Exhibit 10.1

Execution Version

 

AGREEMENT OF PURCHASE AND SALE

dated as of September 7, 2017

by and among

GE CAPITAL TRUCK LEASING HOLDING LLC, and

GENERAL ELECTRIC CREDIT CORPORATION OF TENNESSEE,
as Sellers,

and

PENSKE AUTOMOTIVE GROUP, INC.,
as Purchaser

 

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AGREEMENT OF PURCHASE AND SALE

This Agreement of Purchase and Sale, dated as of September 7, 2017 (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof, this “ Agreement ”), is by and among GE Capital Truck Leasing Holding LLC, a Delaware limited liability company (“ GE Capital Truck ”), General Electric Credit Corporation of Tennessee, a Tennessee corporation (“ GE Tennessee ” and, together with GE Capital Truck, the “ Sellers ” and each a “ Seller ”), and Penske Automotive Group, Inc., a Delaware corporation (“ Purchaser ”).  The Sellers and Purchaser are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

WHEREAS, the Sellers collectively own 15.5% of the issued and outstanding Partnership Interests in Penske Truck Leasing Co., L.P., a Delaware limited partnership (the “ Partnership ”);

WHEREAS, on the date hereof, Purchaser desires to purchase from the Sellers, and the Sellers desire to sell to Purchaser, the Purchased Interests set forth opposite each Seller’s name on Exhibit A attached hereto (representing, in the aggregate, 5.5% of the outstanding Partnership Interests in the Partnership), upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement and the consummation of the Closing (as defined herein) on the date hereof, GE Capital Global Holdings, LLC has executed and delivered to Purchaser a guaranty of performance of the obligations of the Sellers under this Agreement;

WHEREAS, concurrently with the execution and delivery of this Agreement, and in connection with the Closing and the MBK USA CV Closing, the Sellers and MBK USA Commercial Vehicles Inc., a Delaware corporation (“ MBK USA CV ”) are entering into an Agreement of Purchase and Sale, dated as of the date hereof, pursuant to which MBK USA CV shall purchase from the Sellers, and the Sellers shall sell to MBK USA CV, the remaining 10% of the outstanding Partnership Interests in the Partnership collectively owned by the Sellers (the “ MBK USA CV Purchase Agreement ”); and 

WHEREAS, concurrently with the execution and delivery of this Agreement, and in connection with the Closing, the Parties, the other Partners under (and as defined in) the Existing Partnership Agreement and the Partnership are entering into a Cooperation Agreement (the “ Cooperation Agreement ”) and Purchaser and each of the other Partners other than the Sellers (except for GE Tennessee which shall be party solely for purposes of Section 6.9 thereof) and the Partnership are entering into a Seventh Amended and Restated Limited Partnership Agreement of the Partnership, in each case, dated as of the date hereof.  

NOW, THEREFORE, in consideration of the mutual agreements, covenants, representations, warranties and indemnities contained in this Agreement, Purchaser and each Seller hereby agree as follows:

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ARTICLE I

DEFINITIONS

For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

“ Actions or Proceedings ” has the meaning as defined in Section 8.9 .

“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “ control ” (including the terms “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by Contract or otherwise; provided ,   however , that, for purposes of this Agreement and the Transaction Documents, no Seller shall be deemed to be an Affiliate of the Partnership, or any Partner (as defined in the Existing Partnership Agreement), other than the other Sellers.

“ Agreement ” has the meaning as defined in the preamble.

“ Approvals ” means, with respect to any Purchased Interest, all Consents required pursuant to the terms of the Existing Partnership Agreement with respect to the transactions contemplated by this Agreement and the admission of Purchaser as a limited partner with respect to the Purchased Interests.

“ Assignment Agreement ”   means that certain Assignment Agreement, dated as of the date hereof, by and between the Sellers and Purchaser.   

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, are authorized or obligated by Law to be closed.

“ Closing ” has the meaning as defined in Section 6.1 .

“ Closing Date ” has the meaning as defined in Section 6.1 .

“ Code ” means the United States Internal Revenue Code of 1986, as amended.

“ Consent ” means any consent, approval, authorization or waiver.

“ Contract ” means any legally binding: contract, indenture, note, bond, lease, license, instrument, agreement, mortgage, option, warranty, purchase order, insurance policy or benefit plan, or other commitment, whether written or oral.

“ Controlling Party ” has the meaning as defined in Section 7.4(b) .

“ Dispute Notice ” has the meaning as defined in Section 2.4(b) .

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“ E&Y ” has the meaning as defined in Section 2.4(c) .

“ Effective Time ” means 12:01 a.m. Eastern Time on the Closing Date.

“ Existing Partnership Agreement ” means the Sixth Amended and Restated Agreement of Limited Partnership of the Partnership entered into on and as of July 27, 2016. 

“ Final Purchase Price ” means an amount in U.S. Dollars equal to the Initial Purchase Price, as adjusted in accordance with the provisions of Sections 2.4  and 2.5 .

“ Final Purchase Price Statement ” means a written statement (a) setting forth the Final Purchase Price and (b) indicating any changes to the Initial Purchase Price Statement, as finally determined in accordance with Section 2.4 .

“ GAAP ” means generally accepted accounting principles in the United States determined in a manner consistent with past practice of the Partnership.

“ GE Capital Truck ” has the meaning as defined in the preamble.

“ GE Tennessee ” has the meaning as defined in the preamble.  

“ Government Authority ” means any U.S. federal, state or local or any supra-national or non-U.S. government, political subdivision, governmental, regulatory or administrative authority, instrumentality, agency, body or commission, self-regulatory organization or any court, tribunal, or judicial or arbitral body.

“ Indemnified Party ” has the meaning as defined in Section 7.4(a) .

“ Indemnifying Party ” has the meaning as defined in Section 7.4(a) .

“ Independent Accounting Firm ” has the meaning as defined in Section 2.4(c) .

“ Initial Purchase Price ” means an amount in U.S. Dollars equal to the sum of (x) $234,193,548  plus (y) the Partnership’s good faith estimate of the Partnership Net Income Amount, as notified to the Sellers and Purchaser pursuant to Section 2.3 .

“ Initial Purchase Price Statement ” means the Partnership’s good faith estimate of the Initial Purchase Price, described in accordance with Section 2.3 hereof. 

“ Interim Period ” means the period commencing on the opening of business on July 1, 2017 and ending on (and excluding) the Closing Date.

“ Interim Period Distributions ” means the sum of (i) the aggregate amount of any Preliminary Distributions made pursuant to Section 5.1(a) of the Existing Partnership Agreement (as defined therein), plus (ii) the aggregate amount of any discretionary special distributions made pursuant to Section 5.1(c) of the Existing Partnership Agreement, in the case of each of clauses (i) and (ii), solely to the extent the same are distributions of Net Income for, and with respect to, the Interim Period.

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 “ Law ” means any U.S. federal, state, local or non-U.S. statute, law, ordinance, regulation, rule, code, order or other requirement or rule of law (including common law).

“ Liability ” or “ Liabilities ” means any liability, debt, guarantee, claim, demand, expense, commitment or obligation (whether direct or indirect, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due) of every kind and description, including all costs and expenses related thereto.

“ Lien ” means any lien, mortgage, pledge, claim, security interest, encumbrance, charge, option, right of first refusal, proxy, voting trust or agreement, restriction or limitation of any kind, whether arising by agreement, operation of law or otherwise.

“ Losses ” means all losses, damages, costs, expenses, and Liabilities actually suffered or incurred and paid (including reasonable attorneys’ fees).

“ MBK USA CV Closing ” means the closing of the transactions as contemplated by the MBK USA CV Purchase Agreement.

“ MBK USA CV Purchase Agreement ”  has the meaning as defined in the recitals. 

“ Net Income ” means, for any specified period, the consolidated net income of the Partnership and its Subsidiaries (which may be positive or negative), determined on a consolidated basis in accordance with GAAP and in a manner consistent with past practice of the Partnership. For the avoidance of doubt, the consolidated net income for the period covered in any of the Partnership Financial Statements is reflected therein as “Net Earnings” of the Partnership and its Subsidiaries.

“ Order ” means any order, writ, judgment, injunction, temporary restraining order, decree, stipulation, determination or award entered by or with any Government Authority.

“ Organizational Documents ” means (i) any certificate, articles or memorandum filed with any state or country or other jurisdiction which filing forms a Person and (ii) all agreements, documents or instruments governing the internal affairs of a Person, including such Person’s by-laws, codes of regulations, partnership or limited partnership agreements, limited liability company agreements and operating agreements.

“ Parties ” has the meaning as defined in the preamble.

“ Partnership ”  has the meaning as defined in the recitals.

“ Partnership Interests ”  has the meaning set forth in the Existing Partnership Agreement.

“ Partnership Financial Statements ”  means the financial statements of the Partnership provided pursuant to Section 2.02(a)(x) of the Cooperation Agreement.

“ Partnership Net Income Amount ” means (i) 5.5% of the Net Income for the Interim Period,   minus  (ii) the aggregate amount (if any) of 5.5% of the Interim Period 

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Distributions.  For the avoidance of doubt, for purposes of the Final Purchase Price Statement, the Net Income for the portion of the month of the Closing included in the Interim Period shall be equal to (A) the Net Income for the month of the Closing, multiplied by (B) a fraction the numerator of which is the number of calendar days of the month of the Closing that are included in the Interim Period and the denominator of which is the total number of calendar days in the month of the Closing.

“ Permits ” means all permits, licenses, Consents, registrations, concessions, grants, franchises, certificates, identification numbers, exemptions, waivers, and filings issued or required by any Government Authority under applicable Law.

“ Person ” means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or Government Authority.

“ Preliminary Distributions ”  has the meaning as defined in the Existing Partnership Agreement. 

“ Purchase Price Statements ” means the Initial Purchase Price Statement and the Final Purchase Price Statement. 

“ Purchased Interests ” means the limited partnership interests in the Partnership set forth on Exhibit A attached hereto.

“ Purchaser ” has the meaning as defined in the preamble.

“ Purchaser Indemnified Parties ” has the meaning as defined in Section 7.2(a) .

“ Purchaser’s Knowledge ” means the actual knowledge of J. D. Carlson as of the date hereof.  

“ PwC ” has the meaning as defined in Section 2.4(c) .

“Registration Rights Agreement” means the Amended and Restated Registration Rights Agreement, dated March 18, 2015, by and among the Partnership, Penske Truck Leasing Corporation, PTL GP, LLC, Purchaser, MBK USA CV, MBK Commercial Vehicles Inc., and the Sellers. 

“ Representative ” means, with respect to any Person, any officer, director, principal, manager, member, attorney, accountant, agent, employee, consultant, financial advisor or other authorized representative of such Person, in each case, in such capacity with respect to such Person.

“ Resolution Period ” has the meaning as defined in Section 2.4(b) .

“ Retained Rights ” means the rights of any Seller to the Interim Period Distributions actually paid to and received by the Sellers prior to the date hereof.

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“ Review Period ” has the meaning as defined in Section 2.4(a) .

“ Seller Indemnified Parties ” has the meaning as defined in Section 8.3 .

“ Sellers’ Knowledge ” means the actual knowledge of Trevor Schauenberg and Mandeep Johar.

“ Sellers ” has the meaning as defined in the preamble.

“ Subsidiaries ”  of any specified entity means any other entity (a) of which such first entity owns (either directly or through one or more other Subsidiaries) (i) at least a majority of the outstanding equity securities or (ii) equity interests or securities carrying a majority of the voting power to elect a majority of the board of directors or other governing body of such entity or (b) which such first entity contractually or otherwise controls.

“ Tax ” means: (a) any income, gross or net receipts, real or personal property, sales, use, capital gain, transfer, excise, estimated, license, production, franchise, employment, social security, occupation, payroll, registration, governmental pension or insurance, withholding, royalty, severance, stamp or documentary, value added, business or occupation or other tax, charge, assessment, duty, levy, fee or similar governmental charge of any kind (including any interest, additions to tax, or civil or criminal penalties thereon) of any country or any jurisdiction therein; (b) any liability for the payment of any amounts of the type described in clause (a) of this definition arising as a result of being (or ceasing to be) a member of any affiliated group (or being included (or required to be included) in any tax return relating thereto); or (c) any liability for the payment of any amounts of the type described in clause (a) of this definition as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the liability of any other Person, arising under law, by contract or otherwise.

“ Tax Return ” means any return, declaration, report, claim for refund, or information return or statement or other form required to be supplied to a Government Authority in connection with Taxes, including any schedule or attachment thereto, and including any amendment thereof.

“ Third Party Claim ” has the meaning as defined in Section 7.4(a) .

“ Transaction Documents ” means the Assignment Agreement and the Cooperation Agreement.

“ Transaction Material Adverse Effect ” means a material impairment of the ability of Purchaser to perform its material obligations under this Agreement or to consummate the transactions contemplated by this Agreement and the Transaction Documents.

“ Transfer Restrictions ” means any restriction on the sale, assignment, transfer or other disposition of a Purchased Interest (including the creation of a Lien (as defined in the Existing Partnership Agreement)) that arises out of or is based on, (i) the Existing Partnership Agreement or applicable securities or blue sky Laws, or (ii) any Contracts to which Purchaser is a party or bound, or any Laws to which Purchaser is subject, including any Liens created by or through Purchaser.

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1.1 Other Definitional and Interpretive Matters .  Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

Subsidiaries .  For preclusion of doubt, the Partnership and its Subsidiaries shall not be deemed to be Subsidiaries or Affiliates of General Electric Company, the Sellers or any of their respective Subsidiaries for purposes of this Agreement.

Exhibits/Schedules .  The Exhibits and Schedules are hereby incorporated herein and made a part hereof and are an integral part of this Agreement.  Any capitalized terms used in any Exhibit or in any Schedules but not otherwise defined therein shall be defined as set forth in this Agreement.

Gender and Number .  Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

Headings .  The division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.  All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.

Herein .  The words such as “herein,” “hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

Including .  The word “including” or any variation thereof means (unless otherwise specified) “including, without limitation,” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it.

 

ARTICLE II

PURCHASE AND SALE OF PURCHASED
INTERESTS; ASSUMPTION OF OBLIGATIONS

2.1 Purchase and Sale of Purchased Interests .  Upon the terms and subject to the conditions set forth in this Agreement, at the Closing, the Sellers shall sell, assign, transfer and deliver to Purchaser, and Purchaser shall purchase and acquire from each Seller, all of such Seller’s right, title and interest in and to the Purchased Interests, free and clear of all Liens other than any Transfer Restrictions (it being agreed that in no event are the Sellers’ transferring to Purchaser hereunder any Retained Rights).    

2.2 Purchase Price .    In consideration for the Purchased Interests being transferred to Purchaser pursuant to Section 2.1 , Purchaser shall pay to GE Capital Truck, for the benefit of the Sellers, an amount equal to the Final Purchase Price.

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2.3 Initial Purchase Price Statement .  On or prior to the Closing Date, the Partnership has delivered to the Sellers and Purchaser the Initial Purchase Price Statement setting forth the Partnership’s good faith estimate of the Initial Purchase Price, including a statement therein setting forth the estimated Partnership Net Income Amount.  Solely for purposes of the Partnership’s good faith determination of the estimated Initial Purchase Price and estimated Partnership Net Income Amount as set forth in the Initial Purchase Price Statement, the Net Income for the month immediately prior to Closing will be deemed to be the Net Income for the month of Closing.

2.4 Final Purchase Price Calculation .

(a) The Parties shall each have sixty (60) days (the “ Review Period ”) after the delivery by the Partnership of the actual Partnership Net Income Amount pursuant to Section 2.02(a)(y) of the Cooperation Agreement (the “ Proposed Net Income Statement ”).  During the Review Period, the Parties and their Representatives, subject to, and in accordance with, the terms of the Cooperation Agreement, may review the Partnership’s work papers, all books and records of the Partnership and its Affiliates relevant to the preparation of the Proposed Net Income Statement, and the work papers of the Partnership’s accountants relating to such accountants’ review of the Proposed Net Income Statement.

(b) If either Party wishes to dispute any item set forth in the Proposed Net Income Statement, such Party shall, during the Review Period, deliver written notice to the other Party of the same, specifying in reasonable detail the basis for such dispute and such Party’s proposed modifications to the Proposed Net Income Statement (such notice, the “ Dispute Notice ”).  If any Dispute Notice is so delivered during the Review Period, following each delivery of a Dispute Notice until the 30 th day immediately following the Review Period (the “ Resolution Period ”), the Sellers and Purchaser shall negotiate in good faith to reach an agreement as to any matters identified in such Dispute Notice as being in dispute, and, to the extent all such matters are so resolved within the Resolution Period, then the Proposed Net Income Statement as revised to incorporate such changes as have been agreed between the Sellers and Purchaser shall be conclusive and binding upon all Parties as the Final Purchase Price Statement.

(c) If the Sellers and Purchaser fail to resolve all such matters in dispute within the Resolution Period, then (subject to the last sentence of Section 2.4(d) ) any matters identified in any such Dispute Notice that remain in dispute following the expiration of the Resolution Period shall be finally and conclusively determined by PricewaterhouseCoopers LLP, a Delaware limited liability partnership (“ PwC ”), or if PwC is unable or unwilling to serve in such capacity, Ernst & Young LLP, a Delaware limited liability partnership (“ E&Y ”) (and if both PwC and E&Y are unable or unwilling to serve in such capacity, such other globally recognized accounting firm as shall be agreed upon in writing by Purchaser and the Sellers) (the “ Independent Accounting Firm ”).

