Penske Automotive Group, Inc DEFA14A, filed Oct 15, 2026
Penske Automotive Group, Inc. (PAG)
Penske Automotive Group, Inc. agreed on October 15, 2026 to be acquired by Motown Acquisition Corp. for $212.00 per share in cash, with Penske Corporation and Mitsui expected to own approximately 64% and 36%, respectively, after closing. AI summary
DEFA14A
2026-10-15
View Original
Added on
October 15, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
October 15, 2026
Date of Report (date of earliest event reported)
Penske Automotive Group, Inc.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
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1-12297
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22-3086739
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(State or other jurisdiction of incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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2555 Telegraph Road
Bloomfield Hills, Michigan 48302
(Address of principal executive offices and zip code)
(248) 648-2500
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol
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Name of each exchange on which
registered
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Voting Common Stock, par value $0.0001 per share
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PAG
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New York Stock Exchange
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 |
Entry into a Material Definitive Agreement.
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The Merger Agreement
On October 15, 2026, Penske Automotive Group, Inc., a Delaware corporation (the “Company”), entered into an Agreement and
Plan of Merger (the “Merger Agreement”) with Motown Acquisition Corp., a Delaware corporation (“Buyer”), pursuant to which Buyer will merge with and into the
Company (the “Merger”), with the Company surviving the Merger. Buyer is an entity owned by Penske Corporation, a Delaware corporation (“PC”), and Mitsui &
Co., Ltd., a Japanese company (“Mitsui”, and together with PC, Penske Automotive Holdings Corp., a wholly owned subsidiary of PC, and Mitsui & Co. (U.S.A.), Inc., a wholly owned subsidiary of Mitsui,
the “Investor Group” and each, an “Investor Group Member”).
A special committee (the “Special Committee”) of independent and disinterested directors of the Board of Directors of the
Company (the “Board”), which negotiated the terms of the Merger Agreement with the assistance of its independent legal and financial advisors, has unanimously determined that the Merger Agreement and the
transactions contemplated thereby, including the Merger, are advisable, fair to and in the best interests of the Company and the Unaffiliated Company Stockholders (as defined in the Merger Agreement) and recommended, among other things, that the
Board approve and declare advisable the Merger Agreement and the transactions contemplated thereby, including the Merger. Acting on the unanimous recommendation of the Special Committee, the Board (with the directors affiliated with the Investor
Group recusing themselves), by unanimous vote of all directors present, approved and declared advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, determined that the Merger Agreement and the transactions
contemplated thereby, including the Merger, are fair to, and in the best interests of, the Company’s stockholders, including the Unaffiliated Company Stockholders and resolved to recommend that the Company’s stockholders adopt the Merger Agreement
and approve the transactions contemplated thereby, including the Merger, and by unanimous vote of all directors present, directed that the Merger Agreement be submitted to the Company’s stockholders for adoption at a meeting of the Company’s
stockholders.
In connection with its evaluation of the Merger, the Special Committee received an opinion from Moelis & Company LLC (“Moelis”)
to the effect that, as of the date of such opinion and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations set forth therein, the Merger Consideration (as defined below) to be received
by the holders of shares of Company Common Stock (as defined below) (other than shares held by the Company or its wholly owned subsidiaries, shares owned by Buyer, the Excluded Shares (as defined below) and Appraisal Shares (as defined below)) is
fair, from a financial point of view, to such holders of shares of Company Common Stock (other than the Investor Group Members, the Company and any of their respective affiliates) (it being understood and agreed that such opinion is for the benefit
of the Special Committee and may not be relied upon by the Investor Group Members). A more detailed description of Moelis’ opinion and the analyses performed in connection therewith will be included in the proxy statement relating to the Merger.
Merger Consideration.
At the effective time of the Merger (the “Effective Time”), each share of common stock, par value $0.0001 per share, of the
Company (“Company Common Stock”) issued and outstanding immediately prior to the Effective Time (other than (a) shares held by the Company or any of its wholly owned subsidiaries or by Buyer, (b) shares
held by one or more of the Investor Group Members (the “Excluded Shares”), and (c) shares held by stockholders who have properly perfected appraisal rights under Section 262 of the Delaware General
Corporation Law (the “DGCL”) (the “Appraisal Shares”)) will be automatically canceled and converted into the right to receive $212.00 per share in cash, without
interest (the “Merger Consideration”), subject to any withholding taxes required by applicable law.
In addition, the Company expects to continue paying regular quarterly cash dividends through the closing of the
Merger, in each case, in an amount not to exceed $0.02 per share above the per share amount of the last quarterly dividend declared and paid by the Company in the immediately preceding quarter, as well as a pro-rated dividend for any partial quarter prior to the closing of the Merger.
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Treatment of Equity Awards.
At the Effective Time, each restricted stock unit award with respect to Company Common Stock that is outstanding as of immediately prior to the Effective Time (including
any dividend equivalent units credited thereto) (each, a “Company RSU”) will become fully vested and automatically be canceled and be converted into the right to receive a lump-sum cash payment equal to
the product of the Merger Consideration multiplied by the number of shares of Company Common Stock subject to such Company RSU, plus the right to receive any applicable dividend equivalent rights (which right will extend to any dividends with a
record date prior to the Effective Time that have been declared but not paid as of the Effective Time), in each case, without interest.
At the Effective Time, each award of restricted shares of Company Common Stock that is outstanding as of immediately prior to the Effective Time (each, a “Company RSA”) will become fully vested, with all restrictions applicable thereto lapsing, and automatically be converted into the right to receive an amount in cash equal to the Merger Consideration per
underlying share of Company Common Stock subject to such Company RSA, plus any declared but unpaid dividends, in each case, without interest.
At the Effective Time, each performance award in respect of the 2026 performance period that is outstanding as of immediately prior to the Effective Time and that, if
earned, is payable in Company RSAs (each, a “Company Performance Award”) will be canceled and be converted into the right to receive a lump-sum cash payment, without interest, based on performance in
respect of such Company Performance Award deemed achieved at target-level performance.
At the Effective Time, each deferred stock unit credited to the accounts of current and former non-employee directors of the Company (including any dividend equivalents
credited thereto) that is outstanding as of immediately prior to the Effective Time (each, a “Company DSU”) will be canceled and be converted into the right to receive a lump-sum cash payment, without
interest, equal to the Merger Consideration per underlying share of Company Common Stock subject to such Company DSU, including shares attributable to credited dividend equivalent units and declared but unpaid dividends.
At the Effective Time, each deferred cash amount (including any notional investment gains or losses and any dividend equivalents credited thereto) credited to the
accounts of current and former non-employee directors of the Company that is outstanding as of immediately prior to the Effective Time (each, a “Company Deferred Cash Award”) will be canceled and be
converted into the right to receive a lump-sum cash payment equal to the aggregate value of such Company Deferred Cash Award.
All such payments in respect of the Company RSUs, Company RSAs and Company Performance Awards will be made as promptly as practicable following, but in no event later
than the second regularly scheduled payroll date after, the Effective Time (subject to any later payment date required by Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)).
All such payments will be subject to applicable withholdings.
Effective immediately prior to the Effective Time, the Company will terminate its non-employee director compensation plan and payments in respect of
Company DSUs and Company Deferred Cash Awards will be made at the earliest time permissible following the Effective Time, in each case, in compliance with Section 409A.
No Solicitation.
The Merger Agreement contains customary non-solicitation provisions restricting the Company’s ability to solicit or engage in discussions regarding competing acquisition
proposals. The Company is permitted to grant waivers of, and not enforce, any standstill or similar provision that has the effect of prohibiting a counterparty from making an unsolicited acquisition proposal. Notwithstanding these restrictions, prior
to receipt of the stockholder approval described below, the Company may engage with parties who submit acquisition proposals that did not result from a breach of the non-solicitation provisions in
the Merger Agreement and that the Special Committee or the Board, acting on the recommendation of the Special Committee, determines in good faith after consultation with its financial advisors and outside legal counsel constitute or could
reasonably be expected to result in a Superior Proposal (as defined in the Merger Agreement). The Special Committee or the Board, acting on the recommendation of the Special Committee and subject to the terms of the Merger Agreement, may effect an
Adverse Recommendation Change (as defined in the Merger Agreement) in response to a Superior Proposal or an Intervening Event (as defined in the Merger Agreement), and may terminate the Merger Agreement to enter into a definitive agreement with
respect to a Superior Proposal, subject to compliance with the applicable fiduciary-out determinations and notice and negotiation requirements, including providing Buyer with at least five Business Days’ (as defined in the Merger Agreement) prior
written notice and the opportunity to propose revised terms, and subject to the prior or concurrent payment of the Company Termination Fee described below.
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Conditions to Closing.
The consummation of the Merger is subject to customary closing conditions, including the receipt of the Company Stockholder Approval (as defined below), the absence of
any law or governmental order prohibiting the Merger, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the receipt of certain other specified regulatory
approvals, the accuracy of the representations and warranties of the parties (subject to the applicable materiality standards set forth therein), the performance of the covenants of the parties in all material respects, and the absence of a Material
Adverse Effect (as defined in the Merger Agreement).
Stockholder Approval.
The Merger Agreement requires the following stockholder approvals (collectively, the “Company Stockholder Approval”): (i)
the affirmative vote of holders of a majority of the outstanding shares of Company Common Stock entitled to vote thereon, voting as a single class, and (ii) the affirmative vote of a majority of the votes cast by the “disinterested stockholders” (as
defined in Section 144 of the DGCL). For purposes of this vote, the disinterested stockholders will exclude shares held, directly or indirectly, by or on behalf of (a) the Investor Group and the directors and executive officers of any Investor Group
Member and their respective affiliates and family members, (b) any person that the Company has determined to be an “officer” of the Company within the meaning of Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (c) members of the Board who are not members of the Special Committee.
Termination and Fees.
The Merger Agreement may be terminated by mutual written consent at any time prior to the closing of the Merger. Either party may also terminate the Merger Agreement if
the Merger has not been consummated by October 15, 2027 (the “Outside Date”), if a final, non-appealable law or governmental order prohibits the Merger, or if the Company Stockholder Approval is not
obtained. Either party may also terminate if the other party breaches any representation, warranty, covenant or agreement such that the related closing conditions would not be satisfied, subject to a cure period that is the earlier of 30 days and the
Outside Date (to the extent curable), provided that the terminating party is not then in breach that would cause its own closing conditions to fail. As mentioned above, the Company may also terminate the Merger Agreement prior to the time the Company
Stockholder Approval is obtained in order to enter into a definitive agreement with respect to a Superior Proposal, and Buyer may terminate the Merger Agreement if the Special Committee or the Board, acting on the recommendation of the Special
Committee, has effected an Adverse Recommendation Change.
The Company must pay a termination fee of $383.0 million (the “Company Termination Fee”) if (a) the Company terminates the
Merger Agreement to enter into a definitive agreement with respect to a Superior Proposal (payable prior to or concurrently with such termination), (b) Buyer terminates the Merger Agreement following an Adverse Recommendation Change, or (c) following
a public announcement or disclosure of a Takeover Proposal (as defined in the Merger Agreement) that is not withdrawn or otherwise publicly abandoned prior to the applicable time specified in the Merger Agreement (including, in the case of
termination following failure to obtain the Company Stockholder Approval, at least three Business Days prior to the Company Stockholders Meeting (as defined in the Merger Agreement)), the Merger Agreement is terminated due to the expiration of the
Outside Date, failure to obtain the Company Stockholder Approval, or a breach by the Company and within 12 months the Company enters into a definitive written agreement providing for a Takeover Proposal that is later consummated or a Takeover
Proposal is consummated (for purposes of this clause (c), with all references to 20% in the definition of Takeover Proposal deemed references to 50%). Buyer is also entitled, subject to certain conditions specified in the Merger Agreement, to seek
specific performance of the Company’s obligations.
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Buyer must pay the Company a reverse termination fee of $488.0 million (the “Buyer Termination Fee”) if (a) the Company
terminates the Merger Agreement due to a breach by Buyer, or (b) Buyer fails to consummate the Merger when required to do so, and the Company has complied with the notice and confirmation procedures specified in the Merger Agreement. The Buyer
Termination Fee is also payable if the Merger Agreement is terminated due to the expiration of the Outside Date at a time when the Company could have terminated due to Buyer’s breach or failure to close. The Company is also entitled, subject to
certain conditions specified in the Merger Agreement, including full funding of the debt financing (described below) in accordance with its terms, to seek specific performance of Buyer’s obligations, including to cause the Equity Financing (as
defined below) to be funded and the Merger to be consummated.
Other Terms.
The Merger Agreement contains representations, warranties and covenants of the parties that are customary for transactions of this type, including covenants by the
Company relating to the conduct of its business prior to the consummation of the Merger. The Company has agreed to prepare and file a proxy statement and, jointly with Buyer, a transaction statement on Schedule 13E-3, and to hold a meeting of its
stockholders to obtain the Company Stockholder Approval. Each of the Company and Buyer has agreed to use its reasonable best efforts to obtain the required regulatory approvals for the Merger, subject to certain limitations. Prior to the Effective
Time, certain actions, including any amendment, waiver, enforcement or termination of the Merger Agreement or the related transaction documents by the Company, any determination by the Company as to whether the closing conditions have been satisfied
and any declaration or payment of dividends by the Company, require the prior approval or authorization of the Special Committee.
If the Merger is consummated, shares of Company Common Stock, which are currently listed on the New York Stock Exchange (the “NYSE”),
will be delisted from the NYSE and deregistered under the Exchange Act, and will no longer be publicly traded.
As a result of the Merger, upon consummation of the Merger, the Company will cease to be a publicly traded company and will become wholly owned by the Investor Group,
with PC and Mitsui expected to own, directly or indirectly, approximately 64% and 36%, respectively, of the equity interests of the Company.
This summary of the principal terms of the Merger Agreement and the copy of the Merger Agreement filed as Exhibit 2.1 to this Current Report on Form 8-K are intended to
provide information regarding the terms of the Merger Agreement and are not intended to modify or supplement any factual disclosures about the Company in its public reports filed with the Securities and Exchange Commission (“SEC”). In particular, the Merger Agreement and related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to the Company, Buyer or their respective
affiliates.
The Merger Agreement includes customary representations, warranties and covenants of the Company and Buyer made only for the purposes of the Merger Agreement and solely
for the benefit of the parties to the Merger Agreement, in accordance with and subject to the terms of the Merger Agreement. The assertions embodied in those representations and warranties were made for the principal purpose of establishing the
circumstances in which the parties to the Merger Agreement may have the right not to consummate the transactions contemplated thereby (based on the closing conditions therein that relate to the accuracy of such representations and warranties), rather
than establishing matters as facts, and the representations, warranties and covenants set forth in the Merger Agreement (i) may be subject to important qualifications and limitations agreed to by the Company and Buyer in connection with the
negotiated terms thereof and (ii) are not intended to, and do not, confer upon any person other than the parties thereto any rights or remedies thereunder, including the right to rely upon the representations and warranties set forth therein.
Moreover, some of those representations and warranties may not be accurate or complete as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to the Company’s SEC filings or may
have been used for purposes of allocating risk between the Company and Buyer rather than establishing matters as facts. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the
actual state of facts of the Company and Buyer or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants does not purport to be accurate as of the date
of filing of this Form 8-K and may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures by the Company.
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Accordingly, investors should read the representations and warranties in the Merger Agreement not in isolation but only in conjunction with the other information about
the Company and Buyer and their respective subsidiaries, affiliates and businesses that the respective companies include in reports, statements and other filings they may make with the SEC.
The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which
is filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated herein by reference.
Financing
Buyer expects to fund the payment of the aggregate Merger Consideration and related fees and expenses through a combination of: (i) equity financing of up to $2.2
billion in the aggregate from PC and Mitsui (collectively, the “Equity Commitment Parties”) pursuant to equity commitment letters delivered to Buyer concurrently with the execution of the Merger Agreement
(the “Equity Commitment Letters,” and such equity financing, the “Equity Financing”); and (ii) debt financing of up to $1.8 billion, consisting of up to $1.8
billion pursuant to a debt commitment letter from JPMorgan, Bank of America and Wells Fargo, subject to customary conditions set forth therein, with borrowings under such debt commitment letter reduced by up to $1.8 billion of additional senior
subordinated notes to be issued by Buyer and/or up to $1.1 billion of additional borrowings under the U.S. Credit Agreement (as defined below). The Company is a third-party beneficiary of the Equity Commitment Letters for purposes of specifically
enforcing the terms and provisions thereunder under certain circumstances. Concurrently with the execution of the Merger Agreement, the Equity Commitment Parties delivered to the Company limited guarantees pursuant to which each Equity Commitment
Party has guaranteed its specified percentage of certain obligations of Buyer under the Merger Agreement, subject to an aggregate cap. The Company has agreed to provide customary cooperation in connection with the arrangement of the debt financing.
The Merger is not subject to a financing condition.
Support Agreements
On October 15, 2026, concurrently with the execution of the Merger Agreement, the members of the Investor Group and certain of their affiliates (collectively, the “Supporting Stockholders”), who collectively own approximately 72.6% of the outstanding shares of Company Common Stock, entered into separate Voting and Support Agreements (collectively, the “Support Agreements”) with the Company and Buyer. Pursuant to the Support Agreements, each of the Supporting Stockholders has agreed, among other things: (a) to vote all Covered Shares (as defined in the
Support Agreements) (i) in favor of the adoption of the Merger Agreement and the approval of the Merger and certain related proposals and (ii) against any competing acquisition proposal and any other action that would reasonably be expected to
prevent, materially impede or materially delay the Merger (in the case of this clause (a), subject to, in the case of PC and its affiliates, certain limitations under that certain Voting Agreement by and between the Company and PC, dated January 23,
2024); (b) to use reasonable best efforts to supply information for regulatory filings and to take actions necessary to enable Buyer to comply with its obligations with respect to regulatory matters; (c) not to transfer the Covered Shares prior to
termination of the applicable Support Agreement, subject to certain exceptions; (d) to waive any appraisal or dissenters’ rights under Section 262 of the DGCL with respect to such Supporting Stockholder’s shares; and (e) not to commence or
participate in any class action against Buyer or the Company relating to the Support Agreement, the Merger Agreement or the Merger, subject to certain exceptions. The Support Agreements will terminate upon the earliest to occur of the termination of
the Merger Agreement in accordance with its terms, the mutual written consent of the parties thereto and the Effective Time.
The foregoing description of the Support Agreements is not complete and is qualified in its entirety by reference to the full text of the Support Agreements, copies of
which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
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Indemnification Agreements
On October 15, 2026, the Company entered into indemnification agreements (the “Indemnification Agreements”) with each of its
directors in the form filed as Exhibit 10.3 hereto. Under the Indemnification Agreements, the Company has agreed to indemnify each director to the fullest extent permitted by applicable law, against expenses, losses, liabilities, judgments, fines,
penalties and amounts paid in settlement incurred in connection with any threatened, pending or completed action, suit or proceeding in any way connected with, resulting from or relating to the director’s current or former corporate status. The
Indemnification Agreements provide indemnification in addition to the indemnification provided by the Company’s organizational documents and any applicable law. Further, the Company has agreed to advance expenses a director may incur as a result of
any proceeding against him or her as to which he or she could be indemnified.
The foregoing description of the Indemnification Agreements is qualified in its entirety by reference to the form Indemnification Agreement, a copy of which is filed as
Exhibit 10.3 hereto and incorporated herein by reference.
Amendment to Credit Agreement
Concurrently with the execution of the Merger Agreement, the Company entered into the Limited Consent and Thirteenth Amendment (the “Amendment”)
to its U.S. credit agreement with Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation and Daimler Truck Financial Services USA LLC (as amended, the “U.S. Credit Agreement”),
principally to provide for a conditional increase in the borrowing capacity under the U.S. Credit Agreement to finance a portion of the Merger and to obtain the consent of the lenders thereunder to the Merger.
As amended, the U.S. Credit Agreement provides the Company with a one-time option to increase the aggregate revolving commitment thereunder by up to $900.0 million, from
$1.5 billion to up to $2.4 billion. Up to $400.0 million of that increase may be designated as an “Overadvance Commitment,” permitting uncollateralized borrowing in excess of a defined, asset-based borrowing base plus 35% of the goodwill and
franchise value attributed to the Company’s domestic dealerships. The increase, including any requested Overadvance Commitment, becomes effective only upon the satisfaction of certain specified conditions, including evidence that, substantially
concurrently with the initial funding of the increase, the Merger will be consummated in all material respects in accordance with the Merger Agreement and the Equity Financing will be funded in an amount not less than $2.2 billion. If the increase
has not become effective on or before the fifth business day after the Outside Date, the increase (including the Overadvance Commitment) will automatically expire, and the revolving commitment will remain $1.5 billion.
The Amendment also provides the lenders’ limited consent to the Merger and waives any non-compliance with the U.S. Credit Agreement to the extent necessary to permit the
Merger and the transactions contemplated thereby, in each case subject to the terms and conditions set forth therein, including that the Merger be consummated on or before the fifth business day after the Outside Date. The Amendment also permits new
indebtedness of up to $1.8 billion in the aggregate to finance the Merger, in the form of a senior unsecured 364-day bridge facility and/or new senior subordinated notes.
The U.S. Credit Agreement matures on September 30, 2029. As of October 12, 2026, the Company had approximately $606.0 million of revolving borrowings outstanding under
the U.S. Credit Agreement.
The U.S. Credit Agreement continues to be fully and unconditionally guaranteed on a joint and several basis by substantially all of the Company’s U.S. subsidiaries,
remains secured by security interests in substantially all of the Company’s U.S. assets, and continues to contain significant operating covenants, financial tests and ratios, including a ratio of current assets to current liabilities, a fixed charge
coverage ratio, a ratio of debt to stockholders’ equity, and a ratio of debt to EBITDA, as well as typical events of default, including change of control, non-payment of obligations, and cross-defaults to other material indebtedness. A breach of
these covenants or the occurrence of an event of default would give rise to certain remedies under the U.S. Credit Agreement, the most severe of which is the termination of the agreement and acceleration of the amounts owed.
The Company purchases motor vehicles and parts from affiliates of the lenders for sale at certain of its dealerships, and the lenders also provide the Company and
certain of its dealerships with mortgage, “floor-plan”, and consumer financing. The foregoing description of the Amendment is qualified in its entirety by reference to the Amendment, including a conformed copy of the U.S. Credit Agreement, a copy of
which is filed as Exhibit 4.1 hereto and incorporated herein by reference.
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| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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The information set forth under the heading “Amendment to Credit Agreement” in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this
Item 2.03.
| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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The information set forth under the heading “Treatment of Equity Awards” in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this
Item 5.02.
| Item 8.01 |
Other Events.
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On October 15, 2026, the Company issued a press release announcing the execution of the Merger Agreement. A copy of the press release is filed as Exhibit 99.1 hereto and
is incorporated herein by reference.
Cautionary Statement Regarding the Merger
The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, and there can be no assurance that the Merger will be
consummated on the timeline currently anticipated, or at all.
