EXHIBIT 10.4

 

EXECUTION VERSION

 

AMENDED AND RESTATED PAG CO-OBLIGATION FEE, INDEMNITY
AND SECURITY AGREEMENT

 

THIS AMENDED AND RESTATED PAG CO-OBLIGATION FEE, INDEMNITY AND SECURITY
AGREEMENT is made this 17th day of March, 2015, by PENSKE AUTOMOTIVE
GROUP, INC., a Delaware corporation (“PAG”), to and in favor of GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation (“GECC”).

 

WHEREAS, PAG, Penske Truck Leasing Corporation, a Delaware corporation (“PTLC”),
certain subsidiaries of GECC and a subsidiary of LJ VP Holdings LLC, a Delaware
limited liability company (“Holdings”), are partners in Penske Truck Leasing
Co., L.P., a Delaware limited partnership (the “Partnership”);

 

WHEREAS, PAG, PTLC and certain of those GECC subsidiaries became members of
Holdings, which was governed by an Amended and Restated Limited Liability
Agreement dated April 30, 2012 (the “First Amended LLC Agreement”);

 

WHEREAS, GECC and Holdings, as co-obligors, issued $700,000,000 in unsecured
notes on April 30, 2012;

 

WHEREAS, for the purpose of inducing GECC to co-issue such notes, which provided
a benefit to PAG, PAG and GECC entered into that certain PAG Co-Obligation
Fee, Indemnity and Security Agreement dated April 30, 2012 (the “Original
Agreement”);

 

WHEREAS, concurrently with the execution and delivery of the Original Agreement,
PTLC and Penske System, Inc. entered into a PTLC Co-obligation Fee, Indemnity
and Security Agreement dated April 30, 2012 to and in favor of GECC on similar
terms and conditions as contained in the Original Agreement, and on the date
hereof such agreement is being amended and restated in its entirety (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the “PTLC Co-Obligation Agreement”);

 

WHEREAS, GECC caused the assumption by GECC of all obligations with respect to
such unsecured notes in the principal amount of $700,000,000 and the indenture
under which they were issued, pursuant to section 11.03 of such indenture, on
the date hereof (the occurrence of such assumption, the “Fall Away Event”) and,
as a result, (a) Holdings became obligated to pay to GECC 100%  (the “LJ VP
Percentage”) of the total obligations GECC owes under such notes and indenture
to the extent of Holdings’ cash and cash equivalents (subject to limitations
fully set forth in the Limited Liability Agreement of Holdings) and (b) Holdings
was relieved of any and all direct and indirect obligations to the trustee and
the noteholders under and with respect to such indenture and notes (and all
direct liabilities of Holdings to such trustee and noteholders under such
indenture and notes were thereby released, discharged and satisfied); and

 

WHEREAS, on the date hereof, the First Amended LLC Agreement is being amended
and restated in its entirety and the Partnership Agreement of the Partnership is
being amended to reflect the Fall Away Event, the withdrawal of the remaining
GECC subsidiary member of

 

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Holdings, the return to such member of certain partner interests in the
Partnership to such member and the reduction of the LJ VP Percentage from 100%
to 50.1% and certain other events with respect to Holdings and the Partnership,
and the parties to the Original Agreement desire to amend and restate the
Original Agreement in its entirety to make corresponding revisions to its terms.

 

NOW, THEREFORE, in consideration of the foregoing premises, the undertakings set
forth and described herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby mutually acknowledged, PAG,
intending to be legally bound, covenants and agrees to and with GECC as follows:

 

1.                                      Definitions.  As used in this Agreement:

 

“Agent” shall mean a representative of GECC designated by GECC in writing, which
shall initially be GECC until such time as GECC designates another
representative of GECC in writing.

 

“Agreement” shall mean this PAG Co-Obligation Fee, Indemnity and Security
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.

 

“Bankruptcy Action” means (i) the filing by PAG of a voluntary petition seeking
liquidation, reorganization, arrangement or readjustment, in any form, of its
debts under Title 11 of the United States Bankruptcy Code or any other federal
or state insolvency Law, or PAG’s filing an answer consenting to or acquiescing
in any such petition, (ii) the making by PAG of any assignment for the benefit
of its creditors or (iii) the expiration of sixty (60) days after the filing of
an involuntary petition under Title 11 of the United States Bankruptcy Code, an
application for the appointment of a receiver for a material portion of the
assets of PAG, or an involuntary petition seeking liquidation, reorganization,
arrangement or readjustment of its debts under any other federal or state
insolvency Law, provided that the same shall not have been vacated, set aside or
stayed within such sixty (60) -day period.

 

“Board” shall mean the board of directors of PAG.

 

“Bond Indenture” shall mean that certain Senior Indenture, dated as of the
Effective Date, by and among GECC and Holdings in their capacities as co-issuers
of the Bonds, with The Bank of New York Mellon, as Trustee, or any successor
thereto appointed as Trustee pursuant to such Indenture, as the same may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the Holdings LLC Agreement.

 

“Bonds” shall mean the notes issued under the Bond Indenture, in an aggregate
principal amount of $700,000,000.

 

“Bonds Maturity Date” shall have the meaning set forth in the Holdings LLC
Agreement.

 

“Business Day” shall mean any day other than a Saturday or Sunday or other day
that commercial banks are required or permitted to be closed in New York City.

 

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“Claim” shall mean any claim, demand, right, damage, dispute, cost, expense,
Lien, debt, liability, loss, judgment, suit, action and cause of action of
whatever kind and nature whatsoever, whether known or unknown, contingent or
absolute.

 

“Collateral” shall mean the property, or interests in property, in which PAG has
granted security interests to GECC in Section 4, to secure payment of the
Secured Obligations.

 

“Collateral Document” shall mean the Holdings LLC Agreement.

 

“Collateral Distributions” shall mean any monies at any time or from time to
time received or receivable by PAG, under, in respect of, or pursuant to, the
Collateral Document, howsoever denominated, documented or occurring, including
Holdings Member Interest Distributions.

 

“Contribution Subaccount” shall have the meaning set forth in the Holdings LLC
Agreement.

 

“Co-Obligation” shall mean all initially scheduled obligations for the payment
of money by GECC as issuer of the Bonds, as initially provided in the Bond
Indenture.

 

“Deemed Transfer” shall have the meaning set forth in Section 9(b).

 

“Default” shall mean any of the events specified in the definition of “Event of
Default” whether or not any applicable requirement for the giving of notice, the
lapse of time, or both, has been satisfied.

 

“Default Rate” shall mean a rate of interest per annum equal to the Prime Rate
as it may change from time to time plus 2.5%, provided that the Default Rate
shall not exceed a rate that may be lawfully charged.

 

“Effective Date” shall mean the date of the Original Agreement.

 

“Event of Default” shall mean:  (i) the failure of PAG to pay the PAG
Co-Obligation Fee, when due; (ii) the failure of PAG to make any Indemnity
Payment with respect to the Indemnified Amounts referred to in
Section 3(i) below within five (5) Business Days after any such amount is due;
(iii) the failure of PAG to make any Indemnity Payment with respect to the
Indemnified Amounts referred to in Section 3(ii) or 3(iii) below, when due;
(iv) the failure of PAG to observe, comply with or perform any of its material
obligations or covenants hereunder (other than the payment obligations referred
to in clauses (i), (ii) or (iii) of this definition) or under any Transaction
Document and such default shall remain un-remedied upon the expiration of any
grace or cure period provided in respect thereof and, if none has been provided,
within five (5) Business Days after receipt of notice from GECC of the failure
of PAG to observe, comply with or perform any of such obligations; (v) the
failure of PAG to pay any amounts due under Sections 11.7 or 11.8 within five
(5) Business Days after any such amount is due; (vi) any breach of any
representation or warranty of PAG made hereunder; (vii) the failure of PAG to
pay any interest at the Default Rate, when due; or (viii) PAG becoming the
subject of any Bankruptcy Action.