(d) The Sellers and Purchaser shall instruct the Independent Accounting Firm to promptly, but no later than forty (40) days after its acceptance of its appointment, determine (it being understood that in making such determination, the Independent Accounting Firm shall be functioning as an expert and not as an arbitrator), based solely on written presentations of the Sellers and Purchaser submitted to the Independent Accounting Firm and not by independent

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review, only those matters in dispute and shall render a written report setting forth its determination as to the disputed matters and the resulting calculations of the Final Purchase Price, which report and calculations shall be conclusive and binding upon all Parties absent manifest error.  A copy of all materials submitted to the Independent Accounting Firm pursuant to the immediately preceding sentence shall be provided by Purchaser or the Sellers, as applicable, to the other Party concurrently with the submission thereof to the Independent Accounting Firm.  In resolving any disputed item, the Independent Accounting Firm (i) shall be bound by the provisions of this Section 2.4(d) and Section 2.6 and (ii) may not assign a value to any item greater than the greatest value for such item claimed by the Sellers or Purchaser, or less than the smallest value for such item claimed by the Sellers or Purchaser.  If, before the Independent Accounting Firm renders its determination with respect to the disputed items in accordance with this Section 2.4(d) , (x) Purchaser notifies the Sellers of its agreement with any items in the Proposed Net Income Statement or (y) the Sellers notify Purchaser of their agreement with any items in the Proposed Net Income Statement, then in each case, such items as so agreed shall be conclusive and binding on all Parties immediately upon such notice.

(e) The fees and expenses of the Independent Accounting Firm shall be borne fifty percent (50%) by Purchaser and fifty percent (50%) by the Sellers.

2.5 Post-Closing Adjustment .  In the event that (i) the Final Purchase Price is greater than the Initial Purchase Price, Purchaser shall pay to GE Tennessee, for the benefit of the Sellers, an amount equal to such difference or (ii) the Initial Purchase Price is greater than the Final Purchase Price, GE Tennessee, on behalf of the Sellers, shall pay to Purchaser an amount equal to such difference. Any payment due under this Section 2.5 shall be paid by wire transfer of immediately available funds to an account designated by GE Tennessee to Purchaser, or an account designated by Purchaser to GE Tennessee, as applicable, within three Business Days after the date on which the Final Purchase Price Statement becomes conclusive and binding on the Parties in accordance with the provisions of Section 2.4 .

2.6 Certain Calculation Principles .  The Purchase Price Statements shall be prepared and determined from the books and records of the Partnership (as provided or made available by the Partnership) in accordance with GAAP, consistent with past practice of the Partnership.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Each Seller hereby represents and warrants to Purchaser, on a joint and several basis, as set forth below:

3.1 Organization, Authority; Binding Agreement .

(a) Each Seller is duly organized, validly existing, and in good standing under the laws of its state of organization and has the requisite power and authority to own and hold its properties and to conduct its business as now owned, held, and conducted in its jurisdiction of organization and, in all material respects, in the other jurisdictions in which it is required to register

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or qualify to do business.  Each Seller has the requisite power and authority to enter into and to perform its obligations under this Agreement and the Transaction Documents to which it is a party.  The execution, delivery and performance by each Seller of this Agreement and the Transaction Documents to which it is a party have been duly authorized by all necessary action on the part of such Seller.

(b) This Agreement has been, and each of the Transaction Documents to be executed and delivered by each Seller will be, duly executed and delivered by such Seller, and this Agreement is, and each of the Transaction Documents to be executed and delivered by such Seller, when duly executed and delivered by all parties whose execution and delivery thereof is required, shall be, the legal, valid, and binding obligations of such Seller, enforceable against such Seller in accordance with their respective terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, receivership, moratorium, conservatorship, reorganization, or other laws of general application affecting the rights of creditors generally or by general principles of equity.

3.2 No Conflicts . 

(a) Neither the execution and delivery of this Agreement or any Transaction Documents nor the consummation of the transactions contemplated hereby or thereby will (i) violate, breach, or be in conflict with any provisions of the Organizational Documents of any Seller, (ii) result in the creation or imposition of any Lien upon any property, rights or assets of any Seller, (iii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any Contract to which any Seller is a party or by which any Seller is bound or to which any of their respective properties or assets is subject, or (iv) violate any Law or Order of any Government Authority to which any Seller is subject, or by which any of their respective properties or assets is bound.

(b) Except as obtained prior to the Effective Time by the Sellers,  no Consent, or Order of, or declaration or filing with, or notification to, any Government Authority is required on the part of any Seller in connection with the Sellers’ execution and delivery of this Agreement and the Transaction Documents, the compliance by the Sellers with any of the provisions hereof and thereof, or the consummation of the transactions contemplated hereby and thereby, except where the failure to obtain such Consent or Order, or to make such declaration, filing or notification, would not have, or would not reasonably be expected to have, a material adverse effect upon any Seller’s ability to consummate the transactions contemplated by this Agreement and the Transaction Documents.

3.3 Partnership Interests .  The Sellers own, of record and beneficially, the Partnership Interests, free and clear of all Liens other than any Transfer Restrictions.  On the terms and subject to the conditions contained in this Agreement, on the Closing Date, the Sellers shall transfer and deliver to Purchaser good and valid title to the Partnership Interests, free and clear of all Liens, other than any Transfer Restrictions.    

3.4 Agreements and Commitments .  Other than the Existing Partnership Agreement, the Registration Rights Agreement and this Agreement, no Seller is a party to any

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Contract with respect to the Purchased Interests.  No Seller is in default, and, to each Seller’s Knowledge, there is no basis for any valid claim against any Seller of default by such Seller, under the Existing Partnership Agreement.

3.5 Litigation .  As of the date hereof, there are no Actions or Proceedings pending or, to the Sellers’ Knowledge, threatened against any Seller, at law or in equity, before or by any Government Authority, which call into question the validity of, or which would reasonably be expected to prevent the consummation of, the transactions contemplated by this Agreement or the Transaction Documents.    

3.6 Access .  The Sellers have been provided full access to financial and other information about the Partnership’s business and have had the opportunity to ask questions of and receive answers from the Partnership’s management concerning the business and financial condition of the Partnership.  The Sellers have conducted their own investigation, to the extent that they determined necessary or desirable, regarding the Partnership and the transactions contemplated by this Agreement and the Transaction Documents, and have obtained sufficient information from such independent efforts, relating to both the Partnership and its business, to enable the Sellers to evaluate the economic merits and risks of the transactions contemplated by this Agreement and the Transaction Documents, including the sale by the Sellers of the Partnership Interests contemplated hereby, and the Sellers acknowledge that they have determined to enter into this Agreement and the Transaction Documents to which they are parties based on such investigation.  In deciding to enter into this Agreement and the Transaction Documents, the Sellers have not relied upon any representations of Purchaser, the Partnership or any other Person, other than those specifically set forth in this Agreement and the Transaction Documents, and the Sellers acknowledge that no oral representations have been made by Purchaser or the Partnership or any representative of any of them in connection with the transactions contemplated by this Agreement and the Transaction Documents.

3.7 Brokers and Finders .  Except as will be discharged in full by (and as will be the sole responsibility of) the Sellers, no person, firm, corporation or entity acting for or on behalf of the Sellers is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee, directly or indirectly, from any parties in connection with any of the transactions contemplated by this Agreement or the Transaction Documents.

3.8 Withholding .  No withholding under Section 1445 of the Code will be required with respect to any payment made to any Seller pursuant to this Agreement or as a result of the sale of the Purchased Interests pursuant to this Agreement.

 

3.9 No Implied Representations .  In entering into this Agreement, the Sellers have not been induced by and have not relied upon any representations, warranties or statements, whether express or implied, made by Purchaser or any Representative of Purchaser or by any broker or any other person representing or purporting to represent Purchaser, which are not expressly set forth in this Agreement or any Transaction Document or such other agreements, documents or instruments delivered in connection herewith or therewith, whether or not any such representations, warranties or statements were made in writing or orally.    It is understood that, except as otherwise set forth in the Transaction Documents, any cost or financial estimates or projections contained or referred to in this Agreement or which otherwise have been provided to

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the Sellers are not and shall not be deemed to be representations or warranties of Purchaser.  The Sellers acknowledge that (i) there are uncertainties inherent in attempting to make such estimates and projections, (ii) the Sellers are familiar with such uncertainties and, other than the representations and warranties set forth in the Transaction Documents, the Sellers are taking full responsibility for making their own evaluation of the adequacy and accuracy of all estimates and projections so furnished to it by Purchaser, and (iii) the Sellers shall have no claim against Purchaser or its Subsidiaries with respect thereto.

3.10 No Other Representations and Warranties .  Except for the representations and warranties expressly set forth in this Article III or in the Transaction Documents, none of the Sellers or any other Person has made, makes or shall be deemed to make any other representation or warranty of any kind whatsoever, express or implied, written or oral, at law or in equity, on behalf of any Seller or any of its Affiliates, including any representation or warranty regarding any Seller, the Purchased Interests of such Seller, or any assets or Liabilities of such Seller or any of its Affiliates, and each Seller hereby disclaims all other representations and warranties of any kind whatsoever, express or implied, written or oral, at law or in equity.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to the Sellers as set forth below:

4.1 Organization; Authority; Binding Agreement .

(a) Purchaser is duly organized, validly existing, and in good standing under the laws of its state of incorporation and has the requisite corporate power and authority to own and hold its properties and to conduct its business as now owned, held, and conducted in its jurisdiction of incorporation and, in all material respects, in the other jurisdictions in which it is required to register or qualify to do business.  Purchaser has the requisite power and authority to enter into and to perform its obligations under this Agreement and the Transaction Documents to which it is a party.  The execution, delivery and performance by Purchaser of this Agreement and the Transaction Documents to which it is a party have been duly authorized and approved by the Board of Directors of Purchaser, approved by the Special Committee of the Board of Directors of Purchaser, and approved by all other necessary corporate action on the part of Purchaser.

(b) This Agreement has been, and each of the Transaction Documents to be executed and delivered by Purchaser will be, duly executed and delivered by Purchaser, and this Agreement is, and each of the Transaction Documents, when duly executed and delivered by all parties whose execution and delivery thereof is required, shall be, the legal, valid, and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance, receivership, moratorium, conservatorship, reorganization, or other laws of general application affecting the rights of creditors generally or by general principles of equity.

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4.2 No Conflicts .

(a) Neither the execution and delivery of this Agreement or any Transaction Documents nor the consummation of the transactions contemplated hereby or thereby will (i) violate, breach, or be in conflict with any provisions of the Organizational Documents of Purchaser, (ii) result in the creation or imposition of any Lien upon any property, rights or assets of Purchaser, (iii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any Contract to which Purchaser is a party or by which Purchaser is bound or to which any of its properties or assets is subject, in each case, other than as would not reasonably be expected to result in a Transaction Material Adverse Effect, nor (iv) violate any Law or Order of any Government Authority to which Purchaser is subject, or by which any of its properties or assets is bound.

(b) Except as obtained prior to the Effective Time by Purchaser,  no Consent, or Order of, or declaration or filing with, or notification to, any Government Authority is required on the part of Purchaser in connection with Purchaser’s execution and delivery of this Agreement and the Transaction Documents, the compliance by Purchaser with any of the provisions hereof and thereof, or the consummation of the transactions contemplated hereby and thereby, except where the failure to obtain such Consent or Order, or to make such declaration, filing or notification, would not have, or would not reasonably be expected to have, a Transaction Material Adverse Effect.

4.3 Purchase for Investment; Accredited Investor .  Purchaser is acquiring the Purchased Interests for Purchaser’s own account, for investment and not with a view to the distribution or resale thereof, except in compliance with the Securities Act of 1933, as amended, and applicable securities and blue sky Laws.  Purchaser has such knowledge and experience in financial and business matters and in making investments of the type contemplated by this Agreement that it is capable of evaluating the merits and risks of purchasing the Purchased Interests.  Purchaser is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended.

4.4 Access .  Purchaser has been provided full access to financial and other information about the Partnership’s business and has had the opportunity to ask questions of and receive answers from the Partnership’s management concerning the business and financial condition of the Partnership.  Purchaser has conducted its own investigation, to the extent that it has determined necessary or desirable, regarding the Partnership and the transactions contemplated by this Agreement and the Transaction Documents, and has obtained sufficient information from such independent efforts, relating to both the Partnership and its business, to enable Purchaser to evaluate the economic merits and risks of the transactions contemplated by this Agreement and the Transaction Documents, including the purchase by Purchaser of the Partnership Interests contemplated hereby, and Purchaser acknowledges that it has determined to enter into this Agreement and the Transaction Documents to which it is a party based on such investigation.  In deciding to enter into this Agreement and the Transaction Documents, Purchaser has not relied upon any representations of the Sellers, the Partnership or any other Person, other than those specifically set forth in this Agreement and the Transaction Documents, and Purchaser acknowledges that no oral representations have been made by the Sellers or the Partnership or any

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representative of any of them in connection with the transactions contemplated by this Agreement and the Transaction Documents.

4.5 No Implied Representations .  In entering into this Agreement, Purchaser has not been induced by and has not relied upon any representations, warranties or statements, whether express or implied, made by any Seller or any Representative of such Seller or by any broker or any other person representing or purporting to represent such Seller, which are not expressly set forth in this Agreement or any Transaction Document or such other agreements, documents or instruments delivered in connection herewith or therewith, whether or not any such representations, warranties or statements were made in writing or orally.    It is understood that, except as otherwise set forth in the Transaction Documents, any cost or financial estimates or projections contained or referred to in this Agreement or which otherwise have been provided to Purchaser are not and shall not be deemed to be representations or warranties of any Seller.  Purchaser acknowledges that (i) there are uncertainties inherent in attempting to make such estimates and projections, (ii) Purchaser is familiar with such uncertainties and, other than the representations and warranties set forth in the Transaction Documents, Purchaser is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates and projections so furnished to it, and (iii) Purchaser shall have no claim against the Sellers or their Affiliates with respect thereto.

4.6 Litigation .  As of the date hereof, there are no Actions or Proceedings pending or, to Purchaser’s Knowledge, threatened against Purchaser, at law or in equity, before or by any Government Authority, which call into question the validity of, or which would reasonably be expected to prevent the consummation of, the transactions contemplated by this Agreement or any Transaction Documents.

4.7 Brokers and Finders .  Except as will be discharged in full by (and as will be the sole responsibility of) Purchaser, no person, firm, corporation or entity acting for or on behalf of Purchaser is or will be entitled to any broker’s or finder’s fee or any other commission or similar fee, directly or indirectly, from any parties in connection with any of the transactions contemplated by this Agreement or the Transaction Documents.

ARTICLE V

COVENANTS

5.1 Cooperation .  Purchaser, on the one hand, and the Sellers, on the other hand, shall cooperate fully with each other in furnishing any information or performing any action requested by the other Party which is reasonably necessary to the timely and successful consummation of the transactions contemplated by this Agreement.  Each of the Parties agrees to execute and deliver such additional documents, certificates and instruments, and to perform such additional acts, as may be reasonably necessary or appropriate to carry out all of the provisions of this Agreement and to consummate all the transactions contemplated by this Agreement.    

5.2 Tax Matters .

(a) All stamp, transfer, documentary, sales and use, value added, excise,

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license, filing, registration and other similar taxes and fees (including any penalties and interest, but excluding Taxes on income or gain) incurred in connection with the transfer of the Purchased Interests under this Agreement (collectively, the “ Transfer Taxes ”) shall be borne equally by the Sellers, on one hand, and Purchaser, on the other hand.  Any Tax Returns and other documentation that must be filed with respect to Transfer Taxes shall be prepared and filed when due by the party primarily or customarily responsible under applicable local law for the filing of such Tax Returns or other documentation, and such party shall use its commercially reasonable efforts to provide drafts of such Tax Returns and other documentation to the other party at least ten Business Days prior to the due date for such Tax Returns and other documentation.  Such other party shall remit its share of Transfer Taxes shown on such Tax Returns received at least five Business Days prior to the due date for such Tax Returns.  Each party shall notify the other party if the first party receives any notice from a Government Authority with respect to Tax Returns filed pursuant to this Section 5.2(a) , and the parties shall cooperate with each other in good faith to respond to any such notice or any other inquiry from a Government Authority.

(b) The Sellers and Purchaser agree that, for the Partnership’s taxable year in which the sale of the Purchased Interests occurs, they will cooperate in requesting the Partnership to allocate (and the Partnership has agreed in the Cooperation Agreement to allocate) items of income, gain, deduction, loss and credit of the Partnership with respect to the Purchased Interests between the Sellers, on the one hand, and Purchaser, on the other hand, in accordance with an interim closing of the books of the Partnership as of the end of the day preceding the Closing Date and, if Closing occurs on a date other than the last calendar day of a month, to determine such items based on closing of the books at the end of such month of Closing and allocate to the Sellers such items based on a fraction, the numerator of which is the number of calendar days of such month of Closing that are included in the Interim Period and the denominator of which is the total number of calendar days in such month of Closing, and to allocate to Purchaser the remainder.  To the extent the Sellers’ consent may be required under the Existing Partnership Agreement, the Sellers shall not consent (and shall cause their Affiliates not to consent) to any other method to allocate items of such income, gain, deduction, losses and credit between the Sellers, on the one hand, and Purchaser, on the other hand, unless Purchaser consents to such other method in writing, which consent shall not be unreasonably withheld.