Additional Information Regarding the Transaction and Where to Find It
This Current Report on Form 8-K relates to the Merger contemplated by the Merger Agreement. In connection with the Merger, the Company intends to file a preliminary
proxy statement on Schedule 14A (the “Proxy Statement”) with the SEC relating to a special meeting of shareholders to approve the Merger. The definitive proxy statement (if and when available) will be
mailed to the Company’s stockholders seeking their approval of the Merger and other related matters. The Company, Buyer and certain of their affiliates also intend to jointly file a transaction statement on Schedule 13E-3 (the “Schedule 13E-3”) relating to the Merger. The Company may also file other relevant documents with the SEC regarding the Merger. This Current Report on Form 8-K is not a substitute for the Proxy Statement,
Schedule 13E-3, or any other document the Company, Buyer, PC or Mitsui may file with the SEC in connection with the Merger. This Current Report on Form 8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities of
the Company or any other person or the solicitation of any vote or approval.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE MERGER, INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY
STATEMENT REGARDING THE MERGER (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO OR INCORPORATED BY REFERENCE THEREIN), THE SCHEDULE 13E-3 (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO OR INCORPORATED BY REFERENCE THEREIN), AND OTHER RELEVANT
DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE MERGER AND RELATED MATTERS.
Investors and security holders may obtain free copies of these documents, including the Proxy Statement, Schedule 13E-3 and any other documents containing important
information about the Company and the Merger, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. In addition, shareholders of the Company may obtain free copies of such documents by accessing the
Investor Relations portion of the Company’s website at https://investors.penskeautomotive.com/financials/sec-filings.
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Participants in the Solicitation
The Company and certain of its directors, executive officers and other employees may, under the rules of the SEC, be deemed to be participants in the solicitation of
proxies in connection with the Merger. Information about the directors and executive officers of the Company is set forth in the Company’s definitive proxy statement on Schedule 14A for the 2026 annual meeting of the stockholders of the Company,
filed with the SEC on March 20, 2026 (the “Annual Meeting Proxy Statement”), under the sections “Proposal 1 – Election of Directors,” “Executive Officers,” “Executive Compensation,” “Director Compensation”
and “Security Ownership of Certain Beneficial Owners and Management,” and other documents subsequently filed by the Company with the SEC. Transactions with related persons (as defined in Item 404 of Regulation S-K promulgated under the Securities Act
of 1933, as amended) are disclosed under the heading titled “Related Party Transactions” in the Annual Meeting Proxy Statement. To the extent holdings of securities by potential participants (or the identity of such participants) have changed since
the information set forth in the Annual Meeting Proxy Statement, such information has been or will be reflected on the Company’s Statements of Beneficial Ownership on Forms 3 and 4 filed with the SEC. Updated information regarding the identity of
participants and their direct or indirect interests, by security holdings or otherwise, in the Company will be set forth in the Proxy Statement regarding the approval of the Merger and other relevant documents to be filed with the SEC, including the
Schedule 13E-3, if and when they become available. These documents will be available free of charge as described above.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K may include statements that are not statements of historical fact, or “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including with respect to the Merger. In many cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,”
“predicts,” “potential,” “continue” or the negative of such terms and other comparable terminology. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are difficult to predict and are generally
outside the Company’s and Buyer’s control, that could cause actual performance or results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. Such forward-looking statements include, but are not
limited to: the ability of Buyer and the Company to complete the transactions contemplated by the Merger Agreement, including the parties’ ability to satisfy the conditions set forth in the Merger Agreement; statements about the expected timetable
for completing the Merger, Buyer’s and the Company’s beliefs and expectations and statements about the benefits sought to be achieved in Buyer’s proposed acquisition of the Company, the potential effects of the acquisition on each of Buyer and the
Company; as well as the possibility of any termination of the Merger Agreement. These statements are based upon the current beliefs and expectations of Buyer’s and the Company’s management and are subject to significant risks and uncertainties. There
can be no guarantees that the conditions to the closing of the Merger will be satisfied on the expected timetable or at all. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from
those set forth in the forward-looking statements. Risks and uncertainties include, but are not limited to, uncertainties as to the timing of the Merger; the possibility that Buyer’s committed debt financing will not be available; uncertainties as to
how many of the Company’s shareholders will vote in favor of the Merger; the possibility that various conditions to the consummation of the Merger may not be satisfied or waived; the ability to obtain necessary regulatory approvals or to obtain them
on acceptable terms or within expected timing; the risk that any announcements relating to the Merger could have adverse effects on the market price of the Company Common Stock, credit ratings or operating results; the effects of disruption from the
transactions contemplated by the Merger Agreement and the impact of the announcement and pendency of the transactions on the Company’s business, including the ability of the Company to attract, retain and hire key personnel and to maintain
relationships with customers, suppliers and others with whom the Company does business, employee departures, diversion of management’s time and attention from ordinary course business operations, or certain restrictions during the pendency of the
Merger that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; the risk that shareholder litigation in connection with the Merger may result in significant costs of defense, indemnification and
liability; the risk that there may be unexpected costs, charges or expenses resulting from the Merger; general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; and the
impact of tariffs. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, its Quarterly
Reports on Form 10-Q for the quarterly periods ended March 31, 2026 and June 30, 2026, and its other filings made with the SEC. These and other filings made by the Company with the SEC are available at www.sec.gov.
The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the
extent required by law.
9
| Item 9.01 |
Financial Statements and Exhibits.
|
| (d) |
Exhibits.
|
Exhibit Index
|
Exhibit No.
|
Description
|
|
|
Agreement and Plan of Merger, dated October 15, 2026, by and between Penske Automotive Group, Inc. and Motown Acquisition Corp.
|
||
|
Limited Consent and Thirteenth Amendment to the Fifth Amended and Restated Credit Agreement dated October 15, 2026, among Penske Automotive Group, Inc., Mercedes-Benz Financial Services USA
LLC, Toyota Motor Credit Corporation and Daimler Truck Financial Services USA LLC, which includes a Conformed Copy of the Fifth Amended and Restated Credit Agreement.
|
||
|
Voting and Support Agreement, dated October 15, 2026, by and among Penske Automotive Group, Inc., Motown Acquisition Corp., Mitsui & Co., Ltd. and Mitsui & Co. (U.S.A.), Inc.
|
||
|
Voting and Support Agreement, dated October 15, 2026, by and among Penske Automotive Group, Inc., Motown Acquisition Corp., Penske Corporation, Penske Automotive Holdings Corp., Roger S. Penske
and Roger S. Penske Trust.
|
||
|
Form of Indemnification Agreement.
|
||
|
Press Release, dated October 15, 2026.
|
||
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document).
|
| * |
Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
|
10
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
Dated: October 15, 2026
|
||
|
PENSKE AUTOMOTIVE GROUP, INC.
|
||
|
By
|
/s/ Shane M. Spradlin
|
|
|
Shane M. Spradlin
|
||
|
Executive Vice President
|
||
11
Exhibit 2.1
CERTAIN INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT AND REPLACING IT WITH [***]
BECAUSE IT IS BOTH: (I) NOT MATERIAL AND (II) THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
by and between
MOTOWN ACQUISITION CORP.
and
PENSKE AUTOMOTIVE GROUP, INC.
Dated as of October 15, 2026
TABLE OF CONTENTS
|
Page
|
|||
|
ARTICLE I The Merger
|
2
|
||
|
1.01.
|
The Merger
|
2
|
|
|
1.02.
|
Closing
|
2
|
|
|
1.03.
|
Effective Time
|
3
|
|
|
1.04.
|
Effects of the Merger
|
3
|
|
|
1.05.
|
Certificate of Incorporation and Bylaws of the Surviving Corporation
|
3
|
|
|
1.06.
|
Directors and Officers of the Surviving Corporation
|
3
|
|
|
ARTICLE II Effect of the Merger on Capital Stock; Exchange of Certificates; and Equity-Based and Other Long-Term Incentive Awards
|
4
|
||
|
2.01.
|
Effect on Capital Stock
|
4
|
|
|
2.02.
|
Exchange Matters
|
5 | |
|
2.03.
|
Treatment of Equity-Based Awards
|
8
|
|
|
2.04.
|
Adjustments
|
10
|
|
|
2.05.
|
Appraisal Rights
|
10
|
|
|
ARTICLE III Representations and Warranties of the Company
|
11
|
||
|
3.01.
|
Organization; Standing
|
11
|
|
|
3.02.
|
Capitalization
|
12
|
|
|
3.03.
|
Subsidiaries
|
13
|
|
|
3.04.
|
Authority; Noncontravention
|
14
|
|
|
3.05.
|
Governmental Approvals
|
16
|
|
|
3.06.
|
Company SEC Documents; Undisclosed Liabilities; Internal Controls
|
16
|
|
|
3.07.
|
Absence of Certain Changes
|
18
|
|
|
3.08.
|
Legal Proceedings; Judgments
|
19
|
|
|
3.09.
|
Compliance with Laws; Permits
|
19
|
|
|
3.10.
|
Tax Matters
|
20
|
|
|
3.11.
|
Employee Benefits
|
22
|
|
|
3.12.
|
Labor Matters
|
24
|
|
|
3.13.
|
Environmental Matters
|
25
|
|
|
3.14.
|
Intellectual Property
|
26
|
|
|
3.15.
|
Data Privacy and Technology; Information Security
|
27
|
|
|
3.16.
|
Property
|
27
|
|
|
3.17.
|
Contracts
|
28
|
|
|
3.18.
|
Government Contracts
|
30
|
|
|
3.19.
|
Insurance
|
30
|
|
|
3.20.
|
No Rights Agreement; Anti-Takeover Provisions
|
30
|
|
|
3.21.
|
Opinion of Financial Advisor
|
31
|
|
|
3.22.
|
Brokers and Other Advisors
|
31
|
|
|
3.23.
|
CFIUS
|
31
|
|
|
3.24.
|
No Other Buyer Representations or Warranties
|
31
|
|
|
ARTICLE IV Representations and Warranties of Buyer
|
32 | ||
-i-
TABLE OF CONTENTS
(continued)
|
Page
|
|||
|
4.01.
|
Organization; Standing
|
32
|
|
|
4.02.
|
Authority; Noncontravention
|
32
|
|
|
4.03.
|
Governmental Approvals
|
33
|
|
|
4.04.
|
Ownership and Operations of Buyer
|
33
|
|
|
4.05.
|
Financing
|
33
|
|
|
4.06.
|
Limited Guarantees
|
35
|
|
|
4.07.
|
Solvency
|
35
|
|
|
4.08.
|
Absence of Certain Arrangements
|
36
|
|
|
4.09.
|
Brokers and Other Advisors
|
36
|
|
|
4.10.
|
Ownership of Company Common Stock
|
36
|
|
|
4.11.
|
Information Supplied
|
37
|
|
|
4.12.
|
Legal Proceedings
|
37
|
|
|
4.13.
|
No Other Company Representations or Warranties
|
37
|
|
|
4.14.
|
Non-Reliance
|
38
|
|
|
ARTICLE V Additional Covenants and Agreements
|
38
|
||
|
5.01.
|
Conduct of Business
|
38
|
|
|
5.02.
|
Solicitation; Change in Recommendation
|
43
|
|
|
5.03.
|
Efforts
|
46
|
|
|
5.04.
|
Public Announcements
|
50
|
|
|
5.05.
|
Access to Information; Confidentiality
|
51 | |
|
5.06.
|
Indemnification and Insurance
|
51
|
|
|
5.07.
|
Employee Matters
|
54
|
|
|
5.08.
|
Notification of Certain Matters; Stockholder Litigation.
|
55
|
|
|
5.09.
|
Buyer Adoption of Agreement
|
55
|
|
|
5.10.
|
Stock Exchange De-listing
|
55
|
|
|
5.11.
|
Section 16
|
56
|
|
|
5.12.
|
Preparation of the Proxy Statement
|
56
|
|
|
5.13.
|
Company Stockholders Meeting
|
58
|
|
|
5.14.
|
Financing
|
59
|
|
|
5.15.
|
Indenture
|
69
|
|
|
5.16.
|
Further Assurances
|
72
|
|
|
5.17.
|
Certain Tax Matters
|
72
|
|
|
5.18.
|
Company KSOP Matters
|
73
|
|
|
ARTICLE VI Conditions to the Merger
|
74
|
||
|
6.01.
|
Conditions to Each Party’s Obligation To Effect the Merger
|
74
|
|
|
6.02.
|
Conditions to the Obligations of Buyer
|
74
|
|
|
6.03.
|
Conditions to the Obligations of the Company
|
75
|
|
|
ARTICLE VII Termination
|
76
|
||
|
7.01.
|
Termination
|
76
|
|
|
7.02.
|
Effect of Termination
|
77
|
|
-ii-
TABLE OF CONTENTS
(continued)
|
Page
|
|||
|
7.03.
|
Termination Fee
|
78
|
|
|
ARTICLE VIII Miscellaneous
|
81
|
||
|
8.01.
|
No Survival of Representations and Warranties
|
81
|
|
|
8.02.
|
Amendment or Supplement
|
82
|
|
|
8.03.
|
Extension of Time, Waiver, etc
|
82
|
|
|
8.04.
|
Assignment
|
82
|
|
|
8.05.
|
Counterparts
|
83
|
|
|
8.06.
|
Entire Agreement; No Third-Party Beneficiaries
|
83
|
|
|
8.07.
|
Governing Law; Jurisdiction
|
83
|
|
|
8.08.
|
Specific Enforcement
|
85
|
|
|
8.09.
|
Notices
|
85
|
|
|
8.10.
|
Severability
|
87
|
|
|
8.11.
|
Fees and Expenses
|
87
|
|
|
8.12.
|
Interpretation
|
88
|
|
|
8.13.
|
Non-Recourse
|
89
|
|
|
8.14.
|
Disclosure Letter
|
90
|
|
|
8.15.
|
WAIVER OF JURY TRIAL
|
90
|
|
|
8.16.
|
Special Committee Approval
|
91
|
|
|
ARTICLE IX Definitions
|
91
|
||
|
9.01.
|
Definitions
|
91
|
|
Exhibit A: Form of Fifth Amended and Restated Certificate of
Incorporation of Surviving Corporation
-iii-
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of October 15, 2026 (this “Agreement”), is
between Motown Acquisition Corp., a Delaware corporation (“Buyer”), and Penske Automotive Group, Inc., a Delaware corporation (the “Company”).
Each of Buyer and the Company is referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used in
this Agreement are defined in Section 9.01.
RECITALS
A. The Parties intend that, upon the terms
and subject to the conditions set forth in this Agreement and in accordance with the Delaware General Corporation Law (the “DGCL”), at the Effective Time, Buyer will be merged with and
into the Company (the “Merger”), with the Company surviving the Merger (the “Surviving Corporation”), and pursuant to the
Merger each share of the common stock, par value $0.0001 per share, of the Company (the “Company Common Stock”) (other than (i) Excluded Shares, which will be treated in accordance
with Section 2.01(b), (ii) shares of Company Common Stock canceled pursuant to Section 2.01(a), and (iii)
Appraisal Shares, which will be treated in accordance with Section 2.05), will be canceled and converted into the right to receive the Merger Consideration.
B. The board of directors of the Company
(the “Company Board”) has established a special committee of independent and disinterested members of the Company Board (the “Special
Committee”), which has unanimously (i) determined that this Agreement and the Transactions are advisable, fair to, and in the best interests of, the Company and the Unaffiliated Company Stockholders and (ii) recommended to the
Company Board that the Company Board (A) approve and declare advisable this Agreement and the Transactions, (B) determine that this Agreement and the Transactions are fair to, and in the best interests of, the Unaffiliated Company Stockholders,
and (C) recommend that the holders of the Company Common Stock (the “Company Stockholders”) adopt this Agreement and approve the Transactions at the Company Stockholders Meeting (the “Special Committee Recommendation”).
C. The Company Board has, at a duly
convened and held meeting from which all the directors who are Investor Group Affiliates recused themselves from the Company Board’s deliberations and vote with respect to this Agreement and the Transactions, acting on the Special Committee
Recommendation, (i) by unanimous vote of all directors present, (A) approved and declared advisable this Agreement and the Transactions, (B) determined that this Agreement and the Transactions are fair to, and in the best interests of, the
Company and the Company Stockholders, including the Unaffiliated Company Stockholders, and (C) resolved to recommend that the Company Stockholders adopt this Agreement and approve the Transactions at the Company Stockholders Meeting (the “Company Recommendation”), and (ii) by unanimous vote of all directors present, directed that this Agreement be submitted to the Company Stockholders for adoption at the Company
Stockholders Meeting.
D. The board of directors of Buyer has (i)
by unanimous written consent, (A) approved and declared advisable this Agreement and the Transactions, (B) determined that this Agreement and the Transactions are fair to, and in the best interests of, Buyer and Buyer’s stockholders, and (C)
resolved to recommend that Buyer’s stockholders adopt this Agreement and approve the Transactions, and (ii) by unanimous written consent, directed that this Agreement be submitted to Buyer’s stockholders for adoption.
E. The stockholders of Buyer, each of
which is an Investor Group Member, have adopted this Agreement by unanimous written consent, with such consent to be effective immediately following the execution of this Agreement.
F. Concurrently with the execution of
this Agreement, as a material inducement to, and as a condition to, the willingness of the Company to enter into this Agreement, the Investor Group Members and certain of their Affiliates are each entering into Voting and Support Agreements (as
amended, supplemented, replaced or modified, the “Support Agreements”) with the Company pursuant to which, among other things, the Investor Group Members and such other parties have
agreed, subject to the terms and conditions contained in the Support Agreements, to (a) not sell or transfer the shares of Company Common Stock held by them as of the date hereof, (b) vote their respective shares of Company Common Stock and any
other voting securities of the Company held by them in favor of the adoption of this Agreement and the approval of the Transactions at the Company Stockholders Meeting (subject to any limitations applicable to the voting of such shares pursuant
to the Voting Agreement, dated January 23, 2024, by and between the Company and PC), and (c) take or abstain from taking certain other actions as set forth therein.
G. Concurrently with the execution of this
Agreement, as a material inducement to, and as a condition to, the willingness of the Company to enter into this Agreement, certain Investor Group Members or their Affiliates (in such capacity, the “Equity
Commitment Parties” and each an “Equity Commitment Party”) have entered into and delivered (i) the limited guarantees (the “Limited
Guarantees”) with respect to certain obligations of Buyer under this Agreement (the Equity Commitment Parties delivering a Limited Guarantee, in such capacity, collectively the “Guarantors”
and each a “Guarantor”) and (ii) the Equity Commitment Letters.
H. The Company and Buyer desire to make
certain representations, warranties and covenants in connection with this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and covenants contained in this Agreement, and intending to be
legally bound hereby, the Parties hereby agree as set forth herein.
ARTICLE I
The Merger
1.01. The Merger. Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the provisions of the DGCL, at the Effective Time, Buyer will be merged with and into the Company, the
separate corporate existence of Buyer will thereupon cease and the Company will be the Surviving Corporation.
1.02. Closing. The closing of the Merger (the “Closing”) will take place by electronic exchange of deliverables and release of signatures on the third Business
Day following the satisfaction or waiver (to the extent such waiver is permitted by applicable Law) of the conditions set forth in Article VI (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions at the Closing), unless another date, time or place is agreed to by Buyer and the Company. The date on which the Closing actually occurs is
referred to as the “Closing Date.”
2
1.03. Effective Time. Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the Parties will (a) cause a certificate of merger with respect to the Merger (the “Certificate of Merger”) to be executed and filed with the Secretary of State of the State of Delaware (the “Secretary of State of Delaware”)
in accordance with the relevant provisions of the DGCL and (b) make all other filings or recordings required under the DGCL to cause the Merger to be consummated. The Merger will become effective at the time that the Certificate of Merger is filed
with the Secretary of State of Delaware or such other date and time as is mutually agreed upon by the Parties and specified in the Certificate of Merger (such date and time at which the Merger becomes effective is herein referred to as the “Effective Time”).
1.04. Effects of the Merger. The Merger will have the effects provided in this Agreement and as set forth in the applicable provisions of the DGCL, including Section 259 thereof.
1.05. Certificate of Incorporation and Bylaws of the Surviving Corporation.
(a) At the Effective Time, subject to Section 5.06, the certificate of incorporation of the Surviving Corporation (the “Charter”) will be amended and restated
in its entirety to read as set forth in Exhibit A hereto, until thereafter amended, restated or amended and restated as provided therein or by applicable Law.
(b) The Parties will take all necessary
action such that, at the Effective Time, the bylaws of the Surviving Corporation (the “Bylaws”) will be amended and restated in their entirety to be in the form of the bylaws of Buyer,
subject to Section 5.06, except that references to Buyer’s name will be replaced with references to the Surviving Corporation’s name, until thereafter amended, restated or
amended and restated as provided therein or by the Charter or applicable Law.
1.06. Directors and Officers of the Surviving Corporation.
(a) The directors of Buyer immediately prior
to the Effective Time will be the directors of the Surviving Corporation immediately following the Effective Time, until their respective successors are duly elected or appointed and qualified or their earlier death, resignation or removal in
accordance with the Charter, the Bylaws or applicable Law.
(b) The officers of the Company immediately
prior to the Effective Time will be the officers of the Surviving Corporation immediately after the Effective Time until their respective successors are duly appointed and qualified or their earlier death, resignation or removal in accordance
with the Charter, the Bylaws or applicable Law.
3
ARTICLE II
Effect of the Merger on Capital Stock; Exchange of Certificates; and
Equity-Based and Other Long-Term Incentive Awards
2.01. Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Buyer or the holders of any shares of Company Common Stock or any shares of capital stock
of Buyer:
(a) Cancelation of Certain Shares. All shares of Company Common Stock that are owned by (i) the Company as treasury shares, (ii) any wholly owned Subsidiary of the Company, and (iii) Buyer, in each case, immediately prior
to the Effective Time will be canceled and will cease to exist and no consideration will be delivered in exchange therefor.
(b) Excluded Shares. Each Excluded Share will remain issued and outstanding immediately following the Effective Time as one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation
(and will not be converted, canceled, exchanged or otherwise affected by the Merger).
(c) Conversion of Company Common Stock. Each issued and outstanding share of Company Common Stock (including Company RSAs but excluding (i) Excluded Shares, (ii) shares of Company Common Stock to be canceled in accordance
with Section 2.01(a), and (iii) Appraisal Shares) will be converted automatically into and will thereafter represent only the right to receive an amount in cash equal to
$212.00 per share, without interest (the “Merger Consideration”), provided that each such share of Company Common Stock so canceled will retain the right to receive dividends or
distributions in accordance with the first sentence of Section 2.02(c), without interest. As of the Effective Time, all such shares of Company Common Stock will no longer be
outstanding and will automatically be canceled and cease to exist, and each holder of a certificate which immediately prior to the Effective Time represented any such share of Company Common Stock (each, a “Share Certificate”) or non-certificated shares of Company Common Stock held in book-entry form (each, a “Book-Entry Share”) will cease to have any rights with
respect thereto, except the right to receive the Merger Consideration to be paid in consideration therefor and the right to receive dividends or distributions in accordance with the first sentence of Section 2.02(c), in each case, without interest.
