Exhibit 10.1
TRADE NAME AND TRADEMARK AGREEMENT
AGREEMENT, dated May 6, 2008, effective as of July 2, 2007, among PENSKE
AUTOMOTIVE GROUP, INC. (formerly UNITED AUTO GROUP, INC.), a Delaware
corporation (“PAG”); and PENSKE SYSTEM, INC., a Delaware corporation (“Penske
System”).
WHEREAS, Penske System owns certain trademarks, service marks, trade names,
logos, emblems and other indicia of origin (the “Proprietary Marks”), including
the name and mark “PENSKE AUTOMOTIVE GROUP” (the “Licensed Name”), which are
owned exclusively by Penske System, and which Penske System has the exclusive
right to use and the exclusive right to grant licenses to others to use; and
WHEREAS, PAG and its Subsidiaries desire to use the Licensed Name and certain
derivatives thereof listed on Annex A hereto (the “Trade Name”, and, together
with the Licensed Name, the “Name”); and
WHEREAS, the directors and shareholders of PAG, including the affiliates of
Penske System owning shares of PAG, have approved an amendment to the
Certificate of Incorporation of PAG changing the name of PAG to Penske
Automotive Group, Inc., which amendment was effective July 2, 2007; and
NOW, THEREFORE, the parties, in consideration of the undertakings and
commitments of each party to the other party set forth herein, the sufficiency
of which is hereby acknowledged, mutually agree as follows:
1. Rights.
1.1 Grant. Subject to the terms and conditions of this Agreement, Penske System
hereby grants to PAG and its Subsidiaries a non-exclusive license (except as set
forth in Section 1.3) to use the Name. The services in connection with which the
Name are used shall be limited to PAG’s and its Subsidiaries’ activities in the
business of operating retail new and used vehicle automotive dealerships,
offering the vehicle manufacturer products, operating vehicle collision repair
facilities and any other business currently conducted by PAG (to the extent so
conducted) and, upon Penske System consent, which shall not be unreasonably
withheld, ancillary business reasonably related thereto (the “Business”).
1.2 Manner, Form and Quality of Use.
(A) So long as Penske Corporation (“PC”), Penske Automotive Holdings Corp.
(“PHC”) and/or other business entities controlled by Penske Corporation (the
“Penske Entities”) own, directly or indirectly, in the aggregate, on a fully
diluted basis, at least twenty percent (20%) of the voting stock of PAG (the
“Minimum Shareholding”), and PAG owns at least, directly or indirectly, fifty
percent (50%) of the voting stock of the subsidiary or a lesser percentage,
agreed to in writing by Penske System (in each case, a “Subsidiary”), PAG and
its Subsidiaries shall each have the right to use the Name. Penske System agrees
that any current subsidiaries the voting stock of which PAG owns less than 50%
shall be considered a “Subsidiary” as long as PAG maintains its current
ownership interest and operating control of such Subsidiary. If at any time the
Penske Entities no longer own the Minimum Shareholding, any and all such use
shall cease in accordance with the provisions of Section 5.
(B) The Name may be used by PAG and its Subsidiaries only in the following form:
“Penske Automotive Group, Inc.” and in the forms set out on Annex A, which Annex
A may be amended from time to time by addition hereto of a new Annex A.

 

 