ARTICLE VI

CLOSING

6.1 Closing .  The closing of the transactions contemplated by this Agreement (the “ Closing ”) shall take place in New York, New York at the offices of Weil, Gotshal & Manges LLP on the date hereof (the “ Closing Date ”).

6.2 Sellers’ Closing Deliveries .  At Closing, the Sellers shall deliver to Purchaser:

(i) Purchased Interests .  With respect to the Purchased Interests being transferred at the Closing, the Assignment Agreement, duly executed by the Sellers.

(ii) FIRPTA Certificate .  A statement, meeting the requirements of

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Section 1.1445-2(b) of the U.S. Treasury Regulations, to the effect that such Seller is not a “foreign person” within the meaning of Section 1445 of the Code and the U.S. Treasury Regulations thereunder.

6.3 Purchaser’s Closing Deliveries .  At Closing, Purchaser shall deliver to the Sellers:

(i) Initial Purchase Price .  The Initial Purchase Price by wire transfer of federal funds or other immediately available funds to an account(s) designated at least three (3) Business Days prior to the Closing by the Sellers.

(ii) Purchased Interests .  With respect to the Purchased Interests being transferred at the Closing, the Assignment Agreement, duly executed by Purchaser.

ARTICLE VII

INDEMNIFICATION

7.1 Survival .  The representations and warranties of the Sellers and Purchaser contained in or made pursuant to this Agreement shall survive in full force and effect until the fifth anniversary of the Closing Date, at which time they shall terminate (and no claims shall be made for indemnification under Sections 7.2 or 7.3 thereafter).  None of the covenants or other agreements contained in this Agreement shall survive the Closing other than the covenants and agreements that by their terms apply or are to be performed in whole or in part after the Closing Date, which covenants and agreements shall survive for the period provided in such covenants and agreements, if any, or until fully performed.

7.2 Indemnification by the Sellers .

(a) From and after the Closing, and subject to the terms of this Agreement, the Sellers shall, jointly and severally, indemnify and hold harmless Purchaser and its Subsidiaries, and their respective Representatives, permitted successors and permitted assigns (collectively, the “ Purchaser Indemnified Parties ”) against, and reimburse any Purchaser Indemnified Party for, all Losses that such Purchaser Indemnified Party may suffer or incur, or become subject to, as a result of:

(i) the breach of any representations or warranties made by any Seller in this Agreement; or

(ii) any breach or failure by any Seller to perform or comply with any of its covenants or agreements in this Agreement.

(b) Notwithstanding anything in this Agreement to the contrary , the cumulative indemnification obligation of the Sellers under this Article VII shall in no event exceed the Final Purchase Price.

7.3 Indemnification by Purchaser . 

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(a) From and after the Closing, and subject to the terms of this Agreement, Purchaser shall indemnify and hold harmless General Electric Company   and its Subsidiaries (including   the Sellers), and their respective Representatives, permitted successors and permitted assigns (collectively, the “ Seller Indemnified Parties ”) against, and reimburse any Seller Indemnified Party for, all Losses that such Seller Indemnified Party may suffer or incur, or become subject to, as a result of:

(i) the breach of any representations or warranties made by Purchaser in this Agreement; or

(ii) any breach or failure by Purchaser to perform or comply with any of its covenants or agreements in this Agreement.

(b) Notwithstanding anything in this Agreement to the contrary, the cumulative indemnification obligation of Purchaser under this Article VII shall in no event exceed the Final Purchase Price.

7.4 Notification of Claims .

(a) Except as otherwise provided in this Agreement, a Person that may be entitled to be indemnified under this Agreement (the “ Indemnified Party ”), shall promptly notify the Party liable for such indemnification (the “ Indemnifying Party ”) in writing of any pending or threatened claim, demand or circumstance that the Indemnified Party has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party, such claim being a “ Third Party Claim ”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim, demand or circumstance; provided ,   however , that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article VII except to the extent the Indemnifying Party is prejudiced by such failure, it being understood that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered before the expiration of any applicable survival period specified in Section 7.1 for such representation, warranty, covenant or agreement.

(b) Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 7.4(a) with respect to any Third Party Claim, the Indemnifying Party shall have the right (but not the obligation) to assume the defense and control of any Third Party Claim by notice to the Indemnified Party at any time, unless the failure of the Indemnifying Party to timely assume the defense of such Third Party Claim would actually and materially prejudice the Indemnified Party.  Prior to any assumption of the defense and control of any Third Party Claim, the Indemnified Party shall be entitled to conduct the defense of such Third Party Claim as the Controlling Party (as hereinafter defined).  Subject to Section 7.4(d) below, in the event that the Indemnifying Party shall assume the defense of such claim, it shall allow the Indemnified Party a reasonable opportunity to participate in the defense of such Third Party Claim with its own counsel and at its own expense.  The Person that shall control the defense of any such Third Party Claim (the “ Controlling Party ”) shall select counsel, contractors and consultants of recognized standing

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and competence after consultation with the other Party and shall take all steps reasonably necessary in the defense or settlement of such Third Party Claim.

(c) The Sellers or Purchaser, as the case may be, shall, and shall cause each of its Affiliates and Representatives to, cooperate fully with the Controlling Party in the defense of any Third Party Claim.  The Indemnifying Party shall be authorized to consent to a settlement of, or the entry of any judgment arising from, any Third Party Claim, without the consent of any Indemnified Party, provided that the Indemnifying Party shall (i) pay all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement (subject to Section 7.2(b) , if applicable), and (ii) obtain, as a condition of any settlement or other resolution, a complete release of any Indemnified Party potentially affected by such Third Party Claim.

(d) If the Indemnified Party is the non-Controlling Party and a conflict of interest between the Indemnified Party and the Indemnifying Party exists in respect of such Third Party Claim that would reasonably be expected to make it inappropriate for the same counsel to represent the interests of the Indemnifying Party and the Indemnified Party, the Indemnified Party shall have the right to participate in (but not control) the defense of such Third Party Claim and to retain its own counsel at the sole expense of the Indemnifying Party, which such counsel shall be reasonably acceptable to the Indemnifying Party.  In any event, the Sellers and Purchaser shall cooperate in the defense of any Third Party Claim subject to this Article VII and the records of each shall be reasonably available to the other with respect to such defense.

7.5 Exclusive Remedies .  Subject to Section 2.5 ,  following the Closing, the indemnification provisions of this Article VII shall be the sole and exclusive remedies of any Seller Indemnified Party and any Purchaser Indemnified Party, respectively, for any Losses (including any Losses from claims for breach of Contract, warranty, tortious conduct (including negligence) or otherwise and whether predicated on common law, statute, strict liability, or otherwise) that it may at any time suffer or incur, or become subject to, as a result of, or in connection with, any breach of any representation or warranty set forth in this Agreement by Purchaser or the Sellers, respectively, or any breach or failure by Purchaser or the Sellers, respectively, to perform or comply with any covenant or agreement set forth herein.  Nothing in this Agreement, including this Section 7.5 , shall limit a Person’s liability following the Closing for intentional fraud knowingly committed.  Without limiting the generality of the foregoing, the Parties hereby irrevocably waive any right of rescission they may otherwise have or to which they may become entitled.

7.6 Additional Indemnification Provisions .    With respect to each indemnification obligation contained in this Agreement, no representation or warranty of any Seller shall be deemed to be breached as a consequence of the existence of any fact, circumstance or event that is disclosed in connection with another representation or warranty contained in this Agreement.

7.7 Limitation on Liability .  Notwithstanding anything in this Agreement or in any Transaction Document to the contrary, except to the extent required to be paid to a third party in connection with a Third Party Claim, in no event shall any Party have any Liability under this Agreement (including under this Article VII ) for any consequential, special or punitive damages, lost profits or similar items; provided ,   however , that nothing herein shall limit any Party’s Liability

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for Losses in the nature of diminution in value (or the ability of any Party to establish the amount of Losses in the nature of diminution in value by reference to lost profits or other damage amounts in respect of any breach of this Agreement).

7.8 Tax Treatment of Payments .  Seller and Purchaser shall treat any adjustments or indemnity payments made pursuant to this Agreement as adjustments to the Final Purchase Price for income Tax purposes unless applicable Tax law causes such payment not to be so treated.

ARTICLE VIII

MISCELLANEOUS

8.1 Expenses .    Except as set forth in Section 6.01 of the Cooperation Agreement, each of Purchaser and the Sellers shall pay all of their own fees and expenses (including attorneys’ fees and expenses) incurred in connection with this Agreement and the Transaction Documents and the transactions contemplated hereby and thereby.

8.2 Notices .  All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given and received when delivered in person, when received by facsimile or email transmission (in each case, followed by delivery of an original by another delivery method provided for in this Section 8.2 below), or one day after duly sent by overnight courier, addressed as follows (or at such other address for a party as shall be specified by like notice):

(a) if to Purchaser to: 

Penske Automotive Group, Inc.

2555 Telegraph Rd

Bloomfield Hills, MI 48098

Attention:    General Counsel

Facsimile:    248-648-2515

Email:          sspradlin@penskeautomotive.com

 

with a copy to:

 

Penske Automotive Group, Inc.

2555 Telegraph Rd

Bloomfield Hills, MI 48098

Attention:     Chief Financial Officer

Facsimile:     248-648-2155

Email:           jcarlson@penskeautomotive.com

 

MBK USA Commercial Vehicles Inc.

c/o Mitsui & Co., Ltd.

Nippon Life Marunouchi Garden Tower

1-3, Marunouchi 1-chome, Chiyoda-ku,

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Tokyo, Japan

Attention: Masashi Yamanaka

General Manager

Second Motor Vehicles Div.

Facsimile:     +81 3-3285-9005

Email:           m.yamanaka@mitsui.com

 

with a copy to:

 

Debevoise & Plimpton LLP

919 Third Avenue

New York, NY 10022

Attention:    Ezra Borut, Esq.

Facsimile:    212-909-6836

Email:          eborut@debevoise.com

 

(b) if to the Sellers to:

GE Capital Truck Leasing Holding LLC

General Electric Credit Corporation of Tennessee

c/o GE Capital US Holdings, Inc.

41 Farnsworth Street

Boston, MA 02210

Attention:     Mark Landis, Executive Counsel – Mergers & Acquisitions

Facsimile:     203-286-2181

Email:           mark.landis@ge.com

 

with a copy to:

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention:     Jon-Paul Bernard

Facsimile:     212-310-8284

Email:           jon-paul.bernard@weil.com

 

 

8.3 No Assignment; Binding Effect .  Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned by either Party without the prior written consent of the other Party and any attempt to do so shall be void, except for assignments and transfers by operation of law or in connection with the liquidation, dissolution or winding-up of the affairs of either Party;   provided ,   however , that any such assignor Party shall not be released from its obligations under this Agreement upon any such assignment unless the assignee shall be determined by the other Party, acting reasonably, to be creditworthy.  This Agreement shall be binding upon, inure to the benefit of, and may be enforced by, each of the parties to this Agreement and its successors and permitted assigns.

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8.4 Entire Agreement .  This Agreement and the Transaction Documents supersede any other agreement, whether written or oral, that may have been made or entered into by the parties hereto relating to the matters contemplated hereby and thereby and constitute the entire agreement of the Parties with respect to the subject matter hereof and thereof.

8.5 Confidentiality .  Except (i) as required or expressly permitted by this Agreement, (ii) as may be necessary in order to give the notices to obtain any prior regulatory approval or the Approvals, (iii) as necessary to consult with attorneys, accountants, employees, or other advisors retained in connection with the transactions contemplated hereby, (iv) as required by court order or otherwise mandated by law or by Contract to which any Seller or Purchaser is a party, or (v) in connection with legally required disclosure documents prepared by any Seller, Purchaser or any Affiliate of either, no such Party shall issue any news release or other public notice or communication or otherwise make any disclosure to third parties concerning (x) this Agreement or (y) the transactions contemplated hereby,  without the prior consent of the other Party and the Partnership (which consent shall not be unreasonably withheld, conditioned or delayed by the other Party or the Partnership).  Even in cases where such prior consent is not required, Purchaser, on the one hand, and the Sellers, on the other hand, shall, to the extent legally permissible, promptly notify the other Party and the Partnership of such release in advance in order to provide a reasonable opportunity to the other Party and the Partnership to prepare a corresponding or other similar release or other action on a timely basis.

8.6 Amendments, Supplements, etc .  This Agreement may be amended or supplemented only by a writing signed by Purchaser and the Sellers specifically referring to this Agreement.  No term of this Agreement, nor performance thereof or compliance therewith, may be waived except by a writing signed by the party charged with giving such waiver.

8.7 Headings and Captions .  The headings and captions in this Agreement are for reference purposes only and shall not affect the construction or interpretation of any provision of this Agreement.

8.8 Counterparts .  This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

8.9 Governing Law; Jurisdiction .  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (whether in Contract or in tort) without giving effect to the principles of conflicts of law thereof, other than Section 5-1401 of the General Obligations Law thereunder.  The parties hereto agree that any action, suit, proceeding or arbitration of any nature, in law or equity (collectively, “ Actions or Proceedings ”) seeking to enforce any provision of, or based on any matter arising out of or in connection with this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such Action or Proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such Action or Proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such

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Action or Proceeding in any such court or that any such Action or Proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such Action or Proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, the parties hereto agree that service of process on such party as provided in Section 8.2 shall be deemed effective service of process on such party.

8.10 Third-Party Beneficiaries .  Except as provided in Section 7.2 ,  Section 7.3  and Section 8.11  with respect to indemnification obligations of the Sellers and Purchaser for the benefit of the Purchaser Indemnified Parties and the Seller Indemnified Parties, respectively, this Agreement is not intended to confer upon any other Person any rights or remedies hereunder.

8.11 No Recourse .  (i) This Agreement, each Transaction Document and any certificate or other writing delivered pursuant to this Agreement or any such Transaction Document may be enforced only against, and any claim, suit, litigation or other proceeding based upon, arising out of, or related to the foregoing, may be brought only against, the entities that are expressly named as parties hereunder or thereunder and then only with respect to the specific obligations set forth herein or therein with respect to such party and (ii) except as expressly provided in this Agreement, any Transaction Document or any certificate or writing delivered pursuant to this Agreement or any such Transaction Document, no past, present or future director, officer, employee, incorporator, member, partner, shareholder, agent, attorney, advisor, lender or representative or Affiliate of such named party, shall have any Liability (whether in contract or tort, at law or in equity or otherwise, or based upon any theory that seeks to impose Liability of an entity party against its owners or Affiliates) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities of such named party or for any claim based on, arising out of, or related to this Agreement, any Transaction Document or any certificate or writing delivered pursuant to this Agreement or any such Transaction Document.

8.12 No Setoff .  The obligations of the Sellers, and each of their respective Subsidiaries, on the one hand, and Purchaser and each of its Subsidiaries, on the other hand, under this Agreement and the Transaction Documents shall not be subject to any counterclaim, setoff, deduction, diminution, abatement, stay, recoupment, suspension, deferment, reduction or defense, in each case, based upon any claim that Purchaser or the Sellers may have against each other under any other agreement between or among such parties or any of their respective Affiliates.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

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IN WITNESS WHEREOF, the Sellers and Purchaser have caused this Agreement to be duly executed and delivered as of the date first above written.

SELLERS :

 

 

 

 

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PURCHASER :

 

 

 

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Exhibit 10.2

Execution Version

 

 

 

 

COOPERATION AGREEMENT

by and among

PENSKE TRUCK LEASING CO., L.P.,
a Delaware limited partnership,

PENSKE TRUCK LEASING CORPORATION,
a Delaware corporation,

PENSKE AUTOMOTIVE GROUP, INC.,
a Delaware corporation,

PTL GP, LLC,
a Delaware limited liability company,

GE CAPITAL TRUCK LEASING HOLDING LLC,
a Delaware limited liability company,

GENERAL ELECTRIC CREDIT CORPORATION OF TENNESSEE,
a Delaware corporation,

and

MBK USA COMMERCIAL VEHICLES INC.,
a Delaware corporation

 

 

 

Dated as of September 7, 2017

 

 

 

 

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COOPERATION AGREEMENT

THIS COOPERATION AGREEMENT (this “ Agreement ”), dated as of September 7, 2017, is among PENSKE TRUCK LEASING CO., L.P., a Delaware limited partnership (the “ Partnership ”), PENSKE TRUCK LEASING CORPORATION, a Delaware corporation (“ PTLC ”), PENSKE AUTOMOTIVE GROUP, INC., a Delaware corporation (“ PAG ”), PTL GP, LLC, a Delaware limited liability company (the “ General Partner ”, and together with PTLC, the “ Penske Group ”), GE CAPITAL TRUCK LEASING HOLDING LLC, a Delaware limited liability company (“ GE Truck Leasing ”), GENERAL ELECTRIC CREDIT CORPORATION OF TENNESSEE, a Delaware corporation (“ GECC of Tennessee ”; and together with GE Truck Leasing, the “ Sellers ”), and MBK USA COMMERCIAL VEHICLES INC., a Delaware corporation (the “ Mitsui Partner ”).