 

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“Funding Loan” shall have the meaning set forth in Section 9(c).

 

“GECC” shall have the meaning set forth in the first paragraph hereof, including
its successors and assigns pursuant to Section 11.4.

 

“GECC Revolver” shall have the meaning set forth in the first “Whereas” clause
of this Agreement.

 

“Governmental Authority” shall mean any (a) U.S., foreign, federal, state, local
or other government, (b) governmental commission, board, body, bureau, agency,
department or other judicial, regulatory or administrative authority of any
nature, including courts, tribunals and other judicial bodies, (c) self
regulatory body or authority, or (d) instrumentality or entity designed to act
for or on behalf of the foregoing in exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

 

“Holdings” shall have the meaning set forth in the first “Whereas” clause of
this Agreement.

 

“Holdings LLC Agreement” shall mean that certain Second Amended and Restated
Limited Liability Company Agreement of Holdings, dated the date hereof, by and
among the managing member and other members of Holdings, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

 

“Holdings Members” shall mean the Members (as defined in the Holdings LLC
Agreement).

 

“Holdings Member Interests” shall mean all membership interests (including
preferred and common) of Holdings issued to its members at any time or from time
to time.

 

“Holdings Member Interest Distributions” shall mean any distributions, whether
of cash or property, including additional Holdings Member Interests, at any time
or from time to time received or receivable from Holdings by any holder of
Holdings Member Interests, including dividends and returns of capital.

 

“Holdings Payment Amounts” shall mean any amounts paid under Section 10.1 of the
Holdings LLC Agreement, which will be deemed distributed when paid in accordance
with such Section.

 

“Indemnified Amount” shall have the meaning set forth in Section 3 below.

 

“Indemnity Payments” shall have the meaning set forth in Section 3 below.

 

“Interest Obligations” shall have the meaning set forth in the Holdings LLC
Agreement.

 

“Interest Obligations Deficiency” shall have the meaning set forth in the
Holdings LLC Agreement.

 

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“Law” shall mean any applicable foreign or domestic, federal, state or local,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or requirement of any
Governmental Authority or any arbitration tribunal.

 

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement) and any
capital lease having substantially the same economic effect as any of the
foregoing).

 

“Losses” shall mean all damages, losses, liabilities, costs and expenses
incurred by GECC or any of its Affiliates in connection with any breach of or
default under an Additional Capital Contribution Loan.

 

“Material Adverse Effect” shall mean, with respect to PAG, (i) a material
adverse effect on its interest in, or title to, any Collateral, (ii) a material
adverse effect on the validity, status, perfection or priority of any Lien
granted pursuant to the Original Agreement and hereto or pursuant to any other
Transaction Document or (iii) a material adverse effect on the ability of PAG to
perform its obligations under any of the Transaction Documents.

 

“Material Agreements” shall mean the (i)  Organizational Documents of Holdings
and (ii) Bond Indenture.

 

“Maturity Obligations” shall have the meaning set forth in the Holdings LLC
Agreement.

 

“Organizational Documents” shall mean:  (i) for a corporation, its articles (or
certificate) of incorporation and bylaws; (ii) for a limited partnership, its
articles (or certificate)of limited partnership and limited partnership
agreement; and (iii) for a limited liability company, its articles (or
certificate) of formation or organization and any operating agreement or limited
liability company agreement; together with, for each such entity and any other
entity not described above, such other, similar documents as are integral to its
formation or the conduct of its business operations among its shareholders,
partners, or members and the corporation, partnership or limited liability
company.

 

“PAG” shall have the meaning set forth in the first paragraph hereof, including
its permitted successors and permitted assigns pursuant to Section 11.4.

 

“PAG Co-Obligation Fee” shall mean a fee per annum (pro-rated quarterly), equal
in amount to the product of (x) one and fifty one-hundredths percent (1.50%)
(expressed as a decimal), (y) the PAG Co- Obligation Percentage (expressed as a
decimal), and (z) $700,000,000, accrued daily from the date of issuance of the
Bonds on the basis of a 360-day year comprised of twelve 30-day months and
pro-rated for any partial quarterly period.

 

“PAG Co-Obligation Percentage” shall mean 9.02%.

 

“Partnership” shall have the meaning set forth in the first “Whereas” clause of
this Agreement.

 

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“Partnership Agreement” shall mean the Fourth Amended and Restated Agreement of
Limited Partnership of the Partnership, dated April 30, 2012, as amended as of
the date hereof, by and among the limited partners and general partner of the
Partnership, as the same may be further amended, restated, supplemented or
otherwise modified from time to time.

 

“Partnership Interest Distributions” shall mean any distributions, whether of
cash or property, including additional Partnership Interests, at any time or
from time to time received or receivable from the Partnership by any holder of
Partnership Interests, including dividends and returns of capital.

 

“Partnership Interests” shall have the meaning set forth in the Partnership
Agreement.

 

“Partnership Member” and “Partnership Members” shall mean each of, and together,
PTLC and PAG.

 

“Permitted Collateral Encumbrances” shall mean (a) Liens in favor of GECC
granted to secure payment of the Secured Obligations; (b) Liens for taxes,
assessments or other governmental charges not delinquent or being contested in
good faith and by appropriate proceedings and with respect to which proper
reserves have been taken by PAG; provided, that such Liens, individually or in
the aggregate, have no effect on the priority of any Liens in favor of GECC or
the value of any assets in which GECC has such a Lien; and (c) the encumbrances
granted under the Holdings LLC Agreement.

 

“Permitted Encumbrances” shall mean (a) Liens in favor of GECC granted to secure
payment of the Secured Obligations; (b) Liens for taxes, assessments or other
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by PAG; provided, that such Liens, individually or in the aggregate, have
no effect on the priority of any Liens in favor of GECC or the value of any
assets in which GECC has such a Lien; (c) deposits or pledges to secure
obligations under worker’s compensation, social security or similar Laws, or
under unemployment insurance; (d) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of PAG’s business; (e) mechanic’s, worker’s,
materialmen’s or other like Liens arising in the ordinary course of PAG’s
business with respect to obligations which are not due or which are being
contested in good faith by PAG; (f) Liens in the nature of ownership interests
of lessors of real and personal property; (g) other Liens incidental to the
conduct of PAG’s business or the ownership of its property and assets which were
not incurred in connection with the borrowing of money or the obtaining of
advances or credit, and which do not in the aggregate materially detract from
GECC’s rights to, in or under the Collateral or the value of PAG’s business
property or assets or which do not materially impair the use thereof in the
operation of PAG’s business; and (h) the encumbrances granted under the Holdings
LLC Agreement, the LJ VP LLC Agreement and the Partnership Agreement.

 

“Person” shall mean an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.

 

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“Prime Rate” means the prime rate (the base rate on corporate loans at large
U.S. money center commercial banks) as published in the Wall Street Journal or
other equivalent publication if the Wall Street Journal no longer publishes such
information.

 

“PTL GP, LLC Agreement” shall mean that certain Limited Liability Company
Agreement of LJ VP, LLC, dated as of the Effective Date, executed by Holdings as
the sole member of LJ VP, LLC, as the same was amended to change the name of LJ
VP, LLC to PTL GP, LLC as of January     , 2014, and as the same may be further
amended, restated, supplemented or otherwise modified from time to time.