(d) Capital Shares of Buyer. At the Effective Time, each issued and outstanding share of common stock, par value $0.0001 per share, of Buyer will, by virtue of the Merger, be converted into the right to receive a number of
newly issued shares of common stock of the Surviving Corporation equal to the Conversion Ratio.
4
2.02. Exchange Matters.
(a) Prior to the Closing Date, Buyer will
designate a bank or trust company reasonably acceptable to the Company to act as agent (the “Paying Agent”) for the payment of the Merger Consideration in accordance with this Article II and any dividends or distributions in accordance with the first sentence of Section 2.02(c), and, in
connection therewith, prior to the Closing Date will enter into an agreement with the Paying Agent in a form reasonably acceptable to the Company. At or prior to the Effective Time, Buyer will deposit or cause to be deposited with the Paying
Agent an amount in cash sufficient to pay the aggregate Merger Consideration (such cash being hereinafter referred to as the “Exchange Fund”). No investment losses resulting from
investment of the funds deposited with the Paying Agent will diminish the rights of any Company Stockholder entitled thereto to receive the Merger Consideration as provided herein or any dividends or distributions in accordance with the first
sentence of Section 2.02(c).
(b) Payment Procedures.
(i) As promptly as
practicable after the Effective Time (but in no event more than three Business Days thereafter), the Surviving Corporation will cause the Paying Agent to mail to each Person who was, at the Effective Time, a holder of a Share Certificate or
Book-Entry Shares not held, directly or indirectly, through The Depository Trust Company (“DTC”) (other than a Share Certificate or Book-Entry Shares representing a share of Company
Common Stock to be canceled in accordance with Section 2.01(a), Excluded Shares and Appraisal Shares), (x) a letter of transmittal (which will specify that delivery will be
effected, and risk of loss and title to the Share Certificates or such Book-Entry Shares will pass, only upon delivery of the Share Certificates (or affidavits in lieu thereof) to the Paying Agent or, in the case of such Book-Entry Shares upon
adherence to the procedures set forth in the letter of transmittal), and (y) instructions for use in effecting the surrender of the Share Certificates or Book-Entry Shares to the Paying Agent, as applicable, in exchange for payment of the
Merger Consideration as provided in Section 2.01(c) and any dividends or distributions to which such Person is entitled pursuant to the first sentence of Section 2.02(c), in each case, without interest thereon.
(ii) Upon delivery of a
letter of transmittal (duly completed and validly executed in accordance with the instructions thereto, including a duly completed and validly executed IRS Form W-8 or IRS Form W-9, as applicable) and either (A) surrender to the Paying Agent of
Share Certificates (or affidavits of loss in lieu of Share Certificates as provided in this Section 2.02(b) and such other customary documents as may reasonably be required by
the Paying Agent) or (B) transfer of Book-Entry Shares not held through DTC, by book receipt of an “agent’s message” in customary form by the Paying Agent in connection with the surrender of Book-Entry Shares (or such other reasonable evidence,
if any, of surrender with respect to such Book-Entry Shares, as the Paying Agent may reasonably request), in each case as contemplated in Section 2.02(b)(i), the holder of
such Share Certificate or Book-Entry Shares will be entitled to receive in exchange therefor the Merger Consideration and any dividends or distributions to which such Person is entitled pursuant to the first sentence of Section 2.02(c), in each case, without interest thereon, for each share of Company Common Stock formerly represented by such Share Certificate or Book-Entry Share, and the Share
Certificate or Book-Entry Shares so surrendered will forthwith be canceled. Until surrendered as contemplated by this Section 2.02(b), each such Share Certificate or
Book-Entry Share (other than a Share Certificate or Book-Entry Shares representing a share of Company Common Stock to be canceled in accordance with Section 2.01(a), Excluded
Shares and Appraisal Shares) will be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration as contemplated by this Article II and
the right to receive dividends or distributions in accordance with the first sentence of Section 2.02(c), in each case, without interest thereon.
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(iii) The Persons who
were, at the Effective Time, holders of Book-Entry Shares (other than Book-Entry Shares representing a share of Company Common Stock to be canceled in accordance with Section 2.01(a),
Excluded Shares and Appraisal Shares) held, directly or indirectly, through DTC will not be required to deliver a Share Certificate or an executed letter of transmittal to the Paying Agent to receive the Merger Consideration that such holder is
entitled to receive pursuant to this Section 2.02. With respect to such Book-Entry Shares (other than Book-Entry Shares representing a share of Company Common Stock to be
canceled in accordance with Section 2.01(a), Excluded Shares and Appraisal Shares) held, directly or indirectly, through DTC, Buyer and the Company will cooperate to establish
procedures with the Paying Agent, DTC, DTC’s nominees and such other necessary third-party intermediaries to ensure that the Paying Agent will transmit to DTC or its nominees as promptly as practicable after the Effective Time, upon surrender
of Book-Entry Shares held of record by DTC or its nominees in accordance with DTC’s customary surrender procedures and such other procedures as agreed by the Surviving Corporation, the Paying Agent, DTC, DTC’s nominees and such other necessary
third-party intermediaries, the Merger Consideration to which the beneficial owners thereof are entitled to receive as a result of the Merger pursuant to this Article II and any
dividends or distributions to which such beneficial owners are entitled pursuant to the first sentence of Section 2.02(c), in each case, without interest thereon.
(iv) If payment of the
Merger Consideration or any dividends or distributions in accordance with the first sentence of Section 2.02(c) is to be made to a Person other than the Person in whose name
the surrendered Share Certificate is registered, the Surviving Corporation may cause the Paying Agent to pay the Merger Consideration and any dividends or distributions in accordance with the first sentence of Section 2.02(c) to such Person only if such Share Certificate (if applicable) is presented to the Paying Agent, accompanied by all documents required to evidence and effect such transfer and to evidence to
the reasonable satisfaction of the Paying Agent and the Surviving Corporation that any applicable stock transfer or similar Taxes have been paid or are not applicable. Payment of the Merger Consideration and any dividends or distributions in
accordance with the first sentence of Section 2.02(c) with respect to Book-Entry Shares will only be made to the Persons in whose name such Book-Entry Shares are registered in
the stock transfer records of the Company.
(v) No interest will be
paid or accrued on any amount payable upon surrender of any Company Common Stock.
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(c) Transfer Books; No Further Ownership Rights. The Merger Consideration paid in respect of the shares of Company Common Stock upon surrender of a Share Certificate or Book-Entry Shares in accordance with the terms of
this Article II will be deemed to have been paid in full satisfaction of all ownership rights in such Company Common Stock formerly represented by such Share Certificate or Book-Entry
Shares, except for the Surviving Corporation’s obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time that may have been declared and become payable by the Company on such shares of
Company Common Stock prior to the Effective Time and which remain unpaid at the Effective Time. At the Effective Time, the transfer books of the Company will be closed. From and after the Effective Time, there will be no further registration of
transfers on the transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time (other than Excluded Shares that will remain outstanding in accordance with Section 2.01(b)), and the former holders of such shares of Company Common Stock will cease to have any rights with respect to such shares except as otherwise provided for herein
(including the right to receive the Merger Consideration and any dividends or distributions pursuant to the first sentence of this Section 2.02(c), in each case, without
interest) or by applicable Law. Subject to the last sentence of Section 2.02(e), if, at any time after the Effective Time, Share Certificates or Book-Entry Shares (other than
Share Certificates or Book-Entry Shares representing Excluded Shares that will remain outstanding in accordance with Section 2.01(b)) are presented to the Surviving
Corporation, for any reason, they will be canceled and exchanged as provided in this Article II.
(d) Lost, Stolen or Destroyed Certificates. If any Share Certificate representing shares of Company Common Stock entitled to receive the Merger Consideration pursuant to Section
2.01(c) has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Share Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against it with respect to such Share Certificate, the Paying Agent will pay, in exchange for
such lost, stolen or destroyed Share Certificate, the applicable Merger Consideration to be paid in respect of the share of Company Common Stock formerly represented by such Share Certificate as contemplated by this Article II.
(e) Termination of Exchange Fund. At any time following the first anniversary of the Closing Date, the Surviving Corporation will be entitled to require the Paying Agent to deliver to it any portion of the Exchange Fund
(including any interest received with respect thereto) that has not been disbursed to holders of Share Certificates or Book-Entry Shares, and thereafter such holders who have not previously complied with this Article II will be entitled to look only to the Surviving Corporation for, and the Surviving Corporation will remain liable for, payment of their claims for the Merger Consideration and any dividends or
distributions pertaining to their former shares of Company Common Stock that such holders have the right to receive pursuant to the first sentence of Section 2.02(c), in each
case, without interest thereon. Any amounts remaining unclaimed by such holders at such time at which such amounts would otherwise escheat to or become property of any Governmental Authority will become, to the extent permitted by applicable
Law, the property of the Surviving Corporation or its designee, free and clear of all claims or interest of any Person previously entitled thereto.
(f) No Liability. Notwithstanding any provision of this Agreement to the contrary, none of the Parties, the Surviving Corporation or the Paying Agent will be liable to any Person for Merger Consideration delivered to a
public official pursuant to any applicable state, federal or other abandoned property, escheat or similar Law.
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(g) Withholding. Notwithstanding anything in this Agreement to the contrary, each of the Surviving Corporation, the Paying Agent and their respective Affiliates will be entitled to deduct and withhold (or cause to be
deducted and withheld) from any amounts otherwise payable pursuant to this Agreement such amounts as are required to be deducted or withheld under applicable Tax Law; provided, however, that the party intending to make such deduction or withholding will reasonably cooperate with the recipient to reduce or eliminate any such deduction or withholding to the extent
permitted by applicable Law. To the extent that amounts are so deducted or withheld and timely paid over to the relevant Governmental Authority, such amounts will be treated for all purposes of this Agreement as having been paid to the Person
in respect of which such deduction or withholding was made.
2.03. Treatment of Equity-Based Awards.
(a) Prior to the Effective Time, the
Company Board, acting on the recommendation of the Special Committee (or, if appropriate, any duly authorized committee administering the Equity Plans), will adopt such resolutions and take such other actions as may be required to provide for
the following:
(i) Company RSUs. Each Company RSU that is outstanding as of immediately prior to the Effective Time will, immediately prior to and contingent upon the Effective Time, become fully vested. As
of the Effective Time, by virtue of the Merger and without further action on the part of the holder of any Company RSU, each Company RSU that is then outstanding will be automatically canceled and the holder thereof will then become entitled to
receive solely, in full satisfaction of the rights of such holder with respect thereto, a lump-sum cash payment, subject to applicable withholding and without interest, equal to the product, rounded to the nearest cent, of (i) the number of
shares of Company Common Stock subject to such Company RSU immediately prior to the Effective Time multiplied by (ii) the Merger Consideration, which shall be paid in accordance with Section 2.03(b),
and the right to receive any applicable dividend equivalent rights, as may be determined in accordance with the terms of the 2020 Equity Plan and the awards issued thereunder; provided,
that notwithstanding anything to the contrary in the applicable award agreements, such dividend equivalent rights will be deemed to extend to any dividends with a record date prior to the Effective Time that may have been declared and become
payable by the Company on shares of Company Common Stock prior to the Effective Time and which remain unpaid at the Effective Time. As of the Effective Time, each holder of a Company RSU will cease to have any rights with respect thereto,
except the right to receive the payments contemplated by this Section 2.03 in respect thereof.
(ii) Company RSAs. Each Company RSA that is outstanding and unvested as of immediately prior to the Effective Time will, immediately prior to and contingent upon the Effective Time, by virtue
of the Merger and without further action on the part of the holder of any Company RSA, become fully vested with all restrictions applicable thereto lapsing, and, as of the Effective Time, be converted automatically into and will thereafter
represent only the right to receive an amount in cash equal to the Merger Consideration for each share of Company Common Stock subject to such Company RSA in accordance with Section 2.01(c)
and the right to receive dividends or distributions in accordance with the first sentence of Section 2.02(c), in each case, without interest. As of the Effective Time, each
holder of a Company RSA will cease to have any rights with respect thereto, except the right to receive the payments contemplated by this Section 2.03 in respect thereof.
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(iii) Company Performance Awards. As of the Effective Time, by virtue of the Merger and without further action on the part of the holder of any Company Performance Award, each Company
Performance Award outstanding immediately prior to the Effective Time (if any) shall be canceled and automatically converted into the right to receive a lump-sum cash payment, subject to applicable withholding and without interest, equal to the
amount that would have been earned under such Company Performance Award based on performance deemed achieved at the target level of performance applicable to such Company Performance Award, which shall be paid in accordance with Section 2.03(b). As of the Effective Time, each holder of a Company Performance Award will cease to have any rights with respect thereto, except the right to receive the payments
contemplated by this Section 2.03 in respect thereof.
(iv) Company DSUs. As of the Effective Time, by virtue of the Merger and without further action on the part of the holder of any Company DSU, each Company DSU that is then outstanding will be
automatically canceled and the holder thereof will then become entitled to receive, solely in full satisfaction of the rights of such holder with respect thereto, a lump-sum cash payment equal to the product, rounded to the nearest cent, of (i)
the number of shares of Company Common Stock subject to such Company DSU (including any dividend equivalent units credited with respect thereto) immediately prior to the Effective Time multiplied by (ii) the Merger Consideration, which shall be
paid at the earliest time practicable in accordance with Section 2.03(c) in each case, without interest; provided, that notwithstanding anything to the contrary in the Company Non-Employee Director Compensation Plan, dividend equivalent units credited with respect to Company DSUs as of
immediately prior to the Effective Time will be deemed to include dividend equivalents that would be credited based on dividends with a record date prior to the Effective Time that may have been declared and become payable by the Company on
shares of Company Common Stock prior to the Effective Time and which remain unpaid at the Effective Time. For the avoidance of doubt, such cash payment shall be at such time as required to comply with Section 409A of the Code. As of the
Effective Time, each holder of a Company DSU will cease to have any rights with respect thereto, except the right to receive payments contemplated by this Section 2.03 in
respect thereof.
(v) Company Deferred Cash Awards. As of the Effective Time, by virtue of the Merger and without further action on the part of the holder of any Company Deferred Cash Award, each Company
Deferred Cash Award outstanding immediately prior to the Effective Time shall be cancelled and automatically converted into the right to receive a lump-sum cash
payment equal to the aggregate value of such Company Deferred Cash Award as of the Effective Time, which shall be paid at the earliest time practicable in accordance with Section 2.03(c) and, for the avoidance of doubt, shall be at such time as required to comply with Section 409A of the Code. As of the Effective Time, each holder of a Company Deferred Cash Award
will cease to have any rights with respect thereto, except the right to receive the payments contemplated by this Section 2.03 in respect thereof.
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(b) Notwithstanding anything in this
Agreement to the contrary, all amounts payable pursuant to Section 2.03(a) in respect of each Equity-Based Award will be paid as promptly as reasonably practicable after the
Effective Time, but in no event later than the second regularly scheduled payroll date following the Effective Time, by the Surviving Corporation or any of its Subsidiaries through their payroll systems, less applicable Tax withholdings (or, in
the case of non-employee directors or any other individuals with respect to which the Surviving Corporation or any of its Subsidiaries do not have a Tax withholding obligation, such other method as the Company typically utilizes for payments to
such Persons), to the holders of the Equity-Based Awards; provided that, to the extent any such payments constitute a deferral of compensation subject to Section 409A of the Code,
those payments will instead be paid by, or at the discretion of, the Surviving Corporation or its applicable Subsidiaries at such time as is necessary to comply with Section 409A of the Code.
(c) Prior to the Effective Time, the
Company Board, acting on the recommendation of the Special Committee (or, if appropriate, any duly authorized committee administering the Equity Plans), shall adopt such resolutions and take such other actions as may be required to terminate
the Company Non-Employee Director Compensation Plan, effective as of immediately prior to (but contingent upon) the Effective Time, and distribute the amounts deferred thereunder with respect to Company DSUs and Company Deferred Cash Awards in
accordance with this Section 2.03 and in compliance with Section 409A of the Code.
2.04. Adjustments. If between the date hereof and the Effective Time, the outstanding shares of Company Common Stock are changed into a different number of shares or a different class by reason of the occurrence or
record date of any stock split, reverse share split, dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other similar change, the Merger Consideration and any other amounts payable pursuant to this Article II (including any dividends or distributions payable pursuant to the first sentence of Section 2.02(c)) will be
equitably adjusted as necessary to reflect, without duplication, such stock split, reverse share split, dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other similar change. For the avoidance of
doubt, nothing in this Section 2.04 will be construed to permit the Company Group to take any action with respect to Company Common Stock that is otherwise prohibited by this
Agreement.
2.05. Appraisal Rights.
(a) Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock that are outstanding immediately prior to the Effective Time and that are held by any Person who is entitled to demand, and properly demands, appraisal of such shares pursuant to, and
who complies in all respects with, Section 262 of the DGCL (“Appraisal Shares”) will not be converted into the right to receive the Merger Consideration as provided in Section 2.01(c), but instead will be canceled and will represent only the right to receive payment of the appraised value of such Appraisal Shares as provided under Section 262 of
the DGCL; provided, however, that if any such Person fails to perfect or otherwise waives, forfeits, withdraws or loses
the right to appraisal in respect of such shares of Company Common Stock under Section 262 of the DGCL, then the right of such Person to receive payment under Section 262 of the DGCL in respect of such shares of Company Common Stock will cease
and such shares will be deemed to have been converted as of the Effective Time into, and will represent only, the right to receive the Merger Consideration as provided in Section 2.01(c)
and any dividends or distributions in respect of such shares pursuant to the first sentence of Section 2.02(c), in each case, without interest thereon.
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(b) The Company will give prompt written
notice to Buyer of any demands received by the Company for appraisal of any shares of Company Common Stock, withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company in respect thereof, and
will provide Buyer with copies thereof, and Buyer will have the opportunity to participate in all negotiations and Actions with respect to such demands. For purposes of this Section 2.05,
“participate” means that Buyer will be kept apprised of proposed strategy and other significant decisions with respect to demands for appraisal pursuant to the DGCL in respect of Appraisal Shares (to the extent that the attorney-client
privilege between the Company and its counsel is not undermined or otherwise affected), and Buyer may offer comments or suggestions with respect to such demands but will not be afforded any decision-making power or other authority over such
demands except for the payment, settlement or compromise consent set forth below. Prior to the Effective Time, the Company will not, without the prior written consent of Buyer, make any payment with respect to any such demands, settle or offer
to settle any such demands, or agree to do any of the foregoing. Buyer will not, except with the prior written consent of the Company, require the Company to make any payment with respect to any demands for appraisal or settle or offer to
settle any such demands.
ARTICLE III
Representations and Warranties of the Company
The Company represents and warrants to Buyer that, except as (A) set forth in the confidential disclosure letter delivered by the Company to Buyer
concurrently with or prior to the execution and delivery of this Agreement (the “Company Disclosure Letter”), interpreted in accordance with Section
8.14 or (B) disclosed in any Company SEC Documents that are publicly available at least two Business Days prior to the date of this Agreement, other than any disclosures in any such Company SEC Document contained under the
captions “Risk Factors,” “Forward Looking Statements,” “Quantitative or Qualitative Disclosures About Market Risk” (in each case that are not statements of historical fact) or other similarly cautionary, forward-looking or predictive statements in
such Company SEC Documents, it being understood that any matter disclosed in such Company SEC Documents will not be deemed disclosed for purposes of Section 3.01 (Organization; Standing), Section 3.02 (Capitalization),
and Section 3.04 (Authority; Noncontravention):
3.01. Organization; Standing. The Company is a corporation duly incorporated and validly existing under the laws of the State of Delaware. The Company is in good standing with the Secretary of State of Delaware and has
all requisite corporate power and corporate authority necessary to carry on its business as it is now being conducted and own, lease and operate its assets and properties in the manner in which its assets and properties are currently owned, leased
and operated. The Company (in jurisdictions that recognize the following concepts) is duly licensed and qualified to do business as a foreign corporation, and is in good standing, under the laws of such jurisdictions where the nature of its
business or the ownership, leasing or operation of its assets and properties requires such licensing or qualification, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. True, correct
and complete copies of the Company Charter Documents are included in the Company SEC Documents. The Company is not in violation of the Company Charter Documents in any material respect.
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3.02. Capitalization.
(a) The authorized shares of the Company
consist of 240,000,000 shares of Company Common Stock, 100,000 shares of preferred stock, par value $0.0001 (“Company Preferred Stock”), 7,125,000 shares of non-voting common stock,
par value $0.0001 per share (“Company Non-Voting Common Stock”), and 20,000,000 shares of Class C common stock, par value $0.0001 per share (“Company Class C Common Stock”). At the close of business on June 30, 2026 (the “Capitalization Date”), (i) 65,662,873 shares of Company Common Stock were
issued and outstanding (including 474,397 Company RSAs and 374,316 shares of Company Common Stock outstanding under the Company KSOP), (ii) no shares of Company Common Stock were issued and held by the Company in its treasury, (iii) no Company
Preferred Stock was issued, outstanding or held by the Company in its treasury, (iv) no Company Non-Voting Common Stock was issued, outstanding or held by the Company in its treasury, (v) no Company Class C Common Stock was issued, outstanding
or held by the Company in its treasury, (vi) 28,793 Company RSUs were issued and outstanding and (vii) 97,736 Company DSUs were issued and outstanding. As of the Capitalization Date, no shares of capital stock of the Company were reserved for
issuance except 4,590,716 shares of Company Common Stock were reserved and available for issuance pursuant to the 2020 Equity Plan. Since the Capitalization Date through the date hereof, the Company has not issued any Company Securities other
than, in each case, pursuant to the vesting or settlement of Company RSUs and Company DSUs or the forfeiture or withholding of Taxes with respect to Company RSUs, Company RSAs and Company DSUs. All outstanding shares of Company Common Stock
have been duly authorized and validly issued and are fully paid, nonassessable and are not subject to and were not issued in violation of any preemptive rights, subscription rights, anti-dilutive rights, rights of first refusal or similar
rights.
(b) Except as described in Section 3.02(a) or as set forth on Section 3.02(b) of the Company Disclosure Letter, as of
the Capitalization Date, there were (i) no outstanding shares of capital stock of, or other equity or voting interests in, the Company, (ii) no outstanding securities of the Company convertible into or exchangeable for shares of capital stock
of, or other equity or voting interests in, the Company, (iii) no outstanding options, warrants, rights or other commitments or agreements to acquire from the Company, or that obligate the Company to issue, any capital stock of, or other equity
or voting interests in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interests in, the Company, (iv) no obligations of the Company to grant, extend or enter into any subscription,
warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interests in, the Company (the items in clauses
(i), (ii), (iii), and (iv) being referred
to collectively as “Company Securities”), and (v) no other obligations by the Company to make any payments based on the price or value of any Company Securities. Other than the Equity
Plans and as set forth in Section 3.02(b) of the Company Disclosure Letter, there are no outstanding agreements of any kind which obligate the Company to repurchase, redeem or
otherwise acquire any Company Securities (other than pursuant to the forfeiture of, or withholding of Taxes with respect to, Company RSUs, Company DSUs and Company RSAs, if applicable), or obligate the Company to grant, extend or enter into any
such agreements relating to any Company Securities, including any agreements granting any preemptive rights, subscription rights, anti-dilutive rights, rights of first refusal or similar rights with respect to any Company Securities. No direct
or indirect Subsidiary of the Company or any Joint Venture Entity owns any Company Common Stock. The Company does not have outstanding bonds, debentures, notes or other obligations, the holders of which have the right to vote (or that are
convertible into or exercisable for securities having the right to vote) on any matter in a capacity as a holder of Company Common Stock. Except as set forth in Section 3.02(b) of
the Company Disclosure Letter, the Company is not a party to any stockholders’ agreement, voting trust agreement, registration rights agreement or other similar agreement or understanding relating to any Company Securities or any other
agreement relating to the disposition, voting or dividends with respect to any Company Securities.