WHEREAS, on the date hereof, Sellers and PAG are entering into that certain Agreement of Purchase and Sale (as amended, modified or supplemented from time to time, the “ PAG   Purchase Agreement ”) which provides for, among other things, the Sale of the PAG Purchased Interests to PAG;

WHEREAS, on the date hereof, Sellers and the Mitsui Partner are entering into that certain Agreement of Purchase and Sale (as amended, modified or supplemented from time to time, the “ Mitsui   Purchase Agreement ”; and together with the PAG Purchase Agreement, the “ Purchase Agreements ”) which provides for, among other things, the Sale of the Mitsui Purchased Interests to the Mitsui Partner;

WHEREAS, under that certain Sixth Amended and Restated Partnership Agreement of the Partnership, dated as of July 27, 2016 as amended through the date hereof (and as may be further amended, modified or supplemented up to the time immediately prior to the Closing, the “ Existing Partnership   Agreement ”), certain waivers and consents of the Partners are required in connection with the Transfer of the PAG Purchased Interests to PAG and the Mitsui Purchased Interests to the Mitsui Partner;

WHEREAS, the cooperation and assistance of the Partnership will be required in order for the Sellers and PAG to carry out the provisions of the PAG Purchase Agreement, including the determination of any post-Closing adjustments to the purchase price payable by PAG or the Sellers thereunder (as applicable);

WHEREAS, the cooperation and assistance of the Partnership will be required in order for the Sellers and the Mitsui Partner to carry out the provisions of the Mitsui Purchase Agreement, including the determination of any post-Closing adjustments to the purchase price payable by the Mitsui Partner or the Sellers thereunder (as applicable); and

WHEREAS, the parties hereto desire to enter into this Agreement and the other agreements and documents referred to herein and in the Purchase Agreements, to implement the transactions and other agreements contemplated by the Purchase Agreements and the other Transaction Documents ;

 

 

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NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which, by each of the parties hereto, are hereby acknowledged, the parties hereto agree, intending to be legally bound, as follows:

ARTICLE I

DEFINITIONS

Section 1.01.         Certain Definitions .  (a)  The following capitalized terms have the meanings set forth below:

“ Advisory Committee ” has the meaning assigned to such term in the Existing Partnership Agreement.

“ A&R Partnership Agreement ”  means the Seventh Amended and Restated Partnership Agreement, dated as of the date hereof, entered into by and among the Penske Group, PAG, the Mitsui Partner and GECC of Tennessee (which shall be a party solely for purposes of Section 6.9 thereof), in connection with the consummation of the transactions contemplated by the Purchase Agreements.

“ Closing ”  means, collectively, the Closing as such term is defined in the Mitsui Purchase Agreement and the PAG Purchase Agreement.

“ Mitsui Assignment Agreement ” means the Assignment Agreement as such term is defined in the Mitsui Purchase Agreement.

“ Mitsui Partnership Net Income Amount ” means the Partnership Net Income Amount as such term is defined in the Mitsui Purchase Agreement.

“ Mitsui Purchased Interests ” means 10% partnership interests, in limited partner form, in the Partnership held by the Sellers and to be sold to the Mitsui Partner pursuant to the Mitsui Purchase Agreement.

“ Mitsui Transaction Documents ” means the Transaction Documents as such term is defined in the Mitsui Purchase Agreement.

“ PAG Assignment Agreement ” means the Assignment Agreement as such term is defined in the PAG Purchase Agreement.

“ PAG Partnership Net Income Amount ” means the Partnership Net Income Amount as such term is defined in the PAG Purchase Agreement.

“ PAG Purchased Interests ” means 5.5% partnership interests, in limited partner form, in the Partnership held by the Sellers and to be sold to PAG pursuant to the PAG Purchase Agreement.

“ PAG Transaction Documents ” means the Transaction Documents as such term is defined in the PAG Purchase Agreement.

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“ Partner ” has the meaning set forth in the Existing Partnership Agreement.

“ Purchased Interests ” means, collectively, the Mitsui Purchased Interests and the PAG Purchased Interests.

 “ Sale ” has the meaning assigned to such term in the Existing Partnership Agreement.

“ Transaction Documents ” means, collectively, the Mitsui Transaction Documents and the PAG Transaction Documents.

“ Transfer ” has the meaning assigned to such term in the Existing Partnership Agreement.

(b)        In addition to the terms herein defined, capitalized terms used but not defined herein have the common meanings set forth in the Purchase Agreements.

Section 1.02.         Other Definitional and Interpretive Matters .  Unless otherwise expressly provided, for purposes of this Agreement, the following rules of interpretation shall apply:

(a)         Subsidiaries .  For preclusion of doubt, the Partnership and its Subsidiaries shall not be deemed to be Subsidiaries or Affiliates of any of (i) the Sellers or GE Capital Global Holdings, LLC (or any of their respective Subsidiaries), (ii) the Penske Group (or any of their respective Subsidiaries), (iii) the Mitsui Partner (or any of its Subsidiaries) or (iv) PAG (or any of its Subsidiaries), in each case, for purposes of this Agreement.

(b)         Exhibits/Schedules .  The Exhibits and Schedules to this Agreement are hereby incorporated herein and made a part hereof and are an integral part of this Agreement.  Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein shall be defined as set forth in this Agreement.

(c)         Gender and Number .  Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

(d)        Headings .  The division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.  All references in this Agreement to any “Section” are to the corresponding Section of this Agreement unless otherwise specified.

(e)        Herein .  The words such as “herein,” “hereinafter,” “hereof” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

(f)         Including .  The word “including” or any variation thereof means (unless otherwise specified) “including, without limitation,” and shall not be construed to limit any

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general statement that it follows to the specific or similar items or matters immediately following it.

ARTICLE II

CONSENTS, AGREEMENTS AND WAIVERS

Section 2.01.         Consents, Approvals, Agreements and Waivers .  (a)  Pursuant to the Existing Partnership Agreement and subject to the execution and delivery as of the date hereof by each of the Sellers and PAG of the PAG Purchase Agreement and each of the Sellers and the Mitsui Partner of the Mitsui Purchase Agreement, each of the Partners and, as applicable, the Partnership hereby (i) consents to and approves the Sale of the Purchased Interests under and pursuant to the Purchase Agreements, (ii) agrees that it shall not exercise, and hereby waives, any and all rights under the Existing Partnership Agreement with respect to any Transfer of the PAG Purchased Interests held by the Sellers to PAG and with respect to the Transfer of the Mitsui Purchased Interests held by the Sellers to the Mitsui Partner, including pursuant to “rights of first offer” or “rights of first refusal” as a result of the consummation of the transactions contemplated by the Purchase Agreements, and (iii) agrees, effective immediately after giving effect to the consummation of the transactions contemplated by the Purchase Agreements, the delivery by PAG of the PAG Assignment Agreement and the delivery by the Mitsui Partner of the Mitsui Assignment Agreement, in each case, to the General Partner, to execute and deliver the A&R Partnership Agreement.

(b)       The consents, approvals, agreements and waivers set forth in Section 2.01(a) above are limited solely to the transactions occurring in connection with the consummation of and as contemplated by the Purchase Agreements and the other Transaction Documents and not to any subsequent or unrelated Transfer of Partnership Interests. 

(c)        Each of the Partners and the Partnership hereby acknowledges and agrees that no other consent, approval, agreement or waiver is required from any of the Partners or the Partnership or the Advisory Committee under the terms of the Existing Partnership Agreement for the Sale of the Purchased Interests under the Purchase Agreements. Notwithstanding the foregoing, to the extent that any consent, approval, agreement or waiver is so required, the same is hereby irrevocably waived by each of the Partners and the Partnership.

(d)        Each of the Partners and the Partnership hereby acknowledges and agrees that each of the other parties hereto has been furnished with true, correct and complete copies of the Purchase Agreements and the other Transaction Documents. Each of the Partners and the Partnership hereby agrees that, except as otherwise consented to in writing by each of the other parties hereto, neither it nor any of its Affiliates is a party to any binding agreement relating to the transactions contemplated by the Purchase Agreements or the Transaction Documents, other than the Purchase Agreements and the Transaction Documents.

Section 2.02.         Determination of Purchase Price under Purchase Agreement . 

(a)        From and after the date hereof the Partnership shall concurrently provide to the Sellers, PAG and the Mitsui Partner all such information as shall be reasonably requested by the Sellers, PAG or the Mitsui Partner in connection with the calculation and determination of

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the Final Purchase Price under the Purchase Agreements and shall, upon reasonable advance notice, provide the Sellers, PAG and the Mitsui Partner with reasonable access during normal business hours to the offices, properties, personnel, books, commitments, contracts and records of the Partnership or any of its Subsidiaries and shall instruct its Representatives to cooperate with the Sellers’, PAG’s and the Mitsui Partner’s Representatives as reasonably necessary in order for the Sellers, PAG and the Mitsui Partner to have the opportunity to make such calculation and determination of the applicable Final Purchase Price.  In connection with the foregoing, (x) the Partnership has delivered to PAG, the Mitsui Partner and the Sellers (1) audited financial statements of the Partnership for the fiscal years ended December 31, 2016 and December 31, 2015, and unaudited quarterly financial statements of the Partnership for the quarters ended March 31, 2017 and June 30, 2017, in each case prepared in compliance with GAAP (collectively, the “ PTL Financial Statements ”), and (2) a draft statement setting forth the Net Income for each calendar month from and after July 2017 and ending prior to the Closing Date,  (y) (1) the Partnership shall use commercially reasonable efforts to deliver to PAG and the Sellers, as soon as practicable after the Closing Date, a statement setting forth the actual PAG Partnership Net Income Amount and supporting schedules, working papers and all other relevant details to enable a review of such actual PAG Partnership Net Income Amount by the Sellers and PAG and (2) the Partnership shall use commercially reasonable efforts to deliver to the Mitsui Partner and the Sellers, as soon as practicable after the Closing Date, a statement setting forth the actual Mitsui Net Income Amount and supporting schedules, working papers and all other relevant details to enable a review of such actual Mitsui Partnership Net Income Amount by the Sellers and the Mitsui Partner.

(b)        In addition, (i) PAG, on the one hand, and the Sellers, on the other hand, shall cooperate fully with each other in obtaining any information in the Partnership’s possession that is reasonably necessary in connection with preparing or reviewing the Purchase Price Statements under the PAG Purchase Agreement and (ii) the Mitsui Partner, on the one hand, and the Sellers, on the other hand, shall cooperate fully with each other in obtaining any information in the Partnership’s possession that is reasonably necessary in connection with preparing or reviewing the Purchase Price Statements under the Mitsui Purchase Agreement.

(c)        After the Closing, each of PTLC, the General Partner and the Partnership shall cooperate and assist (at the cost and expense of the Sellers and PAG) each of the Sellers and PAG in connection with the resolution of any disagreement among the Sellers, on the one hand, and PAG, on the other hand, (i) with respect to the matters reflected in any Dispute Notice under the PAG Purchase Agreement, including in connection with the resolution of any disputes with respect thereto under Section 2.4 of the PAG Purchase Agreement (which cooperation and assistance shall include compliance with the reasonable requests of the Sellers and PAG in preparing any written presentations to the Independent Accounting Firm in accordance with Section 2.4 of the PAG Purchase Agreement), and (ii) with respect to Actions or Proceedings between the Sellers and PAG initiated in accordance with Section 8.9 of the PAG Purchase Agreement.

(d)        After the Closing, each of PTLC, the General Partner and the Partnership shall cooperate and assist (at the cost and expense of the Sellers and the Mitsui Partner) each of the Sellers and the Mitsui Partner in connection with the resolution of any disagreement among

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the Sellers, on the one hand, and the Mitsui Partner, on the other hand, (i) with respect to the matters reflected in any Dispute Notice under the Mitsui Purchase Agreement, including in connection with the resolution of any disputes with respect thereto under Section 2.4 of the Mitsui Purchase Agreement (which cooperation and assistance shall include compliance with the reasonable requests of the Sellers and the Mitsui Partner in preparing any written presentations to the Independent Accounting Firm in accordance with Section 2.4 of the Mitsui Purchase Agreement), and (ii) with respect to Actions or Proceedings between the Sellers and the Mitsui Partner initiated in accordance with Section 8.9 of the Mitsui Purchase Agreement.     

Section 2.03.         Partnership Distributions and Allocations .

(a)        The Partnership hereby agrees that all distributions to be made after the Closing Date in respect of the PAG Purchased Interests or the Mitsui Purchased Interests for any Subject Year (including any Subject Year prior to the Closing Date) shall be made to PAG or the Mitsui Partner, respectively, in accordance with the terms of the A&R Partnership Agreement. 

(b)        The Partnership hereby agrees to allocate items of income, gain, deduction, loss and credit of the Partnership with respect to the PAG Purchased Interests between the Sellers, on the one hand, and PAG, on the other hand, in accordance with an interim closing of the books of the Partnership as of the end of the day preceding the Closing Date and to determine such items based on closing of the books at the end of such month of Closing and allocate to the Sellers such items based on a fraction, the numerator of which is the number of calendar days of such month of Closing that are included in the Interim Period and the denominator of which is the total number of calendar days in such month of Closing, and to allocate to PAG the remainder.

(c)        The Partnership hereby agrees to allocate items of income, gain, deduction, loss and credit of the Partnership with respect to the Mitsui Purchased Interests between the Sellers, on the one hand, and the Mitsui Partner, on the other hand, in accordance with an interim closing of the books of the Partnership as of the end of the day preceding the Closing Date and to determine such items based on closing of the books at the end of such month of Closing and allocate to the Sellers such items based on a fraction, the numerator of which is the number of calendar days of such month of Closing that are included in the Interim Period and the denominator of which is the total number of calendar days in such month of Closing, and to allocate to the Mitsui Partner the remainder.     

Section 2.04.         Further Assurances .  Each of the Partners agree to take such additional actions (and to cause their designees to the Advisory Committee, as applicable, to consent to the taking of such actions) as may be reasonably necessary or appropriate to consummate the transactions contemplated by this Agreement with respect to the Purchased Interests Sold at the Closing pursuant to the Purchase Agreements and the Transaction Documents.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Each of (i) the Penske Group, (ii) the Sellers, (iii) the Mitsui Partner, (iv) PAG and (v) the Partnership, severally and not jointly, represents and warrants to the other parties hereto that:

Section 3.01.         Organization and Good Standing .  It is duly organized, validly existing and in good standing under the Laws of its jurisdiction of formation or organization, and has all requisite power and authority to own, lease and operate its properties and to carry on its business.

Section 3.02.         Authorization of Agreement .  It has full organizational power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  Its execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate or other action on behalf of it.  This Agreement has been duly executed and delivered by it and (assuming the due authorization, execution and delivery by the other parties hereto and thereto), this Agreement constitutes the legal, valid and binding obligation of it, enforceable against it in accordance with the terms of this Agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies generally.

Section 3.03.        Conflicts; Consents of Third Parties .

(a)        None of the execution and delivery by it of this Agreement, the consummation by it of the transactions contemplated hereby or the compliance by it with any of the provisions hereof will conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination or cancellation under, any provision of (i) the charter or other organizational documents of it, (ii) any material contract or agreement to which it is a party or by which it or its properties or assets are bound, (iii) any Order applicable to it or by which any of its properties or assets are bound or (iv) any applicable Law.

(b)        Except as set forth herein or obtained prior to the Effective Time by the parties to the Purchase Agreements, no consent, waiver, approval, Order or authorization of, or declaration or filing with, or notification to, any Person or Government Authority is required on the part of it in connection with the execution and delivery of this Agreement, the compliance by it with any of the provisions hereof, or the consummation of the transactions contemplated hereby, other than such consents, waivers, approvals, Orders or authorizations the failure to obtain which has not had, or would not reasonably be expected to have, a material adverse effect upon its ability to consummate the transactions contemplated by this Agreement.

Section 3.04.        Litigation .  There are no Actions or Proceedings pending or, to the knowledge of it, threatened against it, or to which it is otherwise a party before any Government Authority, which, has had or, if adversely determined, would reasonably be expected to have, a material adverse effect on the ability of it to perform its obligations under this Agreement.

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP

The Partnership represents and warrants to the other parties hereto that:

Section 4.01.         Operation of the Partnership in the Ordinary Couse of Business .  For the period beginning on January 1, 2017 and ending on the date of this Agreement, the Partnership has been operated only in the ordinary course of its business, consistent with past practice.

Section 4.02.         Financial Statements of the Partnership .  Each of the Partners has previously received true, correct and complete copies of the unaudited consolidated financial statements of the Partnership as of March 31, 2017 and as of June 30, 2017 for the respective periods set forth therein (including, in each case, any notes and schedules thereto) (the “ Interim Financial Statements ”).  The Interim Financial Statements were prepared in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods, and fairly present, in all material respects in accordance with GAAP, the results of operations and financial position of the Partnership (subject to normal year-end audit adjustments).

ARTICLE V

[ RESERVED ]

ARTICLE VI

MISCELLANEOUS

Section 6.01.         Expenses .  Each of the parties hereto shall pay its own fees and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby; provided that all out-of-pocket expenses paid by the Partnership or the General Partner to satisfy the requirements of the Partnership or the General Partner with respect to the Sale of the Purchased Interests shall be allocated equally among, and paid by, PAG (one third), the Mitsui Partner (one third) and the Sellers (one third).

Section 6.02.         Notices .  All notices, consents, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given and received when delivered in person, when delivered by e-mail transmission with receipt confirmed (followed by delivery of an original by another delivery method provided for in this Section 6.02 or by facsimile transmission), or one day after duly sent by overnight courier, addressed as follows (or at such other address for a party as shall be specified by like notice): 

 

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Section 6.03.         Governing Law .  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (whether in contract or in tort) without giving effect to the principles of conflicts of law thereof, other than Section 5-1401 of the General Obligations Law thereunder.  The parties hereto agree that any action, suit, proceeding or arbitration of any nature, in law or equity (collectively, “ Actions or Proceedings ”), seeking to enforce any provision of, or based on any matter arising out of or in connection with this Agreement or the transactions contemplated hereby shall be brought in the United States District Court for the Southern District of New York or any New York State court sitting in New York City, so long as one of such courts shall have subject matter jurisdiction over such Action or Proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of New York, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such Action or Proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of

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the venue of any such Action or Proceeding in any such court or that any such Action or Proceeding which is brought in any such court has been brought in an inconvenient forum.  Process in any such Action or Proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, the parties hereto agree that service of process on such party as provided in Section 6.02 shall be deemed effective service of process on such party.

