Exhibit 10.1

JOINT INSURANCE AGREEMENT

This JOINT INSURANCE AGREEMENT (the “Agreement”) dated as of August 7, 2006 is
by and between UNITED AUTO GROUP, INC., a Delaware corporation (the “UAG”) and
PENSKE CORPORATION, a Delaware corporation (“PC”).

RECITALS

WHEREAS, the UAG and PC are joint insureds under various insurance policies (the
“Policies”), currently including, among others, the policy with respect to each
parties’ general property and catastrophic loss insurance; and

WHEREAS, the parties wish to provide for certain matters relating to the
distribution of available benefits under the Policies;

NOW, THEREFORE, in consideration of the mutual promises and obligations
hereinafter set forth, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE I INSURANCE PAYMENTS

Section 1.1        Premiums. The parties agree that each entities’ relative
portion of premiums due with respect to each Policy (the “Premium Ratio”) shall
be paid as shall be mutually agreed by the parties considering with respect to
property policies, values of insured assets, risk allocations and exposures with
respect to the insured assets.

Section 1.2        Policy Payments. Available benefits under the Policies with
respect to a loss shall be paid to each party as stipulated in the Policies
provided that in the event of losses in excess of the limit of any Policy during
a policy period, the total policy proceeds shall be allocated (and re-allocated
as set forth below) based on the Premium Ratio. In order to assure the
distribution of proceeds with respect to a policy period as set forth above in
the event of multiple losses in a single policy period, each party agrees to pay
the other any previously received amounts under a Policy to the extent necessary
to achieve payments in accordance with the Premium Ratio. For the sake of
illustration, several examples are set forth on Annex A. Satisfaction of Policy
deductibles shall be the responsibility of, and allocated to, each party as set
forth in the Policies.

ARTICLE II REPRESENTATIONS & WARRANTIES

Each party hereby represents and warrants to the other as follows:

 

 

 

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Section 2.1        Organization and Good Standing; Power and Authority;
Qualifications. Such party is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own, lease and operate its properties, to carry
on its business as presently conducted and as proposed to be conducted. Such
party has all requisite corporate power and authority to enter and deliver this
Agreement, to perform its obligations hereunder and carry out the transactions
contemplated by the Agreement.

Section 2.2        Authorization of the Agreement. The execution, delivery and
performance of the Agreement has been duly authorized by all requisite corporate
action of such party, and the Agreement constitutes a legal, valid and binding
obligation of such party, enforceable in accordance with its terms, except to
the extent that enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors’ rights generally.

Section 2.3        No Conflict. The execution, delivery and performance by such
party of the Agreement will not (a) violate any provision of law, statute, rule
or regulation (including stock exchange rules), or any ruling, writ, injunction,
order, judgment or decree of any court, administrative agency or other
governmental body applicable by such party or any of its properties or assets,
(b) to such party’s knowledge, conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute (with due notice or lapse
of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under any agreement by such party, or result in
the creation of any mortgage, lien, security interest, loan, charge or
encumbrance, upon any of the properties or assets of such party, or (c) violate
the certificate of incorporation or the by-laws of such party .

ARTICLE III COVENANTS

Section 3.1        Availability of Proceeds. In light of each party’s obligation
to pay certain proceeds to the other in the event of certain multiple loss
scenarios, each party agrees to keep available any Policy proceeds which could
be subject to claim by the other party through the end of a particular Policy
period or otherwise assure the availability of sufficient funds to fulfill its
obligations hereunder.

ARTICLE IV TERMINATION

Section 4.1        Termination. This Agreement may be terminated at any time by
mutual written consent of the parties and shall terminate at such time as there
are no then existing Policies.

 

 

 

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ARTICLE V MISCELLANEOUS

Section 5.1        Amendments and Waivers. This Agreement may be amended,
modified, supplemented or waived only upon the written agreement of the party
against whom enforcement of such amendment, modification, supplement or waiver
is sought.

Section 5.2        Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and the personal representatives and assigns of the
parties hereto, whether so expressed or not.

Section 5.3        Entire Agreement. This Agreement (with the documents referred
to herein or delivered pursuant hereto and together with the Agreement) embodies
the entire agreement and understanding between the parties hereto and supersedes
all prior agreements and understandings relating to the subject matter hereof.

Section 5.4        Governing Law. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Michigan without
giving effect to the conflicts of law principles thereof which might result in
the application of the laws of any other jurisdiction.

Section 5.5        Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument. All signatures need not appear on any one
counterpart.

Section 5.6        Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

Section 5.7        Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to injunctive relief, including specific performance, to enforce such
obligations without the posting of any bond, and, if any action should be
brought in equity to enforce any of the provisions of this Agreement, none of
the parties hereto shall raise the defense that there is an adequate remedy at
law.

Section 5.8       Further Assurances. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments, and
documents as any other party hereto reasonably may request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.

 

  UNITED AUTO GROUP, INC.               By:
/s/ James R. Davidson
    Name: James R. Davidson     Title:   Executive Vice President - Finance

 

 

  PENSKE CORPORATION               By:
/s/ J. Patrick Conroy
    Name: J. Patrick Conroy     Title:   EVP and CFO

 

 

 

 

 

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Annex A

 

  Assumptions for the sake of illustration:      Premium Ratio =         UAG  
60

Total Policy Limit $100 

Deductible $0 

 

PC 40

       
Example 1 
 

               UAG                                          PC 

  Assumed Simultaneous Loss                   $100                             
  $100    Payments under policy                   $60                           
    $40    Uninsured Loss                     $40                               
$60             
Example 2   
                 UAG                                          PC    Assumed
Simultaneous Loss                   $75                                $75   
Payments under policy                   $60                                $40 
  Uninsured Loss     

               $15 

                              $35             
Example 3   
 
               UAG                                          PC 
  Assumed Simultaneous Loss                   $110                             
  $10    Payments under policy                   $90                           
    $10    Uninsured Loss                     $20 

                              $0 

           
Example 4   
 
               UAG                                          PC 
  Assumed Simultaneous Loss                   $25                             
  $100    Payments under policy                   $25                           
    $75    Uninsured Loss                   $0                             
  $25              Multiple Loss Examples         
Example 5   
 
               UAG                                          PC 
  Assumed Initial Loss                   $100                                $0 
  Payments under policy                   $100                             
  $0    Second Subsequent Loss                   $0                             
  $100    Result: UAG pays to PC $40 of previously received proceeds           
Example 6   
 
               UAG                                          PC 
  Assumed Initial Loss                   $50                                $50 
  Payments under policy                   $50                             
  $50    Second Subsequent Loss                   $10 

                              $10 

  Result: PC pays to UAG $10 of previously received proceeds   

 

 

 

 

 

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