control—Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission]; their
report with respect thereto is [also incorporated by reference into that
registration statement] [attached hereto]. They have not audited the internal
control over financial reporting of the company as of any date or for any period
subsequent to [ ]. Therefore, they are unable to and do not express any opinion
on the internal control over financial reporting as of any date or for any
period subsequent to [ ].
(iv) The
unaudited selected financial information with respect to the consolidated
results of operations and financial position of the Company for the five most
recent fiscal years included in the Prospectus and included or incorporated by
reference in Item 6 of the Company's Annual Report on Form 10-K for the most
recent fiscal year agrees with the corresponding amounts (after restatement
where applicable) in the audited consolidated financial statements for such five
fiscal years which were included or incorporated by reference in the Company's
Annual Reports on Form 10-K for such fiscal years;
(v) They have
compared the information in the Prospectus under selected captions with the
disclosure requirements of Regulation S-K and on the basis of limited procedures
specified in such letter nothing came to their attention as a result of the
foregoing procedures that caused them to believe that this information does not
conform in all material respects with the disclosure requirements of Items 301,
302, 402 and 503(d), respectively, of Regulation S-K;
(vi) On the
basis of limited procedures, not constituting an examination in accordance with
generally accepted auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of the
latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting matters
and such other inquiries and
Annex I -
1
procedures
as may be specified in such letter, nothing came to their attention that caused
them to believe that:
(A) any other
unaudited income statement data and balance sheet items included in the
Prospectus do not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and items were derived,
and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most recent fiscal
year;
(B) the
unaudited financial statements which were not included in the Prospectus but
from which were derived the unaudited condensed financial statements referred to
in clause (A) and any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited financial
statements included or incorporated by reference in the Company's Annual Report
on Form 10-K for the most recent fiscal year;
(C) any
unaudited pro forma consolidated condensed financial statements included or
incorporated by reference in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of those
statements;
(D) as of a
specified date not more than five days prior to the date of such letter, there
have been any changes in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or stockholders’ equity or other
items specified by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the Prospectus,
except in each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such letter;
and
(E) for the
period from the date of the latest financial statements included or incorporated
by reference in the Prospectus to the specified date referred to in clause (D)
there were any decreases in consolidated net revenues or operating profit or the
total or per share amounts of consolidated net income or other items specified
by the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified by
the Representatives, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; and
(F) for the
period from the date of the latest financial statements included or incorporated
by reference in the Prospectus to the specified date referred to in clause (D)
no material modifications should be made to the disclosures about changes in
internal control over financial reporting in order for the company’s
certifications that were included in the company’s quarterly report on Form 10-Q
for the quarter ending [ ] to be accurate and to comply with the requirements of
Section 302 of the Sarbanes Oxley Act of 2002.
(vii) In
addition to the examination referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries
Annex I -
2
and other
procedures referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives which are
derived from the general accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents incorporated by reference)
or in Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by reference in
the Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in
agreement.
(viii) With
respect to [interim period], they have also
(A) Inquired
of management about significant changes in the design or operation of internal
control over financial reporting as it relates to the preparation of annual as
well as interim financial information that could have occurred subsequent to the
[preceding annual audit or prior review of interim financial
information].
(B)
Evaluated the implications of misstatements identified by them as part of their
required review of interim financial information as described in SAS No. 100,
Interim Financial Information as it relates to effective internal control over
financial reporting.
(C)
Determined,
through a combination of observation and inquiry, whether any change in internal
control over financial reporting has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial
reporting.