Section 6.04.         No Assignment; Binding Effect .  Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned by any party hereto without the prior written consent of each of the other parties and any attempt to do so shall be void, except for assignments and transfers by operation of law or in connection with the liquidation, dissolution or winding-up of the affairs of any party hereto;  provided ,   however , that any such assignor  party shall not be released from its obligations under this Agreement upon any such assignment unless the assignee shall be determined by the other parties, acting reasonably, to be creditworthy. This Agreement shall be binding upon, inure to the benefit of, and may be enforced by, each of the parties to this Agreement and its permitted successors and permitted assigns.

Section 6.05.         Counterparts .  This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.  Facsimiles, e-mail transmission of .pdf signatures or other electronic copies of signatures shall be deemed to be originals.

Section 6.06.         Severability .  If any term or other provision of this Agreement is invalid, illegal or unenforceable by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party hereto.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of such parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the greatest extent possible.

Section 6.07.         Amendments, Supplements .  This Agreement may be amended, supplemented or otherwise modified only by a writing signed by each of the parties hereto specifically referring to this Agreement.  No term of this Agreement, nor performance thereof or compliance therewith, may be waived except by a writing signed by all of the parties charged with giving such waiver. 

Section 6.08.         Headings and Captions .  The headings and captions in this Agreement are for reference purposes only and shall not affect the construction or interpretation of any provision of this Agreement.

Section 6.09.         Negotiated Agreement .  This Agreement was negotiated by the parties with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to the construction or interpretation hereof.

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Section 6.10.         Confidentiality .  Except (i) as required or expressly permitted by this Agreement, (ii) as may be necessary in order to give the notices to obtain any prior regulatory approval or the Approvals, (iii) as necessary to consult with attorneys, accountants, employees, or other advisors retained in connection with the transactions contemplated hereby, or under the Purchase Agreements, (iv) as required by court order or otherwise mandated by law (including in connection with any party hereto providing any access to regulators having supervisory authority over such party), or (v) in connection with legally required disclosure documents prepared by any party hereto or any Affiliate thereof, no party shall issue any news release or other public notice or communication or otherwise make any disclosure to third parties concerning (x) this Agreement or the Purchase Agreements or (y) the transactions contemplated hereby or thereby without the prior consent of the other parties (which consent shall not be unreasonably withheld, conditioned or delayed).  Even in cases where such prior consent is not required, each party shall, to the extent legally permissible, promptly notify the other parties of such release by it in advance in order to provide a reasonable opportunity to the other parties to prepare a corresponding or other similar release or other action on a timely basis.

Section 6.11.         Entire Agreement .  This Agreement, together with the Purchase Agreements and the other Transaction Documents, supersedes any other agreement, whether written or oral, that may have been made or entered into by the parties hereto relating to the matters contemplated hereby and constitutes the entire agreement of the parties with respect to the subject matter hereof. 

Section 6.12.         Specific Performance .  Each of the parties hereto hereby acknowledges and agrees that any breach of any provision of this Agreement by any other party hereto may result in irreparable harm to the other parties hereto and that money damages would not be a sufficient remedy for any such breach.  In the event of any such breach by any party hereto, each party agrees that any and all of other parties hereto shall have the right, in addition to any other rights they may have (whether at law or in equity), to seek specific performance and injunctive or other equitable relief as a remedy for any such breach of this Agreement, and each of the parties hereby waives any requirement for the posting of any bond or other security in connection therewith. 

Section 6.13.         No Waiver .  No failure or delay by any party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first written above.

 

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Exhibit 10.3

SEVENTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF PENSKE TRUCK LEASING CO., L.P.

 

 

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SCHEDULES

SCHEDULE A – Partners and Percentage Interests

SCHEDULE B – Current Members of Advisory Committee

 

 

 

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SEVENTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

PENSKE TRUCK LEASING CO., L.P.

THIS SEVENTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is entered into this 7th day of September, 2017, and effective as of the Effective Time, by and among Penske Truck Leasing Corporation, a Delaware corporation with its offices at 2675 Morgantown Road, Reading, Pennsylvania 19607 (as further defined below, “ PTLC ”), PTL GP, LLC, a Delaware limited liability company (formerly known as LJ VP, LLC) with its offices at 2675 Morgantown Road, Reading, Pennsylvania 19607 (as further defined below, “ PTL GP ”), Penske Automotive Group, Inc., a Delaware corporation with its offices at 2555 Telegraph Road, Bloomfield Hills, Michigan 48302 (as further defined below, “ PAG ”), and MBK USA Commercial Vehicles Inc., a Delaware corporation, with its offices at Nippon Life Marunouchi Garden Tower, 1‑3 Marunouchi 1-chome, Chiyoda-ku, Tokyo, Japan (as further defined below, “ MBK USA CV ”). General Electric Credit Corporation of Tennessee, a Tennessee corporation with its offices at 2 Bethesda Metro Center, Suite 600, Bethesda, MD 20814 (as further defined below, “ GE Tennessee ”), and GE Capital Truck Leasing Holding LLC, a Delaware limited liability company (formerly known as GE Capital Truck Leasing Holding Corp.) with its offices at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808 (as further defined below, “ GE Truck Leasing Holdco ” and, together with GE Tennessee, the “ Withdrawing GE Partners ”) are parties to this Agreement, effective as of the Effective Time, solely for purposes of Section 6.9 herein.

WITNESSETH:

WHEREAS, a limited partnership was heretofore formed in accordance with the provisions of the Delaware Revised Uniform Limited Partnership Act (6 Del . C . §17-101, et   seq .) (as amended from time to time and any successor to such Act, the “ Act ”) under the name Penske Truck Leasing Co., L.P. pursuant to an agreement of limited partnership dated July 18, 1988 (the “ Partnership ”);

WHEREAS, the agreement of limited partnership of the Partnership was amended and restated in its entirety by the Amended and Restated Agreement of Limited Partnership dated August 10, 1988, and thereafter and heretofore was amended or amended and restated from time to time, most recently by an amendment and restatement in its entirety known as the Sixth Amended and Restated Agreement of Limited Partnership of the Partnership, dated July 27, 2016 (the “ Sixth Amended and Restated Partnership Agreement ”), by and among the parties hereto and certain other predecessor parties; and

WHEREAS, the parties hereto desire to recognize the sale of the limited Partnership Interests held by the Withdrawing GE Partners to MBK USA CV and PAG, and to amend and restate the Sixth Amended and Restated Partnership Agreement in its entirety as hereinafter set forth.

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NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto, intending to be legally bound, hereby agree that the Sixth Amended and Restated Partnership Agreement is hereby amended and restated in its entirety by this Seventh Amended and Restated Agreement of Limited Partnership and, as so amended and restated hereby, shall read in its entirety as follows:

ARTICLE 1

THE LIMITED PARTNERSHIP

1.1  Formation .

(a) The parties hereto have heretofore been admitted to the Partnership as general partner or limited partners of the Partnership, as applicable, and the Partnership shall engage in the business hereinafter described for the period and upon the terms and conditions hereinafter set forth.

(b) As of the Effective Time, (i) MBK USA CV has acquired an additional ten percent (10%)  limited Partnership Interest previously held by the Withdrawing GE Partners, (ii) PAG has acquired an additional five and a half percent (5.5%) limited Partnership Interest previously held by the Withdrawing GE Partners and (iii) the Withdrawing GE Partners no longer have any Partnership Interests or, except as expressly provided in Section 6.9 , rights or obligations under this Agreement.

(c) PTL GP shall be the general partner in the Partnership. However, if any Conversion Event occurs, then at such time (A) PTL GP’s Partnership Interest (or in the case of a Sale of a portion of such Partnership Interest, the portion thereof being Sold) will automatically convert from a Partnership Interest as a general partner in the Partnership to a Partnership Interest as a limited partner in the Partnership (at the same Percentage Interest) and, subject to the further conditions relating to Transfers under this Agreement, the transferee in such Sale or, if there is no such transferee, PTL GP, shall be admitted as a Limited Partner and (B) if such conversion would otherwise result in there being no General Partner, then, effective immediately prior to such conversion, the Partnership Interest held by the then Managing Member of Holdings will automatically convert from a Partnership Interest as a limited partner in the Partnership to a Partnership Interest as a general partner in the Partnership and the then Managing Member of Holdings shall be automatically admitted to the Partnership as a General Partner and shall continue the Partnership without dissolution.

1.2  Certificate of Limited Partnership . PTLC has previously executed and caused to be filed (a) a Certificate of Limited Partnership of the Partnership in the office of the Secretary of State of the State of Delaware on July 18, 1988, (b) a Certificate of Amendment to Certificate of Limited Partnership of the Partnership in the office of the Secretary of State of the State of Delaware on July 21, 1988, and (c) a Certificate of Amendment to Certificate of Limited Partnership of the Partnership in the office of the Secretary of State of the State of Delaware on March 20, 2002 (such Certificate of Limited Partnership, together with and as amended by such Certificates of Amendment, is hereinafter collectively referred to as the “ Certificate ”). The General Partner shall execute such further documents (including any additional amendments to the Certificate to reflect

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the occurrence of the transactions contemplated by Subsection 1.1(c) ) and take such further action as shall be appropriate to comply with all requirements of Law for the formation and operation of a limited partnership in the State of Delaware and all other jurisdictions where the Partnership may elect to do business.

1.3  Name . The name of the Partnership is Penske Truck Leasing Co., L.P. Subject to the provisions of Subsection 6.5(d)(i) , the General Partner may change the name of the Partnership or cause the business of the Partnership to be conducted under any other name (other than any name including the term “Mitsui” or derivatives thereof) and, in any such event, the General Partner shall notify the Limited Partners of such name change within thirty (30) days thereafter.

1.4  Character of Business . The business of the Partnership shall be (i) the rental, leasing and servicing (including the provision of fuel) of tractors, trailers and trucks to third-party users, and the sale of such tractors, trailers and trucks used in the business of the Partnership, (ii) acting as a dedicated contract motor carrier, (iii) the provision of other third-party logistics services such as distribution center management, transportation management, managing and optimizing enterprises’ logistics networks, and providing supply chain consulting services, (iv) conducting Business Activities Ancillary to the businesses set forth in clauses (i), (ii) and (iii), and (v) such other activities and business as may be lawfully conducted by a limited partnership formed under the Laws of the State of Delaware. “ Business Activities Ancillary ” to a specified business shall mean business activities that are not conducted as a separate profitable business offering and comprise not more than five percent (5%) of the value measured by the net profit of the business activities of the specified business. The Partnership shall have and exercise all the powers now or hereafter conferred by the Laws of the State of Delaware on limited partnerships formed under the Laws of that State, and to do any and all things as fully as natural persons might or could do as are not prohibited by Law in furtherance of the aforesaid business of the Partnership. The business of the Partnership shall be conducted in accordance with, and any action required or permitted to be taken by the General Partner or any Limited Partner shall be taken in compliance with, all applicable Laws.

1.5  Certain Business Policies . The Partnership adopted prior to the Effective Time, in accordance with the terms of this Agreement as then in effect, and maintains policies with respect to requirements of environmental Laws, antitrust Laws, anti-corruption Laws, anti-bribery Laws, Laws relating to contracts with Governmental Authorities, insider trading and ethical business practices. The Partnership shall conduct its business in accordance with such policies, as the same may be amended from time to time in accordance with Subsection 6.5(c)(ii) . The Partnership shall (i) notify the members of the Advisory Committee promptly upon becoming aware of any violation by any member of the Partnership Group of any anti-corruption, anti-bribery or similar Laws, including the FCPA, (ii) promptly provide the members of the Advisory Committee with information regarding any such violation upon request therefor, and (iii) permit any member of the Advisory Committee not the target of the violation to examine the relevant books and records of the Partnership Group and interview relevant personnel of the Partnership Group, in each case regarding any such violation; provided , that with respect to the procedures in clause (ii) and (iii) of this Section 1.5 , such procedures shall be implemented in such a manner to safeguard, to the greatest extent reasonably practical, the “attorney-client” and “attorney work product” privileges applicable

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to the Partnership and/or its Partners (including by entering into a joint defense, common interest or similar agreement).

1.6  Principal Offices . The location of the principal offices of the Partnership shall be at 2675 Morgantown Road, Reading, Pennsylvania 19607, or at such other location as may be selected from time to time by the General Partner. If the General Partner changes the location of the principal offices of the Partnership, the Limited Partners shall be notified in writing within thirty (30) days thereafter. The Partnership may maintain such other offices at such other places as the General Partner deems advisable.

1.7  Fiscal Year . The fiscal year of the Partnership shall be the calendar year (the “ Partnership Year ”).

1.8  Accounting Matters . Unless otherwise specified herein, all accounting determinations hereunder shall be made, all accounting terms used herein shall be interpreted, and all financial statements required to be delivered hereunder shall be prepared, in accordance with Generally Accepted Accounting Principles applied on a consistent basis with prior periods, except, in the case of such financial statements, for departures from Generally Accepted Accounting Principles that may from time to time be approved in writing by the Partners and the Auditor who is at the time reporting on such financial statements. In the event that any “Accounting Change” (as defined below) shall occur and such change results in a change in the method of calculation of permitted distributions, standards or other terms in this Agreement, then the General Partner agrees to enter into negotiations with the other Partners in order to amend such provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired result that the criteria for permitting distributions and other matters shall have the same economic effect after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by the Partners, all such permitted distributions and other matters in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. “ Accounting Changes ” refers to changes in accounting principles required by the promulgation of any final rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or any successor organization or, if applicable, the SEC.

ARTICLE 2

DEFINITIONS

2.1  Definitions . The following defined terms used in this Agreement shall have the respective meanings specified below.

“ ABS Facility ” shall mean the asset-backed securitization facility of the Partnership, which as of the Effective Time is the $1.1 billion revolving asset-backed securitization facility entered into on October 5, 2012, as amended most recently as of September 30, 2016, and as the same may be further amended, restated, supplemented, refinanced, replaced or otherwise modified from time to time, including any replacement or successor asset-backed securitization facility pari passu in right of payment.

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“ Accepting Partners ” shall have the meaning ascribed to such term in Subsection 9.3(e) .

“ Acquisitions ” shall have the meaning ascribed to such term in Subsection 6.5(c)(xv) .

“ Act ” shall have the meaning ascribed to such term in the first “Whereas” clause hereof as amended and in effect from time to time, or the corresponding provisions of any successor statute.

“ Adjusted Capital Account Deficit ” shall mean, with respect to any Limited Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant taxable year or other period after giving effect to the following adjustments:

(i) Credit to such Capital Account any amounts that such Partner is obligated to restore (pursuant to the terms of this Agreement or otherwise) or deemed obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704‑2(g)(1) and 1.704‑2(i)(5); and

(ii) Debit to such Capital Account the items described in Regulations Sections 1.704‑1(b)(2)(ii)(d)(4), 1.704‑1(b)(2)(ii)(d)(5) and 1.704‑1(b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704‑1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“ Advisory Committee ” shall have the meaning ascribed to such term in Subsection 6.4(a) .

“ Affiliate ” shall mean, with respect to any specified Person, any other Person that, at the time of determination, (i) directly or indirectly through one or more intermediaries Controls, is Controlled by or is under common Control with, such specified Person, (ii) beneficially owns or Controls ten percent (10%) or more of any class or series of outstanding voting securities of such specified Person, (iii) is a managing member, manager or general partner of such specified Person, or (iv) is an officer, director, managing member, manager or general partner of any of the foregoing. For purposes of this definition, “ beneficially own ”  has the meaning given in Rule 13d-3 under the Exchange Act and a Person’s beneficial ownership of securities of any Person will be calculated in accordance with the provisions of that Rule.

“ Affiliate Acquisition ” means any transaction or series of related transactions pursuant to which (directly or indirectly) the Partnership Group acquires any equity interests, securities, assets, properties or rights from any Partner or any Affiliate of any Partner (including in a purchase, merger or consolidation) or in respect of which any Partner or any Affiliate of any Partner is entitled to receive consideration.

“ After-Acquired Business ” shall have the meaning ascribed to such term in Subsection 6.6(g) .

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“ After-Acquired Company ” shall have the meaning ascribed to such term in Subsection 6.6(g) .

“ Agreement ” shall mean this Seventh Amended and Restated Agreement of Limited Partnership, including the Schedules hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Auditor ” shall mean Deloitte LLP or any successor firm of independent auditors selected pursuant to Subsection 6.4(g) .

“ Bankruptcy ” of a Partner shall mean (i) the filing by a Partner of a voluntary petition seeking liquidation, reorganization, arrangement or readjustment, in any form, of its debts under Title 11 of the United States Code or any other federal or state insolvency Law, or a Partner’s filing an answer consenting to or acquiescing in any such petition, (ii) the making by a Partner 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 Code, an application for the appointment of a receiver for the assets of a Partner, 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.

“ Bona Fide Lender ” shall have the meaning ascribed to such term in Subsection 9.2(d) .

“ Business Activities Ancillary ” shall have the meaning ascribed to such term in Section 1.4 .

“ 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 or Tokyo, Japan.