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3.03. Subsidiaries.
(a) Each of the Subsidiaries of the Company
is duly organized, validly existing and in good standing (where such concept is recognized under applicable Law) under the Laws of the jurisdiction of its organization except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each of the Subsidiaries of the Company has all requisite corporate or similar power and corporate or similar authority necessary to (i) carry on its business as it is now being conducted and (ii)
own, lease and operate its assets and properties in the manner in which its assets and properties are currently owned, leased or operated, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. None of the Subsidiaries of the Company or, to the Knowledge of the Company, any of the Joint Venture Entities, are in violation of their respective organizational or governing documents in any material respect.
(b) All of the outstanding capital stock of
or other voting securities of, or ownership interests in, each Subsidiary of the Company, is owned by the Company, directly or indirectly, free and clear of any Encumbrance (other than Permitted Encumbrances) and free of any transfer
restriction (other than transfer restrictions applicable to a direct or indirect change of control, a direct or indirect change in beneficial ownership, or change of management under the Dealer Arrangements, or transfer restrictions of general
applicability as may be provided under the Securities Act or other applicable securities laws), including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other voting securities or ownership interests.
As of the date of this Agreement, there are no issued, reserved for issuance or outstanding (i) securities of the Company Group convertible into, or exchangeable for, shares of capital stock or other voting securities of, or ownership interests
in, any Subsidiary of the Company, as applicable, (ii) warrants, calls, options or other rights to acquire from the Company Group, or other obligations of the Company Group to issue, any capital stock or other voting securities of, or ownership
interests in, or any securities convertible into, or exchangeable for, any capital stock or other voting securities of, or ownership interests in, any Subsidiary of the Company, as applicable, or (iii) restricted shares, stock appreciation
rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or other voting
securities of, or ownership interests in, any Subsidiary of the Company (the items in clauses (i) through (iii)
being referred to collectively as the “Company Subsidiary Securities”). There are no outstanding obligations of the Company Group to repurchase, redeem or otherwise acquire any of the
Company Subsidiary Securities.
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(c) Section 3.03(c) of the Company Disclosure Letter sets forth a true, correct and complete list, as of the date of this Agreement, of each Person that is not a Subsidiary of the Company but in which the Company, directly
or indirectly, holds an equity interest (each such Person, a “Joint Venture Entity” and each such interest, a “JV Interest”),
and the (i) name, (ii) type of entity, (iii) the jurisdiction of its organization, (iv) to the Knowledge of the Company, the name of the other Persons owning interests in, or engaged in the business of, the Joint Venture Entity with the
Company, (v) the number and percentage of the JV Interests held by the Company, directly or indirectly, and the Company or the applicable Subsidiary of the Company that holds such JV Interests, (vi) the Joint Venture Entity’s authorized capital
stock or other securities, the number and type of its issued and outstanding capital stock or other securities, and (vii) to the Knowledge of the Company, the number and percentage of the capital stock or other securities held by each other
Person owning securities in the Joint Venture Entity. All JV Interests are owned, directly or indirectly, by the Company, free and clear of all Encumbrances (other than Permitted Encumbrances) and free of any transfer restriction (other than
(x) transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities laws, (y) transfer restrictions applicable to a direct or indirect change of control, a direct or indirect change in
beneficial ownership or change of management under the Dealer Arrangements, and (z) as set forth in the applicable joint venture agreement or organizational documents of a Joint Venture Entity).
3.04. Authority; Noncontravention.
(a) The Company has all necessary corporate
power and corporate authority to execute and deliver this Agreement and to perform its obligations hereunder and, subject to the receipt of the Company Stockholder Approval, to consummate the Merger Transactions. The execution, delivery and
performance by the Company of this Agreement, and the consummation by it of the Transactions, have been duly authorized, and except for obtaining the Company Stockholder Approval, no other corporate action on the part of the Company is
necessary to authorize the execution, delivery and performance by the Company of this Agreement and the consummation by it of the Merger Transactions. This Agreement has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery hereof by Buyer, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws of general application affecting or relating to the enforcement of creditors’ rights generally and (ii) is subject to general principles of equity,
whether considered in a proceeding at law or in equity (clauses (i) and (ii), collectively, the “Enforceability Exception”).
(b) The Special Committee, at a meeting duly
convened and held, adopted resolutions that unanimously (i) determined that this Agreement and the Transactions are advisable, fair to, and in the best interests of, the Company and the Unaffiliated Company Stockholders and (ii) recommended to
the Company Board the Special Committee Recommendation, which resolutions, subject to Section 5.02, have not been subsequently rescinded, withdrawn or modified in a manner
adverse to Buyer.
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(c) The Company Board, at a meeting duly
convened and held from which all directors who are Investor Group Affiliates recused themselves from the Company Board’s deliberations and vote with respect to this Agreement and the Transactions, acting on the Special Committee Recommendation,
by unanimous vote of all directors present adopted resolutions (i) (A) approving and declaring advisable this Agreement and the Transactions, (B) determining that this Agreement and the Transactions are fair to, and in the best interests of,
the Company and the Company Stockholders, including the Unaffiliated Company Stockholders, and (C) resolving to make the Company Recommendation to the Company Stockholders, and (ii) directing that this Agreement be submitted to the Company
Stockholders for adoption at the Company Stockholders Meeting, which resolutions, subject to Section 5.02, have not been subsequently rescinded, withdrawn or modified in a
manner adverse to Buyer.
(d) Assuming the representations and
warranties set forth in Section 4.10 are true and correct, the affirmative vote (in person or by proxy) of the holders of a majority of the outstanding shares of Company
Common Stock entitled to vote thereon, voting as a single class, at the Company Stockholders Meeting or any adjournment or postponement thereof (the “Requisite Stockholder Approval”)
is the only vote of the holders of any class or series of shares of capital stock of the Company required by the Company Charter Documents and Section 251 of the DGCL to adopt this Agreement and approve the Merger. In addition to the Requisite
Stockholder Approval, the adoption of this Agreement and approval of the Merger at the Company Stockholders Meeting or any adjournment or postponement thereof will be subject to the approval by the affirmative vote (in person or by proxy) of
the holders of a majority of the votes cast by the “disinterested stockholders” (as such term is defined in Section 144 of the DGCL), which, for the avoidance of doubt, will exclude any stockholder of the Company that is not an Unaffiliated
Company Stockholder (such approval, together with the Requisite Stockholder Approval, the “Company Stockholder Approval”). Prior to the Effective Time, the Company Board (acting on
the Special Committee Recommendation) shall have, by unanimous vote of all directors present, adopted resolutions waiving application of Section 203 of the DGCL to the consummation of the Merger and the other Transactions.
(e) Neither the execution and delivery of
this Agreement by the Company, nor the consummation by the Company of the Transactions, nor performance or compliance by the Company with any of the terms or provisions hereof, will (i) subject to the receipt of the Requisite Stockholder
Approval, violate, contravene or conflict with any provision of the Company Charter Documents, (ii) assuming the Requisite Stockholder Approval is obtained, conflict with or violate any provision of any organizational or governing documents of
any Subsidiary of the Company, or (iii) assuming that the consents, approvals, filings, licenses, Permits, authorizations, declarations, notifications and registrations referred to in Section 3.05
and the Requisite Stockholder Approval are obtained prior to the Effective Time and the filings referred to in Section 3.05 are made and any approvals or consents thereunder
have been obtained and waiting periods thereunder have terminated or expired prior to the Effective Time, (x) violate any Law or Judgment applicable to the Company Group (or by which any of their respective properties or assets are bound), (y)
violate, conflict with or constitute a default under (or any event which with notice or lapse of time or both would constitute a default), result in any breach of or any loss of benefit under, require any consent or approval under, or give to
others any right of termination, vesting, amendment, acceleration or cancelation of, any of the terms or provisions of any Material Contract under Section 3.17(a)(ii), Section 3.17(a)(iii), Section 3.17(a)(vi) or Section 3.17(a)(vii)(B),
or (z) result in the creation of any Encumbrances (other than a Permitted Encumbrance) on any properties or assets of the Company Group, except, in the case of clauses (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other occurrences or Encumbrances which would not, individually or in the aggregate, reasonably be expected to (I)
have a Material Adverse Effect or (II) prevent or materially delay, interfere with, impair or hinder the consummation by the Company of the Transactions or the compliance by the Company with its obligations under this Agreement.
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3.05. Governmental Approvals. Except for (a) compliance with the applicable requirements of the Exchange Act, including the filing with the Securities and Exchange Commission (the “SEC”) of a proxy statement relating to the Company Stockholders Meeting (as amended or supplemented from time to time, the “Proxy Statement”) and the Schedule
13E‑3, (b) compliance with the rules and regulations of the New York Stock Exchange (“NYSE”), (c) the filing of the Certificate of Merger with the Secretary of State of Delaware pursuant
to the DGCL, (d) filings required under, and compliance with other applicable requirements of, the HSR Act, any other Antitrust Laws or FDI Laws or any other Required Regulatory Approvals, and (e) compliance with any applicable state securities or
blue sky laws, no consent, approval, license, permit or authorization of, or filing, declaration, notification or registration with, any Governmental Authority is necessary for the execution and delivery of this Agreement by the Company, the
performance by the Company of its obligations hereunder and the consummation by the Company of the Transactions, other than such other consents, approvals, licenses, permits, authorizations, filings, declarations, notifications or registrations
that, if not obtained, made or given, would not, individually or in the aggregate, reasonably be expected to (x) have a Material Adverse Effect or (y) prevent or materially delay, interfere with, impair or hinder the consummation by the Company of
the Transactions or the compliance by the Company with its obligations under this Agreement.
3.06. Company SEC Documents; Undisclosed Liabilities; Internal Controls.
(a) Since January 1, 2024, the Company has
timely filed or furnished (as applicable) on a timely basis all Company SEC Documents together with all certifications required pursuant to the Sarbanes-Oxley Act. None of the Subsidiaries of the Company is required to make any filings with
the SEC. Each of the Company SEC Documents filed or furnished since January 1, 2024, at the time of its filing or being furnished (or, if amended or supplemented, as of the date of such amendment or supplement, or, in the case of a Company SEC
Document that is a registration statement filed pursuant to the Securities Act or a proxy statement filed pursuant to the Exchange Act, on the date of effectiveness of such Company SEC Document or date of the applicable meeting, respectively),
complied or will comply (as applicable) as to form in all material respects, with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as applicable, in effect on the date that such Company SEC
Document was filed or furnished. The Company SEC Documents filed or furnished since January 1, 2024, at the time they were filed (or, if amended, supplemented or superseded, as of the date of such amendment, supplement or superseding filing),
did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading. As
of the date of this Agreement, there are no outstanding or unresolved comments received from the SEC with respect to any Company SEC Documents and, to the Knowledge of the Company, as of the date of this Agreement, none of the Company SEC
Documents is the subject of ongoing SEC review. As of the date of this Agreement, there has been no correspondence between the SEC and the Company relating to the Company or the Company SEC Documents since January 1, 2024 that is not set forth
in the Company SEC Documents or that has not otherwise been disclosed to Buyer prior to the date of this Agreement.
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(b) The consolidated financial statements of the Company (including all related notes or schedules) included or incorporated by reference in the Company SEC Documents, as of
their respective dates of filing with the SEC (or, if such Company SEC Documents were amended prior to the date hereof, the date of the filing of such amendment, with respect to the consolidated financial statements that are amended or restated
therein), (i) complied in all material respects with the published rules and regulations of the SEC with respect thereto and applicable accounting requirements, (ii) have been prepared in accordance with GAAP
(except, in the case of unaudited quarterly statements, as permitted by Form 10-Q with respect to any financial statements filed on Form 10-Q) applied on a consistent basis during the periods involved (except (A) as may be indicated in the notes thereto or (B) as permitted by Regulation S-X), and (iii) fairly present in all material respects the consolidated financial position of the Company
and its consolidated Subsidiaries as of the dates thereof and the consolidated balance sheets, consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of cash flows and consolidated statements
of equity for the periods shown (subject, in the case of unaudited quarterly financial statements, to normal and recurring year‑end adjustments).
(c) Neither the Company nor any of its consolidated Subsidiaries has any liabilities of a type required to be disclosed in the
liabilities column of a balance sheet prepared in accordance with GAAP, except liabilities (i) disclosed, reflected or reserved against in the audited consolidated balance sheet (or the notes thereto) of the Company
as of December 31, 2025 (the “Audited Balance Sheet Date”) included in the Company SEC Documents, (ii) incurred after the Audited Balance Sheet Date in the ordinary course of business (none of which is a liability resulting from breach of
contract, breach of warranty, tort, infringement or misappropriation), (iii) as contemplated by this Agreement or otherwise incurred in connection with the Transactions or the process leading to the execution of this Agreement, or (iv) as would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(d) The Company maintains a system of “internal control over financial reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP, including reasonable assurance (i) that transactions are executed in accordance with management’s general
or specific authorizations and recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability and (ii) regarding prevention or timely detection of any unauthorized acquisition, use
or disposition of the Company’s assets that could have a material effect on the Company’s financial statements. As of the date of this Agreement, no significant deficiency, material weakness or fraud that involves management or other employees
who have a role in the preparation of the Company’s financial statements was identified in management’s assessment of internal control over financial reporting as of December 31, 2025. The Company maintains “disclosure controls and procedures”
(as defined by Rule 13a-15 or 15d-15 under the Exchange Act). Such disclosure controls and procedures are, except as would not, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect, designed to ensure that
all information required to be disclosed by the Company is recorded, processed, summarized and reported on a timely basis to the individuals responsible for the preparation of the Company’s filings with the SEC to allow timely decisions regarding
required disclosure within the time periods specified in the SEC’s rules and forms, and in compliance with the Exchange Act and the Securities Act. The Company has disclosed, based on its most recent evaluation of internal controls over
financial reporting, to the Company’s outside auditors and the audit committee of the Company Board (x) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are
reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (y) any fraud, whether or not material, that involves management or other employees who have a significant role in the
Company’s internal control over financial reporting, all of which information described in clauses (x) and (y) above has been disclosed by the Company to Buyer prior to the date of this Agreement.
(e) As of the date of this Agreement, neither the Company nor any of its Subsidiaries is a party to, or has any commitment to become a party to, any “off balance sheet
arrangement” that would be required to be disclosed under Item 303(a) of Regulation S-K as promulgated by the SEC. Except as have been described in the Company SEC Documents, as of the date of this Agreement, there
are no unconsolidated direct or indirect Subsidiaries of the Company.
(f) The Proxy Statement and the Schedule 13E-3 (including any amendment or supplement thereto), at the time first sent or given to the stockholders of the Company and at the time
of the Company Stockholders Meeting, will comply as to form in all material respects with the requirements of the Exchange Act and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to statements made
or incorporated by reference therein based on information supplied by or on behalf of the Investor Group, Buyer or any of their respective Representatives for inclusion or incorporation by reference in the Proxy Statement or the Schedule 13E-3.
(a) Since the Audited Balance Sheet Date through the date of this Agreement, except for the execution and performance of this Agreement and the Transactions and the discussions,
negotiations and transactions related thereto, the Company Group has conducted its business in the ordinary course of business, except as has not had and would not, individually or in the aggregate, reasonably be expected to have, a Material
Adverse Effect.
(b) Since the Audited Balance Sheet Date through the date of this Agreement, there has not been any change, event, development,
occurrence, state of facts, circumstances or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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(c) Since June 30, 2026 through the date of this Agreement, the Company Group has not taken any action that, if taken after the date hereof, would constitute a breach of, or
otherwise require the consent of Buyer under, any of the covenants set forth in Section 5.01(b)(i), (ii), (vi), (vii), (viii), (ix), (x), (xi), (xii) or (xv).
3.08. Legal Proceedings; Judgments. Except as
(a) has not had and would not, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect or (b) has not, and would not, individually or in the aggregate, reasonably be expected to prevent or materially delay,
interfere with, impair or hinder the consummation by the Company of the Transactions or the compliance by the Company with its obligations under this Agreement, there is no pending or, to the Knowledge of the Company, threatened Action or, to the
Knowledge of the Company, investigation (x) against any member of the Company Group or its respective assets or properties, (y) against any officer, director or employee of any member of the Company Group, in their
capacities as such, or, to the Knowledge of the Company, any other Person with respect to which any member of the Company Group has or would reasonably be expected to have an indemnification obligation, or (z) that is reasonably expected to
result in injunctive relief against a member of the Company Group that prohibits such member of the Company Group from engaging in or continuing any conduct, activity, or practice relating to the business of the Company Group. There is no, and
since January 1, 2024, there has been no, outstanding order, judgment, injunction, ruling, writ or decree (including a suspension or debarment) of any Governmental Authority (a “Judgment”) by or before any Governmental Authority to which
any member of the Company Group is a party or any of its or their respective assets are bound that would, individually or in the aggregate, reasonably be expected to (I) have, a Material Adverse Effect or (II) prevent or materially delay,
interfere with, impair or hinder the consummation by the Company of the Transactions or the compliance by the Company with its obligations under this Agreement. Notwithstanding the foregoing, this Section 3.08 does not apply to
any Transaction Litigation or stockholder litigation (or a derivative or similar claim) or other Action brought in connection with this Agreement or any of the Transactions, in each case, that first arises on or after the date of this Agreement.
(a) Each member of the Company Group is, and has been since January 1, 2024, in compliance with all Laws or Judgments applicable to such member of the Company Group or its
respective properties or assets, except where such failure to comply has not had and would not, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect.
(b) Each member of the Company Group holds and is, and has been since January 1, 2024, in compliance with all licenses,
franchises, permits, certificates, consents, approvals, authorizations, designations, waivers, exemptions, deviations and registrations from Governmental Authorities (collectively, “Permits”) necessary for the lawful conduct of its
respective businesses, except where the failure to hold or comply with the same would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no member of the Company Group nor any of their respective
directors, officers or employees acting in such capacity, nor to the Knowledge of the Company, any of its or their respective agents acting on its or their behalf, since January 1, 2024 (i) has made any illegal
contributions, gifts, entertainment, or unlawful expenses relating to political activity, has made any bribe, unlawful rebate, payoff, influence payment, kickback or other similar unlawful payment of any nature, or has violated any applicable
Anti-Corruption Law, or (ii) has violated any applicable Export-Import Laws.
(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no member of the Company Group nor any of their respective
directors, officers or employees acting in such capacity, nor, to the Knowledge of the Company, any of its or their respective agents acting on its or their behalf, since January 1, 2024, has (i) been or is a Sanctioned Person, (ii) engaged in
any transactions, directly or indirectly, with or for the benefit of any Sanctioned Person or in or involving any Sanctioned Jurisdiction, or (iii) otherwise violated applicable Sanctions.
(e) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, since January 1, 2024, the Company and its consolidated Subsidiaries have adhered to a
system of internal controls and maintained accurate books and records as required by the U.S. Foreign Corrupt Practices Act of 1977. The Company has established and maintains policies and procedures reasonably designed to promote and achieve
compliance with any Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions applicable to the Company Group.
(f) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, since January 1, 2024, no member of the Company Group has
received any allegation, inquiry, notice or communication that alleges that such member of the Company Group, or any director, officer or, to the Knowledge of the Company, employee, agent, representative, or other Person acting for or on behalf
or at the direction thereof, has violated any Anti-Corruption Laws, Anti-Money Laundering Laws, Sanctions, or Export-Import Laws.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each member of the Company Group has properly prepared (or
caused to be prepared) and timely filed (taking into account valid extensions of time within which to file) all Tax Returns (including information provided therewith or with respect thereto) required to be filed by it, and all such filed Tax
Returns (taking into account all amendments thereto) are true, complete and accurate in all respects.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all Taxes owed by the Company Group that are due (whether or
not shown on any Tax Return) have been timely paid or have been adequately reserved against in accordance with GAAP.
(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each member of the Company Group has complied with all
applicable Laws relating to the withholding of Taxes.
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(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, since January 1, 2024 through the date hereof, no member of
the Company Group has any currently open, or received written notice of, any pending audits, examinations, investigations, proposed adjustments, claims or other proceedings in respect of any Taxes.
(e) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there are no Encumbrances for Taxes upon the assets or
properties of the Company Group, except for any Permitted Encumbrances.
(f) No member of the Company Group has been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date
of this Agreement that was purported or intended to be governed by Section 355 of the Code (or any similar provision of state, local or non-U.S. Law).
(g) No member of the Company Group has been a member of an affiliated group of corporations filing a consolidated U.S. federal income Tax Return (other than a group the common
parent of which is the Company) or has any liability for the Taxes of any Person (other than another member of the Company Group) under Treasury Regulations Section 1.1502-6 (or any similar provision of any state, local or non-U.S. Law) or as a
transferee or successor, other than by reason of ordinary course commercial agreements not primarily related to Taxes.
(h) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no member of the Company Group is a party to, or bound by, or
has any obligation under, any Tax sharing, Tax allocation or Tax indemnification Contract other than (i) Contracts solely among the Company Group and (ii) any Contract entered into in the ordinary course of business
and the primary purpose of which is not related to Taxes.
(i) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no member of the Company Group has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect to an assessment, collection, reassessment or deficiency for Taxes (other than pursuant to extensions of time to file Tax Returns obtained in the ordinary course of
business) and no request for any such waiver or extension is currently pending.
(j) No member of the Company Group has participated in any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2).
(k) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no member of the Company Group will be required to include in
a taxable period ending after the Closing Date an amount of taxable income attributable to income that accrued in a taxable period prior to the Closing Date but was not recognized for Tax purposes in such prior taxable period as a result of the
installment method of accounting, an open transaction disposition, the completed contract method of accounting, the long-term contract method of accounting, or Section 481 of the Code or comparable provisions of
state, local or non-U.S. Tax Law.
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(l) Within the past three years, no member of the Company Group has executed, entered into or is subject to any closing agreement under Section 7121 of the Code, IRS private
letter ruling or advance pricing agreement or comparable agreement or ruling of any other taxing authority that is still in effect, nor is any such ruling or request for such ruling currently pending.