Annex I -
3
ANNEX
II
[
]
[
]
[
]
[
]
As
representatives of the several Underwriters
named in
Schedule I to the Underwriting Agreement
c/o
[ ],
2005
Re: [
]
Ladies
and Gentlemen:
We have
acted as counsel for [ ], [a [
] corporation] [a [ ]limited liability
company][an individual resident of the State of ](the “Selling Stockholder”), in
connection with his sale to you and the several other underwriters (the
“Underwriters”) of [ ] shares (the “Shares”) of
common stock, $.01 par value per share (the “Common Stock”), pursuant to that
certain Underwriting Agreement dated as of [ ], 2005
(the “Underwriting Agreement”) by and among Asbury Automotive Group, Inc., a
Delaware corporation (the “Company”), Asbury Automotive Holdings L.L.C., the
Selling Stockholder, certain other selling stockholders listed therein, and
,
[ ]. [ ], as the representatives of the several
Underwriters. This opinion is provided to you at the request of the Selling
Stockholder in accordance with Section 7(e) of the Underwriting
Agreement.
In our
capacity as such counsel, we have reviewed the Underwriting Agreement, the
Selling Stockholder’s Irrevocable Power of Attorney (the “Power of Attorney”)
executed by the Selling Stockholder to appoint the Selling Stockholder’s
Attorneys-in-Fact (the “Attorneys-in-Fact”) and the related Custody Agreement
(the “Custody Agreement”), the certificate in the name of the Selling
Stockholder representing an aggregate of [ ] shares of the Common Stock and such
other agreements, records, certificates and documents as we deem necessary to
form a basis for the opinions hereinafter expressed.
1
It is our
opinion that:
1. The
Power-of-Attorney and the Custody Agreement have been duly executed and
delivered by the Selling Stockholder and constitute valid and binding agreements
of the Selling Stockholder enforceable against such Selling Stockholder in
accordance with their respective terms;
2. The
Underwriting Agreement has been duly executed and delivered by or on behalf of
the Selling Stockholder; and the sale of the Shares and the compliance by the
Selling Stockholder with all of the applicable provisions of the Underwriting
Agreement, the Power-of-Attorney and the Custody Agreement and the consummation
of the transactions therein contemplated will not (a) to such counsel’s
knowledge, conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any statute, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder is bound or
to which any of the property or assets of the Selling Stockholder is subject or
(b) result in any violation of the provisions of the [Certificate of
Incorporation or By-laws of the Selling Stockholder] [the Partnership Agreement]
[the Certificate of Formation or Limited Liability Company Agreement of such
Selling Stockholder] or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over the Selling
Stockholder or the property of the Selling Stockholder;
3. No
consent, approval, authorization or order of any court or governmental agency or
body is required for the consummation of the transactions contemplated by the
Underwriting Agreement in connection with the Shares, except for those consents
that have been duly obtained and are in full force and effect, such as have been
obtained under the Securities Act of 1933, as amended, and except that no
opinion is being given hereunder regarding any requisite approvals by any stock
exchange or the National Association of Securities Dealers, Inc.;
4. Assuming
that the Shares have been validly issued to the Selling Stockholder by the
Company and are fully paid and non-assessable, immediately prior to the delivery
of the Shares, the Selling Stockholder had good and valid title to such Shares,
free and clear of all liens, encumbrances or claims, and full right, power and
authority to sell, assign, transfer and deliver the Shares; and
5. Upon the
consummation of the sale of the Shares to be sold by the Selling Stockholder to
the Underwriters as provided in the Underwriting Agreement, good and valid title
to the Shares, free and clear of all liens, encumbrances or claims, has been
transferred to each of the several Underwriters; provided that the Underwriters
paid value therefore and have purchased such Shares without notice of an adverse
claim thereto (within the meaning of the Uniform Commercial Code as in effect as
of the date hereof in the State of New York).
[In
rendering the opinion in paragraph (4), counsel may rely upon a certificate of
the Selling Stockholder in respect of matters of fact as to ownership of, and
liens, encumbrances or claims on, the Shares, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such certificate. In rendering the opinions such counsel may qualify such
opinions by noting that no opinion is expressed as to the validity or
enforceability of any provision which purports to provide that the powers
granted under a power of attorney will survive the death of the principal. Such
counsel may also note that it is not expressing any opinion with respect to the
accuracy or completeness of any representation or warranty made by the Selling
Stockholder or any other party in the Registration Statement, the Underwriting
Agreement or any document or instrument executed in connection with the
transactions contemplated thereby.]