 

“PTLC” shall have the meaning set forth in the first paragraph hereof, including
its permitted successors and permitted assigns pursuant to Article 9 of the
Holdings LLC Agreement.

 

“Sale” and “Sold” shall have the meanings set forth in the Holdings LLC
Agreement.

 

“Secured Obligations” shall mean the obligations of PAG described in Section 4
below as being secured by the Collateral.

 

“Subsidiary” of a Person shall refer to (i) any corporation (or equivalent legal
entity under foreign Law) of which such Person owns directly or indirectly more
than fifty percent (50%) of the stock, the holders of which are ordinarily and
generally, in the absence of contingencies or understandings, entitled to vote
for the election of directors, (ii) any limited liability company in which such
Person owns directly or indirectly more than fifty percent (50%)  of the
membership interests, (iii) any partnership in which such other Person owns
directly or indirectly more than a fifty percent (50%) interest and (iv) any
other entity of which another Person has the voting power to elect the majority
of the members of the board of directors, the board of managers, or a similar
governing body of such entity.

 

“Transaction Documents” shall mean this Agreement, the Original Agreement, the
Collateral Document and any and all other agreements, instruments and documents,
including guaranties, pledges, powers of attorney, consents and all other
writings heretofore, now or hereafter executed by PAG and/or delivered to GECC
relating to the security interests granted by this Agreement.

 

“Transfer” shall have the meaning set forth in the Holdings LLC Agreement.

 

“Trustee” shall have the meaning set forth in the Holdings LLC Agreement.

 

“UCC” shall mean the Uniform Commercial Code, as amended from time to time and
any successor thereto.

 

“UCC Filing” shall have the meaning set forth in Section 4(b)(iii).

 

2.                                      PAG Co-Obligation Fee.  In consideration
of the Co-Obligation, commencing on the Effective Date and continuing on a
calendar quarterly basis thereafter, on the last Business Day of each calendar
quarter, until the originally scheduled maturity date of the Bonds, PAG shall
pay to GECC the PAG Co-Obligation Fee.

 

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3.                                      Indemnification.  Without limiting any
other rights which GECC may have hereunder, under any of the other Transaction
Documents or under applicable Law, subject to Section 10, PAG hereby agrees to
indemnify GECC for losses resulting from (i)  (a) at any time when the Bonds are
outstanding, the PAG Co-Obligation Percentage of any interest payments on the
Bonds and any payments of trustee and similar fees related to the Bonds made
directly by GECC under the Co-Obligation and (b) if the Bonds are redeemed by
GECC prior to their scheduled maturity date, the PAG Co-Obligation Percentage of
the amount of any interest that would have been payable on the Bonds if they had
not been so redeemed, accruing from the date of redemption until the originally
scheduled maturity date of the Bonds, with any such deemed accrual being due and
payable upon each originally scheduled payment date (such payments of deemed
accrual amounts to be the applicable indemnification, notwithstanding that the
aggregate of these payments may exceed the interest component of the redemption
price paid by GECC on the Bonds), (ii) the PAG Co-Obligation Percentage of any
principal payments on the Bonds made directly by GECC under the Co-Obligation,
with such obligation becoming due and payable on the originally scheduled
maturity date of the Bonds (whether or not the Bonds remain outstanding until
their originally scheduled maturity date), (iii) without duplication with
clauses (i) or (ii), the failure to make any payment due to GECC under
Section 11.7 or Section 11.8, (iv) interest at the Default Rate on any payment
referred to in clauses (i) - (iii) hereof or with respect to the PAG
Co-Obligation Fee when such payment was not made on or prior to the due date
thereof and (v) all damages, losses, liabilities, costs and expenses incurred by
GECC or any of its Affiliates in connection with the failure of PAG to observe,
comply with or perform its material obligations or covenants hereunder or a
breach of any representation or warranty of PAG hereunder (all of the foregoing
clauses (i) - (v) hereof are called, collectively, the “Indemnified Amounts”),
which Indemnified Amounts shall be due and payable on demand (such amounts, as
and when payment thereof is demanded, are herein collectively called the
“Indemnity Payments”)).  Any Holdings Payment Amounts will reduce any
Indemnified Amounts due hereunder with respect to PAG by an amount equal to 18%
of the Holdings Payment Amounts.  The indemnity obligations contained in this
Section 3 shall survive the termination of this Agreement.

 

4.                                      Security Interests.  (a)  Grants of
Liens.  As security for its obligations with respect to the PAG Co-Obligation
Fee under Section 2 and all of its Indemnified Amounts, PAG hereby confirms its
grant under the Original Agreement and hereby grants to GECC a security interest
in all right, title and interest of PAG to, in or under all Holdings Member
Interests held by PAG on or after the Effective Date, including (i) all Holdings
Member Interest Distributions thereunder, (ii) any certificate at any time
issued to represent or evidence its right, title and interest therein, and
(iii) all proceeds of the foregoing; which security interest PAG at all times
shall cause to be first priority and perfected.

 

(b)                                 Collateral Representation and Warranties. 
PAG represents and warrants to GECC with respect to the Collateral that:

 

(i)                                     It is the owner of the Collateral
pledged by it free and clear of any and all Liens, other than Permitted
Collateral Encumbrances.

 

(ii)                                  It has all power, statutory and otherwise,
to grant the first priority, perfected security interest in the Collateral
pledged by it.

 

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(iii)                               No authorization, approval or other action
by, and, except with respect to PAG’s disclosure obligations as a public
company, no notice to or filing with, any Governmental Authority is required
(i) for its granting of a security interest in the Collateral pursuant hereto,
(ii) except for filings with the Secretary of State of Delaware under Article 9
of the UCC of the State of Delaware (the “UCC Filing”), which were made
concurrently with the execution and delivery of the Original Agreement, for the
perfection of such security interest as a first priority security interest or
(iii) for the exercise by GECC of any rights or remedies pursuant to this
Agreement or applicable Law.

 

(iv)                              The UCC Filing was made concurrently with the
execution and delivery of the Original Agreement, and created a valid first
priority, perfected security interest in the Collateral of PAG securing the
payment of the Secured Obligations which remains validly perfected with a first
priority as of the date hereof.  All filings and other actions necessary or
desirable to perfect and protect such first priority, perfected security
interest have been duly taken and GECC has a first priority, perfected security
interest in the Collateral of PAG, subject only to the Permitted Collateral
Encumbrances.

 

(c)                                  Collateral Covenants.  PAG covenants to
GECC with respect to the Collateral that:

 

(i)                                     At any time and from time to time, upon
the written request of GECC, and at the sole expense of PAG, PAG will promptly
and duly execute and deliver any and all such further instruments and documents
and take such further actions as GECC may reasonably deem desirable to obtain
the full benefits of this Agreement and of the rights and powers herein granted
with respect to PAG, including the execution and filing of any financing or
continuation statements under the UCC in effect in any jurisdiction with respect
to the first priority, perfected security interest granted hereby and by the
Original Agreement and, if otherwise required hereunder, transferring Collateral
to the possession of Agent (if a first priority, perfected security interest in
such Collateral can be perfected by possession) or causing Holdings to agree (in
writing) that it will only comply with instructions originated by Agent without
further consent by PAG upon the occurrence and continuance of an Event of
Default with respect to PAG. PAG also hereby authorizes GECC to file any such
financing or continuation statement without the signature of PAG to the maximum
extent not prohibited by applicable Law.

 

(ii)                                  PAG will defend the right, title and
interest hereunder of GECC, as holder of a first priority, perfected security
interest in the Collateral in which PAG has granted a first priority, perfected
security interest to GECC hereunder or under the Original Agreement, against the
Claims of all Persons whomsoever.