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(C) PAG and its Subsidiaries shall use only the Name and the Proprietary Marks
authorized hereunder, and only in the manner permitted hereunder.
(D) The Name may: (i) subject to the rights of landlords and other third
parties, be used and appear prominently on or at PAG’s real estate facilities,
premises, garages, locations, offices, signs, vehicles, fixtures, furniture,
appliances, equipment, uniforms and other appropriate places and articles in
connection with PAG’s business; (ii) be printed on all letterhead, envelopes,
business cards, invoices, and all other stationery of PAG, and (iii) be used in
all advertising, sales and promotional material published by PAG. Any and all
other use, and the format thereof, shall be subject to Penske System’s prior
approval, based upon Penske System’s receipt of samples of any such proposed use
and which have not been prepared or previously approved by Penske System. If
written disapproval thereof is not received within ten (10) days of mailing or
personal presentation, Penske System shall be deemed to have given the required
approval.
(E) In addition to using the Name, PAG may use the Proprietary Marks in the
various respects as provided in Section 1.2.B hereof, as an emblem or logo,
strictly in accordance with the form (including colors) and manner approved by
Penske System; it being understood that the Name and the Proprietary Marks in
any format may not, in any event, be used in such a manner as to touch
physically the name and mark of any third person, or otherwise be combined,
connected or integrated so as to form a composite mark containing any other
name, word, term, design or symbol, or combination thereof, which is not owned
by Penske System, except in each case as set forth on Annex A.
(F) The services in connection with which the Licensed Name and Proprietary
Marks are used by PAG and Subsidiary shall be limited to the business set forth
in Section 1.1 hereof.
1.3 Rights Reserved. Penske System reserved the absolute right to use and to
grant others the right to use the “PENSKE” name and any other intellectual
property utilizing the name and mark “PENSKE” in any form, alone or in
association with any name or mark, other than “PENSKE AUTOMOTIVE GROUP, “PENSKE
AUTOMOTIVE”, “PENSKEAUTO” or “PENSKE AUTO”, and the other names noted on Annex A
for any purpose whatsoever. Penske System shall cause its affiliates to take
steps as soon as possible to cease, terminate, and withdraw all further use of
the Name on its stationery, premises, vehicles, signs, websites and other
facilities, and all articles, places and things where it has appeared or been
used.
1.4 Quality. The business operations of PAG and its Subsidiaries, in connection
with which the Name and the Proprietary Marks are used, shall be of a quality
comparable to and be conducted in accordance with the same standards and in
conformity with the requirements related to the use of the Proprietary Marks by
Penske System.
2. Payment by PAG and Subsidiary. In consideration of the rights granted by
Penske System to PAG hereunder, PAG shall pay Penske System an annual fee of
$50,000.00, payable in cash on June 1 of each year (the “Payment Date”),
commencing June 1, 2008.
3. Inspection. Penske System shall have the right, in order to assure itself
that the provisions of this Agreement are being observed:
(A) To request and receive from PAG from time to time samples or photographs
showing representative examples of the ways in which the Name is then being
displayed; and

 