“ Capital Account ” shall mean, with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions:

(i) To each Partner’s Capital Account there shall be credited such Partner’s Capital Contributions, such Partner’s distributive share of Profits and any items in the nature of income or gain that are specially allocated pursuant to Section 5.3 or Section 5.4 , and the amount of any Partnership liabilities assumed by such Partner or that are secured by any Partnership property distributed to such Partner;

(ii) To each Partner’s Capital Account there shall be debited the amount of cash and the Gross Asset Value of any Partnership property distributed to such Partner pursuant to any provision of this Agreement, such Partner’s distributive share of Losses and any items in the nature of expenses or losses that are specially allocated pursuant to Section 5.3 or Section 5.4 , and the amount of any liabilities of such Partner assumed by the Partnership or that are secured by any property contributed by such Partner to the Partnership.

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(iii) In the event all or a portion of an interest in the Partnership is Transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Partnership Interest.

(iv) In determining the amount of any liability for purposes of subparagraphs (i) and (ii) and the definition of “Capital Contribution,” Code Section 752(c) and any other applicable provisions of the Code and Regulations shall be taken into account.

“ Capital Call Conditions ” shall mean, collectively, the following conditions:

(i) the General Partner shall have determined that the Partnership requires additional equity capital to maintain any Investment Grade Rating on a stand-alone basis; and

(ii) the General Partner shall have determined to make a capital call that satisfies each of the following conditions, with the approval of the Advisory Committee (acting reasonably and in good faith) pursuant to Subsection 6.5(e)(v) :

(A) the net proceeds of such capital call do not exceed the amount reasonably required to maintain such Investment Grade Rating;

(B) such capital call is made, solely for cash in U.S. dollars and at a price based upon the fair market value of one hundred percent (100%) of the Partnership Interests adjusted for limited (non-controlling) Partnership Interests (as determined by the Advisory Committee following its receipt of valuation guidance from an independent third party financial advisor of nationally recognized standing to the Partnership, and taking into account such factors as, among other things, the consolidated financial statements of the Partnership and its Subsidiaries, current forecasts of the Partnership and its Subsidiaries prepared in a manner consistent with past practice, the results of operations of the Partnership and its Subsidiaries, the current financial condition of the Partnership and its Subsidiaries, the profitability of the Partnership and its Subsidiaries and the then-current market conditions);

(C) such capital call is, except as otherwise expressly provided in Section 3.1 , made pro rata among all of the Partners (in accordance with their respective Percentage Interests); and

(D) no amendment, supplement or modification of any kind shall be made to this Agreement in connection with such capital call or the consummation thereof (other than to adjust Capital Accounts of the Partners, to adjust the Percentage Interests of the Partners in accordance with Subsection 3.1(m) (as applicable) and (if applicable) to admit any new purchaser of limited Partnership Interests with respect to such capital call in accordance with Subsection 3.1(j)(ii) (if applicable) as a Limited Partner).

“ Capital Contribution ” shall mean, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership by such Partner (or its predecessors in interest) with respect to the Partnership Interest held by such Partner.

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“ Capital Markets Activity ” shall have the meaning ascribed to such term in Subsection 6.6(i)(1) .

“ Certificate ” shall have the meaning ascribed to such term in Section 1.2 .

“ Change of Control of the Partnership ” shall mean (i) the consummation of a merger or consolidation of one or more members of the Partnership Group which collectively own, directly or indirectly, all or substantially all of the Partnership Group’s assets with or into another entity (whether or not it is the surviving entity) that is not the Partnership or a direct or indirect wholly-owned subsidiary of the Partnership; or (ii) the Sale of all or substantially all of the Partnership Group’s assets (whether by sale of assets, capital stock or otherwise) in one or a series of related transactions.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended and in effect from time to time, or the corresponding provisions of any successor statute.

“ Control ” (including the correlative terms “ Controlling ,” “ Controlled by ” and “ under common Control with ”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“ Conversion Event ” shall mean the occurrence of any of the following: (i) the Sale in accordance with this Agreement or the Holdings LLC Agreement of all or any portion of PTL GP’s Partnership Interest; (ii) the dissolution of Holdings pursuant to Section 12.1 of the Holdings LLC Agreement; (iii) the dissolution of PTL GP pursuant to Section 15 of the PTL GP LLC Agreement or the Bankruptcy of PTL GP; and (iv) while PTL GP then holds a Partnership Interest (as a general partner), the Managing Member of Holdings ceases to be PTLC or a Controlled Affiliate of PTLC other than as a result of a Bankruptcy of PTLC (or any permitted successor to its Member Interest as the Managing Member of Holdings).

“ Corresponding Provision ” shall mean the provision in a Prior Agreement, if any, that corresponds to a given provision in this Agreement.

“ Credit Agreement ” shall mean the senior credit facility of the Partnership, which as of the Effective Time is the Credit Agreement, dated as of March 9, 2015, by and among the Partnership, PTL Finance Corporation, the Subsidiary borrowers and the several lenders from time to time parties thereto, as the same may be amended, restated, supplemented, refinanced, replaced or otherwise modified from time to time, including any replacement or successor credit agreements pari passu in right of payment.

“ Default Recovery/Remarketing Activities ” shall have the meaning ascribed to such term in Subsection 6.6(i)(2) .

“ De Minimis Business ” shall have the meaning ascribed to such term in Subsection 6.6(i)(3) .

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“ Depreciation ” shall mean, for each taxable year or portion of a taxable year for which the Partnership is required to allocate Profits, Losses, or other items pursuant to ARTICLE 5 or the Corresponding Provision of any Prior Agreement, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such year or other period, except that (i) with respect to any asset whose Gross Asset Value differs from its adjusted tax basis for federal income tax purposes and which difference is being eliminated by use of the “remedial allocation method” defined by Treasury Regulation Section 1.704‑3(d), Depreciation for such taxable year or portion of a taxable year shall be the amount of the book basis recovered for such taxable year or portion of a taxable year under the rules prescribed in Treasury Regulation Section 1.704‑3(d)(2) (notwithstanding anything to the contrary in Subsection 5.6(c) or the Corresponding Provision of any Prior Agreement) and (ii) with respect to any other asset whose Gross Asset Value differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided ,   however , that if the adjusted tax basis of an asset at the beginning of such taxable year or portion of a taxable year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method agreed upon by the Partners.

“ Discretionary Distributions ” shall have the meaning ascribed to such term in Subsection 5.1(c) .

“ Effective Time ” shall mean the close of the Partnership’s business on the date of this Agreement.

“ Electing Partner ”   shall have the meaning ascribed to such term in Subsection 3.1(d) .

“ Evaluation Material ” shall have the meaning ascribed to such term in Subsection 6.4(i) .

“ Event of Withdrawal ” shall have the meaning ascribed to such term in Subsection 11.1(b) .

“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended and in effect from time to time, or the corresponding provisions of any successor statute, and the rules and regulations promulgated thereunder.

“ Exercising Partner ” shall have the meaning ascribed to such term in Subsection 10.3(i) .

“ Existing Business Activities ” shall have the meaning ascribed to such term in Subsection 6.6(i)(4) .

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“ FCPA ” shall mean the United States Foreign Corrupt Practices Act of 1977, as amended and in effect from time to time, or the corresponding provisions of any successor statute, and the rules and regulations promulgated thereunder.

“ Financial Services Business ” shall have the meaning ascribed to such term in Subsection 6.6(i)(5) .

“ Financing ” shall have the meaning ascribed to such term in Subsection 6.6(i)(6) .

“ First Opportunity ” shall have the meaning ascribed to such term in Subsection 6.6(g)(ii) .

“ Foreclosure ” shall have the meaning ascribed to such term in Subsection 9.2(d) .

“ Former GE Partners ” shall mean the Withdrawing GE Partners and such other direct and indirect subsidiaries of General Electric Company as were from time to time partners in the Partnership and their respective successors and assigns.

“ GE Partner Agreements ”   shall mean, collectively, the PTLC Security Agreement, the PAG Security Agreement, the Mitsui Co-Obligation Fee, Payment and Security Agreement and the Holdings LLC Agreement.

“ GE Tennessee ” shall have the meaning ascribed to such term in the first paragraph of this Agreement and shall include the successors and assigns thereof permitted under Subsection 6.9(r) of this Agreement.

“ GE Truck Leasing Holdco ”  shall have the meaning ascribed to such term in the first paragraph of this Agreement and shall include the successors and assigns thereof permitted under Subsection 6.9(r) of this Agreement.

“ General Partner ” shall mean PTL GP until such time as PTL GP is replaced or substituted in accordance with the terms of Subsection 1.1(c) or Subsection 11.1(b) of this Agreement, in either case in its capacity as the general partner in the Partnership and with respect to its Partnership Interest as a general partner in the Partnership.

“ Generally Accepted Accounting Principles ” shall refer to generally accepted accounting principles as in effect from time to time in the United States of America.

“ Governmental Authority ” shall mean any (i) U.S., foreign, federal, state, local or other government, (ii) governmental commission, board, body, bureau, agency, department or other judicial, regulatory or administrative authority of any nature, including courts, tribunals and other judicial bodies, (iii) any self-regulatory body or authority, and (iv) any 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.

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“ Gross Asset Value ” shall mean, with respect to any asset, the asset’s adjusted basis for federal income tax purposes except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as agreed to by the General Partner and the contributing Partner at the time of such contribution, provided that, if the contributing Partner is the General Partner or an Affiliate of the General Partner, the gross fair market value of such asset must be agreed to by the General Partner and each Significant Limited Partner;

(ii) The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as proposed by the General Partner and approved by each Significant Limited Partner, as of the following times: (a) the acquisition of an additional interest in the Partnership by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (b) the distribution by the Partnership to a Partner of more than a de minimis amount of property as consideration for a Partnership Interest; (c) the liquidation of the Partnership within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g); and (d) in connection with the grant of an interest in the Partnership (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Partnership by an existing Partner acting in a partner capacity, or by a new Partner acting in a partner capacity in anticipation of being a Partner; provided ,   however , that adjustments pursuant to clauses (a), (b) and (d) above shall be made only if the General Partner reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;

(iii) The Gross Asset Value of any Partnership asset distributed to any Partner shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the distributee and the General Partner, provided that, if the distributee is the General Partner or an Affiliate of the General Partner, the determination of the fair market value of the distributed asset must be agreed to by the General Partner and each Significant Limited Partner; and

(iv) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Section 743(b) but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to (a) Regulations Section 1.704-1(b)(2)(iv)(m) and (b) subparagraph (vi) of the definition of “Profits” and “Losses” in this Section 2.1 or Subsection 5.3(g) ,   provided ,   however , that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent the General Partner determines that an adjustment pursuant to subparagraph (ii) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to Subsections (i) ,   (ii) , or (iv) hereof or the Corresponding Provision of any Prior Agreement, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

“ Holdings ” shall mean LJ VP Holdings LLC, a Delaware limited liability company and the sole member of PTL GP.

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“ Holdings LLC Agreement ” shall mean that certain Third Amended and Restated Limited Liability Company Agreement of Holdings, of even date with this Agreement, as the same may be further amended, restated, supplemented or otherwise modified from time to time.

“ Initial   Capital Call Deficiency ” shall have the meaning ascribed to such term in Subsection 3.1(c) .

“ Initiated Offer ” shall have the meaning ascribed to such term in Subsection 9.3(c) .

“ Insurance ” shall have the meaning ascribed to such term in Subsection 6.6(i)(7) .

“ Interested Party ” shall have the meaning ascribed to such term in Subsection 6.6(a) .

“ Investment Grade Rating ”  shall have the meaning ascribed to such term in Subsection 3.1(1) .

“ IPO ” shall mean the initial public offering limited to common equity securities involving the Partnership Registrant in accordance with applicable securities Laws.

“ IPO Consummation Obligation ” shall have the meaning ascribed to such term in Subsection 10.1(c) .

“ IPO Notice ” shall have the meaning ascribed to such term in Subsection 10.1(a) .

“ Issuing Entity ” shall mean any entity formed to be the issuer in the IPO.

“ 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.

“ Leasing ” shall have the meaning ascribed to such term in Subsection 6.6(i)(8) .

“ 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); provided ,   however , that “Liens” shall not include contracts entered into by the Partnership to lease, rent or otherwise permit the utilization of the Partnership’s assets in the ordinary course of business, unless such contracts are entered into in connection with the incurrence of indebtedness by the Partnership or its Subsidiaries.

“ Limited Partner ” shall mean (i) as of the Effective Time, PTLC, PAG and MBK USA CV and (ii) after the Effective Time, the Persons set forth in the foregoing clause (i) and such other Persons as may be admitted from time to time as limited partners in the Partnership in accordance with this Agreement, each in its capacity as a Limited Partner; provided ,   however , that the term “Limited Partner” at any given time shall not include (A) such Persons that cease to be limited partners as provided in ARTICLE 9, or (B) the Managing Member of Holdings if it becomes

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the general partner in the Partnership pursuant to Subsection 1.1(c) , but only with respect to its Partnership Interest as the general partner in the Partnership.

“ Liquidity IPO Notice ” shall have the meaning ascribed to such term in Subsection 10.3(c) .

“ Majority Approval ” shall have the meaning ascribed to such term in Subsection 6.5(e) .

“ Managing Member ” shall have the meaning ascribed to such term in the Holdings LLC Agreement.

“ MBK USA CV ” shall have the meaning ascribed to such term in the first paragraph of this Agreement and shall include any of its Permitted Intragroup Transferees.

“ Member ” shall have the meaning ascribed to such term in the Holdings LLC Agreement.

“ Member Interest ” shall have the meaning ascribed to such term in the Holdings LLC Agreement.

“ Mitsui ” shall mean Mitsui & Co., Ltd., a Japanese company.

“ Mitsui Committee Member ” shall have the meaning ascribed to such term in Subsection 6.4(a) .

“ Mitsui Consolidated Group ” shall mean the consolidated group, determined in accordance with Generally Accepted Accounting Principles, of which Mitsui is the common parent. For the sake of clarity, PAG is not a member of the Mitsui Consolidated Group.

“ Mitsui   Co-Obligation Fee, Payment and Security Agreement ” shall mean the Mitsui Co-Obligation Fee, Payment and Security Agreement dated as of March 18, 2015, as amended by an Amendment No. 1 dated as of November 24, 2015 and an Amendment No. 2 dated as of March 31, 2016, as the same may be further amended, restated, supplemented or otherwise modified from time to time.

“ Mitsui Pledged Interest ” shall have the meaning ascribed to such term in Subsection 9.2(e) .

“ Mitsui Priority Amount ” shall mean the Purchase Indemnity Amount under (and as defined in) that certain Purchase and Sale Agreement, dated as of March 18, 2015, by and among Logistics Holding LLC, a Delaware limited liability company, GE Capital Memco, LLC, a Delaware limited liability company, General Electric Capital Corporation,  a Delaware Corporation, MBK Commercial Vehicles Inc., a Delaware corporation, and MBK USA CV.

“ Mitsui Trainee ” shall have the meaning ascribed to such term in Subsection 6.8(b) .

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“ Net Income ” shall mean, for any period, the consolidated net income of the Partnership and its Subsidiaries, determined on a consolidated basis in accordance with Generally Accepted Accounting Principles; provided ,   however , (i) any positive or negative currency translation adjustments will be excluded from the determination of Net Income to the extent such adjustments do not require an adjustment to the Partnership’s equity and (ii) goodwill impairment charges will be excluded from the determination of Net Income.

“ Non-Issuing Partner ” shall have the meaning ascribed to such term in Subsection 6.4(i) .

“ Nonrecourse Deductions ” shall have the meaning set forth in Regulations Sections 1.704‑2(b)(1) and 1.704‑2(c).

“ Nonrecourse Liability ” shall have the meaning set forth in Regulations Section 1.704‑2(b)(3).

“ Non-Voting Observer ” shall have the meaning ascribed to such term in Subsection 6.4(j) .

“ Offer ” shall have the meaning ascribed to such term in Subsection 9.3(c) .

“ Offered Interest ” shall have the meaning ascribed to such term in Subsection 9.3(c) .

“ Offered Partner ” shall have the meaning ascribed to such term in Subsection 3.1(n)(i) .

“ Offeree Partners ” shall have the meaning ascribed to such term in Subsection 9.3(c) .

“ Offering Partner ” shall have the meaning ascribed to such term in Subsection 9.3(c) .

“ Other Financial Services Activities ” shall have the meaning ascribed to such term in Subsection 6.6(i)(9) .

“ PAG ” shall have the meaning ascribed to such term in the first paragraph of this Agreement and shall include any of its Permitted Intragroup Transferees except for members of the PTLC Consolidated Group.

“ PAG Committee Member ” shall have the meaning ascribed to such term in Subsection 6.4(a) .

“ PAG Consolidated Group ” shall mean a consolidated group, determined in accordance with Generally Accepted Accounting Principles, of which PAG is the common parent.

“ PAG Pledged Interest ” shall have the meaning ascribed to such term in Subsection 9.2(d) .

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“ PAG Security Agreement ” shall mean the Amended and Restated PAG Co-Obligation Fee, Indemnity and Security Agreement, dated as of March 17, 2015, as modified by the letter agreement among General Electric Capital Corporation, GE Tennessee and PAG, dated November 24, 2015, and as the same may be further amended, restated, supplemented or otherwise modified from time to time.

“ Partner ” shall mean the General Partner or a Limited Partner.

“ Partner Nonrecourse Debt ” shall have the meaning set forth in Regulations Section 1.704-2(b)(4).