 

(iii)                               PAG will not change its name in any manner
which might make any financing or continuation statement filed hereunder
seriously misleading within the meaning of Section 9-507 of the UCC of the State
of New York (or any

 

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other then-applicable provision of the UCC of the State of New York), unless PAG
shall have given GECC at least thirty (30) days prior written notice thereof and
shall have taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is impossible to take such
action in advance) necessary or reasonably requested by GECC to amend such
financing statement or continuation statement so that it is not seriously
misleading.  PAG will not sign or authorize the signing on PAG’s behalf of any
financing statement naming PAG as debtor covering all or any portion of PAG’s
Collateral, except financing statements naming GECC as secured party.

 

(iv)                              PAG will not directly or indirectly Transfer
or create or suffer or permit to be created any Lien on any of the Collateral,
other than Permitted Collateral Encumbrances or as otherwise permitted by this
Agreement, provided that nothing in this Section 4(c)(iv) will prevent the
payment of Holdings Member Interest Distributions, and the application such
funds by PAG, at any time an Event of Default shall not then exist.

 

(v)                                 PAG will perform all of its obligations (if
any) under the Collateral Document prior to the time that any interest or
penalty would attach against PAG or any of the Collateral as a result of PAG’s
failure to perform any of such obligations.

 

(vi)                              PAG will not (x) suffer or permit any
amendment, restatement, supplement or other modification or waiver of its
Organizational Documents unless and to the extent (1) required by Law to do so,
or (2) such amendment, restatement, supplement or other modification or waiver
(A) would not cause any contravention of, or conflict with, any material term or
condition of this Agreement, any other Transaction Document, or any Material
Agreement, or (B) would not otherwise reasonably be expected to have a Material
Adverse Effect; or (y) waive, release or compromise any Claims PAG may have
against any other Person which arise under any Collateral Document.

 

(vii)                           So long as an Event of Default shall not then
exist, PAG shall be entitled (1) to exercise for any purpose any and all powers,
and (2) to receive any and all Holdings Member Interest Distributions (if any)
arising from or relating to the Collateral; provided, however, that PAG shall
not exercise such rights or powers, or approve or consent to any action that
would be in contravention of the provisions of, or constitute a breach or
Default under, this Agreement or any of the Transaction Documents.

 

(viii)                        If there is an Event of Default with respect to
PAG, any Event of Default attributable to a failure to pay any Indemnified
Amounts shall be deemed waived upon the receipt by GECC of amounts sufficient to
satisfy all such Indemnified Amounts then due and payable by PAG.

 

(d)                                 Event of Default.  If any Event of Default
shall occur and be continuing (and not waived in accordance herewith), the Agent
may exercise in addition to all other

 

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rights and remedies granted to it in this Agreement, the Holdings LLC Agreement
and in any other Transaction Documents, all rights and remedies of a secured
party under the UCC of the State of New York with respect to the Collateral
described in Section 4(a) hereto.  Without limiting the generality of the
foregoing, PAG expressly agrees that in any such event Agent, without demand of
performance or other demand, advertisement or notice of any kind (except the
notice specified below of time and place of public or private sale) to or upon
PAG or any other Person (all and each of which demands, advertisements or
notices are hereby expressly, irrevocably and unconditionally waived), may
forthwith collect, receive, appropriate and realize upon such Collateral in
which PAG has granted a security interest to GECC with respect thereto, or any
part thereof, or may forthwith sell, lease, assign, give option or options to
purchase, or sell or otherwise dispose of and deliver such Collateral (or
contract to do so), or any part thereof, in one or more parcels at public or
private sale or sales, at any exchange or broker’s board or at any of the
Agent’s offices or elsewhere at such prices as it may deem best, for cash or on
credit or for future delivery without the assumption of any credit risk.  PAG
expressly acknowledges that private sales may be less favorable to a seller than
public sales but that private sales shall nevertheless be deemed commercially
reasonable and otherwise permitted hereunder.  In view of the fact that federal
and state securities Laws and/or other applicable Laws may impose certain
restrictions on the method by which a sale of such Collateral may be effected,
PAG agrees that upon the occurrence of an Event of Default with respect to it,
the Agent may, from time to time, attempt to sell all or any part of such
Collateral in which PAG has granted a security interest to GECC relating to such
Event of Default hereunder, by means of a private placement, restricting the
prospective purchasers to those who will represent and agree that they are
purchasing for investment only and not for distribution.  In so doing, the Agent
may solicit offers to buy such Collateral, or any part thereof, for cash, from a
limited number of investors deemed by the Agent in its judgment, to be
financially responsible parties who might be interested in purchasing such
Collateral, and if the Agent solicits such offers, then the acceptance by the
Agent of the highest offer obtained therefrom shall be deemed to be a
commercially reasonable method of disposing of such Collateral.  GECC or the
Agent shall have the right upon any such public sale or sales, and, to the
maximum extent not prohibited by applicable Law, upon any such private sale or
sales, to purchase the whole or any part of such Collateral so sold, free of any
right or equity of redemption, which equity of redemption PAG hereby irrevocably
and unconditionally releases.  GECC shall apply the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale to the Secured
Obligations in such order and manner as GECC may elect.  Only after so paying
over such net proceeds and after the payment by the Agent of any other amount
required by any provision of Law, including Section 9-608(a)(1)(C) of the UCC of
the State of New York, need GECC account for the surplus, if any, to PAG.  To
the maximum extent not prohibited by applicable Law, PAG hereby irrevocably and
unconditionally waives all Claims against the Agent and/or GECC arising out of
the repossession, retention or sale of such Collateral except in each case such
as arise out of the gross negligence or willful misconduct of the Agent or
GECC.  Any notification of intended disposition of any of such Collateral
required by Law will be deemed to be a reasonable authenticated notification of
disposition if given at least ten (10) days prior to such disposition and such
notice shall (i) describe GECC and PAG, (ii) describe such

 

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Collateral that is the subject of the intended disposition, (iii) state the
method of the intended disposition, (iv) state that PAG is entitled to an
accounting of the Secured Obligations and state the charge, if any, for an
accounting and (v) state the time and place of any public disposition or the
time after which any private sale is to be made.  The Agent and/or GECC may
disclaim any representations or warranties that might arise in connection with
the Sale or other Transfer of such Collateral and has no obligation to provide
any representations or warranties at such time except to advise the purchaser in
writing of provisions of the Collateral Document or instruments to which it will
succeed or be subject to.  Except as expressly required by the UCC of the State
of New York or by the equitable principles of good faith and fair dealing, the
Agent and/or GECC shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or nominee of the Agent
and/or GECC or as to any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto.  Notwithstanding
the foregoing, the parties hereto agree that to the extent that PAG is the
Managing Member (as defined in the Holdings LLC Agreement) at the time that GECC
exercises its remedies with respect to any Holdings Member Interests in the
Collateral, then the transferee of such Holdings Member Interests shall become
the Managing Member only to the extent permitted and as provided in the Holdings
LLC Agreement.

 

(e)                                  Default Rate. If any payments hereunder are
not received by GECC on the due date therefor, interest on such payments shall
accrue at the Default Rate with respect to any of such payments until such
payments and all accrued interest thereon have been fully paid to GECC.

 

(f)                                   Inspection of Premises.  At all reasonable
times, upon the occurrence and during the continuation of a Default, at PAG’s
expense, GECC shall have full access to and the right to audit, check, inspect
and make abstracts and copies from PAG’s books, records, audits, correspondence
and all other papers relating to the Collateral from time to time in GECC’s sole
discretion.  Upon the occurrence and during the continuation of a Default, GECC
may also enter upon PAG’s premises at any time during business hours and at any
other reasonable time, and from time to time, for the purpose of inspecting the
Collateral and any and all records pertaining thereto.