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(B) To make reasonable inspections from time to time of PAG and its Subsidiary
physical premises and facilities, including the Subsidiary’s automobile
franchise agreement(s).
4. Ownership. PAG and its Subsidiaries jointly and severally warrant and confirm
Penske System’s ownership of all right, title and interest in and to the Name,
and the Proprietary Marks, and PAG and its Subsidiaries each agree that they do
not have any right, title or interest, nor will they claim any right, title or
interest, of ownership or otherwise in and to the Name or the Proprietary Marks,
other than the right to the use thereof as provided herein. Penske System shall
have the right, in its reasonable discretion, through counsel of its own choice
and at PAG’s expense to take such steps as may be necessary or appropriate to
preserve and protect the Name as used hereunder. PAG and Subsidiary each agree
to cooperate fully with Penske System in this regard and to join in any action
which Penske System may elect to take. PAG and its Subsidiaries shall also
comply, at their expense, with Penske System’s reasonable instructions in filing
and maintaining requisite trade name or fictitious name registrations related to
their use of the Name, and shall execute any documents reasonably deemed
necessary by Penske System to obtain protection for the Name or to maintain its
continued validity and enforceability, which shall include reasonable
protections in foreign jurisdictions in which PAG and its Subsidiaries may use
the Name.
5. Term. The term of this Agreement shall commence as of the date hereof and,
subject to Section 6, shall automatically terminate twenty-four (24) months
after the date that the Minimum Shareholding no longer exists or upon six
(6) months written notice by PAG. Should the Minimum Shareholding cease to exist
and PAG be in compliance with the terms of this Agreement, this Agreement shall,
upon mutual agreement by PAG and Penske System, be amended so that (a) the
annual fee payable by PAG to Penske System shall be changed and increased to an
amount which shall be mutually agreed upon by PAG and Penske System, which
annual fee shall be reflective of, and no less than, license fees then
prevailing in the United States of America for similar brand licensed rights and
(b) the term of this Agreement shall continue in accordance with its terms, as
modified as a result of subsection (a) of this paragraph, for five (5) years
after the date that the Minimum Shareholding no longer exists, subject to
termination upon six (6) months written notice by PAG. If PAG and Penske System
cannot agree upon the new annual license fees within ninety (90) days after the
date Penske System has advised PAG that it requires such amendment to this
Agreement, Penske System may at its option at any time thereafter terminate the
Agreement upon sixty (60) days written notice to PAG and the term of this
Agreement shall automatically terminate twenty-four (24) months after the date
that the Minimum Shareholding no longer exists or upon six (6) months written
notice by PAG.
6. Termination; Expiration.
6.1 Termination for Breach. If PAG or any Subsidiary should breach any provision
of this Agreement in any material respect, including, without limitation, its
failure to obtain Penske System’s prior approval of any proposed use of the
Name, or the failure by PAG to make any payments required to be made by
Section 2 hereof, Penske System shall have the right (in addition to such other
rights as it may have under law or equity) to terminate this Agreement by giving
thirty (30) days’ prior written notice thereof to PAG and the breaching
Subsidiary, which notice shall specify the breach and intention to terminate if
the breach has not been cured during such period. If such breach is not so cured
within that period, this Agreement and all rights granted hereunder to PAG and
all Subsidiaries shall terminate without further notice at the end of such
period.
PAG and all Subsidiaries shall be deemed to be in default under this Agreement,
and this Agreement and all rights granted hereunder shall automatically
terminate without notice, if any of the following events occur:

 

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(A) If PAG or any Subsidiary becomes insolvent or if PAG is dissolved; if a
receiver or trustee for the business of either PAG or Subsidiary is appointed;
or if PAG or Subsidiary files a voluntary petition in bankruptcy or an
involuntary petition is filed by any other person, and said involuntary petition
is not dismissed within sixty (60) days of filing; or
(B) If PAG or any Subsidiary attempts to transfer any rights under this
Agreement in violation of this Agreement; or
(C) If PAG or any Subsidiary is convicted of a felony or any other crime or
offense that is reasonably likely, in the sole opinion of Penske System, to
adversely affect the Licensed Name, the Proprietary Marks, or Penske System’s
interest herein.
6.2 Effect of Termination. Upon the termination of this Agreement for any
reason, all rights granted to PAG and all Subsidiaries to use the Name shall
terminate and PAG and all Subsidiaries shall immediately file or make its
reasonable best efforts to cause to be filed an appropriate amendment to its
Certificate of Incorporation and “fictitious name” filings removing the name
“PENSKE” from such corporate and fictitious name, and it will not thereafter use
any name which is similar to the Name. PAG and all Subsidiaries will also take
such other steps as soon as reasonably practicable to cease, terminate and
withdraw all further use of the Name on its stationery, premises, website,
vehicles, signs and other facilities, and on all articles, places and things
where it has appeared or been used. In addition to filing an appropriate
amendment to its Certificate of Incorporation and its “fictitious name” filing,
PAG and all Subsidiaries shall, as soon as practicable, file appropriate
documents and take such other action to amend its certificates of qualification
to do business in all states and other jurisdictions in which it does business,
and other licenses and registrations, so as to remove the name “PENSKE” from its
name and title and otherwise.
7. Indemnification.
(A) It is understood and agreed that nothing in this Agreement authorizes PAG or
its Subsidiaries to make any contract, agreement, warranty or representation on
behalf of Penske System or PHC or PC, or their subsidiaries or affiliates,
including, but not limited to Penske Truck Leasing Corporation, Penske Truck
Leasing Co., L.P., Penske Racing, Inc. and Penske Auto Centers LLC, or to incur
any debt or other obligation in their name; and that Penske System, PHC, and PC
and their respective subsidiaries and affiliates shall in no event assume
liability for, or be deemed liable hereunder as a result of, any such action, or
by reason of any related act or omission of PAG or its Subsidiaries hereunder,
or any claim or payment arising therefrom against PAG or Subsidiaries.
(B) PAG and its Subsidiaries shall jointly and severally indemnify and hold
Penske System, PHC, and PC and their respective subsidiaries and affiliates
harmless from and against any and all liabilities, claims, actions, fines,
damages, losses, costs and expenses (including reasonable attorneys’ fees)
arising out of, caused by or connected directly or indirectly with, the breach
or non-performance by PAG and its Subsidiaries of its obligations hereunder, as
well as the use of the name “PENSKE” and the Name hereunder by PAG or its
Subsidiaries.