(a) With respect to each material Company Plan, the Company has made available to Buyer true, correct and complete copies (to the extent applicable)
of (i) the plan document or a written description thereof (or, if appropriate, a form thereof), including any amendments thereto, (ii) the most recent determination or opinion letter from the IRS, if applicable,
(iii) the most recent annual report on Form 5500 filed with the IRS (and attached schedules) and the most recent actuarial valuation or similar report (to the extent available), (iv) each current trust agreement or
other funding vehicle, and (v) for the three most recent years, any material non-routine correspondence with the IRS, the United States Department of Labor, the Pension Benefit Guaranty Corporation, the SEC and any
other Governmental Authority regarding the operation and administration of any such material Company Plan. For purposes of this Section 3.11, the following types of Company Plans will not be considered material Company Plans: (A)
any plan, program, or policy providing customary health, welfare, or fringe benefits made available in the ordinary course of business to a broad-based group of employees on a nondiscriminatory basis, including medical, dental, vision, life
insurance, disability, vacation, holiday, sick leave, expense reimbursement or relocation benefits; or (B) any commission, incentive or bonus compensation arrangement that (1) is adopted and administered by the Company Group in the ordinary
course of business, (2) determines an individual’s variable compensation primarily by reference to sales, service, financing or other performance metrics of a specific dealership, store or other business unit, and (3) is offered on substantially
similar terms to a class of similarly situated employees at the applicable dealership or business unit.
(b) Each Company Plan has been administered in compliance with its terms and applicable Laws, including ERISA and the Code, as applicable, other than instances of noncompliance
that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each Company Plan
intended to be “qualified” within the meaning of Section 401(a) of the Code is so qualified and has received a favorable determination letter from the IRS or is entitled to rely upon a favorable opinion issued by the
IRS, and to the Knowledge of the Company, there are no existing circumstances or any events that have occurred that could reasonably be expected to cause the loss of any such qualification status. There are no pending, or to the Knowledge of the
Company, threatened claims (other than routine claims for benefits) by, on behalf of or involving any Company Plan or any trust related thereto and no audit or other proceeding by a Governmental Authority is pending, or to the Knowledge of the
Company, threatened with respect to any Company Plan, in each case, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(c) Except as set forth in Section 3.11(c) of the Company Disclosure Letter, neither the Company nor any of its ERISA Affiliates has, since
January 1, 2024, maintained, sponsored or contributed to or been obligated to maintain, sponsor or contribute to, or has any liability with respect to any (i) defined benefit pension plan (as defined in Section 3(35)
of ERISA) or a plan subject to Title IV of ERISA or Section 412 of the Code, (ii) “multiemployer plan” (as defined in Section 3(37) or 4001(a)(3) of ERISA), (iii) multiple employer welfare arrangement as defined in
Section 3(40) of ERISA, (iv) multiple employer plan as defined in Section 201 of ERISA or Section 413(c) of the Code, or (v) post-termination or post-retirement health, life, disability or other welfare benefits, or
coverage, other than benefits or coverage required to be provided under Part 6 of Title I of ERISA or Section 4980(B)(f) of the Code or any other applicable Law.
(d) Except as set forth in this Agreement, the consummation of the Merger Transactions will not, either alone or in combination with another event, result in (i) any of the following with respect to any current or former director, officer, employee or other individual service provider of the Company Group: (A) any payment, compensation or
benefit becoming due, or any increase thereof; (B) the acceleration of the time of payment or vesting of any payment, compensation or benefit, or increase thereof, and (C) any funding
(through a grantor trust or otherwise) of any compensation or benefit; or (ii) any limitation or restriction on the right to amend, terminate or transfer the assets of any material Company Plan on or following the Effective Time.
(e) The consummation of the Merger Transactions will not, either alone or in combination with any other event, result in the payment of any amount that could, individually or in combination with any other
payment, be characterized as an “excess parachute payment” (as such term is defined in Section 280G(b)(1) of the Code). No member of the Company Group is a party to or has any obligation under any Company Plan or
otherwise to gross-up or indemnify any person for excise Taxes payable pursuant to Section 409A or 4999 of the Code.
(f) Each Company Plan administered in or covering employees in the U.S. that is a “non-qualified deferred compensation plan” (as such term is defined in Section 409A(d) of the Code) has been maintained in
documentary and operational compliance with the requirements of Section 409A of the Code and the applicable guidance thereunder, other than instances of noncompliance that would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(g) All Company Plans maintained outside the jurisdiction of the U.S. that provide compensation or benefits in respect of any employee of the Company Group that is primarily
based outside the U.S., (i) if intended to qualify for special Tax treatment or be registered, meet all requirements for such treatment or are registered, (ii) if intended to be funded or book-reserved, are fully
funded or book-reserved, as appropriate, based upon reasonable actuarial assumptions, and (iii) have been maintained in good standing with applicable Governmental Authorities and in compliance with all applicable Laws, in each case, except as
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(h) The Company has the authority to take all required actions and provide such direction as contemplated by Section 5.18 with respect to the Company KSOP. The Company KSOP was validly
authorized and established in accordance with applicable Law in all material respects and is a qualified employee stock ownership plan within the meaning of Section 4975(e)(7) of the Code. The Company KSOP has received a favorable determination
or opinion letter from the IRS that the Company KSOP plan document meets the applicable qualification requirements of Section 401(a) of the Code, and, to the Knowledge of the Company, since the date of such determination (A) such qualified status
has not been revoked and (B) nothing has occurred that would reasonably be expected to cause revocation of such qualified status. The Company KSOP has been administered and operated in compliance in all material respects with its terms and all
applicable Law, including ERISA and the Code. All shares of Company Common Stock owned by the Company KSOP are, and have at all times constituted, “employer securities” as that term is defined in Section 409(l) of the Code and “qualifying
employer securities” as defined in Section 407(d)(5) of ERISA. All shares of Company Common Stock purchased by the Company KSOP were purchased for no more than “adequate consideration” within the meaning of Section 3(18) of ERISA. Neither the
Company nor any “party in interest” or “disqualified person” with respect to the Company KSOP has engaged in a non-exempt “prohibited transaction” within the meaning of Section 4975 of the Code or Section 406 of ERISA. Neither the Company KSOP
nor the Company is subject to any claims or liabilities in respect of the Company KSOP, except for the payment of benefits and expenses payable in connection with the administration of the Company KSOP. There are no outstanding loans related to
the Company KSOP or outstanding loans that have been used to purchase shares of Company Common Stock under the Company KSOP.
(i) Section 3.11(i) of the Company Disclosure Letter sets forth a true, correct and complete list of all Equity-Based Awards
outstanding as of the date of this Agreement, including with respect to each such award (i) the name of the holder thereof, (ii) the number of shares or the amount of cash subject to such award, (iii) the grant or
issuance date, and (iv) any applicable vesting schedule.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there is no, and since January 1, 2024, there has been no,
labor dispute, strike, controversy, slowdown, work stoppage or lockout pending or, to the Knowledge of the Company, threatened against or affecting any member of the Company Group. Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, since January 1, 2024 to the date of this Agreement, there have been no union grievances or union representation questions involving employees or the Company Group or any such grievances
or union representation questions threatened against or affecting the Company Group. Neither the execution and delivery of this Agreement nor the consummation of the Transactions (either alone or in combination with another event) requires the
provision of information to, or consultations, discussions or negotiations with, employee representative bodies (including any unions or works councils) that represent employees of the Company Group, except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each member of the Company Group is, and since January 1,
2024 has been, in compliance with all applicable Laws and Judgments relating to labor, employment and employment practices, including all such Laws relating to discrimination, harassment, retaliation, equal opportunity, affirmative action,
workers’ compensation, terms and conditions of employment, termination of employment, wages, overtime, classification and compensation of employees and consultants and independent contractors, social security and Tax matters in connection with
employees and independent contractors, pay equity, hours, disability rights and benefits, employee leaves of absence, occupational safety and health, employee whistle-blowing, immigration, employee privacy, child labor, unfair labor practices,
labor relations, profit sharing, employment hiring, paid sick time, background screens, drug testing, and layoffs (including the Worker Adjustment and Retraining Notification Act of 1988, or similar federal, state or local mass layoff or plant
closing Law).
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(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, or as set forth on Section 3.12(c) of the Company
Disclosure Letter, there is no, and since January 1, 2024, there has been no, pending, or, to the Knowledge of the Company, threatened Action against the Company Group brought by or on behalf of any applicant for employment, any current or former
employee, officer, director or individual service provider of the Company Group, or any person alleging to be a current or former employee, or any group or class of the foregoing, or any Governmental Authority, alleging (i)
violation of any labor or employment Laws, (ii) breach of any collective bargaining agreement, (iii) breach of any express or implied contract of employment, (iv) wrongful termination of employment, or (v) any other
discriminatory, wrongful or tortious conduct in connection with any employment relationship, including before the Equal Employment Opportunity Commission.
(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no member of the Company Group is currently bound by any
consent decree with, or citation by, any Governmental Authority relating to employees or employment practices. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no member of the
Company Group or any of its executive officers has received since January 1, 2024 any notice of intent by any Governmental Authority responsible for the enforcement of labor or employment laws to conduct an investigation relating to the Company
Group and, to the Knowledge of the Company, no such investigation is in progress.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each member of the Company Group is, and since January 1, 2024 has been, in compliance
with all Environmental Laws and in possession of and compliance with all Permits required under Environmental Laws.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, there is no pending or, to the Knowledge of the Company, threatened Action against any
member of the Company Group arising under Environmental Laws.
(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no Hazardous Materials have been Released on, at, under or from any Company Group property
that would reasonably be expected to give rise to any Action against, or any obligation to conduct investigation or remediation by, any member of the Company Group under any Environmental Law.
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(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company Group owns all of the
Owned Company Intellectual Property, free and clear of all Encumbrances (other than Permitted Encumbrances), (ii) all of the Registered Company Intellectual Property is subsisting, and to the Knowledge of the Company, all Owned Company
Intellectual Property is valid and enforceable, and (iii) the Company Group has taken all necessary actions to maintain and protect each item of Registered Company Intellectual Property.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, a member of the Company Group owns, is licensed or otherwise
has the right to use all material Intellectual Property reasonably necessary to conduct the business of the Company Group (taken as a whole) as conducted as of the date hereof (the “Company Intellectual Property”).
(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company Group has used commercially reasonable efforts to protect and maintain the
confidentiality of Trade Secrets included in the Owned Company Intellectual Property and (ii) to the Knowledge of the Company, there has been no unauthorized disclosure or use of any Trade Secret included in the Owned Company Intellectual
Property.
(d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no adverse third-party Actions are pending or, to the
Knowledge of the Company, threatened in writing against any member of the Company Group (i) challenging the ownership, validity or use by the Company Group of any Owned Company Intellectual Property or (ii) alleging that any member of the Company
Group is infringing, misappropriating or otherwise violating the Intellectual Property of any Person.
(e) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, currently and since January 1, 2024, to the Knowledge of the Company, (i) no Person is or
has been infringing, misappropriating or otherwise violating the rights of the Company Group with respect to any Owned Company Intellectual Property, and (ii) the operation of the business of the Company Group is not violating, misappropriating
or infringing nor has violated, misappropriated or infringed the Intellectual Property of any other Person.
(f) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, since January 1, 2024, (i) the Company Group is using, developing and
deploying AI Technology in compliance in all material respects with the applicable Contracts and Laws regarding the same, (ii) the Company Group has not used AI Technology to create or develop any material Owned Company Intellectual Property, and
(iii) the Company Group has implemented commercially reasonable policies and procedures to govern its use of AI Technology.
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(g) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each member of the Company Group is in compliance with the requirements of the
licenses for any Open Source Software incorporated into any software included in the Owned Company Intellectual Property, and (ii) no member of the Company Group is required to provide any source code of software included in the Owned Company
Intellectual Property to any party pursuant to any of the licenses (including any version of GNU General Public License or the GNU Affero General Public License) for Open Source Software or as a result of using any of the Open Source Software
(other than the Open Source Software itself), except for software that is removable or replaceable without material costs or material interruption of the Company Group’s business (taken as a whole).
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each
member of the Company Group is in compliance with all applicable Data Security and Privacy Requirements and (ii) since January 1, 2024, no member of the Company Group has received a complaint from any Governmental Authority regarding its
Processing of Personal Information that is pending or unresolved. Since January 1, 2024, each member of the Company Group has used commercially reasonable measures designed to ensure the confidentiality, integrity, privacy and security of
Personal Information within the control of the Company Group and designed to protect any Personal Information under their control from any access that would violate Data Privacy Laws applicable to the Company Group.
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, since January 1, 2024, to the Knowledge of the Company, no member of the Company Group has
experienced any breaches, outages or unauthorized accesses to the Company IT Assets or any breaches of or unauthorized accesses to Personal Information or Trade Secrets within the possession or control of the Company Group.
(c) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the Company IT Assets material to the business of the Company
Group operate and perform in all respects as required to permit the Company Group to conduct the business of the Company Group (taken as a whole) as conducted as of the date hereof. Each member of the Company Group has taken commercially
reasonable steps and implemented commercially reasonable safeguards, in each case designed to protect the Company IT Assets material to the business of the Company Group from unauthorized access and from any disabling codes or instructions,
spyware, Trojan horses, worms, viruses or other software routines that are designed to cause unauthorized access to, or unauthorized disruption, impairment, disablement or destruction of, software, data or other materials (“Malicious Code”).
Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, to the Knowledge of the Company, the Company Products, Company IT Assets and all software material to the business of the Company
Group are free from Malicious Code.
(a) With respect to the Owned Real Property, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the Company
Group has good and marketable title to such property, free and clear of any Encumbrance (other than Permitted Encumbrances) and (ii) there are no outstanding options, rights of first offer or rights of first refusal or other similar rights in
favor of any third party to purchase such property, or any portion thereof or interest therein.
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(b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each Company Lease is in full force and effect, and the
Company Group has a good and valid leasehold, sub-leasehold or license interest (as lessee, sublessee or licensee) in each Leased Real Property, free and clear of all Encumbrances (other than Permitted Encumbrances), (ii) no member of the Company
Group has received written notice of any Actions in eminent domain, condemnation or other similar Actions that are pending, and, to the Knowledge of the Company, there are no such Actions threatened, in each case, affecting any portion of the
Leased Real Property, and (iii) no Leased Real Property is subject to any lease, license, sublease or use and occupancy agreement pursuant to which the Company has granted any third party the right to use or occupy all or any portion of any
Leased Real Property.
(a) For purposes of this Agreement, “Material Contract” means any Contract (but excluding any Company Plan) to which the
Company Group is a party or by which the Company Group or any of their respective properties or assets is bound that:
(i) is filed as an exhibit to the Company’s Annual Report on Form 10-K or is otherwise a “material
contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under the Securities Act);
(ii) is a joint venture, partnership or other similar arrangement that is material to the business of the Company Group, taken as a whole, other than with
respect to any partnership that is wholly owned by the Company Group;
(iii) (A) provides for indebtedness of the Company Group having an outstanding principal amount or committed principal amount in excess of $75,000,000 (other
than (x) indebtedness solely between or among any of the Company and its wholly owned Subsidiaries or (y) with respect to floorplan, wholesale, inventory or similar financing), (B) under which the Company Group has directly or indirectly
guaranteed any obligation of a joint venture or partnership, other than with respect to any partnership that is wholly owned by the Company Group (including any guarantee of indebtedness or any “keep well” or other agreement to maintain any
financial statement condition), or (C) under which the Company Group, directly or indirectly, has agreed to make any advance, loan, extension of credit or capital contribution to, or other investment in, any Person (other than the Company or any
of its wholly owned Subsidiaries), in any such case which, individually, is in excess of $75,000,000, other than investments in the Company Group;
(iv) relates to the acquisition or disposition of any business, assets or properties (whether by merger, sale of stock, sale of assets or otherwise), other than
acquisitions or dispositions of real property, for aggregate consideration under such Contract in excess of $75,000,000 that was entered into after January 1, 2024, excluding (A) acquisitions or dispositions in the ordinary course of business,
(B) acquisitions or dispositions of assets that are no longer used or useful in the conduct of business of the Company Group, or (C) repurchases by the Company of Company Common Stock;
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(v) is a Contract for maintenance or repair and overhaul that would be expected to result in the Company Group incurring costs in excess of $75,000,000 in the
12-month period following the date hereof;
(vi) is a Contract not referred to in the other subsections of this Section 3.17(a) and that is outside the ordinary course of business and by
its terms (A) is reasonably expected to result in (1) minimum payments to the Company Group under such Contract of more than $75,000,000 in the 12-month period following the date of this Agreement or (2) minimum payments from the Company Group
under such Contract of more than $75,000,000 in the 12-month period following the date of this Agreement, or (B) except with respect to Company Leases, has five years or more remaining in its term, provides for payments to or from the Company
Group under such Contract following the date of this Agreement in excess of $75,000,000 annually or $250,000,000 in the aggregate and cannot be canceled by the Company Group upon notice of 90 days or less;
(viii) is a settlement agreement imposing future limitations that materially impact the operation of the Company Group or that includes the admission of wrongdoing
by the Company Group or any of their respective officers or directors;
(ix) prohibits the payment of dividends or distributions in respect of the capital stock of the Company Group, prohibits the pledging of the capital stock of the
Company Group or prohibits the issuance of guarantees by the Company Group;
(x) is a Company Lease that requires base rental payments by any member of the Company Group in excess of $4,000,000 for the calendar year ending December 31,
2026 or any calendar year thereafter; or
(xi) is a Collective Bargaining Agreement.
(b) Except with respect to any Contract that has expired in accordance with its terms, been terminated, restated or replaced, (i) subject to the
Enforceability Exception, each Material Contract is valid and binding on the Company Group to the extent such Person is a party thereto, as applicable, and to the Knowledge of the Company, each other party thereto, and is in full force and
effect, except where the failure to be valid, binding or in full force and effect would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (ii) the Company Group, and, to the Knowledge of the Company,
any other party thereto, have performed all obligations required to be performed by it under each Material Contract, except where such nonperformance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect, (iii) no member of the Company Group has received written notice of the existence of any breach or default on the part of such member of the Company Group under any Material Contract, except where such breach or default would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (iv) to the Knowledge of the Company, the counterparty under such Material Contract is not in breach or default thereof, except as would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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(c) The Company has made available to Buyer true, correct and complete copies of the Material Contracts as in effect as of the date hereof except with respect to (i) the Company
Leases, (ii) any Material Contracts that are included as exhibits to the Company SEC Documents, and (iii) other than the Framework Agreements, any Dealer Arrangements.
(a) Each member of the Company Group is in compliance with applicable statutory, regulatory and contractual requirements applicable to each Government Contract, except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Since January 1, 2024, with respect to any Government Contract, (i) there has been no civil fraud, criminal or bribery investigation by any Governmental Authority against any member of the Company Group,
(ii) all written representations, certifications and disclosures made by the Company Group were current, accurate and complete when made, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect, and (iii) neither any Governmental Authority nor any prime contractor or subcontractor has notified any member of the Company Group, in writing, that they have, or are alleged to have, materially breached or violated any Law,
representation, certification, or requirement pertaining to any Government Contract.
3.19. Insurance. Except as would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) the Company Group has all policies of insurance covering the Company Group and any of their respective employees, properties or assets, that are customarily carried by Persons of similar size and
conducting business similar to that of the Company Group, (b) all insurance policies of the Company Group are in full force and effect, except for any expiration thereof in accordance with the terms thereof, (c) all premiums due under such
insurance policies have been paid, (d) the Company Group is not in default under any such insurance policy, and (e) no written notice of cancelation, termination, non-renewal or material modification in coverage has been received with respect to
any such insurance policy.
(a) As of the date hereof, the Company is not party to a stockholder rights agreement, “poison pill” or similar anti-takeover agreement or plan.
(b) Assuming the accuracy of the representations and warranties set forth in Section 4.04, the Company Board or
the Special Committee has taken all necessary actions so that the restrictions on business combinations set forth in Section 203 of the DGCL and any other similar Law are not applicable to this Agreement and no
“business combination,” “control share acquisition,” “fair price,” “moratorium” or other anti-takeover Law (each, together with Section 203 of the DGCL, a “Takeover Law”) applies or will apply to the Merger or
the other Transactions. To the Knowledge of the Company, no other Takeover Law, anti-takeover, business combination or control share acquisition or similar Law applies to the Merger or the other Transactions.
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3.21. Opinion of Financial Advisor. Moelis & Company LLC (“Moelis”)
has delivered to the Special Committee its written opinion (or oral opinion to be confirmed in writing), dated as of the date thereof, to the effect that, as of the date of such opinion and subject to the various assumptions made, procedures
followed, matters considered, and qualifications and limitations set forth therein, the Merger Consideration to be received by holders of Company Common Stock (excluding the holders of Excluded Shares, any shares of Company Common Stock to be
canceled in accordance with Section 2.01(a), and Appraisal Shares) pursuant to this Agreement is fair from a financial point of view to such holders of shares of Company Common Stock (other than the Investor Group Members, the
Company and any of their respective Affiliates) (it being understood and agreed that such written opinion is for the benefit of the Special Committee and may not be relied upon by the Investor Group Members). A signed, true, correct and complete
copy of Moelis’s opinion will be made available to Buyer for informational purposes only (on a non-reliance basis) promptly following receipt by the Special Committee and the Company Board (and, in any event, within two Business Days of the date
of this Agreement).
3.22. Brokers and Other Advisors. Except for Moelis, the fees and
expenses of which will be paid by the Company, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission, in connection with the Merger
Transactions based upon arrangements made by or on behalf of the Company Group.
3.23. CFIUS. Neither the Company nor any of its Subsidiaries produces, designs, tests, manufactures, fabricates or develops one or more “critical technologies,” within the
meaning of section 721 of the Defense Production Act of 1950, including all implementing regulations thereof administered by CFIUS.
3.24. No Other Buyer Representations or Warranties. In entering into this Agreement, the Company acknowledges that it has relied solely upon its
own investigation, review and analysis of Buyer and not on any factual representations or opinions of Buyer or its Representatives (except the representations and warranties contained in Article IV). Except for the representations and
warranties made by Buyer in Article IV (or in any certificate or other agreement provided pursuant to this Agreement or in any of the Ancillary Documents), none of Buyer or any other Person on behalf of Buyer makes any other express or
implied representation or warranty with respect to Buyer, its Affiliates or its businesses, operations, assets, liabilities, condition (financial or otherwise) or prospects, and the Company acknowledges the foregoing.
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Buyer represents and warrants to the Company:
4.01. Organization; Standing. Buyer is a corporation duly
incorporated, validly existing under the laws of the State of Delaware and is in good standing with the Secretary of State of Delaware. Buyer has all requisite corporate power and authority necessary to carry on its business as it is now being
conducted. Buyer (in jurisdictions that recognize the following concepts) is duly licensed or qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the nature of the business conducted by it or
the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed, qualified or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Buyer Material Adverse Effect. Buyer has made available to the Company complete and correct copies of its certificate of incorporation and bylaws, each as amended to the date of this Agreement.