 

(g)                                  GECC’s Discretion.  After an Event of
Default exists, and while it is continuing, GECC shall have the right in its
sole discretion to determine which rights, Liens or remedies GECC may at any
time pursue, relinquish, subordinate, or modify or to take any other action with
respect thereto and such determination will not in any way modify or affect any
of GECC’s rights hereunder.  In no event shall PAG have any right to require
GECC to marshal any Collateral.

 

(h)                                 Waiver of Subrogation.  Except as provided
in Section 7.6, PAG shall not have any right of subrogation as to any Collateral
until this Agreement has terminated as provided in Section 11.16.

 

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5.                                      Conditions.  Upon the execution and
delivery of this Agreement and the occurrence of the following, the Agreement
shall amend and restate, without novation, the Original Agreement:

 

(a)                                 Organizational Documents.  GECC shall have
received on or prior to the date hereof the following items, each of which shall
be in form and substance satisfactory to GECC:

 

(i)                                     a certificate of the Secretary or an
Assistant Secretary of PAG, dated the date hereof, and certifying (A) that
attached thereto is a true and complete copy of the resolutions of the Board of
PAG authorizing the execution, delivery and performance of this Agreement, the
Holdings LLC Agreement (as amended and restated on the date hereof) and the
other documents to be delivered by it hereunder and thereunder and the
transactions contemplated hereby and thereby, and that such resolutions have not
been amended, modified, revoked or rescinded and are in full force and effect,
(B) that attached thereto is a true and complete copy of such Party’s
Organizational Documents, each as in effect as of the Effective Date and (C) as
to the incumbency and specimen signature of each officer or authorized signatory
executing this Agreement or any other document delivered in connection herewith
or therewith on behalf of PAG, together with evidence of the incumbency of such
Secretary or Assistant Secretary;

 

(ii)                                  copies of certificates of good standing
dated as of a recent date of PAG from the Secretary of State of the State of
Delaware;

 

(b)                                 Lien Searches.  GECC shall have received on
or prior to the date hereof the following items, each of which shall be in form
and substance satisfactory to GECC:

 

(i)                                     certified copies of requests for
information or copies (Form UCC-11) dated a date reasonably near the date hereof
listing all effective financing statements which name PAG (under its present
name or any previous name in the past ten years) as transferor or debtor and
which are filed with the Secretary of State of Delaware, together with copies of
such financing statements, and tax and judgment lien searches showing no such
liens that are not permitted by the Transaction Documents;

 

(c)                                  UCCs.  The following filings shall have
been made on or prior to the date hereof, each of which shall be in form and
substance satisfactory to GECC:

 

(i)                                     proper financing statements
(Form UCC-1), naming PAG, as the debtor, and GECC, as secured party, in respect
of the first priority, perfected security interest created hereunder and proper
financing statements (Form UCC-3), if any, necessary to release all first
priority, perfected security interests and other rights of any other Person in
the Collateral previously granted by PAG shall have been filed and all filing
fees, taxes or other amounts required to be paid in connection with such filings
shall have been paid;

 

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(d)                                 Opinions.  GECC shall have received on or
prior to the date hereof the following items, each of which shall be in form and
substance satisfactory to GECC:

 

(i)                                     the executed legal opinions of Shane
Spradlin, general counsel of PAG, dated the date hereof and addressed to GECC,
with respect to certain corporate Law matters, including due organization, valid
existence and good standing, power and authority, and due authorization,
execution and delivery of this Agreement, the Holdings LLC Agreement (as amended
and restated on the date hereof), the Partnership Agreement (as amended and
restate on the date hereof), the Governmental Authority consents or filings
required in connection with the execution, delivery and performance of the
Transaction Documents, the absence of conflicts with the Organizational
Documents of PAG or Laws and regulations arising from the execution, delivery
and performance of the Transaction Documents and the Collateral Document, the
absence of conflicts with court orders or agreements or other contracts arising
from the execution, delivery and performance of the Transaction Documents and
the Collateral Document, the absence of litigation affecting the transactions
contemplated by the Transaction Documents, the enforceability of this Agreement,
and the Collateral Document and the other Transaction Documents, the creation,
attachment and continued perfection of the perfected security interests in the
Collateral granted by PAG pursuant hereto, and other such matters as GECC may
request.

 

6.                                      General Representations and Warranties. 
PAG hereby represents and warrants to GECC that:

 

6.1.                            Authority.  PAG has full power, authority and
legal right to enter into this Agreement and the other Transaction Documents to
which it is party and to perform all its respective obligations hereunder and
thereunder.  The execution, delivery and performance of this Agreement and of
the other Transaction Documents to which it is a party (a) are within PAG’s
corporate (or other organizational) powers, have been duly authorized, are not
in contravention of Law or the terms of its Organizational Documents of any
Collateral Document or Material Agreement or undertaking to which PAG is a party
or by which PAG is bound, and (b) will not conflict with nor result in any
breach in any of the provisions of or constitute a default under or result in
the creation of any Lien (except Liens created pursuant to this Agreement or
permitted by this Agreement) upon any asset of PAG under the provisions of any
Organizational Document or other instrument to which PAG or its property is a
party or by which it may be bound.

 

6.2.                            Formation and Qualification.

 

(a)                                 PAG is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization and is
duly qualified to do business and is in good standing in the states or other
jurisdictions listed on Schedule 6.2 which constitute all states in which
qualification and good standing where its ownership, lease or operation of
property or the conduct of its business requires such qualification, except to
the extent the failure to so qualify or be in good standing would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect on PAG.

 

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(b)                                 PAG (excluding, for the avoidance of doubt,
its Subsidiaries) has not been known by any other organization name in the ten
(10) years immediately preceding the date hereof (other than “United Auto
Group, Inc.”) and does not itself sell inventory under any other name; nor has
PAG been the surviving organization of a merger or consolidation during the ten
(10) years immediately preceding the date hereof.

 

6.3.                            Enforceable Obligations.  This Agreement is, and
each other Transaction Document executed by PAG, constitutes (or will constitute
upon the execution and delivery thereof), the legal, valid and binding
obligation of PAG, enforceable against it in accordance with its terms, except
as such enforcement is subject to the effect of (i) any applicable bankruptcy,
insolvency, moratorium or similar Laws affecting creditors’ rights generally,
and (ii) general principles of equity (regardless of whether considered in a
proceeding in equity or at Law).

 

6.4.                            Financial Condition Representation.  The
consolidated financial statements of PAG and its subsidiaries and the related
notes thereto included in its Annual Report on Form 10-K filed with the
Securities and Exchange Commission on February 26, 2015 comply in all material
respects with the applicable requirements of the Exchange Act (as defined in the
Partnership Agreement) and fairly present in all material respects the
consolidated financial position of PAG and its subsidiaries as of the dates
indicated and the results of their operations and cash flows for the periods
specified and such financial statements have been prepared in conformity with
Generally Accepted Accounting Principles (as defined in the Partnership
Agreement) applied on a consistent basis throughout the periods covered
thereby.  Since December 31, 2014, PAG has conducted its business in the
ordinary course in all material respects consistent with past practice, and,
since such date, there has not been any changes, events or occurrences which has
had or would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect with respect to PAG.