 

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8. Miscellaneous.
8.1 Entire Agreement; Modifications. This Agreement and the Exhibit(s) annexed
hereto contain all of the terms and conditions of the agreement between the
parties concerning the subject matter hereof and supersede all previous
commitments and understandings concerning the same. There are no verbal
commitments, representations or warranties which have not been embodied in this
Agreement. The terms of this Agreement and Exhibit(s) may not be modified or
changed, except by an express statement in writing signed on behalf of each
party by a duly authorized officer and referring specifically to the Agreement
and Exhibit.
8.2 Assignment. PAG or its Subsidiaries may not assign or sublicense any of its
rights or delegate any of its duties under this Agreement, by operation of law
or otherwise, without the express written prior consent of Penske System. Any
attempted or purported assignment or sublicensing in violation of this
Section 8.2 shall be void and shall be an event of default under Section 6
hereof.
8.3 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
8.4 Waiver. The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement. Any waiver must be in writing.
8.5 Notices. Any notice or other communication given hereunder shall be deemed
properly given if mailed by registered or certified mail to the parties at the
following address (or at any substitute address which any party may specify by
such notice):

         
 
  To Penske System:   Penske System, Inc.
1105 North Market Street
Suite 1300
Wilmington, Delaware 19801
Attention: President
 
       
 
  With a copy to:   Penske Corporation
2555 Telegraph Road
Bloomfield Hills, MI 48043
Attn: Executive Vice President and General Counsel
 
       
 
  To PAG or its Subsidiaries:   Penske Automotive Group, Inc.
2555 Telegraph Road
Bloomfield Hills, MI 48043
Attn: Chairman of the Board
 
       
 
  With a copy to:   Penske Automotive Group, Inc.
2555 Telegraph Road
Bloomfield Hills, MI 48043
Attn: General Counsel

8.6 Headings. The headings in this Agreement are solely for convenience of
reference and shall not affect its interpretation.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed these premises as of
the day and year first above written in this Agreement.

              PENSKE AUTOMOTIVE GROUP, INC.
 
       
 
  By:   /s/ Robert T. O’Shaughnessy
 
  Title:   Chief Financial Officer
 
            PENSKE SYSTEM, INC.
 
       
 
  By:   /s/ J. Patrick Conroy
 
  Title:   Executive Vice President

 

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Annex A — Derivative Names
Penske Automotive
PenskeAuto
Penske Auto
Penske Wynn Ferrari Maserati
Penske Honda
Penske Chevrolet
Penske Cadillac Hummer South Bay
                    , a Penske Automotive dealership
Penske Rapid Repair
Penske Direct
Penske Wholesale Outlet
(PENSKE AUTOMOTIVE LOGO) [c73124p7312401.jpg]

 

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