“ Partner Nonrecourse Debt Minimum Gain ” shall mean an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with the provisions of Regulations Section 1.704-2(i)(3) relating to “partner nonrecourse debt minimum gain.”

“ Partner Nonrecourse Deductions ” shall have the meaning set forth in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

“ Partnership ” shall have the meaning ascribed to such term in the first “Whereas” clause hereof.

“ Partnership Certificate ” shall have the meaning ascribed to such term in Section 3.7 .

“ Partnership Group ” shall mean, individually or in the aggregate, the Partnership and its Subsidiaries.

“ Partnership Interest ” shall refer, with respect to a given Partner as of a given date, to such Partner’s interest as a general partner of the Partnership (if any) and such Partner’s interest as a limited partner of the Partnership (if any), in each case as of such date, including any and all benefits to which the holder of such an interest may be entitled as provided in this Agreement, together with all obligations of such Partner to comply with the terms and provisions of this Agreement.

“ Partnership Minimum Gain ” shall have the meaning set forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

“ Partnership Registrant ” shall mean the Partnership or the Issuing Entity that is the issuer in the IPO, as the case may be.

“ Partnership Year ” shall have the meaning ascribed to such term in Section 1.7 .

“ Penske Change of Control ” shall have the meaning ascribed to such term in Subsection 9.4(a) .

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“ Penske Corporation” shall mean Penske Corporation, a Delaware corporation.

“ Penske Partners ” shall mean (i) PTLC, (ii) PTL GP until the date, if any, that PTL GP ceases to be a Controlled Affiliate of Penske Corporation and (iii) subject to Subsections 5.2(b)(i) ,  5.2(b)(ii) and the last sentence of Subsection 6.6(b) , PAG until the date, if any, that PAG ceases to be a Controlled Affiliate of Penske Corporation, and, in each case, any Permitted Intragroup Transferees thereof.

The “ Percentage Interest ” of a Partner shall be the percentage ownership set forth next to its respective name on Schedule A hereto, as such Schedule A shall be amended, restated, supplemented or otherwise modified from time to time to reflect Sales of then outstanding Partnership Interests, issuance and sales of new Partnership Interests, and additional Capital Contributions of the Partners, in each case, in accordance with the terms of this Agreement.

“ Permitted Intragroup Transferees ” of a Partner shall mean transferees and assignees of such Partner to which a Partnership Interest has been Sold as permitted or required under Subsections 9.2(a) or  9.2(b) , excluding those that have ceased to be a member of the PTLC Consolidated Group, the PAG Consolidated Group or the Mitsui Consolidated Group, as the case may be.

“ Person ” shall include an individual, a partnership, a corporation, a limited liability company, a trust, an unincorporated organization, a government or any department or agency thereof, and any other entity.

“ Potential Counterparty ” shall have the meaning ascribed to such term in Subsection 6.4(i) .

“ Preliminary Distributions ” shall have the meaning ascribed to such term in Subsection 5.1(a) .

“ Prior Agreement ” shall mean each of the Amended and Restated Agreement of Limited Partnership of Penske Truck Leasing Co., L.P., dated August 10, 1988, the Second Amended and Restated Agreement of Limited Partnership of Penske Truck Leasing Co., L.P., dated September 19, 2008, the Third Amended and Restated Agreement of Limited Partnership of Penske Truck Leasing Co., L.P., dated March 26, 2009, the Fourth Amended and Restated Agreement of Limited Partnership of Penske Truck Leasing Co., L.P., dated April 30, 2012, the Fifth Agreement of Limited Partnership of Penske Truck Leasing Co., L.P., dated March 18, 2015 and the Sixth Amended and Restated Partnership Agreement, in each case, as amended and in effect from time to time prior to the Effective Time.

“ Profits ” and “ Losses ” shall mean, for each taxable year or portion of a taxable year, an amount equal to the Partnership’s taxable income or loss for such taxable year or portion of a taxable year, determined in accordance with Code Section 703(a) (for this purpose, all items of

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income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

(i) Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss;

(ii) Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss;

(iii) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraphs (ii) or (iii) of the definition of “Gross Asset Value” in this Section 2.1 the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses;

(iv) Gain or loss resulting from any disposition of Partnership property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(v) In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such taxable year or portion of a taxable year;

(vi) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and notwithstanding any other provision of this definition of “Profits” and “Losses,” any items that are specially allocated pursuant to Sections 5.3 and  5.4 shall not be taken into account in computing Profits or Losses.

(vii) The amounts of items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Sections 5.3 and  5.4 shall be determined by applying rules analogous to those set forth in subparagraphs (i) through (vi).

“ Prohibited Action ” shall have the meaning ascribed to such term in Subsections 6.9(c) and (d) .

“ Protected Period ” shall mean any time prior to the Effective Time during which a Former GE Partner was a partner in the Partnership.  For avoidance of doubt, when referencing a filing, Return, financial statement or other document that includes information with respect to any period or portion thereof prior to the Effective Time during which a Former GE Partner was a

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partner in the Partnership, the Protected Period shall be deemed to include the time period covered by such filing, Return, financial statement or document.

“ PTL GP ” shall mean PTL GP, LLC, a Delaware limited liability company and shall include any permitted successors or permitted assigns as contemplated by the Holdings LLC Agreement.

“ PTLC ” shall have the meaning ascribed to such term in the first paragraph of this Agreement and shall include any of its Permitted Intragroup Transferees except members of the PAG Consolidated Group.

“ PTLC Committee Member ” shall have the meaning ascribed to such term in Subsection 6.4(a) .

“ PTLC Consolidated Group ” shall mean the consolidated group, determined in accordance with Generally Accepted Accounting Principles, of which Penske Corporation is the common parent, except that members of the PAG Consolidated Group shall not be deemed members of the PTLC Consolidated Group.

“ PTLC Security Agreement ” shall mean the Second Amended and Restated PTLC Co-Obligation Fee, Indemnity and Security Agreement, of even date with this Agreement, among GE Tennessee, PTLC and Penske System, Inc., as the same may be further amended, restated, supplemented or otherwise modified from time to time.

“ Public Materials ” shall have the meaning ascribed to such term in Subsection 6.9(k) .

“ Purchasing Partner ” shall have the meaning ascribed to such term in Subsection 3.1(n)(i) .

“ Recipient Group ” shall have the meaning ascribed to such term in Subsection 6.4(i) .

“ Registration Rights Agreement ” shall mean the First Amended and Restated Registration Rights Agreement, dated as of March 18, 2015, entered into by and among the partners in the Partnership as of the date thereof, the Partnership and Holdings,  as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Regulations ” shall mean the United States Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations may be amended, restated, supplemented or otherwise modified from time to time.

“ Regulatory Allocations ” shall have the meaning set forth in Section 5.4 .

“ Remaining Capital Call Deficiency ” shall have the meaning ascribed to such term in Subsection 3.1(e) .

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“ Requisite Approval ” shall have the meaning ascribed to such term in Subsection 6.5(d) .

“ Response Notice ” shall have the meaning ascribed to such term in Subsection 9.3(d) .

“ Restricted Person ” shall have the meaning ascribed to such term in Subsection 6.6(g) .

“ Returns ” shall have the meaning ascribed to such term in Subsection 8.2(d) .

“ Rollins Business ” shall mean the truck leasing business as conducted by Rollins Truck Leasing Corp. at the time of its acquisition by the Partnership and such business as may have been continued by the Partnership Group.

“ Sale ” (including, with its correlative meanings, “ Sell ” and “ Sold ”) with respect to a Partnership Interest shall mean any voluntary or involuntary sale, assignment, transfer or other disposition of all or any portion of such Partnership Interest (or any right or interest therein), including by operation of Law, but, for the avoidance of doubt, does not include the creation of any Liens upon a Partnership Interest unless the holder of such a Lien acquires all or any portion of such Partnership Interest or the Partnership Interest is otherwise sold, transferred or assigned in accordance with the Lien.

“ Schedule ” shall refer to one of several written Schedules to this Agreement, as amended, restated, supplemented or otherwise modified from time to time to the extent permitted by this Agreement, each of which is hereby incorporated into and made a part of this Agreement for all purposes.

“ SEC ” shall mean the Securities and Exchange Commission or any successor agency.

“ Securities ” shall mean any common equity securities of the Partnership Registrant.

“ Securities Act ” shall mean the Securities Act of 1933, as amended and in effect from time to time, or the corresponding provisions of any successor statute, and the rules and regulations promulgated thereunder.

“ Securities Activity ” shall have the meaning ascribed to such term in Subsection 6.6(i)(10) .

“ Selling Interests ” shall have the meaning ascribed to such term in Subsection 10.1(d) .

“ Significant Limited Partner ” shall mean each of PAG and MBK USA CV, so long as such Person holds at least a ten percent (10%) Percentage Interest.

“ Subject Purchaser ” shall have the meaning ascribed to such term in Subsection 3.1(i) .

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“ Subject Year ” shall mean a Partnership Year with respect to which Net Income for such Partnership Year or the fiscal quarters thereof is being calculated for purposes of determining whether distributions to the Partners are to be made under Section 5.1 , regardless of whether such distributions are to be made in such Partnership Year or the following Partnership Year.

“ Subject Year to Date ” shall mean the Subject Year through and including the quarter for which Net Income is being calculated.

“ Subsidiary ” shall refer to (i) any corporation (or equivalent legal entity under foreign Law) of which another 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 fifty percent (50%) of the partnership interests 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 body of such entity.

“ Tax Matters Partner ” shall have the meaning ascribed to such term in Subsection 8.2(e) .

“ Third-Party Proposed Sale ” shall have the meaning ascribed to such term in Subsection 9.3(c) .

“ Third Tier Built-In Gain ” shall have the meaning ascribed to such term in Subsection 5.5(d) .

“ TMP Eligible Partner ” shall have the meaning ascribed to such term in Subsection 8.2(e) .

“ Trade Name and Trademark Agreement ” shall mean that certain Amended and Restated Trade Name and Trademark Agreement, dated April 30, 2012, between Penske System, Inc. and the Partnership, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Transfer ” shall mean any Sale or creation of a Lien.

“ Transferring Limited Partner ” shall have the meaning ascribed to such term in Subsection 9.4(b) .

“ Triggering Transfer ” shall have the meaning ascribed to such term in Subsection 9.4(b) .

“ Unanimous Approval ” shall have the meaning ascribed to such term in Subsection 6.5(c) .

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“ Withdrawing   GE   Partners ” shall have the meaning ascribed to such term in the third “Whereas” clause of this Agreement.

2.2  General Provisions . Unless the context otherwise requires, as used in this Agreement, (i) 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; (ii) terms used in the singular also include the plural and vice versa; (iii) all references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations; (iv) any pronoun shall include the corresponding masculine, feminine and neuter forms; (v) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”; (vi) the word “will” shall be construed to have the same meaning and effect as the word “shall”; (vii) 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 (viii) 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.

ARTICLE 3

CAPITAL CONTRIBUTIONS; ISSUANCE OF PARTNERSHIP INTERESTS;
CAPITAL ACCOUNTS

3.1  Additional Capital Contributions; Issuance of Additional Partnership Interests .

(a) Except as required in Section 3.3 , no additional Capital Contributions shall be required to be made by the Partners.

(b) If at any time the Advisory Committee has approved raising additional equity capital pursuant to Subsection 6.5(c)(viii) or Subsection 6.5(e)(v) then the General Partner may, by written notice, cause the Partnership to make a voluntary capital call to all Partners for the amount of such additional equity capital.  Any such notice of any additional capital call shall include the following information: (i) the aggregate amount of the Capital  Contributions to be made and the reason for such capital call, (ii) the fair market value of one hundred percent (100%) of the Partnership Interests adjusted for limited (non-controlling) Partnership Interests, as determined reasonably and in good faith by the Advisory Committee (on a pro forma basis after giving effect to the full satisfaction of such capital call), and (iii) the aggregate Percentage Interest represented by such capital call (on a pro forma basis after giving effect to the full satisfaction of such capital call).

(c) A capital call by the Partnership pursuant to Subsection 3.1(b) shall remain open for thirty (30) days or such longer period as may be determined by the General Partner.  If by the end of such period, any of the Partners shall have failed to provide written notice to the General Partner that it has elected to contribute its pro rata portion of such capital call (based on its Percentage Interests), the General Partner shall inform the Partners in writing within two (2) Business Days thereafter of the amount of such capital call not subscribed for by any non-participating Partners and by any Partners not participating in full with respect to their pro rata shares (such aggregate deficiency, the “ Initial   Capital Call Deficiency ”).

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(d) Following receipt of notice from the General Partner of any Initial Capital Call Deficiency, each Partner that elected to contribute its pro rata portion of the capital call (each, an “ Electing Partner ”) shall be entitled to elect to make an additional Capital Contribution of up to its pro rata share of any such Initial Capital Call Deficiency (based upon the aggregate Percentage Interests of all Electing Partners that elected to make a Capital Contribution pursuant to this Subsection 3.1(d) , without giving effect to such Capital Contribution). Each Electing Partner that exercises this right to contribute up to such pro rata share of any Initial Capital Call Deficiency shall provide notice thereof to the General Partner and each other Partner within ten (10) days after receipt of such notice of Initial Capital Call Deficiency from the General Partner, specifying the maximum amount such Partner has elected to contribute pursuant to this Subsection 3.1(d) .

(e) In the event that the Electing Partners do not elect to contribute in the aggregate   an amount sufficient to satisfy in full any Initial Capital Call Deficiency within such ten (10) day period, the General Partner shall inform the Partners in writing within two (2) Business Days thereafter of the amount of such Initial Capital Call Deficiency in respect of which Electing Partners have not elected to make additional Capital Contributions (the “ Remaining Capital Call Deficiency ”).

(f) Following receipt of notice from the General Partner of any Remaining Capital Call Deficiency, each Partner may elect to make additional Capital Contributions in respect of all or any portion of such Remaining Capital Call Deficiency by providing written notice thereof to the General Partner and each other Partner within ten (10) days after receipt of such notice of Remaining Capital Call Deficiency.

(g) If, within ten (10) days after receipt by each Partner of the notice of such Remaining Capital Call Deficiency, any Partners shall have provided notice to the General Partner of its election to contribute all or a portion of the Remaining Capital Call Deficiency, then the additional amount of capital to be contributed by all such Partners shall be allocated among them as follows:

(1)  First , each participating Partner shall contribute its pro rata share of the Remaining Capital Call Deficiency (calculated by reference to the Percentage Interests of such participating Partners, but excluding, for purposes of such calculation, the Percentage Interests of any non-participating Partner) up to (but not to exceed) the additional amount it has agreed to contribute with respect to such Remaining Capital Call Deficiency; and

(2)  Thereafter , if any of the Remaining Capital Call Deficiency shall not have been fully funded, each Partner that has contributed its full pro rata portion of such deficiency pursuant to Subsection 3.1(g)(1) shall contribute its pro rata share of such remaining shortfall (calculated by reference to the Percentage Interests of only those Partners that have elected to contribute more than their pro rata share of the Remaining Capital Call Deficiency) up to (but not to exceed) the additional amount it has agreed to contribute, up to the remaining amount of such Remaining Capital Call Deficiency.

(h) Upon receipt by the General Partner of a Partner’s election to participate in a capital call pursuant to Subsections 3.1(c) ,  3.1(d) and  3.1(f) , such Electing Partner shall be obligated to contribute to the Partnership the aggregate amount so elected, subject to reduction as

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provided herein and subject to abandonment of the capital call pursuant to Subsection 3.1(1) . The failure by any Partner to elect to participate in the capital call pursuant to Subsections 3.1(c) ,   3.1(d) and  3.1(f) shall be an irrevocable waiver of such Partner’s right to participate in satisfying such capital call.

(i) If (and only if) the Remaining Capital Call Deficiency is not satisfied in full by the participating Partners as provided in Subsection 3.1(g) (including, for the avoidance of doubt, following any capital call approved pursuant to Subsection 6.5(c)(viii) ), then the General Partner may cause the Partnership to offer to sell and issue limited Partnership Interests, in a transaction that is exempt from the registration requirements of applicable securities Laws, to any Person that is a legal entity and is not a Partner or an Affiliate of any Partner (each, a “ Subject Purchaser ”) and to admit such Subject Purchasers as Limited Partners of the Partnership, provided that:

(1) the pricing of the proposed issuance is at least equal to the greater of the fair market value of the limited Partnership Interests issued and sold or ninety percent (90%) of the implied price of limited Partnership Interests issued   to the existing Partners in such immediately preceding capital call (based upon the notice delivered by the General Partner to the existing Partners pursuant to Subsection 3.1(b) above), and the proposed issuance is otherwise on arms’ length terms and conditions; provided that if the proposed issuance of limited Partnership Interests is at a price that is less than the implied price of limited Partnership Interests issued   to the existing Partners in such immediately preceding capital call, then (A) the implied price of limited Partnership Interests issued   to the existing Partners in the immediately preceding capital call shall be decreased to equal the price for limited Partnership Interests in such proposed issuance (but without reducing the amount of the Capital Contributions by the participating Partners in respect of such capital call), (B) the aggregate Percentage Interest represented by the preceding capital call shall be adjusted to reflect the implied price of limited Partnership Interests in the proposed issuance and the aggregate proceeds to be received by the Partnership in connection with such proposed issuance and related capital call and (C) the General Partner shall promptly notify the Partners of the matters reflected in clauses (A) and (B) above; and

(2) such issuance is only for the unsatisfied portion of the Remaining Capital Call Deficiency in respect of such immediately preceding capital call.