(a) Buyer has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger Transactions. The board of directors of Buyer has adopted resolutions by unanimous written consent (i) (A) approving and declaring advisable this Agreement and the
Transactions, (B) determining that this Agreement and the Transactions are fair to, and in the best interests of, Buyer and Buyer’s stockholders, and (C) resolving to recommend that Buyer’s stockholders adopt this Agreement and approve the
Transactions, and (ii) directing that this Agreement be submitted to Buyer’s stockholders for their adoption with effect immediately after the execution of this Agreement, which resolutions have not been subsequently rescinded, modified or
withdrawn. The stockholders of Buyer, each of which is an Investor Group Member, have adopted this Agreement and approved the Transactions by unanimous written consent, with such consent to be effective immediately following the execution and
delivery of this Agreement. Except as expressly set forth in this Section 4.02(a), or would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect, no other action on the part of
Buyer is necessary to authorize the execution, delivery and performance by Buyer of this Agreement and the consummation by Buyer of the Transactions. This Agreement has been duly executed and delivered by Buyer and, assuming due authorization,
execution and delivery hereof by the Company, constitutes a legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms, subject to the Enforceability Exception.
(b) Neither the execution and delivery of this Agreement by Buyer, nor the consummation by Buyer of the Transactions, nor performance or compliance by Buyer with any of the terms
or provisions hereof applicable to it, will (i) conflict with or violate any provision of the certificate of incorporation or bylaws of Buyer or (ii) assuming that the consents, approvals, filings, licenses, permits, authorizations, declarations,
notifications and registrations referred to in Section 4.03 are obtained prior to the Effective Time and the filings referred to in Section 4.03 are made and any waiting periods thereunder have terminated or
expired prior to the Effective Time, (x) violate any Law or Judgment applicable to Buyer or (y) violate or constitute a default under any of the terms, conditions or provisions of any
Contract to which Buyer is a party or accelerate Buyer’s obligations under any such Contract, except, in the case of clause (ii), as would not, individually or in the aggregate, reasonably be expected
to have a Buyer Material Adverse Effect.
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(a) Except for (i) compliance with the applicable requirements of the Exchange Act, including the filing with the SEC of the Proxy Statement and the
Schedule 13E-3, (ii) compliance with the rules and regulations of the NYSE, (iii) the filing of the Certificate of Merger with the Secretary of State of Delaware pursuant to the DGCL, (iv) filings required under, and compliance with other
applicable requirements of, the HSR Act and any other Antitrust Laws or FDI Laws set forth on Section 3.05 of the Company Disclosure Letter, and (v) compliance with any applicable state securities or blue sky laws, no consent or
approval of, or filing, license, permit or authorization, declaration, notification or registration with, any Governmental Authority is necessary for the execution and delivery of this Agreement by Buyer, the performance by Buyer of its
obligations hereunder and the consummation of the Transactions by Buyer, other than such other consents, approvals, filings, licenses, permits or authorizations, declarations, notifications or registrations that, if not obtained, made or given,
would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect.
4.04. Ownership and Operations of Buyer. The Investor Group collectively
owns beneficially and of record all of the outstanding shares of capital stock of Buyer, free and clear of all Encumbrances, other than (a) Encumbrances in connection with the Financing, (b) Encumbrances under the Interim Investors Agreement,
dated as of the date hereof, among Buyer and the Investor Group Members, none of which would reasonably be expected to prevent or materially delay the Closing, and (c) transfer restrictions of general applicability as may be provided under the
Securities Act or other applicable securities Laws. Except for the Equity Commitment Letters, there are no options, warrants, rights, convertible or exchangeable securities, stock-based performance units or Contracts to which Buyer is a party or
by which Buyer is bound obligating Buyer to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of, or any security convertible or exchangeable for any shares of capital stock of, Buyer. Buyer was
formed solely for the purpose of engaging in the Transactions, has no liabilities or obligations of any nature other than those incident to its formation or pursuant to the Transactions and, prior to the Effective Time, will not engage in any
other business activities other than those relating to the Transactions or those incident to their formation.
(a) Buyer has delivered to the Company true, complete and correct copies of (i) the Debt Commitment Letter and (ii) the Equity Commitment Letters.
(b) Buyer has delivered to the Company true, complete and correct copies of any fee letter referred to in the Commitment Letters,
subject, in the case of each such fee letter, to redaction solely of pricing and other economic terms, fee amounts and the “market flex” provisions that are customarily redacted in transactions of this type, none of which redactions covers terms
that could (i) reduce the amount of the Financing below the amount required to satisfy the Financing Uses or (ii) impose any new condition or contingency or otherwise adversely amend, modify or expand any conditions precedent to the receipt of
any portion of the Financing necessary to consummate the Transactions in a manner that would reasonably be expected to (A) prevent or materially delay the Closing or (B) adversely affect the ability of Buyer to enforce its rights against the
other parties to the Commitment Letters. The Equity Commitment Letters provide that the Company is an express third-party beneficiary thereof solely for the purposes and subject to the conditions set forth therein. Notwithstanding anything to the
contrary herein, for purposes of this Agreement, including this Article IV, any delay that would not permit the Closing to occur on or before the Outside Date shall be deemed to be a material delay.
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(c) As of the date of this Agreement, (i) none of the Commitment Letters in the form delivered to the Company have been amended, supplemented or modified and (ii) the respective
commitments contained in the Commitment Letters have not been withdrawn, terminated or rescinded in any respect and, to the Knowledge of Buyer, no such withdrawal, termination or rescission is contemplated. As of the date of this Agreement,
except for the fee letters referred to in Section 4.05(b) and customary engagement letters and fee credit letters with respect to the Debt Financing (none of which (x) reduces the amount of the Financing below the amount required
to satisfy the Financing Uses, (y) imposes any new condition or contingency or otherwise adversely amends, modifies or expands any conditions precedent to the receipt of any portion of the Financing necessary to consummate the Transactions in a
manner that would reasonably be expected to (A) prevent or materially delay the Closing or (B) adversely affect the ability of Buyer to enforce its rights against the other parties to the Commitment Letters), there are no side letters or
Contracts to which Buyer is a party related to the funding or investing, as applicable, of the Financing other than as expressly set forth in the Commitment Letters delivered to the Company on or prior to the date hereof that could (i) reduce the
amount of the Financing below the amount required to satisfy the Financing Uses or (ii) impose any new condition or contingency or otherwise adversely amend, modify or expand any condition precedent to the receipt of any portion of the Financing
necessary to consummate the Transactions in a manner that would be reasonably expected to (A) prevent or materially delay the Closing or (B) adversely affect the ability of Buyer to enforce its rights under the Commitment Letters.
(d) As of the date of this Agreement, Buyer has fully paid all commitment fees, if any, or other fees in connection with the Commitment Letters that are due and payable on or
prior to the date hereof pursuant to the terms of the Commitment Letters.
(e) As of the date of this Agreement, the Commitment Letters are in full force and effect and are the legal, valid, binding and fully enforceable obligations of Buyer, and, to
the Knowledge of Buyer, each of the other parties thereto, except, in each case, as such enforceability may be limited by the Enforceability Exception. As of the date of this Agreement, there are no conditions precedent or other contingencies
related to the funding or investing, as applicable, of the full amount of the Financing required to satisfy the Financing Uses (including pursuant to any “market flex” provisions in any fee letters), other than as expressly set forth in the
Commitment Letters. As of the date of this Agreement, no event has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to (i) constitute a default or breach on the part of Buyer or, to the
Knowledge of Buyer, any other party thereto under any of the Commitment Letters, (ii) constitute a failure to satisfy a condition on the part of Buyer, or to the Knowledge of Buyer, any other party thereto, under any of the Commitment Letters, or
(iii) otherwise result in any portion of the Financing required to satisfy the Financing Uses being unavailable on the Closing Date; provided, however, that Buyer is not making any representation or warranty regarding the effect
of any inaccuracy of the representations and warranties of the Company set forth in Article III, or any failure by the Company to comply with its obligations under the terms of this Agreement.
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(f) As of the date of this Agreement, assuming the satisfaction or waiver of the conditions set forth in Sections 6.01
and 6.02, Buyer has no reason to believe that any of the conditions to the Financing contemplated by the Commitment Letters applicable to Buyer, will not be satisfied or that the full amount of the Financing required to satisfy the
Financing Uses will not be made available to Buyer in full on the Closing Date. The aggregate proceeds contemplated by the Commitment Letters are sufficient to (i) pay the aggregate Merger Consideration and the other payments under Article
II, in connection with or as a result of the Merger (which does not include, for the avoidance of doubt, any payments with respect to any Excluded Shares), (ii) pay any and all fees and expenses incurred by or on behalf of Buyer, the
Surviving Corporation or any of their respective Affiliates required to be paid at Closing by Buyer in connection with the Merger, the Financing and the other Transactions, (iii) prepay or repay any outstanding indebtedness of the Company Group
required by this Agreement to be prepaid or repaid, (iv) satisfy all of the liabilities or other payment obligations (including liabilities or other obligations of the Company Group) required to be paid or otherwise funded by Buyer in connection
with the Transactions, and (v) otherwise consummate the Transactions upon the terms contemplated by this Agreement (clauses (i) through (v), the “Financing Uses”).
4.06. Limited Guarantees. Concurrently with the execution of this Agreement, Buyer has delivered to the Company a true, complete and correct copy of each duly executed
Limited Guarantee. Each Limited Guarantee is in full force and effect and constitutes the legal, valid, binding and fully enforceable obligations of the Guarantor party thereto, enforceable against such Guarantor in accordance with its terms,
except as such enforceability may be limited by the Enforceability Exception. As of the date of this Agreement, no event has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to (i) constitute a
default or breach on the part of any Guarantor under any Limited Guarantee, (ii) constitute a failure to satisfy a condition on the part of any Guarantor under any Limited Guarantee, or (iii) otherwise result in any portion of amounts guaranteed
under any Limited Guarantee being unavailable as and when required to be paid in accordance with the Limited Guarantee and this Agreement.
4.07. Solvency. Buyer is not entering into this Agreement (and none of the Guarantors are
entering into their respective Limited Guarantees) with the actual intent to hinder, delay or defraud present or future creditors of the Company or any of its Subsidiaries. Assuming (a) satisfaction or waiver of the
conditions to Buyer’s obligation to consummate the Merger, (b) the accuracy of the representations and warranties of the Company set forth in Article III, (c) the solvency of the
Company Group immediately prior to giving effect to the Transactions, and (d) the payment of the aggregate Merger Consideration and the other amounts required to be paid pursuant to Article II, the satisfaction in full of the Financing
Uses and the funding of the Financing pursuant to the Commitment Letters, the Surviving Corporation and its Subsidiaries, on a consolidated basis, will be Solvent as of the Effective Time and immediately after the consummation of the applicable
Transactions. For the purposes of this Agreement, the term “Solvent,” when used with respect to any Person, means that, as of any date of determination, (i) the fair value of the assets of such Person and its
Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts and liabilities, direct, subordinated, contingent or otherwise, of such Person and its Subsidiaries on a consolidated basis, (ii) the present fair saleable value of
the property of such Person and its Subsidiaries on a consolidated basis will be greater than the amount that will be required to pay the probable liability of such Person and its Subsidiaries on a consolidated basis on their debts and other
liabilities, direct, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (iii) such Person and its Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, direct,
subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, and (iv) such Person and its Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are proposed to be conducted following the date of determination.
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4.08. Absence of Certain Arrangements. None of Buyer, any Investor Group Member or any of their respective Affiliates has entered into any
Contract with any bank or investment bank or other potential provider of debt financing on an exclusive basis in connection with any transaction involving the Company (or otherwise on terms that would prohibit such provider from providing or
seeking to provide such financing to any third party in connection with a transaction relating to the Company or any of its Subsidiaries), except for such actions to which the Company has previously agreed in writing. Other than this Agreement,
the Support Agreements, the Confidentiality Agreement, the Limited Guarantees and the Commitment Letters, as of the date hereof, there are no Contracts or any commitments to enter into any Contract between Buyer, any Investor Group Member or any
of their respective Affiliates, on the one hand, and any director, officer, employee or stockholder (other than another Investor Group Member or any Investor Group Affiliate) of the Company, on the other hand, regarding the Transactions or the
operations of the Surviving Corporation after the Effective Time.
4.09. Brokers and Other Advisors. No broker, investment banker, financial advisor or
other Person is entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission payable by the Company or any of its Subsidiaries in connection with the Transactions based upon arrangements made by or on behalf of
Buyer.
4.10. Ownership of Company Common Stock. Except for (a) the Investor Group Affiliates set forth on Section 4.10
to the Buyer Disclosure Letter and (b) other Investor Group Affiliates that are officers, directors or employees of the Company Group, none of Buyer, any Investor Group Member or any of their respective Subsidiaries or Affiliates beneficially
owns, directly or indirectly (including pursuant to a derivatives contract), any shares of Company Common Stock or other securities convertible into, exchangeable for or exercisable for shares of Company Common Stock or any securities of any
Subsidiary of the Company other than Excluded Shares, and neither Buyer nor any of its Subsidiaries or Affiliates has any rights to acquire, directly or indirectly, any shares of Company Common Stock, except pursuant to this Agreement. For a
period of at least the three years prior to the date hereof, the Penske Parties, on the one hand, have continuously beneficially owned, directly or indirectly, shares of Company Common Stock representing not less than 15% of the voting power of
the outstanding voting stock of the Company, and the Mitsui Parties, on the other hand, have continuously beneficially owned, directly or indirectly, shares of Company Common Stock representing not less than 15% of the voting power of the
outstanding voting stock of the Company.
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4.11. Information Supplied. None of the information supplied or to be supplied by or on behalf of Buyer or its Affiliates for inclusion or
incorporation by reference in the Proxy Statement and the Schedule 13E-3 (including any amendments or supplements thereto) will, at the time the Proxy Statement and the Schedule 13E-3 (or any amendment or supplement thereto) are first sent or
given to the stockholders of the Company and at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, neither Buyer nor any of its Affiliates make any representation or warranty with respect to statements made or incorporated by
reference therein based on information supplied by or on behalf of the Company or any Affiliates thereof for inclusion or incorporation by reference in the Proxy Statement, the Schedule 13E-3 or other required SEC filings.
4.12. Legal Proceedings. Except as would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect,
as of the date of this Agreement, there is no (a) pending or, to the Knowledge of Buyer, threatened Action against Buyer or any of its Affiliates or (b) Judgment imposed upon or
affecting Buyer or any of its Affiliates, in each case, by or before any Governmental Authority.
4.13. No Other Company Representations or Warranties. Except for the representations and warranties made by the
Company in Article III (or in any certificate or other agreement provided pursuant to this Agreement or in any of the Ancillary Documents), Buyer hereby acknowledges (for itself and on behalf of its Affiliates and Representatives) that
neither the Company Group, nor any other Person, has made or is making, and Buyer and its Affiliates and Representatives have not relied on and are not relying on, any other express or implied representation or warranty with respect to the
Company or any of its Subsidiaries or their respective businesses, operations, properties, assets, liabilities, condition (financial or otherwise) or prospects, or any estimates, projections, forecasts and other forward-looking information or
business and strategic plan information regarding the Company Group, notwithstanding the delivery or disclosure to Buyer or any of its Affiliates or Representatives of any documentation, forecasts or other information (in any form or through any
medium) with respect to any one or more of the foregoing or any oral, written, video, electronic or other information developed by Buyer or any of its Affiliates or Representatives, Buyer hereby acknowledges (for itself and on behalf of its
Affiliates and Representatives) that it has conducted, to its satisfaction, its own independent investigation of the business, operations, assets and financial condition of the Company Group and, in making their determination to proceed with the
Transactions, Buyer and its Affiliates and Representatives have relied on the results of their own independent investigation.
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4.14. Non-Reliance. In connection with the due diligence investigation of the Company
by Buyer and its Affiliates and Representatives, the negotiations of this Agreement or the course of the Transactions, Buyer and its Affiliates and Representatives have received and may continue to receive from the Company certain estimates,
projections, forecasts and other forward-looking information, as well as certain business and strategic plan information, regarding the Company Group and their respective businesses and operations. Buyer hereby acknowledges (for itself and on
behalf of its Affiliates and Representatives) that there are uncertainties inherent in attempting to make such estimates, projections, forecasts and other forward-looking statements, as well as in such business and strategic plans, with which
Buyer is familiar, Buyer (for itself and on behalf of its Affiliates and Representatives) is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections, forecasts and other forward-looking
information, as well as such business plans, so furnished to them (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, forward-looking information or business plans), and that Buyer, its Affiliates
and Representatives have not relied on such information and will have no claim against the Company or any of its Subsidiaries, or any of their respective Representatives, with respect thereto or, except for the representations and warranties
expressly set forth in Article III (or in any certificate or other agreement provided pursuant to this Agreement or in any of the Ancillary Documents), any rights hereunder with respect thereto.
(a) Except (x) as required by applicable Law, Judgment or a Governmental Authority, (y)
as required or expressly contemplated by this Agreement, or (z) as set forth in Section 5.01(a) of the Company Disclosure Letter, during the period from the date of this Agreement until the Effective
Time (or such earlier date on which this Agreement is validly terminated pursuant to Section 7.01), unless Buyer otherwise consents in writing (such consent not to be unreasonably withheld, conditioned or delayed), the Company
will, and will cause each of its Subsidiaries to, (i) use its reasonable best efforts to act and carry on the business of the Company Group in the ordinary course of business in all material respects and (ii) use its
reasonable best efforts to (A) preserve in all material respects the Company Group’s current business organizations intact and preserve in all material respects its present and future relationships with customers,
suppliers, joint venture partners, lenders and other financing sources, Governmental Authorities and other Persons with which the Company Group has material business relations or regulator relations and (B) keep
available the services of its directors, officers and key employees (it being agreed that no action or omission by the Company or any of its Subsidiaries with respect to a matter specifically addressed by any provision of Section 5.01(b)
will be deemed a breach of this Section 5.01(a)).
(b) Except as (x) required by applicable Law, Judgment or a Governmental Authority, (y) as required or expressly contemplated by
this Agreement, or (z) as set forth in Section 5.01(b) of the Company Disclosure Letter, during the period from the date of this Agreement until the Effective Time (or such earlier date on which this Agreement is validly
terminated pursuant to Section 7.01), unless Buyer otherwise consents in advance in writing (such consent not to be unreasonably withheld, conditioned or delayed), the Company will not, and will cause its Subsidiaries not to:
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(i) except in connection with the pledge of equity interests pursuant to the Credit Facilities, issue or grant, or authorize the issuance or grant of, any
shares of the capital stock of any member of the Company Group or other equity or voting interests, equity-based awards or any securities convertible into, or exchangeable or exercisable for, any shares of its capital stock or other equity or
voting interests (including any rights, warrants or options to purchase any shares of its capital stock or other equity or voting interests) of any member of the Company Group; provided that the Company may issue shares of Company Common
Stock (A) upon the vesting of Company RSUs and Company DSUs that are outstanding on the date of this Agreement in accordance with, and subject to the terms thereof in effect on the date of this Agreement (or granted following the date of this
Agreement to the extent permitted by this Section 5.01(b)), or (B) as required by any Company Plans in effect on the date of this Agreement;
(ii) redeem, purchase or otherwise acquire, or offer to redeem, repurchase or otherwise acquire, any shares of the capital stock or other equity or voting
interests of a member of the Company Group, or any securities convertible into, or exchangeable or exercisable for, any shares of its capital stock or other equity or voting interests or equity-based awards (including any rights, warrants or
options to purchase any shares of its capital stock or other equity or voting interests of a member of the Company Group) (other than pursuant to the forfeiture of, or withholding of Taxes with respect to, Equity-Based Awards);
(iii) other than (i) regular quarterly dividends (with record and payment dates consistent with past practice) by the Company, in each case, in an amount not to
exceed $0.02 per share above the per share amount of the last quarterly dividend declared and paid by the Company in the immediately preceding quarter, (ii) a “stub period” dividend to holders of record of Company Common Stock as of immediately
prior to the Effective Time in an amount per share equal to the product of (A) the number of days from the record date for payment of the last regular quarterly dividend paid by the Company prior to the Effective Time, multiplied by (B) a daily
dividend rate determined by dividing the amount per share of such last regular quarterly dividend by 91, or (iii) dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent (in the cases of clauses
(i) and (ii), which the Parties hereby agree will be established, declared, set aside and paid, as applicable, from the date of this Agreement through the Effective Time or as otherwise in accordance with the first sentence of Section 2.02(c)),
establish a record date for, declare, set aside for payment or pay any dividend on, or make any other distribution (whether in cash, securities or other property) in respect of, any shares of its capital stock or other equity or voting interests;
(iv) split, reverse split, combine, consolidate, subdivide, reclassify, adjust or recapitalize any shares of its capital stock or other equity or voting interests, or equity-based awards, or
authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or other equity or voting securities or equity-based awards, except for any such transaction by a wholly owned Subsidiary
of the Company which remains a wholly owned Subsidiary after consummation of such transaction;
(v) adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization of the Company or any of its
Subsidiaries (other than the Merger), except for the liquidation or dissolution of any dormant Subsidiary;
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(vi) incur, create, assume, issue, sell, syndicate or
refinance any Indebtedness or guarantee, endorse or otherwise become liable for (whether directly, contingently or otherwise) the Indebtedness of any Person, except for (A) intercompany Indebtedness among the Company and its wholly owned
Subsidiaries in the ordinary course of business, (B) borrowings permitted under the Credit Facilities as in effect on the date of this Agreement in an aggregate principal amount outstanding at any time that would not exceed an amount equal to
$700,000,000 in excess of the amount outstanding on June 30, 2026, (C) Indebtedness incurred in connection with the renewal, extension or refinancing of any Indebtedness or revolving facility or line of credit existing on the date of this
Agreement (including the Credit Facilities) or permitted to be incurred, assumed or otherwise entered into hereunder, in each case, as set forth in Section 5.01(b)(vi)(C) of the
Company Disclosure Letter, (D) the Financing and any Company Credit Agreement Amendment and borrowings under the Company Credit Agreement, (E) Indebtedness that will be repaid, terminated or released prior to or in connection with the Closing,
(F) Indebtedness for borrowed money under letters of credit, bonds, sureties or similar credit support or assurances in the ordinary course of business, (G) Indebtedness related to Dealer Arrangements, floor plan credit facilities, wholesale
financing facilities and inventory financing facilities in the ordinary course of business, (H) Indebtedness related to mortgages on Owned Real Property and (I) additional Indebtedness incurred in the ordinary course of business after the date of
this Agreement in an aggregate principal amount outstanding at any time not to exceed $100,000,000;
(vii) sell, lease, license, transfer to any Person, or pledge, abandon or otherwise dispose of, in a single transaction or series of related transactions, any of
the material properties, assets, businesses or rights of the Company Group (excluding Owned Company Intellectual Property), except (A) transfers, sales or leases among the Company and its wholly owned Subsidiaries, (B) dispositions of obsolete or surplus assets that are no longer used or useful in the conduct of the business of the Company or any of its Subsidiaries, (C) leases, subleases or licenses
of Owned Real Property or Leased Real Property, and voluntary terminations or surrenders of such leases, subleases or licenses, in each case, in the ordinary course of business, including pursuant to any Dealership
Agreement, (D) sales or leases of inventory in the ordinary course of business (and related retail installment purchase and lease purchase agreements with respect thereto), and (E) pledges in connection with the
Encumbrances permitted under Section 5.01(b)(viii) and in the ordinary course of business;
(viii) grant any Encumbrance (other than a Permitted Encumbrance) on any of its material assets other than
Encumbrances (A) to secure Indebtedness and other obligations permitted under Section 5.01(b)(vi) (but subject to the restrictions set forth in Section 5.01(b)(vi)), (B) under
equipment leases entered into in the ordinary course of business, or (C) in favor of the Company or a wholly owned Subsidiary of the Company;
(ix) acquire (by merger, consolidation, acquisition of stock or assets or otherwise), or make any investment in, directly or indirectly, the capital stock or a
material portion of the assets of any other Person or business, or division thereof, if the aggregate amount of consideration paid or transferred by the Company Group in connection with all such transactions would exceed $75,000,000;
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(x) except as required pursuant to the terms of any Company Plan or Collective Bargaining Agreement in effect on the date of this Agreement, (A) grant to any
executive officer any material increase in compensation other than increases in base cash compensation in the ordinary course of business consistent with past practice in connection with the Company’s annual review cycle, (B) increase, grant,
provide, promise or otherwise agree to any severance, termination or other similar payments or retention benefits to any individual service provider of the Company Group, (C) make any new performance-based awards that would have constituted
Company Performance Awards if in existence on the date hereof, (D) establish, adopt, enter into, terminate or amend in any material respect any Collective Bargaining Agreement that would reasonably be expected to result in a material increase in
the costs to the Company or any of its Subsidiaries of maintaining such Collective Bargaining Agreement or material Company Plan or any plan, agreement, program, policy or other arrangement that would be a material Company Plan if in existence on
the date hereof (other than such amendments to the Company KSOP as may be deemed advisable by the administrator of the Company KSOP to effectuate the treatment of the Company KSOP contemplated by Section 5.18, including the KSOP
Amendment), or (E) take any action to accelerate any rights or benefits under any material Company Plan; provided, however, that the foregoing will not restrict the Company Group from providing employees below the Executive Vice
President level who are newly hired or promoted based on job performance or workplace requirements, in each case, in the ordinary course of business, plans, agreements, benefits and compensation arrangements (excluding equity or equity-based
incentive grants) that have a value that is consistent with the value of compensation and benefits provided to employees holding similar positions (and, for clarity, the Company Group may enter into, adopt, establish or amend Company Plans and
other arrangements to the limited extent necessary to provide such compensation and benefits to such newly hired or promoted employees);
(xi) make any material changes in financial accounting methods, principles or practices, except insofar as may be required by GAAP (or any interpretation
thereof), a Governmental Authority or the Financial Accounting Standards Board (or any similar organization);
(xii) (A) make, change or revoke any Tax election, adopt or change any Tax accounting method or change any Tax accounting period, (B)
file any Tax Return in a manner inconsistent with past practice, except as otherwise required by a change in applicable Law, (C) settle or compromise any suit, claim, action, investigation, proceeding or audit with
respect to Taxes involving payments or liability in excess of $2,000,000 in the aggregate, or (D) file any amended Tax Return; except in each case to the extent not material to the Company Group as a whole;
(xiii) amend or otherwise change (whether by merger, consolidation or otherwise) the (A) Company Charter Documents or (B) the comparable organizational documents of any Subsidiary of the Company, in the case of this clause (B), in any manner materially adverse to Buyer or its Affiliates;
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(xiv) subject to the other restrictions set forth in Section 5.01, other than a renewal of a Contract (including any Company Lease) on
substantially similar terms as or more favorable to the Company Group than those in effect on the date of this Agreement, enter into, extend or renew, or otherwise modify, amend, terminate (other than terminations occurring as a result of the
expiration of the term thereof) or waive any material rights or obligations under, any Material Contract of a type described in Section 3.17(a)(ii), Section 3.17(a)(vi), Section 3.17(a)(vii) or Section
3.17(a)(viii) of the definition thereof (or in each case, any Contract that, if entered into prior to the date of this Agreement, would be a Material Contract of a type described in Section 3.17(a)(ii), Section 3.17(a)(vi),
Section 3.17(a)(vii) or Section 3.17(a)(viii) of the definition thereof), in each case, in a manner that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(xv) subject to Section 5.08, settle, release, waive or compromise any pending or threatened Action against the Company Group, other than
settlements of any pending or threatened Action (A) in which the Company or any of its Subsidiaries is named as a nominal defendant, (B) reflected or reserved against in the balance
sheet (or the notes thereto) of the Company as of the Audited Balance Sheet Date included in the Company SEC Documents for an amount not in excess of the amount so reflected or reserved (excluding any amount that may be paid under insurance
policies or indemnification agreements), or (C) if the amount of any such settlement is individually not material to the Company and the Company’s Subsidiaries, taken as a whole, after taking into account any amounts that may be paid under
insurance policies or indemnification agreements; provided that no settlement of any pending or threatened Action may involve any material injunctive or equitable relief or impose material restrictions on the business activities of the
Company Group, taken as a whole;
(xvi) make or commit to any capital expenditures other than in the ordinary course of business and which do not exceed, in the aggregate, for the period between the date hereof and the
Effective Time, 150% of the capital expenditures by the Company for the calendar year ended December 31, 2025; or
(xvii) commit or agree, in writing or otherwise, to take any of the foregoing actions or adopt any resolutions in support of any of the foregoing actions.