The
opinions expressed herein are limited in all respects to the federal laws of the
United States of America and the laws of the States of [ ] and no opinion is
expressed with respect to the laws of any other jurisdiction or any effect which
such laws may have on the opinions expressed herein. This opinion is limited to
the matters stated herein, and no opinion is implied or may be inferred beyond
the matters expressly stated herein.
2
This
opinion is furnished by us on behalf of the Selling Stockholder solely for the
benefit of the Underwriters in connection with the transactions described
herein, and this opinion may not be furnished to or relied upon by any person or
entity for any other purpose without our prior written content. Further, this
opinion is not to be quoted in whole or in part or otherwise referred to (other
than in connection with the transactions contemplated by the Underwriting
Agreement), nor is it to be filed with any governmental agency or any other
person.
This
opinion is given as of the date hereof, and we assume no obligation to advise
you after the date hereof of facts or circumstances that come to our attention
or changes in law that occur which could affect the opinions contained
herein.
Very
truly yours,
3
Exhibit
23.2
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We
consent to the incorporation by reference in this Registration Statement on
Form S-3 of our report dated March 14, 2005 (which report expresses an
unqualified opinion and includes an explanatory paragraph relating to the
adoption of Statement of Financial Accounting Standards No. 142, “Goodwill
and Other Intangible Assets”), relating to the consolidated financial statements
of Asbury Automotive Group, Inc., and management’s report on the effectiveness
of internal control over financial reporting appearing in the Annual Report on
Form 10-K of Asbury Automotive Group, Inc. for the year ended
December 31, 2004 and to the reference to us under the heading “Experts” in
the Prospectus, which is part of this Registration Statement.
/s/
Deloitte & Touche LLP
New York,
New York
March 21,
2005
Exhibit 23.2
Exhibit
24
Asbury
Automotive Group, Inc.
Common
Stock (par value $0.01 per share)
Irrevocable
Power of Attorney of Selling Stockholder
The
undersigned stockholder of Asbury Automotive Group, Inc., a Delaware corporation
(the “Company”), understands that the ‘‘undersigned and certain other
stockholders of the Company (the undersigned and such other stockholders being
hereinafter referred to as the “Selling Stockholders”) propose to sell certain
shares of Common Stock, par value $0.01 per share, of the Company (the “Common
Stock”) to the several underwriters (the “Underwriters”) named in the
Underwriting Agreement referred to below, represented by [$] (the
“Representatives”) and that the Underwriters propose to offer such shares to the
public. The undersigned also understands that, in connection with the offering
pursuant to the Underwriting Agreement (as defined below), the Company has filed
a Registration Statement (the “Registration Statement”) with the Securities and
Exchange Commission (the “Commission”) to register under the Securities Act of
1933, as amended (the “1933 Act”) the offering of the shares to be sold by the
Selling Stockholders.
Concurrently
with the execution and delivery of this Power of Attorney, the undersigned is
also executing and delivering a Custody Agreement (the “Custody Agreement”)
pursuant to which certificates for at least the number of shares of Common Stock
set forth opposite the name of the undersigned at the end of this instrument are
being deposited with Tony W. Lee and/or Ian K. Snow, who will hold such
certificates as custodian (the “Custodian”). The undersigned will furnish an
opinion substantially in the form of Section 7(e) of the Underwriting Agreement
(defined below), to be delivered on the closing date of the
Offering.
1.