 

6.5.  Absence of Claims Against PTLC.  PAG does not have any Claim against PTLC.

 

7.                                      Covenants.

 

PAG shall, until payment in full of the Secured Obligations and termination of
this Agreement (except as otherwise expressly provided below):

 

7.1.                            Conduct of Business and Maintenance of Existence
and Assets.  (a) Keep in full force and effect (i) its existence and (ii) the
Material Agreements to which it is then a party, each to the extent within PAG’s
control and using its reasonable best efforts to the extent not within PAG’s
control; and (b) make all such reports and pay all such franchise and other
taxes and license fees and do all such other acts and things as may be lawfully
required to maintain its rights, licenses, leases, powers and franchises under
the Laws of the United States or any political subdivision thereof where the
failure to do so, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect.

 

7.2.                            Requirements of Law.  Comply at all times, in
all material respects, with all requirements of Law, the failure to comply with
which would reasonably be expected to have

 

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a Material Adverse Effect and promptly notify GECC in writing of any violation
by PAG of any requirement of Law which violation would reasonably be expected to
have a Material Adverse Effect.

 

7.3.                            Notice of Default.  Promptly give written notice
to GECC of the occurrence of any Default by PAG.

 

7.4.                            Books and Records.  Keep proper books and
records of account in which full, true and correct entries in conformity with
generally accepted accounting principles as in effect from time to time in the
United States of America and all requirements of Law shall be made in all
material respects of all dealings and transactions in relation to its business
and activities.

 

7.5.                            Further Assurances.  Execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates,
legal opinions or documents, and take such actions, as the Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Transaction Documents upon the exercise by GECC of any
power, right, privilege or remedy pursuant to this Agreement or the other
Transaction Documents, including any filings necessary to perfect and protect
the first priority, perfected security interest, which requires any consent,
approval, recording, qualification or authorization of any Governmental
Authority, and it shall execute and deliver, or shall cause the execution and
delivery of, all applications, certifications, instruments and other documents
and papers that such Agent may be required to obtain from it for such
governmental consent, approval, recording, qualification or authorization.

 

7.6.                            No Enforcement of Claims.  Until the termination
of the PTLC Co-Obligation Agreement in accordance with Section 9.16 thereof, not
enforce any Claim against PTLC other than any Claim PAG may have against PTLC
arising after the date hereof directly as a result of any action or inaction of
PTLC as general partner of the Partnership.

 

8.                                      Intentionally Left Blank.

 

9.                                      Tax Characterization.  PAG and GECC
agree to the following characterization, for tax purposes, of the Bonds and
related payments and expenses:

 

(a)                                 The Bonds shall be treated as debt of GECC
and not as debt of Holdings;

 

(b)                                 An amount equal to the net proceeds of the
Bonds shall be treated as having been transferred in cash by GECC to each member
as of the Effective Date in proportion to the member’s Holdings Member Interest
as of such date (each such transfer a “Deemed Transfer”);

 

(c)                                  Each Deemed Transfer to a Partnership
Member shall be treated as the proceeds of a loan from GECC to Partnership
Member (each such loan a “Funding Loan”) with a face amount equal to the product
of the face amount of the Bonds and such Partnership Member’s respective
Co-Obligation Percentage, being, in the case of PAG, the PAG Co-Obligation
Percentage;

 

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(d)                                 Each Funding Loan shall be treated as having
terms consistent with the agreement between GECC and the Partnership Members, as
reflected in the Holdings LLC Agreement and this Agreement, relating to their
economic sharing of obligations relating to the Bonds, including the treatment
of all PAG Co-Obligation Fees paid or accrued by a Partnership Member as
interest paid or accrued on such Partnership Member’s Funding Loan and the
treatment of all payments by a Partnership Member of an Indemnified Amount
described in Section 3(i) or Section 3(ii) or, to the extent related to the PAG
Co-Obligation Fee or to payments referred to in Section 3(i) or Section 3(ii),
Section 3(iv) as payments made on, or of financing costs or other fees or
expenses with respect to, such Partnership Member’s Funding Loan;

 

(e)                                  Each member in Holdings as of the Effective
Date shall be treated as having contributed cash, in an amount equal to the
amount of the Deemed Transfer to such member, to Holdings as a Capital
Contribution (as defined in the Holdings LLC Agreement) on the date the Bonds
were issued;

 

(f)                                   All payments by Holdings on, or of
financing costs or other fees or expenses with respect to, the Bonds shall be
treated as having been distributed in cash to the members in Holdings in
proportion to such member’s Holdings Member Interest on the date such payment
was made, with amounts so treated as distributed to each Partnership Member
further treated as used to make payments to GECC on, or of financing costs or
other fees or expenses with respect to, such Partnership Member’s Funding Loan,
and then used by GECC to make payments on, or of financing costs or other fees
or expenses with respect to, the Bonds; and

 

(g)                                  All Holdings Payment Amounts treated under
Section 10.1 of the Holdings LLC Agreement as distributed to a Partnership
Member shall be treated as used by such Partnership Member to make payments to
GECC on, or of financing costs or other fees or expenses with respect to, such
Partnership Member’s Funding Loan, and then used by GECC to make payments on, or
of financing costs or other fees or expenses with respect to, the Bonds;

 

PAG and GECC are aware of the income tax consequences of the above
characterizations of the Bonds and the related payments and expenses described
in this Section 9 and hereby agree to be bound by the tax characterizations as
set forth in this Section 9 in reporting such items for income tax purposes.

 

10.                               Reinstatement of Indemnity Obligation. 
Notwithstanding anything in this Agreement or the Holdings LLC Agreement to the
contrary, PAG’s indemnification obligations pursuant to Section 3 shall continue
to be effective, or be reinstated, as the case may be, if at any time payment of
any Indemnity Payments by or on behalf of PAG hereunder, or if any of the funds
previously paid out of the Funding Subaccount or the Contribution Subaccount to
or for the account of GECC under the Original Agreement or under the Holdings
LLC Agreement prior to its amendment on the date hereof, is rescinded or must
otherwise be restored or returned upon any Bankruptcy of PAG or otherwise.

 

11.                               Miscellaneous.

 

11.1.                     GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE

 

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STATE OF NEW YORK APPLIED TO CONTRACTS TO BE PERFORMED WHOLLY WITHIN THE STATE
OF NEW YORK AND WITHOUT REFERENCE TO ANY CONFLICT OF LAW RULES THAT MIGHT LEAD
TO THE APLICATION OF THE LAWS OF ANY OTHER JURISDICTION.  ANY JUDICIAL
PROCEEDING BROUGHT BY OR AGAINST PAG WITH RESPECT TO ANY OF THE OBLIGATIONS,
THIS AGREEMENT (INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY OR PERFORMANCE)
OR ANY OTHER DOCUMENT OR RELATED TRANSACTION MAY BE BROUGHT IN ANY COURT OF
COMPETENT JURISDICTION IN THE CITY, COUNTY AND STATE OF NEW YORK, UNITED STATES
OF AMERICA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, PAG ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER DOCUMENT.  PAG HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO PAG AT ITS ADDRESS SET FORTH IN
SECTION 11.5 AND SERVICE SO MADE SHALL BE DEEMED COMPLETED FIVE (5) BUSINESS
DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE MAILS OF THE UNITED
STATES OF AMERICA, AND, AT GECC’S OPTION, BY SERVICE UPON THE CT CORPORATION (OR
ANY SUCCESSOR OR REPLACEMENT PERSON, AS SELECTED BY GECC), WHICH PAG IRREVOCABLY
APPOINTS AS PAG’S AGENT FOR THE PURPOSE OF ACCEPTING SERVICE WITHIN THE STATE OF
NEW YORK. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF GECC TO BRING PROCEEDINGS AGAINST
PAG IN THE COURTS OF ANY OTHER JURISDICTION.  PAG WAIVES ANY OBJECTION TO
JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREUNDER AND SHALL NOT ASSERT
ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR BASED UPON FORUM NON
CONVENIENS.  ANY JUDICIAL PROCEEDING BY PAG AGAINST GECC INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER OR CLAIM IN ANY WAY ARISING OUT OF, RELATED TO OR
CONNECTED WITH THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, SHALL BE
BROUGHT ONLY IN A FEDERAL OR STATE COURT LOCATED IN THE CITY OF NEW YORK, STATE
OF NEW YORK.