(c) Nothing contained in this Agreement is intended to give Buyer, directly or indirectly, the right to control or direct the Company Group’s operations prior to
the Effective Time. Prior to the Effective Time, the Company will exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.
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(a) No Solicitation. From the date of this Agreement until the earlier of the Effective Time and the valid termination of
this Agreement in accordance with Article VII, except as permitted by this Section 5.02, the Company will not, and will cause each of its and its Subsidiaries’ officers and directors not to, and will direct its
Representatives engaged in connection with the Transactions not to, directly or indirectly, and to not announce any public intention to, (i) initiate, solicit, cause or knowingly encourage (including by way of furnishing non-public information)
or otherwise knowingly assist the submission of any inquiries regarding, or the making of any proposal or offer that constitutes, or would reasonably be expected to lead to, a Takeover Proposal, (ii) engage in, continue, facilitate or otherwise
participate in any discussions or negotiations regarding (except to notify any Person of the provisions of this Section 5.02) a Takeover Proposal or any inquiry or proposal that would reasonably be expected to lead to a Takeover
Proposal, or furnish to any other Person any information or afford any Person with access to the business, employees, officers, Contracts, properties, assets or books and records of the Company Group, in each case in connection with, or for the
purpose of, encouraging, facilitating or assisting a Takeover Proposal, or where such Person has made or indicated an intention to make, a Takeover Proposal, (iii) approve, endorse or recommend a Takeover Proposal, (iv) enter into any letter of
intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement providing for a Takeover Proposal or any agreement requiring the Company to abandon, terminate or fail to consummate
the Merger Transactions, or (v) resolve, endorse, recommend, agree or propose to do any of the foregoing. Notwithstanding anything to the contrary contained in this Agreement, the Company shall be permitted to grant waivers of, and not enforce,
any standstill provision or similar provision that has the effect of prohibiting the counterparty thereto from making an unsolicited Takeover Proposal.
(b) Exceptions to Non-Solicitation. Notwithstanding anything contained in Section 5.02(a) or any other provision of this Agreement to the contrary, if at
any time on or after the date of this Agreement and prior to obtaining the Company Stockholder Approval, the Company or any of its Representatives receives a Takeover Proposal, which Takeover Proposal did not result from any breach of this Section
5.02, (i) the Company and its Representatives may contact and engage in discussions with such Person or group of Persons making the Takeover Proposal or its or their Representatives and financing sources to clarify the terms and
conditions thereof or to request that any Takeover Proposal made orally be made in writing or to notify such Person or group of Persons or its or their Representatives and financing sources of the provisions of this Section 5.02,
and (ii) if the Special Committee or the Company Board (acting on the recommendation of the Special Committee) determines in good faith, after consultation with its financial advisors and outside legal counsel, that such Takeover Proposal
constitutes or could reasonably be expected to result in a Superior Proposal, then the Company and any of its Representatives may enter into an Acceptable Confidentiality Agreement with the Person or group of Persons making such Takeover Proposal
and, pursuant to such Acceptable Confidentiality Agreement, (A) furnish information with respect to the Company Group to the Person or group of Persons who has made such Takeover Proposal and its or their respective Representatives and financing
sources; provided that the Company will promptly provide to Buyer any material non-public information concerning the Company or any of its Subsidiaries that is provided to any Person given such access which was not previously provided to
Buyer or its Representatives prior to, or substantially concurrently with, the time it is provided to such Person or group of Persons, and (B) engage in or otherwise participate in discussions or negotiations regarding such Takeover Proposal with
the Person or group of Persons making such Takeover Proposal and its or their Representatives and financing sources.
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(c) Notice of Acquisition Proposals. Following the date of this Agreement and prior to the Company Stockholder Approval,
the Company will promptly (but, in any event, within 24 hours following receipt) notify Buyer in the event the Company or any of its or its Subsidiaries’ officers or directors or its or their other Representatives receive a Takeover Proposal and
will disclose to Buyer the material terms and conditions of any such Takeover Proposal (including copies of any such written Takeover Proposal or of any written materials relating thereto (or where no written materials are provided, a reasonably
detailed written description thereof)) and the identity of the Person or group of Persons making such Takeover Proposal, and the Company will thereafter keep Buyer informed on a reasonably current basis of any material developments with respect
to any such Takeover Proposal (including any material changes thereto) and the status of any discussions or negotiations in connection with the Takeover Proposal. For the avoidance of doubt, all information provided to Buyer pursuant to this Section
5.02(c) will be subject to the terms of the Confidentiality Agreement.
(d) No Change of Recommendation. None of the Company Board or the Special Committee will (i)
(A) fail to include the Company Recommendation or the Special Committee Recommendation in the Proxy Statement and Schedule 13E-3, (B) withdraw, withhold or modify, amend or qualify in a manner adverse to Buyer, or publicly propose to withdraw,
withhold or modify, amend or qualify in a manner adverse to Buyer, the Company Recommendation or the Special Committee Recommendation, or otherwise make any public statement or proposal inconsistent with the Company Recommendation or the Special
Committee Recommendation, (C) recommend the approval or adoption of, or approve or adopt, or publicly propose to recommend, approve or adopt, any Takeover Proposal, (D) fail to recommend, in a Solicitation/Recommendation Statement on Schedule
14D-9, against any Takeover Proposal subject to Regulation 14D under the Exchange Act within ten Business Days after commencement of such Takeover Proposal, (E) within five Business Days following a written request by Buyer following the date any
Takeover Proposal or any material modification thereto is first published or sent, given or communicated to the Company Stockholders (other than a Takeover Proposal subject to Regulation 14D, which is covered by clause (D)), fail to issue
a press release that reaffirms the Company Recommendation or the Special Committee Recommendation; provided that Buyer may not make any such request on more than one occasion in respect of any Takeover Proposal or any material
modification of a Takeover Proposal, or (F) publicly propose or agree to any of the foregoing (any action described in this clause (i) being referred to as an “Adverse Recommendation Change”), or (ii) execute or enter into (or
cause or permit the Company or any of its Subsidiaries to execute or enter into) any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement providing for a
Takeover Proposal, other than any Acceptable Confidentiality Agreement (each, a “Company Acquisition Agreement”).
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(e) Superior Proposals. Notwithstanding anything to the contrary set forth in this Section 5.02, prior to obtaining the Company
Stockholder Approval, the Special Committee or the Company Board (acting on the recommendation of the Special Committee) may, in response to an unsolicited, bona fide written Takeover Proposal that is
made after the date of this Agreement and which did not result from a material breach by the Company of its obligations set forth in Section 5.02(a), effect an Adverse Recommendation Change or terminate this Agreement to enter
into a Company Acquisition Agreement if and only if (i) the Special Committee or the Company Board (acting on the recommendation of the Special Committee) determines in good faith, after consultation with its outside legal counsel and financial
advisor, that such Takeover Proposal constitutes a Superior Proposal, (ii) the Special Committee or the Company Board (acting on the recommendation of the Special Committee), as applicable, has given Buyer written notice (a “Takeover Proposal
Notice”) (which will not constitute an Adverse Recommendation Change) at least five Business Days in advance (the “Notice Period”) of the Adverse Recommendation Change or termination, as applicable, which notice will set forth in
writing that it intends to take such action and a reasonably detailed description of the basis therefor and will also include all information required by Section 5.02(c), mutatis mutandis,
(iii) during the Notice Period, the Special Committee on behalf of the Company will, and will cause its Representatives to, if requested by Buyer, negotiate in good faith with Buyer, including providing Buyer the opportunity to make a
presentation to the Company Board and the Special Committee regarding this Agreement and, to the extent applicable, any proposed revisions to this Agreement in response to such Takeover Proposal, and (iv) at the end of the Notice Period, the
Special Committee or the Company Board (acting on the recommendation of the Special Committee), as applicable, determines in good faith, after consultation with its outside legal counsel and financial advisor (and taking into account any
adjustment or modification of the terms of this Agreement to which Buyer has irrevocably and in writing agreed to make), that the Takeover Proposal continues to be a Superior Proposal and, after consultation with its outside legal counsel, that
the failure to effect an Adverse Recommendation Change or terminate this Agreement to enter into a Company Acquisition Agreement would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Law. Any
material amendment or modification to any Takeover Proposal will require a new Takeover Proposal Notice, and the Notice Period will be extended by an additional three Business Days from the date of receipt of such new Takeover Proposal.
(f) Intervening Events. Notwithstanding anything to the contrary set forth in this Section 5.02, prior to
obtaining the Company Stockholder Approval, the Special Committee or the Company Board (acting on the recommendation of the Special Committee) may make an Adverse Recommendation Change in respect of an Intervening Event if and only if (i) the
Special Committee or the Company Board (acting on the recommendation of the Special Committee) determines in good faith, after consultation with its outside legal counsel and financial advisor, that the failure to make an Adverse Recommendation
Change in response to such Intervening Event would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Law, (ii) the Special Committee or the Company Board (acting on the recommendation of the Special
Committee), as applicable, has given Buyer written notice (which will not constitute an Adverse Recommendation Change) at least as long as the Notice Period in advance of the Adverse Recommendation Change, which notice will set forth in writing
that it intends to take such action and a reasonably detailed description of the basis therefor, (iii) during the Notice Period, the Special Committee on behalf of the Company will, and will cause its Representatives to, if requested by Buyer,
negotiate in good faith with Buyer, including providing Buyer the opportunity to make a presentation to the Company Board and the Special Committee regarding this Agreement and, to the extent applicable, any proposed revisions to this Agreement
in response to such Intervening Event, and (iv) at the end of the Notice Period, the Special Committee or the Company Board (acting on the recommendation of the Special Committee), as applicable, determines in good faith, after consultation with
its outside legal counsel and financial advisor (and taking into account any adjustment or modification of the terms of this Agreement to which Buyer has irrevocably and in writing agreed to make), that the failure to effect an Adverse
Recommendation Change would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable Law.
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(g) Certain Permitted Disclosures. Nothing in this Section 5.02 or elsewhere in this Agreement will
prohibit the Company from (i) disclosing a position contemplated by Rule 14d-9, Rule 14e-2(a) or Item 1012(a) of Regulation M-A under the Exchange Act, (ii) making any “stop, look and listen” statement or similar communication of the type
contemplated by Rule 14d-9(f) under the Exchange Act, or (iii) informing any Person or group of the existence of the provisions contained in this Section 5.02; provided, however, that nothing in this Section 5.02(g)
will be deemed to permit the Company, the Special Committee or the Company Board (acting on the recommendation of the Special Committee) to effect an Adverse Recommendation Change other than in accordance with Section 5.02(e) or
Section 5.02(f); it being understood that a disclosure that constitutes only a “stop, look and listen” statement or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act will not be deemed to be an
Adverse Recommendation Change if it (x) reaffirms the Company Recommendation and the Special Committee Recommendation or (y) includes a factually accurate public statement that describes the Company’s receipt of a Takeover Proposal, that no
position has been taken by the Company Board or the Special Committee as to the advisability or desirability of a Takeover Proposal and the operation of this Agreement with respect thereto.
(a) Subject to the terms and conditions of this Agreement (and the other sections of this Section 5.03), each
Party will cooperate with the other Parties and use (and the Company will cause its Subsidiaries to use and Buyer will cause its Affiliates to use) their respective reasonable best efforts to as promptly as reasonably practicable (i) take, or cause to be taken, all actions, and do, or cause to be done, and assist and cooperate with the other Parties in doing, all things necessary, proper or advisable to cause the conditions to Closing to be
satisfied as promptly as reasonably practicable and to consummate and make effective, in the most expeditious manner reasonably practicable, the Transactions, including preparing and filing promptly and fully all documentation to effect all
necessary, proper and advisable filings, notices, petitions, statements, registrations, declarations, submissions of information, applications, reports and other documents, (ii) obtain all approvals, consents, registrations, waivers, permits,
authorizations, exemptions, clearances, orders and other confirmations from any Governmental Authority or third party necessary, proper or advisable to consummate the Transactions, and (iii) execute and deliver any additional instruments
necessary to consummate the Transactions.
(b) In furtherance and not in limitation of the foregoing, the Company and Buyer will each use (and the Company will cause its Subsidiaries to use and Buyer will cause its
Affiliates to use) their respective reasonable best efforts to (i) take all action necessary to ensure that no Takeover Law is or becomes applicable to any of the Transactions and refrain from taking any actions that
would cause the applicability of such Laws and (ii) if the restrictions of any Takeover Law become applicable to any of the Transactions, take all action reasonably necessary to ensure that the Transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise lawfully minimize the effect of such Takeover Law on the Transactions.
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(c) Subject to Section 5.03(d), Buyer will solely control the timing and strategy for obtaining any approvals, consents, registrations, waivers, permits,
authorizations, exemptions, clearances, orders and other confirmations from any other Governmental Authorities in connection with the Transactions (including, for the avoidance of doubt, any Required Regulatory Approvals) and coordinate the
overall development of the positions to be taken and the regulatory actions to be requested in any filing or submission with such other Governmental Authority in connection with the Transactions and in connection with any investigation or other
inquiry or litigation by or before, or any negotiations with, any such other Governmental Authority relating to the Transactions and of all other regulatory matters incidental thereto, including the final content of any substantive communications
with any applicable Governmental Authority with respect to obtaining approval or expiration of any waiting period under the HSR Act and any applicable Antitrust Laws; provided that Buyer will, in good faith, cooperate and consult with the
Company in advance and take into consideration the Company’s views, suggestions and comments regarding nonconfidential strategy, efforts and positions to be taken and regulatory actions requested in any filing or submission with such other
Governmental Authority.
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(d) Notwithstanding anything to the contrary in Section 5.03(a) and Section 5.03(b),
each Party agrees to (i) make (and the Company will cause its Subsidiaries and Buyer will cause its Affiliates or, if required pursuant to the HSR Act, any of the Equity Commitment Parties or Investor Group Members or any of their respective
Affiliates to make) an appropriate filing of a Notification and Report Form pursuant to the HSR Act with respect to the Transactions as promptly as reasonably practicable, but no later than 20 Business Days, following the date of this Agreement,
and to supply (and the Company will cause its Subsidiaries and Buyer will cause its Affiliates or, if required pursuant to the HSR Act, any of the Equity Commitment Parties or Investor Group Members or any of their respective Affiliates to
supply) as promptly as reasonably practicable any additional information and documentary material that may be requested pursuant to the HSR Act, (ii) use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be
done, and to assist and cooperate with the other Party in doing, all things reasonably necessary, proper or advisable to obtain approval under any Antitrust Laws that may be required by any foreign or U.S. federal, state or local Governmental
Authority, in each case with competent jurisdiction, so as to enable the Parties to consummate the Transactions, (iii) make any filing to any Governmental Authority that is legally mandatory or necessary, proper or advisable to obtain any
Required Regulatory Approval as promptly as reasonably practicable following the date hereof, and to supply as promptly as reasonably practicable any additional information and documentary material that may be requested by a Governmental
Authority, and (iv) promptly take any and all steps necessary to secure clearance of any filing before a Governmental Authority. Subject to Section 5.03 of the Buyer Disclosure Letter, Buyer’s reasonable best efforts to consummate
the Transactions shall include taking or committing to take or causing its controlled Affiliates to take or commit to take any of the following actions: (A) (I) executing settlements, undertakings, consent decrees, stipulations or other
agreements with any Governmental Authority or with any other Person; (II) placing restrictions on or agreeing to place restrictions on particular assets or categories of assets or businesses, services or other operations or interests of Buyer;
(III) permitting the Company to place any restrictions on any of the particular assets or categories of assets or businesses, services or other operations or interests of the Company or any of its Subsidiaries prior to the Effective Time; (IV)
terminating existing relationships, contractual rights or obligations of (x) the Company or its Subsidiaries or (y) Buyer or any of its controlled Affiliates; (V) creating any relationship, contractual right or obligation of (x) the Company or
its Subsidiaries or (y) Buyer or any of its controlled Affiliates; or (VI) effectuating any other change or restructuring of (x) the Company or its Subsidiaries or (y) Buyer or any of its controlled Affiliates and (B) defending through litigation
any claim asserted in court or administrative or other tribunal by any Person (including any Governmental Authority) in order to avoid the entry of, or to have vacated or terminated, any Restraint that is seeking to or would prevent the Closing
prior to the Outside Date then in effect; provided, however, that notwithstanding anything to the contrary in this Section 5.03 or Section 5.03 of the Buyer Disclosure Letter, none of Buyer, any
Investor Group Member, any Equity Commitment Party, or any of their respective Affiliates will be required to take or commit to taking any action that would materially adversely affect the governance, economic or other material rights or
interests of (x) the Company and its Affiliates, taken as a whole or (y) Buyer, any Investor Group Member, any Equity Commitment Party, or any of their respective Affiliates, taken as a whole. Notwithstanding anything to the contrary in this Section
5.03 or Section 5.03 of the Buyer Disclosure Letter, none of Buyer, the Company, any of its Subsidiaries, any Investor Group Member, any Equity Commitment Party, nor any of their respective Affiliates will be required
to sell, divest, hold separate or otherwise dispose of, or agree to sell, divest, hold separate or otherwise dispose of, any assets, businesses or interests. Subject to the foregoing, Buyer will respond to and seek to resolve (subject to its
efforts obligations hereunder) as promptly as reasonably practicable any objections asserted by any Governmental Authority with respect to the Transactions. Each of the Company and Buyer will not take (and each of Company and Buyer will cause
their respective Affiliates not to take) any action with the intention to, or that would reasonably be expected to, hinder or delay the expiration or termination of any waiting period under the HSR Act or the obtaining of approval of the DOJ or
FTC as necessary, in each case, beyond the Outside Date. Nothing in this Agreement will require any party to take or agree to take any action with respect to its business or operations unless the effectiveness of such agreement or action is
conditioned upon the Closing. Neither Buyer nor the Company will commit (and will cause their respective Affiliates, including, in the case of Buyer, the Equity Commitment Parties and Investor Group Members and their respective Affiliates, not
to commit) to or agree with any Governmental Authority to stay, toll or extend any applicable waiting period under the HSR Act or any other Antitrust Laws or enter into a timing agreement with any Governmental Authority, without the prior written
consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed).