In connection with the foregoing, the undersigned hereby irrevocably
appoints Ian K. Snow and Tony W. Lee, and either of them acting alone, the
attorneys-in-fact (collectively the “Attorneys-in-Fact” and individually an
“Attorney-in-Fact”) of the undersigned, and agrees that the Attorneys-in-Fact,
or either of them acting alone, may also act as attorneys-in-fact for any other
Selling Stockholder, with full power and authority in the name of, and for and
on behalf of, the undersigned:
(a) to sell,
assign and transfer to the Underwriters pursuant to the Underwriting Agreement
(as defined herein) the Maximum Number of shares (as set forth on the signature
page hereof) of Common Stock of the Company including any Optional Shares (as
defined in the Underwriting Agreement) (the “Shares”) and represented by the
certificates deposited by or on behalf of the undersigned with the Custodian
pursuant to the Custody Agreement at a purchase price per Share to be paid by
the Underwriters, as determined by negotiation among the Company, the
Attorneys-in-Fact and the Representatives, but at the same price per Share to be
paid by the Underwriters to each of the other Selling Stockholders for the
Common Stock sold by it.
(b) for the
purpose of effecting such sale, to negotiate, execute, deliver and perform the
undersigned’s obligations under an underwriting agreement (the “Underwriting
Agreement”) among the Company, the Selling Stockholders and the Representatives,
as representatives of the several Underwriters named therein, in substantially
the form thereof attached hereto as Exhibit A.
together with such additions thereto, deletions therefrom and changes thereto
(including the purchase price per Share to be paid by the Underwriters and the
number (or method of determining the number) of Shares (not to exceed the
Maximum Number in the aggregate) to be sold by the undersigned) as may be
approved in the sole discretion of the Attorneys-in-Fact, or either of them
acting alone, such approval to be conclusively evidenced by the execution and
delivery of the Underwriting Agreement by the Attorneys-in-Fact, or either of
them acting alone, provided,
however,
notwithstanding the foregoing, the Attorneys-in-Fact shall not have the
authority to change the provisions of the Underwriting Agreement from the form
attached hereto as Exhibit A in a manner which may materially adversely
affect the undersigned, including, without limitation,
the
following provisions: Section l(b) (representations and warranties of
Selling Stockholders); Section 6 (expenses to be borne by Selling
Stockholders) and Section 8 (as it relates to indemnification and contribution
rights and obligations of Selling Stockholders);
(c) to
execute and deliver any amendments, modifications or supplements to the
Underwriting Agreement or the Custody Agreement, to amend, modify or supplement
any of the terms thereof including, without limitation, the terms of the
offering; provided,
however, that no
such amendment shall increase the number of the Shares to be sold by the
undersigned to more than the Maximum Number in the aggregate;
(d) to give
such orders and instructions to the Custodian or any other person as the
Attorneys-in-Fact, or either of them acting alone, may determine, including,
without limitation, orders or instructions for the following: (i) the
transfer on the books of the Company of the Shares in order to effect their sale
(including the names in which new certificates for the Shares are to be issued
and the denominations thereof), (ii) the purchase of any transfer tax
stamps necessary in connection with the transfer of the Shares, (iii) the
delivery to or for the account of the Underwriters of the certificates for the
Shares against receipt by the Custodian of the purchase price therefor,
(iv) the payment by the Custodian out of the proceeds of any sale of the
Shares to the Underwriters of all expenses as are to be borne by the undersigned
in accordance with the terms of the Underwriting Agreement, (v) the
remittance by the Custodian of the net balance of the proceeds from any sale of
the Shares to be sold in accordance with the payment instructions set forth in
the Custody Agreement or such other instructions as the Attorneys-in-Fact, or
either of them acting alone, may, upon the instructions of the undersigned, have
given to the Custodian in accordance with the Custody Agreement, and
(vi) the return to the undersigned of new certificates representing the
number of shares of Common Stock, if any, represented by certificates deposited
with the Custodian which are in excess of the number of Shares sold by the
undersigned to the Underwriters as specified in the Underwriting Agreement and
to be sold at any subsequent Time of Delivery;
(e) to join
the Company in withdrawing the Registration Statement if the Company should