(j) Any offer and sale of limited Partnership Interests to a Subject Purchaser pursuant to Subsection 3.1(i) shall be made by the General Partner during the period of one hundred eighty (180) days following the final election by Electing Partners with respect to the Remaining Capital Call Deficiency and shall be at a price and on terms and conditions that, in the case of an issuance approved pursuant to Subsection 6.5(e)(v) , comply with Subsection 3.1(i) and, in the case of an issuance approved pursuant to Subsection 6.5(c)(viii) , comply with the terms and conditions set forth by the Advisory Committee in granting its approval. In addition, such offer and sale shall be made only subject to the following conditions:

(i) the purchase price is paid one hundred percent (100%) in cash in U.S. dollars to the Partnership (less associated customary fees and expenses);

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(ii) no amendment, supplement or modification of any kind will be made to this Agreement in connection with the proposed issuance or the consummation thereof (other than to admit each Subject Purchaser as a  Limited Partner, and to adjust the Percentage Interests of all Partners, in each case on Schedule A , after receipt by the Partnership of a true and complete copy of this Agreement duly executed by each Subject Purchaser);

(iii) such issuance shall comply with applicable Laws (including any applicable securities Laws and any applicable regulatory filing requirement of any Governmental Authority with respect thereto); and

(iv) none of the “bad actor” disqualifying events, described in Rule 506(d)(1)(i)-(viii) promulgated under the Securities Act, shall be applicable to any of the purchasers of such limited Partnership Interests pursuant to such issuance.

(k) The closing of the Capital Contributions and issuance and sale of limited Partnership Interests provided by this Section 3.1 shall be held simultaneously, at a time and place as determined by the General Partner. However, if such issuance and sale is not consummated within one hundred eighty (180) days following the final election by participating Partners with respect to the Remaining Capital Call Deficiency, then the restrictions provided for herein shall again become effective, and no capital call and no issuance and sale of limited Partnership Interests may be made thereafter by the Partnership without again complying with the provisions of this Section 3.1 .

(l) If the expected proceeds of any equity issuance pursuant to Subsection 3.1(i) are insufficient to satisfy any related Remaining Capital Call Deficiency, then the related capital call and proposed issuance of Partnership Interests shall be abandoned and shall not be consummated by the Partners or the Partnership; provided ,   however , that notwithstanding the foregoing, if the Partnership has received a notice or other indication from the applicable rating agency or agencies that the aggregate amount expected to be funded to the Partnership in connection with a capital call and related proposed issuance of Partnership Interests approved pursuant to Section 6.5(e)(v) (taking into account the amount of any Remaining Capital Call Deficiency) is nonetheless sufficient to avoid the Partnership’s loss of any minimum investment grade corporate, unsecured, long-term debt rating (“ Investment Grade Rating ”), then (i) the General Partner shall provide, as promptly as practicable to the Partners, a written notice (x) describing such notice or other indication and (y) stating the General Partner’s reasonable determination that, taking into account such notice or other indication, that the aggregate amount expected to be funded to the Partnership in connection with such capital call and related proposed issuance is believed by the General Partner to be sufficient to avoid the Partnership’s loss of any Investment Grade Rating, and (ii) the related capital call and proposed issuance of Partnership Interests shall not be abandoned and shall be consummated by the Partners or the Partnership.

(m) Following the consummation of the transactions contemplated by this Section 3.1 , (x) the Capital Accounts for each participating Partner shall be adjusted, and (y) the Percentage Interests of each of the Partners shall each be adjusted, in each case, as and to the extent applicable. For greater clarity, the adjustments in the Capital Accounts and Percentage Interests shall not create any right to or affect distributions payable under ARTICLE 5 attributable to Net Income

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of the Partnership with respect to periods prior to the date of consummation of the applicable transaction.

(n) Notwithstanding anything in this Section 3.1 to the contrary, if the Advisory Committee has determined to raise equity capital pursuant to Subsection 6.5(e)(v) , and because of a financial exigency it concludes that it is not reasonably practicable to comply with the capital call provisions of Subsections 3.1(a) through  3.1(l) , then, at the request of the General Partner, any Partner (including, for purposes of this Subsection 3.1(n) ,  one or more of such Partner’s Permitted Intragroup Transferees) may, at such Partner’s sole election, purchase from the Partnership additional limited Partnership Interests at a price equal to the fair market value of such limited Partnership Interests (determined in a manner consistent with Subsection 3.1(b) ) and in an aggregate amount not to exceed the aggregate amount that is necessary to provide the Partnership with the funds reasonably determined by the General Partner to be necessary for the Partnership to maintain an Investment Grade Rating.  No limited Partnership Interests issued pursuant to this Subsection 3.1(n) shall entitle the holder thereof to any greater rights or preferences than are provided in this Agreement for all of the existing limited Partnership Interests.  Any limited Partnership Interests issued pursuant to this Subsection 3.1(n) shall have a Percentage Interest based on the price paid relative to the fair market value of all the Partnership Interests.

(i) If a Partner elects to purchase additional limited Partnership Interests pursuant to this Subsection 3.1(n) (a “ Purchasing Partner ”), then (A) the Partnership shall notify each Significant Limited Partner that is not the Purchasing Partner of such issuance of additional limited Partnership Interests no less than five (5) Business Days before the date of such issuance, (B) each such Significant Limited Partner and PTLC (as applicable) (the “ Offered Partners ”) shall have thirty (30) Business Days after the delivery of such notice by the Partnership to elect to purchase from the Purchasing Partner, at the same price and on the same other terms and conditions, its pro rata portion of the additional limited Partnership Interests issued to the Purchasing Partner, calculated in accordance with each Partner’s Percentage Interest as of the date immediately prior to the date the Purchasing Partner purchased the additional limited Partnership Interests from the Partnership in accordance with this Subsection 3.1(n) .

(ii) If any Offered Partner declines to purchase its full pro rata portion of such additional limited Partnership Interests, then the limited Partnership Interests that remain available shall be offered to each Offered Partner that had elected to purchase its full pro rata portion, utilizing the process set forth in Subsection 3.1(n)(i) , except substituting a five (5) Business Day period for the thirty (30) Business Day period in clause (B), and each fully-electing Offered Partner shall have the right to purchase up to its relative pro rata portion (for clarity, calculated only among such fully-electing Offered Partners and the Purchasing Partner) of such remaining limited Partnership Interests, and of any Partnership Interests that have not been subscribed for in such second round (calculated using only the Offered Partners fully participating in such second round and the Purchasing Partner).

(iii) In respect of the period when such newly issued additional limited Partnership Interests are held by the Purchasing Partner, the Purchasing Partner shall be entitled to (x) all distributions for such period to the extent payable in respect of such additional limited Partnership Interests under ARTICLE 5, and (y) all allocations of items of income, gain, loss

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and deduction (including all special allocations) to the extent for such period and in respect of such additional limited Partnership Interests.  Notwithstanding any other provision of this Agreement, no changes to any governance, voting, approval, consent or other rights of any Partner provided herein as a result of the issuance of limited Partnership Interests under this Subsection 3.1(n) shall be effective until the procedures set forth in this Subsection 3.1(n) have been complied with in full.

3.2  Capital Contributions and Accounts . Effective as of the Effective Time, (i) MBK USA CV has acquired an additional ten percent (10%) limited Partnership Interest previously held by the Withdrawing GE Partners and is succeeding to the Capital Account of the Partnership Interest(s) being transferred to it and (ii) PAG has acquired an additional five and a half percent (5.5%) limited Partnership Interest previously held by the Withdrawing GE Partners and is succeeding to the Capital Account of the Partnership Interest(s) being transferred to it.  A Capital Account shall be maintained for each Partner on the books of the Partnership. Each Partner’s interest in the capital of the Partnership shall be represented by its Capital Account. The Capital Account of each Partner as of the Effective Time, after giving effect to the first sentence of this Section 3.2 , to all distributions and contributions made at or prior to the Effective Time and to all allocations of items of income, gain, loss and deduction (including all special allocations) with respect to any period (or a portion thereof) ending at or prior to the Effective Time, shall be proportionate to such Partner’s Percentage Interest as set forth on Schedule A in effect at the Effective Time. The Partnership shall be permitted to adjust the Capital Account of each Partner after the Effective Time as appropriate to give effect to the immediately preceding sentence.

3.3  Negative Capital Accounts . In the event the Partnership is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) (other than as a result of a termination under Code Section 708(b)(1)(B)), (x) distributions shall be made pursuant to Article 11 to the Partners who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2), and (y) if the General Partner’s Capital Account has a deficit balance (after giving effect to all contributions, distributions, and allocations for all taxable years, including the taxable year during which such liquidation occurs), the General Partner shall contribute to the capital of the Partnership the amount necessary to restore such deficit balance to zero in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3). If any Limited Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions, and allocations for all taxable years, including the taxable year during which such liquidation occurs), such Limited Partner shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purposes whatsoever. In no event shall any transaction contemplated by clauses (x) and (y) of the first sentence of this Section 3.3 result in a change in any Partner’s Percentage Interest.

3.4  Compliance with Treasury Regulations . The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulation Section 1.704-1(b) (or any corresponding provision of succeeding Law) and shall be interpreted and applied in a manner consistent with such Regulation. In the event the General Partner shall determine and each Significant Limited Partner approve that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to comply with such Regulation, the Partnership may make such modifications (provided that no such modification shall have a material adverse effect on the economic position of any Partner).

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The Partnership also shall make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Treasury Regulation Section 1.704-1(b) (or any corresponding provisions of succeeding Law provided that such modification shall not have a material adverse effect on the economic position of any Partner).

3.5  Succession to Capital Accounts . In the event any interest in the Partnership is Sold in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest. For purposes of the immediately preceding sentence, the portion of the Capital Account to which the transferee succeeds shall be that percentage of the transferor’s total Capital Account as the Percentage Interest being transferred bears to the total Percentage Interest of the transferor, taking into account Section 9.6 .

3.6  No Withdrawal of Capital Contributions . No Partner shall withdraw any Capital Contributions without the unanimous written approval of the other Partners. No Partner shall receive any interest with respect to its Capital Contributions.

3.7  No Partnership Certificates . No certificates to evidence a Partner’s interest in the Partnership (a “ Partnership Certificate ”) shall be issued and any Partnership Certificates previously issued shall be null and void and without any force or effect whatsoever.

3.8  Percentage Interests . Effective as of the Effective Time, the Percentage Interest of each Partner in the Partnership is as set forth on Schedule A hereto.

ARTICLE 4

COSTS AND EXPENSES

4.1  Operating Costs . The Partnership shall (i) pay or cause to be paid all costs and expenses of the Partnership incurred in pursuing and conducting, or otherwise related to, the business of the Partnership and (ii) reimburse the General Partner for any documented out-of-pocket costs and expenses incurred by it in connection therewith (including in the performance of its duties as Tax Matters Partner), to the extent permitted by Section 6.7 .

ARTICLE 5

DISTRIBUTIONS; PARTNERSHIP ALLOCATIONS;
TAX MATTERS

5.1  Distributions Prior to Dissolution .

(a)  Preliminary Quarterly Distributions . By no later than forty-five (45) days following the end of each of the first three quarters of each Subject Year, subject to Section 9.6 , applicable Law and the terms of any applicable credit agreement, indenture, debt security or debt instrument, the Partnership shall make a distribution to the Partners of the amount, if any, by which fifty percent (50%) of Net Income for the Subject Year To Date exceeds the distributions made pursuant to this Subsection 5.1(a) with respect to such Subject Year (the “ Preliminary Distributions ”), in the following amounts, order and priority (for the avoidance of doubt, the

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amounts, order and priority of distributions pursuant to this Subsection 5.1(a) shall not apply to any distributions in accordance with Section 11.3 upon the dissolution of the Partnership and the failure to continue the Partnership as provided in Section 11.1 ):

(i) First, in the event that the Partnership shall have sold all or substantially all of the Rollins Business, 64.5% to MBK USA CV and 35.5% to PAG of an aggregate amount equal to the excess, if any, of (A) the excess, if any, of (1) $57,000,000, over (2) the product of (x) .40 times (y) the excess, if any, of (I) the initial Gross Asset Value of the Code Section 197 intangibles attributable to the Rollins Business, over (II) the sales price for such intangibles, over (B) all prior distributions to MBK USA CV and PAG pursuant to this Subsection 5.1(a)(i) or Subsection 5.1(b)(i) ; and

(ii) Second, to the Partners pro rata in accordance with each Partner’s Percentage Interest.

(b)  Annual Distributions . With respect to any Subject Year, by no later than April 15 of the following Partnership Year, subject to Section 9.6 , applicable Law and the terms of any applicable credit agreement, indenture, debt security or debt instrument, the Partnership shall make a distribution to the Partners of the amount, if any, by which fifty percent (50%) of Net Income for the Subject Year, based on the Partnership’s audited financial statements determined in accordance with Generally Accepted Accounting Principles with respect to the Subject Year, exceeds the cumulative Preliminary Distributions made with respect to the Subject Year, in the following amounts, order and priority (for the avoidance of doubt,  the amounts, order and priority of distributions pursuant to this Subsection 5.1(b) shall not apply to any distributions in accordance with Section 11.3 upon the dissolution of the Partnership and the failure to continue the Partnership as provided in Section 11.1 ):

(i) First, in the event that the Partnership shall have sold all or substantially all of the Rollins Business, 64.5% to MBK USA CV and 35.5% to PAG of an aggregate amount equal to the excess, if any, of (A) the excess, if any, of (1) $57,000,000, over (2) the product of (x) .40 times (y) the excess, if any, of (I) the initial Gross Asset Value of the Code Section 197 intangibles attributable to the Rollins Business, over (II) the sales price for such intangibles, over (B) all prior and current distributions to MBK USA CV and PAG pursuant to Subsection 5.1(a)(i) and all prior distributions to MBK USA CV and PAG pursuant to this Subsection 5.1(b)(i) ; and

(ii) Second, to the Partners pro rata in accordance with each Partner’s Percentage Interest.

(c)  Discretionary Special Distributions . Except for distributions to the Partners in accordance with Subsections 5.1(a) and  5.1(b) , the Partnership shall not at any time prior to January 28, 2018 without Unanimous Approval make any other distributions to the Partners (such other distributions “ Discretionary Distributions ”). During the period from and after January 29, 2018 and on or prior to January 28, 2023, and provided that (x) the ratio of consolidated debt to consolidated equity of the Partnership is less than 3.0 to 1.0 immediately before, and after giving pro forma effect to the payment of, the proposed Discretionary Distributions and (y) the amount of all distributions made by the Partnership to the Partners with respect to the then current calendar year

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does not exceed eighty percent (80%) of the consolidated Net Income of the Partnership for the then current Partnership Year through the date of such Discretionary Distribution, then the making of a Discretionary Distribution shall require Majority Approval. After January 29, 2023, the making of any Discretionary Distribution shall require Majority Approval. Any Discretionary Distributions made pursuant to this Subsection 5.1(c) shall be made by the Partnership to the Partners pro rata in accordance with each Partner’s Percentage Interest.

(d)  Notice of Determination of Law .  If any determination is made by the General Partner that applicable Law would forbid any distribution pursuant to this Section 5.1 , then the General Partner shall provide notice to each other Partner of such determination (which shall include the basis for such determination) and provide each other Partner with a reasonable opportunity to discuss such determination.

(e)  Certain Tax Amounts .  All amounts withheld pursuant to the Code or any provision of any state or local tax Law with respect to any payment or distribution to a Partner will be treated as amounts distributed to such Partner for all purposes of this Agreement. If the Partnership incurs any withholding tax or other liability for tax, interest or penalties with respect to income, gain, loss, deduction or credit allocated to any Partner (including any amount payable by the Partnership pursuant to an adjustment under Code Section 6225), such Partner shall be required promptly to reimburse the Partnership for such amount to the extent that the Partnership does not recoup the amount by offsetting it against amounts otherwise distributable to such Partner; the obligations of any Person under this sentence with respect to any taxable year during which such Person is a Partner shall survive any withdrawal of such Person from being a Partner in the Partnership, any Transfer of such Person’s Partnership Interest and any termination, dissolution, liquidation or winding up of the Partnership.

5.2  Partnership Allocations .

(a)  Profits and Losses . For each taxable year or portion of a taxable year for which the Partnership is required to allocate Profits, Losses, or other items pursuant to this ARTICLE 5, after giving effect to the special allocations set forth in Sections 5.3 and 5.4 , and subject to the rules of Section 5.5 and Section 9.6 , Profits and Losses of the Partnership for the relevant period shall be allocated to the Partners in proportion to their Percentage Interests, subject to the limitation in Subsection 5.2(b) below with respect to the allocation of Losses.

(b)  Loss Limitation .

(i)  Capital Account Limitation . The Losses allocated pursuant to Subsection 5.2(a) shall not exceed the maximum amount of Losses that can be so allocated without causing any Limited Partner to have an Adjusted Capital Account Deficit at the end of any taxable year. All Losses otherwise allocable to a Limited Partner in excess of the limitation set forth in this Subsection 5.2(b)(i) shall be allocated (A) in the case of any Penske Partner (other than PAG), first, to the other Penske Partners (other than PAG), if any, that are Limited Partners without such an Adjusted Capital Account Deficit in proportion to and to the extent of the amount of Losses that can be allocated to each such Penske Partner without causing it to have an Adjusted Capital Account Deficit and, thereafter, to the General Partner, (B) in the case of PAG, to the General Partner, (C) in the case of PTL GP, as a Limited Partner, (x) with respect to eighty-two percent (82%) of such