 

11.2.                     Entire Understanding.  This Agreement, the other
Transaction Documents and the Material Agreements contain the entire
understanding between PAG and GECC relative to the subject matter hereof and
thereof and supersede all prior agreements and understandings, if any, relating
to the subject matter hereof.  This Agreement does not modify or amend any
rights or obligations of PAG or GECC with respect to events or circumstances
arising prior to the date hereof which matters will continue to be governed by
the Original Agreement.  Any promises, representations, warranties or guarantees
not herein contained and hereinafter made shall have no force and effect unless
in writing, signed by the respective officers of the party making such promises,
representations, warranties or guarantees.  Neither this Agreement nor any other
Transaction Document, nor any portion or provisions hereof or thereof may be
changed, modified, amended, waived, supplemented, discharged, cancelled or
terminated, in whole or in

 

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part, orally or by any course of dealing, or in any manner other than by an
agreement in writing, signed by the party to be charged.

 

11.3.                     Advice of Counsel.  PAG and GECC acknowledges that it
has been advised by counsel in connection with the execution of this Agreement
and the other Transaction Documents and is not relying upon oral representations
or statements inconsistent with the terms and provisions of this Agreement or
any other Transaction Document.

 

11.4.                     Successors and Assigns.

 

(a)                                 This Agreement shall be binding upon and
inure to the benefit of PAG and GECC and all future holders of the Secured
Obligations and their respective successors and assigns, except that PAG may not
Transfer any of its rights or obligations under this Agreement except as
expressly permitted hereunder or in the Holdings LLC Agreement.  Any purported
Transfer which is not in compliance with this Agreement shall be null and void
and of no force or effect whatsoever.

 

(b)                                 PAG authorizes GECC to disclose to any of
its transferees or potential transferees any and all financial information in
GECC’s possession concerning PAG which has been delivered to GECC by or on
behalf of PAG pursuant to this Agreement, any other Transaction Document, the
Material Agreements or in connection with GECC’s credit evaluation of PAG
subject, however, to the provisions on confidentiality set forth in Section 6.8
of the Holdings LLC Agreement and Section 6.4(i) of the Partnership Agreement.

 

(c)                                  In the case of a Sale of Holdings Member
Interests pursuant to Article 9 of the Holdings LLC Agreement, subject to the
restrictions and requirements thereunder and under the Partnership Agreement,
such purchaser or transferee shall duly execute an instrument of assumption in
form and substance satisfactory to the Agent and delivered to GECC setting forth
such purchaser’s or transferee’s agreement to be bound by all of the provisions
of this Agreement (including the portion of the Indemnified Amounts
corresponding to the Member Interests being transferred) and acknowledging that
such Membership Interests are under and subject to the security interest granted
hereunder and, upon the execution and delivery of such agreement, shall be
deemed “PAG” for purposes of such portion hereunder with respect to such
Membership Interests being transferred or otherwise; provided, that the Agent
shall have the opportunity to request additional information or documentation
reasonably necessary to make a determination that the assumption of the
obligations to pay the PAG Co-Obligation Fee and the Indemnified Amounts is
being made by a creditworthy party (who shall be at least as creditworthy as the
transferor as of the Effective Date) and such transfer shall not be permitted
unless and until this determination is made by the Agent, which determination
shall be made promptly, reasonably and in good faith; provided further, that the
assumption of the obligations to pay the PAG Co-Obligation Fee and the
Indemnified Amounts shall not release PAG of any of its obligations or
liabilities hereunder.  Notwithstanding the immediately preceding proviso, if
(i) Penske Corporation, a Delaware corporation, or PTLC acquires PAG’s Holdings
Member Interest and PTLC or Penske Corporation, as applicable, fully assumes all
of PAG’s obligations to pay the

 

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PAG Co-Obligation Fee under Section 2, all Indemnified Amounts under Section 3
(then existing and future) and all other obligations hereunder, and all such
obligations are joint and several with PTLC’s obligations to pay the PTLC
Co-Obligation Fee (as defined in the PTLC Co-Obligation Agreement) under
Section 2 of the PTLC Co-Obligation Agreement and Indemnified Amounts under
Section 3 (then existing and future) of the PTLC Co-Obligation Agreement,
(ii) GECC continues to have a first priority, perfected security in such Sold
Holdings Member Interest and such Sale is made in accordance with this
Section 11.4, and (iii) GECC simultaneously obtains a first priority, perfected
security interest in the Trademark License Fee (as defined in the PTLC
Co-Obligation Agreement) as security for the performance of the obligations of
Penske Corporation or PTLC, as applicable, to pay the PAG Co-Obligation Fee
under Section 2 and Indemnified Amounts under Section 3(i), Section 3(iii),
Section (v) (to the extent relating to payments under Section 3(i)) and
Section 3(vi) (to the extent relating to payments under Section 3(i) and 3(iii))
with respect to PAG’s Indemnity Payment obligations hereunder, then PAG will be
released from its obligations to pay the PAG Co-Obligation Fee under Section 2
and Indemnified Amounts under Section 3 for obligations or liabilities incurred
in the future and all other future obligations hereunder (but not any then
existing obligations or liabilities, including with respect to any then existing
Additional Capital Contribution Loan, whether or not then due).

 

11.5.                     Notice.  Any notice or request hereunder may be given
to PAG or to GECC at their respective addresses set forth below or at such other
address as may hereafter be specified in a notice designated as a notice of
change of address under this Section.  Any notice or request hereunder may be
given by (a) hand delivery, (b) overnight courier, (c) registered or certified
mail, return receipt requested, (d) electronic transmission or facsimile (or
such other e-mail address or number as may hereafter be specified in a notice
designated as a notice of change of address), with electronic confirmation of
its receipt and subsequently confirmed by registered or certified mail or
overnight courier.  Any notice or other communication required or permitted
pursuant to this Agreement shall be deemed given (a) when personally delivered
to any officer of the party to whom it is addressed, (b) on the earlier of
actual receipt thereof or five (5) Business Days following posting thereof by
certified or registered mail, postage prepaid, or (c) upon actual receipt
thereof when sent by a recognized overnight delivery service or (d) upon actual
receipt thereof when sent by electronic transmission or by facsimile to the
address or number set forth below with electronic confirmation of its receipt,
in each case, addressed to each party at its address set forth below or at such
other address as has been furnished in writing by a party to the other by like
notice, provided, that in order for an electronic transmission to constitute
proper notice hereunder, such electronic transmission must specifically
reference this Section 9.5 and state that it is intended to constitute notice
hereunder:

 

(A)                     If to GECC at:

GECC

 

201 Main Avenue

 

Norwalk CT 06851

 

Attention . Managing Director-Business Development

 

Facsimile:  203-229-5742

 

Email: john.gamber@ge.com

 

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                                      with a copy to:

GECC

 

901 Main Avenue

 

Norwalk, CT 06851

 

Attention:

Executive Counsel — Mergers & Acquisitions

 

Facsimile:

(203) 286-2181

 

E-mail Address:

mark.landis@ge.com

 

 

(B)                     If to PAG at:

Penske Automotive Group, Inc.

 

2555 Telegraph Road

 

Bloomfield Hills, MI 48302

 

Attention:

Executive Vice President and Chief Financial Officer

 

Facsimile:

248-648-2805

 

E-mail Address:

dave.jones@penskeautomotive.com

 

 

                                      with a copy to:

Penske Automotive Group, Inc.