desire to withdraw such registration;
(f) to retain
legal counsel in connection with any and all matters referred to herein (which
counsel may, but need not be, counsel for the Company);
(g) to agree
upon the allocation and to arrange payment therefor of the expenses of the
offering (including, without limitation, the fees and expenses of the Custodian
and the fees and expenses of counsel referred to above) between and among the
Company and the Selling Stockholders, including the undersigned;
(h) to
endorse (in blank or otherwise) on behalf of the undersigned the certificate or
certificates representing the Shares of Common Stock to be sold by the
undersigned, or a stock power or powers attached to such certificate or
certificates; and
(i) to make,
execute, acknowledge and deliver all other contracts, orders, receipts, notices,
requests, instructions, certificates, letters and other writings, including
communications to the Commission (including a request or requests for
acceleration of the effective date of the Registration Statement) and state
securities law authorities, any amendments to the Underwriting Agreement, the
Custody Agreement or any agreement with the Company with regard to expenses, and
certificates and other documents required to be delivered by or on behalf of the
undersigned pursuant to the Underwriting Agreement or the Custody Agreement, and
specifically to execute on behalf of the undersigned stock powers and transfer
instructions relating to the Shares to be sold by the undersigned, and in
general to do all things and to take all action which the Attorneys-in-Fact, or
either of them acting alone, may consider necessary or proper in connection
with, or to carry out and comply with, all terms and conditions of the
Underwriting Agreement and the Custody Agreement and the aforesaid sale of
Shares to the several Underwriters.
2
2.
The undersigned hereby makes, at and as of the date of this Power of Attorney,
with and to the several Underwriters each of the representations, warranties and
agreements of each Selling Stockholder set forth in the Underwriting Agreement
attached hereto as Exhibit A, and all such representations, warranties and
agreements are incorporated by reference herein in their entirety (the
representations, warranties and agreements being subject, however, to the
exception that orders or other authorizations that may be required under the
1933 Act in connection with the purchase and distribution by the Underwriters of
the Shares to be sold by the undersigned have not yet been
obtained).
The
undersigned further:
(a) represents
and warrants to, and agrees with, the several Underwriters that this Power of
Attorney and the Custody Agreement have been duly executed and delivered by or
on behalf of the undersigned and constitute valid and binding agreements of the
undersigned in accordance with their respective terms; and
(b) (i) confirms
to the several Underwriters the accuracy of the information concerning the
undersigned and the undersigned’s shareholding in the Company as set forth in
the prospectus dated March [ ], 2005, under the caption
“Selling Stockholders”, a copy of which has been furnished to the undersigned,
(ii) also confirms to the several Underwriters the accuracy of the
information concerning the undersigned contained or to be contained in any
selling stockholder’s questionnaire or other written document furnished by the
undersigned to the Company for purposes of the Registration Statement or any
prospectus (preliminary or final) contained therein or filed pursuant to
Rule 424 under the 1933 Act or in any amendment or supplement thereto
(including any documents incorporated by reference therein), (iii) agrees
with the Company and the several Underwriters immediately to notify the Company
and promptly (but in any event within two business days thereafter) to confirm
the same in writing if, during the period or at the date(s) referred to in
paragraph 4 hereof, there should be any change known to the undersigned
affecting the accuracy of the above-mentioned information, or if any subsequent
version of such section of the prospectus delivered to the undersigned should be
inaccurate, and (iv) agrees with the Company and the several Underwriters
that for all purposes of the representations, warranties and agreements
incorporated by reference herein from the Underwriting Agreement attached hereto
as Exhibit A, delivery of this Power of Attorney and the statements
contained herein constitute (and in the absence of any such notification as is
referred to in subclause (iii) given prior to the date on which the
Underwriting Agreement is executed and delivered by the undersigned will
constitute on a continuing basis) written information furnished by the
undersigned to the Company for use in the Registration Statement and any such
prospectus, amendment or supplement.
3. This
Power of Attorney and all authority conferred hereby are granted and conferred
subject to the interests of the Underwriters and the other Selling Stockholders;
and, in consideration of those interests and for the purpose of completing the
transactions contemplated by the Underwriting Agreement and this Power of
Attorney, this Power of Attorney and all authority conferred hereby, to the
extent enforceable by law, shall be deemed an agency coupled with an interest
and be irrevocable and not subject to termination by the undersigned or by
operation of law, whether by the death or incapacity of the undersigned or any
executor or trustee or the termination of any estate or trust or by the
dissolution or liquidation of any corporation or partnership or by the
occurrence of any other event, and the obligations of the Selling Stockholder
under the Underwriting Agreement similarly are not to be subject to termination.
If any such individual or any such executor or trustee should die or become
incapacitated or if any such estate or trust should be terminated or if any such
corporation or partnership should be dissolved or liquidated or if any other
such event should occur before the delivery of the Shares to be sold by the
undersigned under the Underwriting Agreement, certificates representing such
Shares shall be delivered by or on behalf of the undersigned in accordance with
the terms and conditions of the Underwriting Agreement and of the Custody
Agreement and all other actions required to be taken under the Underwriting
Agreement or the Custody Agreement shall be taken, and actions taken by the
Attorneys-in-Fact, or either of them acting alone, pursuant to this Power of
Attorney and by the Custodian under the Custody Agreement shall be as valid as
if such death, incapacity, termination, dissolution, liquidation or other event
had not occurred, regardless of whether or not the Custodian, the
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Attorneys-in-Fact,
or either of them acting alone, shall have received notice of such death,
incapacity, termination, dissolution, liquidatin or other event.
Notwithstanding
the foregoing, if the First Time of Delivery (as defined in the Underwriting
Agreement) does not occur on or prior to
[ ],
2005, then from and after such date the undersigned shall have the power to
revoke all authority hereby conferred by giving written notice to each of the
Attorneys-in-Fact that this Power of Attorney has been terminated; subject,
however, to all lawful action done or performed by the Attorneys-in-Fact or
either one of them, pursuant to this Power of Attorney prior to the actual
receipt of such notice.
4.
The undersigned will immediately notify the Attorneys-in-Fact, the Company and
the Representatives of the occurrence of any event known to the undersigned
which shall cause the representations and warranties contained herein not to be
true and correct during the period of the public offering of the Shares or at
each Time of Delivery for the Shares pursuant to the Underwriting
Agreement.
5.
The undersigned ratifies all that the Attorneys-in-Fact shall do by virtue of
this Power of Attorney. All actions may be taken by either of the
Attorneys-in-Fact alone. In the event that any statement, request, notice or
instruction given by one Attorney-in-Fact shall be inconsistent with that given
by another, any such statement, request, notice or instruction from Ian K. Snow
shall prevail.
6.
The undersigned agrees to hold the Attorneys-in-Fact, jointly and severally,
free and harmless from any and all loss, damage, liability or expense incurred
in connection herewith, including reasonable attorney’s fees and costs, which
they, or either of them acting alone, may sustain as a result of any action
taken in good faith hereunder.
7.
This Power of Attorney shall be governed by, and construed in accordance with,
the laws of the State of New York.
Dated:
March [ ], 2005
Maximum
Number of Shares of Common Stock to be sold:
[•]
Shares
Maximum
Number of Shares of Optional Stock to be sold:
[•]
Shares
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NOTE: ALL
SIGNATURE(S) ON THIS POWER OF ATTORNEY MUST BE EITHER GUARANTEED BY ONE OF THE
INSTITUTIONS REFERRED TO IN THE FIRST PARAGRAPH OF THE CUSTODY AGREEMENT OR ELSE
MUST BE NOTARIZED; SEE BELOW.
|
Signature(s)
guaranteed by:
| |
|
[OR]
| |
STATE
OF )
ss.:
COUNTY
OF )
On the
day __ of __________ before me personally came to me known and known to me to be
the individual described in, and who executed the foregoing instrument, and
(s)he acknowledged to me that (s)he executed the same.
|
Notary
Public
|
My term
expires: ____________________
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