 

2555 Telegraph Road

 

Bloomfield Hills, MI 48302

 

Attention:

Executive Vice President and General Counsel

 

Facsimile:

248-648-2515

 

E-mail Address:

sspradlin@penskeautomotive.com

 

 

                                      with a copy to:

 Penske Corporation

 

2555 Telegraph Road,

 

Bloomfield Hills, MI 48302

 

Attention:

Executive Vice President and General Counsel

 

Facsimile:

248-648-2135

 

E-mail Address:

larry.bluth@penskecorp.com

 

11.6.                     Severability.  If any part of this Agreement is
contrary to, prohibited by, or deemed invalid under applicable Laws, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.

 

11.7.                     Expenses. All costs, fees and expenses, including
reasonable attorneys’, consultants’ or accountants’ fees and disbursements,
incurred by GECC under, pursuant to or in connection with this Agreement or any
other Transaction Document in respect of the following:  (a) all efforts made to
enforce payment of any Secured Obligations or effect collection of any
Collateral, or (b) after the occurrence of an Event of Default, as permitted by
this Agreement,

 

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inspection of PAG’s books and records or any Collateral, including field audits,
or any physical inventory or any appraisal of any Collateral, or (c)
liquidating, enforcing or foreclosing on GECC’s security interest in or Lien on
any of the Collateral, whether through judicial proceedings or otherwise, or
(d) defending or prosecuting any actions or proceedings arising out of or
relating to this Agreement or any other Transaction Document, shall, in each
case, be charged to PAG’s account as and when incurred, shall be due and payable
on demand, shall bear interest at the Default Rate until paid in full, shall be
part of the Secured Obligations, and shall be secured by the Collateral.  This
Section 11.7 shall survive the termination of this Agreement.

 

11.8.                     Right to Cure.  GECC may, in its sole discretion,
(a) cure any default or event of default by PAG under any Transaction Document
or Material Agreement that affects the Collateral, the value of the Collateral
or the ability of GECC to collect or Sell any Collateral or the rights and
remedies of GECC therein, (b) pay or bond on appeal any judgment entered against
PAG, (c) discharge any Liens at any time levied on or existing with respect to
the Collateral and (d) pay any amount, incur any expense or perform any act
which GECC, in its sole discretion determines is necessary or appropriate to
preserve, protect, insure or maintain the Collateral and the rights of GECC with
respect thereto.  GECC may add any amounts so expended to the Secured
Obligations and charge PAG in default therefor, such amounts to be repayable by
PAG on demand, shall bear interest at the Default Rate until paid in full, shall
be part of the Secured Obligations of PAG, and shall be secured by the
Collateral.  GECC shall be under no obligation to effect such cure, payment or
bonding and shall not, by doing so, be deemed to have assumed any obligation or
liability of PAG.  Any payment made or other action taken by GECC under this
Section shall be without prejudice to any right to assert a Default or an Event
of Default and to proceed accordingly.  This Section 11.8 shall survive the
termination of this Agreement.

 

11.9.                     Injunctive Relief.  PAG recognizes that, in the event
PAG fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy at Law may prove to be inadequate relief to
GECC and, therefore, GECC, if GECC so requests, shall be entitled to temporary
and permanent injunctive relief in any such case without the necessity of
proving that actual damages are not an adequate remedy or posting any bond.

 

11.10.              Consequential Damages.  PAG hereby waives, to the maximum
extent not prohibited by Law, any right it may have to claim or recover any
special, exemplary, punitive or consequential damages.

 

11.11.              Captions.  The captions at various places in this Agreement
and any other Transaction Document are intended for convenience only and do not
constitute and shall not be interpreted as part of this Agreement or any Other
Document.

 

11.12.              Counterparts; Telecopied Signatures.  This Agreement and the
other Transaction Documents may be executed in any number of separate
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed, shall be deemed an original, but all such counterparts
shall constitute one and the same agreement.  Delivery of a counterpart hereto
or to any other Transaction Document by facsimile transmission or by electronic
transmission of an Adobe portable document format file (also known as a “PDF
file”) shall be as effective as delivery of an original counterpart hereto.

 

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11.13.              Survival of Representations and Warranties.  All
representations and warranties of PAG made in this Agreement and the other
Transaction Documents shall be true at the time of such party’s execution of
this Agreement and the other Transaction Documents, and shall survive the
execution, delivery and acceptance thereof by the parties thereto and the
closing of the transactions described therein or related thereto. Upon any Sale
of a Holdings Member Interest in accordance with Article 9 of the Holdings LLC
Agreement, any purchaser or transferee pursuant to such Sale shall confirm the
accuracy of the representations and warranties hereto with respect to such
purchaser or transferee and the transferred Holdings Member Interests as of the
effective date of such Sale pursuant to an instrument of assumption in form and
substance reasonably satisfactory to the Agent setting forth such purchaser’s or
transferee’s agreement to be bound by all of the provisions of this Agreement,
delivered to GECC.

 

11.14.  Certain Matters of Construction.  Unless the context otherwise requires,
(a) the terms “herein”, “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular section,
paragraph or subdivision; (b) terms used herein in the singular also include the
plural and vice versa; (c) all references to statutes and related regulations
shall include any amendments of same and any successor statutes and regulations;
(d) references herein or in any other Transaction Document to any actions being
taken (or omitted to be taken) by GECC or its assignee or transferee after a
Default or Event of Default shall be presumed to mean, unless otherwise
expressly provided, while such Default or Event of Default is continuing;
(e) any pronoun shall include the corresponding masculine, feminine and neuter
forms; (f) the words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”; (g) the word “will” shall be
construed to have the same meaning and effect as the word “shall”; (h) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Section of, and Exhibits and Schedules to,
this Agreement; and (i) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

 

11.15.              Time.  Time is of the essence in this Agreement and each
other Transaction Document.  Unless otherwise expressly provided, all references
herein and in any other Transaction Documents to time shall mean and refer to
New York time.

 

11.16.              Termination.  This Agreement, and the assignments, pledges
and security interests created or granted hereby, shall terminate when all
Secured Obligations shall have been fully paid and satisfied, except that
Section 7.6 shall survive the termination of this Agreement as set forth
therein.  At such time, GECC shall release and reassign (without recourse upon,
or any warranty whatsoever by, GECC), and deliver to PAG all Collateral then in
the custody or possession of GECC, and provide or authorize termination
statements under the UCC of the State of Delaware, all without recourse upon, or
warranty whatsoever by, GECC and at the cost and expense of PAG.  This Agreement
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by GECC upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of PAG, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee of similar officer for, PAG or any substantial part of its property, or
otherwise, all as though such payments had not been made.

 

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[Signature page follows]

 

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IN WITNESS WHEREOF, PAG has caused this Agreement to be duly executed and
delivered by its authorized representative as of the date first above written.

 

 

PENSKE AUTOMOTIVE GROUP, INC.

 

 

 

 

 

 

By:

/s/ David Jones

 

 

Name:

David Jones

 

 

Title:

EVP & CFO

 

--------------------------------------------------------------------------------

 

 

Accepted:

 

 

 

 

 

GENERAL ELECTRIC CAPITAL CORPORATION

 

 

 

 

 

 

By:

/s/ Dennis M. Murray

 

 

Name:

Dennis M. Murray

 

 

Title:

President

 

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Schedule 6.2

 

Alabama

Arizona

Connecticut

Florida

Massachusetts

Michigan

Missouri

New Jersey

New York

North Carolina

Pennsylvania

Virginia

 

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