(e) Without limiting the foregoing, Buyer will not, and will not permit any Equity Commitment Party, Investor Group Member or any of their respective Affiliates to, acquire or
agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of or equity in or otherwise making any investment in, or by any other manner, any Person or portion thereof, or otherwise acquire or agree to
acquire or make any investment in any assets, if the entering into of a definitive agreement relating to or the consummation of such acquisition, merger, consolidation or investment would reasonably be expected to (i) materially delay the
obtaining of, or materially increase the risk of not obtaining, any consent, approval, authorization, declaration, waiver, license, franchise, permit, certificate or order of any Governmental Authority necessary to consummate the Transactions or
the expiration or termination of any applicable waiting period, (ii) materially increase the risk of any Governmental Authority entering an order prohibiting the consummation of the Transactions, or (iii) materially delay the consummation of the
Transactions; provided, that, notwithstanding anything to the contrary herein, any delay that would not permit the Closing to occur on or before the Outside Date shall be deemed to be a material delay.
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(f) In furtherance and not in limitation of the foregoing, each Party will use (and will cause their respective Affiliates to use) their respective reasonable best efforts to (i)
promptly cooperate in all respects with each other in connection with any necessary, proper or advisable submissions, consents, approvals, filings, petitions, statements, licenses, permits, authorizations, declarations, notifications,
registrations, submissions of information, applications, reports, waivers, exemptions, clearances, orders, confirmations and other documents with the FTC, the DOJ or any other Governmental Authority in connection with the Transactions and in
connection with any investigation or other inquiry by or before the FTC, the DOJ or any other Governmental Authority relating to the Transactions or any proceeding initiated by a private Person, (ii) keep the other Party informed in all material
respects and on a reasonably timely basis of any material written or verbal communication received by such Party from, or given by such Party to, the FTC, the DOJ or any other Governmental Authority (including by promptly sending the other Party
a copy of all documents, information, correspondence or other communications) and of any material written or verbal communication received or given in connection with any proceeding by a private Person, in each case regarding any of the
Transactions, (iii) subject to applicable Laws and the Confidentiality Agreement relating to the exchange of information, and to the extent reasonably practicable, promptly consult with the other Party with respect to information relating to the
other Party and its Subsidiaries, as the case may be, that appears in any filing made with, or written materials submitted to, any third Person or the FTC, the DOJ or any other Governmental Authority in connection with the Transactions, other
than “4(c) documents” or “4(d) documents,” as those terms are used in the rules and regulations under the HSR Act, (iv) to the extent reasonably practicable and permitted by the FTC, the DOJ or such other applicable Governmental Authority or
other Person, promptly give the other Party the opportunity to attend and participate in such meetings and conferences (whether in person, by telephone or otherwise), and (v) subject to Section 5.03(d),
promptly obtain all consents, registrations, waivers, exemptions, approvals, confirmations, clearances, permits, certificates, orders, and authorizations necessary, proper or advisable to be obtained from, or renewed with, the FTC, the DOJ and
any other Governmental Authority. Prior to submitting any document or any information relating to the Transactions or the Parties (whether formally or informally, in draft form or final form) to the FTC, the DOJ or any other Governmental
Authority, the applicable Party will send the other Party such document or information reasonably in advance of such submission, and such document or information will not be submitted to the FTC, the DOJ or any other Governmental Authority
without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed). Notwithstanding anything to the contrary in this Section 5.03, any Party may, as it deems advisable and
necessary, reasonably designate any competitively sensitive information and material provided to the other Party under this Section 5.03 as “outside counsel only.” Such materials and the information contained therein will be
given only to the outside legal counsel of the recipient and will not be disclosed by such outside counsel to employees, officers, or directors of the recipient, unless express written permission is obtained in advance from the source of the
materials. The Parties will use reasonable efforts to share information protected from disclosure under the attorney-client privilege, work product doctrine, joint defense privilege or any other privilege pursuant to this Section 5.03
so as to preserve any applicable privilege.
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5.04. Public
Announcements. Unless and until an Adverse Recommendation Change has occurred, Buyer, on the one hand, and the Company, on the other hand, will consult (and will cause their respective Affiliates and, in the case of Buyer,
the Equity Commitment Parties and the Investor Group Members and their respective Affiliates, to consult) with each other before issuing, and give each other the opportunity to review and comment upon, any press release or other public
statements with respect to the Transactions, and will not (and will cause their respective Affiliates and, in the case of Buyer, the Equity Commitment Parties and the Investor Group Members and their respective Affiliates, not to) issue any
such press release or make any such public statement without the prior written consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed), except (i) as may be required with respect to such Person by
applicable Law, Judgment, court process or any obligations pursuant to any listing agreement with, or the rules and regulations of, any applicable securities exchange, securities quotation system or other listing authority; provided that Buyer or the Company, as applicable, will, and Buyer will cause the applicable Investor Group Member or Equity Commitment Party or Affiliates thereof to, use reasonable
best efforts to give the other Party a reasonable opportunity to review and comment on such press release or public statement, and (ii) for any matters referred to in Section 5.02.
The Parties agree that the initial press release to be issued with respect to the Transactions following execution of this Agreement will be in the form agreed to by the Parties prior to the execution of this Agreement (the “Announcement”). Notwithstanding the foregoing, this Section 5.04 will not apply to any press release or other public
statement which (a) is consistent with the Announcement and the terms of this Agreement and does not contain any information relating to the Transactions that has not been previously announced or made public in
accordance with the terms of this Agreement or (b) is made in the ordinary course of business and does not relate specifically to the signing of this Agreement or the Transactions. Notwithstanding the
foregoing, Buyer and its Affiliates may, without consulting the Company, make communications to, and provide ordinary course communications regarding this Agreement and the Transactions, to the Debt Financing Sources Related Parties and
existing or prospective general and limited partners, equity holders, members, managers, agents and investors of Buyer or any of its Affiliates, in each case, who are subject to customary confidentiality restrictions.
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5.05. Access to Information; Confidentiality. Subject to applicable Law and any applicable Judgment, between
the date of this Agreement and the earlier of the Effective Time and the valid termination of this Agreement pursuant to Section 7.01, upon reasonable notice, the Company will
afford to Buyer and each of Buyer’s Representatives reasonable access during normal business hours to the Company’s and its Subsidiaries’ officers, employees, agents, properties, books, Contracts and records (other than any of the foregoing
that relate to the negotiation and execution of this Agreement, or, except as expressly provided in Section 5.02, to any Takeover Proposal or any other transactions potentially
competing with or alternative to the Merger Transactions or proposals from other parties relating to any competing or alternative transactions or relating to any deliberations of the Company Board regarding any Takeover Proposal or Adverse
Recommendation Change or the deliberations of the Special Committee on any matter) and the Company will furnish promptly to Buyer and each of Buyer’s Representatives such information concerning its and its Subsidiaries’ business, personnel,
assets, liabilities and properties as Buyer may reasonably request, in each case, in connection with the consummation of the Transactions (including for integration planning); provided
that Buyer and its Representatives will conduct any such activities in such a manner as not to interfere unreasonably with the business or operations of the Company or any of its Subsidiaries and that Buyer and its Representatives will not
conduct any invasive sampling of the environment at any property of the Company Group; provided further, however, that the Company will not be obligated to provide such access or information if the Company determines, in its reasonable judgment, that doing so could (i) violate applicable
Law, an applicable Judgment or a Contract or obligation of confidentiality owing to a third party or (ii) jeopardize the protection of an attorney-client privilege, attorney work product protection or other legal privilege; provided that in the case of the foregoing clauses (i) and (ii), the Company will, and will cause its Affiliates to, use reasonable best efforts to find a suitable alternative to disclose information in
such a way that such disclosure does not cause the loss or waiver of such privilege or violate any confidentiality obligations or Law, as applicable. All requests for information made pursuant to this Section 5.05 will be directed to the executive officer or other Person designated by the Company. Until the Effective Time, all information provided will be subject to the terms of the confidentiality agreement
dated as of August 11, 2026, among the Company, PC (on behalf of itself and PAHC) and Mitsui (on behalf of itself and Mitsui USA) (the “Confidentiality Agreement”).
(a) For a period of six years from and after the Effective Time, Buyer will, and will cause the Surviving Corporation to, to the fullest extent permissible by applicable Law, (i) indemnify and hold
harmless each current or former director or officer of the Company Group and each other Person who at the Effective Time is, or at any time prior to the Effective Time was, indemnified or entitled to be indemnified by the Company Group
pursuant to the Company Charter Documents and the organizational documents of such Subsidiaries as in effect on the date of this Agreement or in any agreement in existence as of the date of this Agreement providing for indemnification or
advancement of expenses between the Company or any of its Subsidiaries and such Person (each, an “Indemnitee” and, collectively, the “Indemnitees”)
with respect to all claims, liabilities, losses, damages, judgments, fines, penalties, costs (including amounts paid in settlement or compromise) and expenses (including fees and expenses of legal counsel) in connection with any Action
(whether civil, criminal, administrative or investigative), whenever asserted, based on or arising out of, in whole or in part, (A) the fact that an Indemnitee is or was a member, director, manager, officer,
employee or agent of the Company or such Subsidiary or (B) acts or omissions by an Indemnitee in the Indemnitee’s capacity as a member, director, manager, officer, employee or agent of the Company or such
Subsidiary or taken at the request of the Company or such Subsidiary (including in connection with serving at the request of the Company or such Subsidiary as a representative of another Person (including any employee benefit plan)), in
each case under clause (A) or (B), at, or at any time prior to, the Effective Time (including any Action relating in whole or in part to the Transactions, the approval of this Agreement and the Transactions and the process undertaken
in connection therewith or relating to the enforcement of this provision or any other indemnification or expense advancement right of any Indemnitee) and (ii) assume in the Merger without any further action all obligations of the Company
and such Subsidiaries to the Indemnitees in respect of indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time as provided in the Company Charter Documents
and the organizational documents of such Subsidiaries as in effect on the date of this Agreement or in any agreement in existence as of the date of this Agreement providing for indemnification or advancement of expenses between the Company
Group and any Indemnitee.
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(b) Without limiting the foregoing, for
a period of six years from and after the Effective Time, to the extent permitted by applicable Law, (i) the Surviving Corporation’s Charter and Bylaws will contain, and the Surviving Corporation will cause the
organizational documents of its Subsidiaries to contain, provisions no less favorable to the Indemnitees with respect to limitation of liabilities, indemnification and exculpation, in each case, of members, managers, directors and officers
than are set forth as of the date of this Agreement in the Company Charter Documents and the organizational documents of such Subsidiaries as in effect on the date of this Agreement and (ii) to the fullest extent the Company would have been
permitted by applicable Law, the Surviving Corporation will, without requiring a preliminary determination of entitlement to indemnification, advance any expenses (including fees and expenses of legal counsel) of any Indemnitee under this Section 5.06 (including in connection with enforcing the indemnity and other obligations referred to in this Section 5.06),
subject to receipt from the Indemnitee to whom such expenses are advanced of an undertaking to repay such advances if it is ultimately determined in accordance with applicable Law that such Indemnitee is not entitled to indemnification.
(c) In the event any Action is brought against any Indemnitee and in which indemnification could be sought by such Indemnitee in any threatened or actual litigation, claim or proceeding relating to any acts or omissions covered
under this Section 5.06 (each, a “Claim”), (i) neither the Surviving Corporation nor any
of its Subsidiaries will settle, compromise or consent to the entry of any judgment in any such Claim, unless (x) such settlement, compromise or consent relates only to monetary damages payable by Persons other than such Indemnitee, does
not include any admission or finding of wrongdoing on the part of such Indemnitee and includes an unconditional release of such Indemnitee from all liability arising out of such Claim or (y) such Indemnitee otherwise consents in writing to
such settlement, compromise or consent, and (ii) each of the Surviving Corporation, its Subsidiaries and the Indemnitees will cooperate in the defense of any Claim and will provide access to properties and individuals as reasonably
requested and furnish or cause to be furnished records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.
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(d) Prior to the Effective Time, the Company will purchase and bind a six-year prepaid “tail policy” on terms and conditions providing at least substantially equivalent benefits as the current policies of directors’ and officers’
liability insurance maintained by the Company Group with respect to matters existing or occurring prior to the Effective Time, covering without limitation the Transactions (the “D&O Tail
Policy”), or, if substantially equivalent insurance coverage is unavailable, the best available coverage. The D&O Tail Policy will provide by its terms that it will survive the Merger for not less than six years for the
benefit of the Company, its Subsidiaries, the Company’s and any of its Subsidiary’s past and present directors or officers that are insured under the Company’s current directors’ and officers’ liability insurance policy in effect as of the
date hereof. The Surviving Corporation will maintain the D&O Tail Policy in full force and effect and continue to honor the obligations thereunder for a period of six years after the Effective Time or, if such policies are terminated
or canceled, obtain (subject to the limitations set forth in the next sentence) an alternative D&O Tail Policy on substantially similar terms as set forth in this Section 5.06(d).
Neither the Company (prior to the Effective Time) nor the Surviving Corporation (after the Effective Time) will be required to pay an annual premium for the D&O Tail Policy in excess of 300% (the “Maximum Amount”) of the last annual premium paid prior to the date of this Agreement (it being understood and agreed that in the event the cost of such D&O Tail Policy exceeds the Maximum Amount, in the
aggregate, the Company will remain obligated to provide as much comparable insurance as possible for an annual premium equal to the Maximum Amount). The Company and Indemnitees may be required to make reasonable application and provide
reasonable and customary representations and warranties to applicable insurance carriers for the purpose of obtaining such D&O Tail Policy.
(e) The provisions of this Section 5.06 are (i) intended to be for the benefit of, and are enforceable by, each Indemnitee, his or her heirs and his or her representatives and (ii)
in addition to, and not in substitution for, any other rights to indemnification or contribution that any such individual may have under the Company Charter Documents, under the organizational documents of such Subsidiaries as in effect on
the date of this Agreement or by contract or otherwise. The obligations of Buyer, the Company and the Surviving Corporation under this Section 5.06 will not be terminated or
modified in such a manner as to adversely affect the rights of any Indemnitee to whom this Section 5.06 applies unless (x) such termination or
modification is required by applicable Law or (y) the affected Indemnitee has consented in writing to such termination or modification (it being expressly agreed that the Indemnitees to whom this Section 5.06 applies are third-party beneficiaries of this Section 5.06).
(f) In the event that the Surviving
Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, proper provision will be made so that the successors and assigns of the Surviving Corporation assume all of the
obligations thereof set forth in this Section 5.06.
(g) Nothing in this Agreement is
intended to, will be construed to or will release, waive or impair any rights to directors’ and officers’ insurance claims under any policy that is or has been in existence with respect to the Company or any of its Subsidiaries for any of
their respective directors, officers or other employees, it being understood and agreed that the indemnification provided for in this Section 5.06 is not prior to or in
substitution for any such claims under such policies.
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(a) For the period beginning at the Effective Time and for 12 months thereafter (or, if shorter, until the date of employment termination of the relevant Continuing Employee (such period, the “Comparability Period”)), the Company will, and will cause its Subsidiaries to, provide to each Person who is an employee of the Company or any of its Subsidiaries immediately prior to the Effective Time (each, a “Continuing Employee”), (i) a base salary or wage rate and target short-term incentive opportunities (excluding retention or change in control or equity incentives (including, for the
avoidance of doubt, any equity incentives provided under the Company KSOP)) that are no less favorable, in each case, than those in effect immediately prior to the Effective Time, (ii) opportunities for annual discretionary bonuses based on
similar factors and criteria that were used to determine discretionary bonuses in the previous year and (iii) employee benefit plans and arrangements sponsored or maintained by a member of the Company Group (excluding any retiree welfare
benefits, nonqualified deferred compensation, long-term or equity incentive opportunities (including, for the avoidance of doubt, any equity incentives provided under the Company KSOP) and defined benefit pension plans (collectively, “Excluded Benefits”)) that are substantially comparable in the aggregate to those provided to such Continuing Employee immediately prior to the Effective Time, provided that, notwithstanding anything to the contrary in this Section 5.07, the Company may modify the compensation
otherwise required under this Section 5.07 for any Continuing Employee whom the Company determines, in its reasonable discretion, to be underperforming. For the Comparability
Period, the Company may, and may cause its Subsidiaries to, provide to certain Continuing Employees, as determined on a case-by-case basis in the sole discretion of Buyer, long-term incentive opportunities (which may be provided in the form
of cash awards, phantom equity awards or a combination thereof as determined in the discretion of Buyer) that are no less favorable, in the aggregate, than the long-term incentive opportunities provided to such Continuing Employee as of
immediately prior to the Effective Time.
(b) With respect to all employee
benefit plans and arrangements sponsored or maintained by a member of the Company Group in which Continuing Employees are eligible to participate from and after the Effective Time, including any “employee benefit plan” (as defined in
Section 3(3) of ERISA) (but excluding any plans providing for Excluded Benefits), for purposes of determining eligibility to participate, level of benefits, vesting and benefit accruals, the Company Group will continue to recognize each
Continuing Employee’s service with the Company Group; provided, however, that such service need not be recognized to
the extent that such recognition would result in any duplication of benefits for the same period of service or to the extent it was not credited for such purposes under the analogous Company Plan prior to the Effective Time.
(c) With respect to any Company Plan
providing for health and welfare benefits in which Continuing Employees are eligible to participate from and after the Effective Time, the Company Group shall, as applicable (i) waive, or use reasonable best efforts to cause insurance
carriers to waive, all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees (and their covered dependents) but, unless otherwise
required by applicable Law, only to the same extent waived under such Company Plan prior to the Effective Time and (ii) give effect, or use reasonable best efforts to cause insurance carriers to give effect, in determining any deductible
and maximum out-of-pocket limitations, to amounts paid by such employees (and their covered dependents) with respect to such Company Plan, only to the same extent recognized by the Company or the applicable Subsidiary prior to the Effective
Time. Such credited expenses shall also count toward any annual or lifetime limits, treatment or visit limits or similar limitations that apply under the terms of the applicable plan.
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(d) The provisions of this Section 5.07 are solely for the benefit of the Parties, and no provision of this Section 5.07 is intended to, or will
constitute the establishment or adoption of, or an amendment to, any employee benefit plan for purposes of ERISA or otherwise and, except as otherwise explicitly provided for in this Agreement, no current or former employee or any other
individual associated therewith will be regarded for any purpose as a third-party beneficiary of this Agreement or have the right to enforce the provisions hereof.
(a) Except in connection with an Action subject to Section 2.05(b) (which will be governed by Section 2.05(b)),
the Company will promptly notify Buyer of any Action brought by stockholders of the Company or other Persons against the Company Group or any of its directors, officers or its Representatives arising out of or relating to this Agreement or
the Transactions (the “Transaction Litigation”), and will keep Buyer reasonably informed with respect to the status thereof. Without limiting the preceding sentence, the Company
will give Buyer the opportunity to participate in the defense, resolution and settlement of any Transaction Litigation against the Company or the Company’s directors relating to this Agreement or the Transactions (including by allowing for
advanced review and comment on all filings or responses to be made in connection therewith and reasonable advance review of materials proposed to be delivered in connection with any discovery or document production), and the Company will in
good faith give consideration to Buyer’s advice with respect to such Transaction Litigation; provided that the Company will retain all decision making power and authority with
respect to such Transaction Litigation. Notwithstanding the immediately preceding sentence, the Company will not settle or resolve any Transaction Litigation without Buyer’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed. Disclosure of information pursuant to this Section 5.08 will be subject to the terms and conditions of Section 5.05, including regarding attorney-client privilege, attorney work product protection or other legal privilege.
(b) The Company will not, without the
prior written consent of an Indemnitee, settle any Transaction Litigation against such Indemnitee unless the settlement relates only to monetary damages payable by Persons other than such Indemnitee, does not include any admission or
finding of wrongdoing on the part of such Indemnitee and includes an unconditional release of such Indemnitee from liability arising out of such Transaction Litigation.
5.09. Buyer Adoption of Agreement. Concurrently with the execution and delivery of this Agreement, Buyer will deliver to the Company the unanimous written consent of the stockholders of Buyer adopting this Agreement and
approving the Transactions in accordance with the DGCL, with effect immediately following the execution of this Agreement.
5.10. Stock Exchange De-listing. Buyer and the Company will cooperate and use their respective reasonable best efforts to take, or cause to be taken, and do or cause to be done all things reasonably necessary, proper or
advisable under applicable Law and the rules and policies of the NYSE to enable the delisting by the Company of the shares of Company Common Stock from the NYSE and the deregistration of the Company Common Stock under the Exchange Act as
promptly as practicable after the Effective Time. Without limiting the foregoing, Buyer will be responsible for preparing and filing, or causing the NYSE or the Surviving Corporation to prepare and file, (a) a Form 25 pursuant to Rule
12d2-2 under the Exchange Act with respect to the delisting of the Company Common Stock from the NYSE and (b) a Form 15 pursuant to Rules 12g-4 and 12h-3 under the Exchange Act with respect to the deregistration of the Company Common Stock,
in each case as promptly as practicable, and in any event within ten Business Days, after the Effective Time.
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5.11. Section 16. The Company and the Company Board (or a duly formed committee thereof consisting of non-employee directors (as such term is
defined for the purposes of Rule 16b-3 promulgated under the Exchange Act)), will, to the extent necessary, take appropriate action, prior to or as of the Effective Time, to approve, for purposes of Section 16(b) of the Exchange Act, the
disposition and cancelation or deemed disposition and cancelation of shares of Company Common Stock and Equity-Based Awards in the Merger by applicable individuals and to cause such dispositions or cancelations to be exempt under Rule 16b-3
promulgated under the Exchange Act.
(a) The Company will prepare and file with the SEC, as promptly as practicable after the date of this Agreement, but in any event within 30 Business Days after the date of this Agreement, a Proxy Statement in preliminary form
relating to the Company Stockholders Meeting. Except under the circumstances expressly permitted by Section 5.02, the Proxy Statement will include the Company Recommendation and
the Special Committee Recommendation. The Company and Buyer will cooperate to, concurrently with the preparation and filing of the Proxy Statement, jointly prepare and file with the SEC a Rule 13E-3 Transaction Statement on Schedule 13E-3
(such transaction statement, including any amendment or supplement thereto, the “Schedule 13E-3”) relating to the Transactions.
(b) The Company will use reasonable best
efforts to cause the Proxy Statement to comply as to form and substance with the provisions of the Exchange Act in all material respects. The Company and Buyer will use reasonable best efforts to cause, as to themselves and their
Affiliates, the Schedule 13E-3 to comply as to form and substance with the provisions of the Exchange Act in all material respects. The Company and Buyer will furnish all information required by the Exchange Act or other applicable Law
concerning it and its Affiliates, respectively, as the other Party may reasonably request or as customarily included in a Proxy Statement or a Schedule 13E-3 prepared in connection with a transaction of the type contemplated by this
Agreement, and the Company and Buyer will ensure that none of the information supplied by it or any of its Affiliates or their respective Representatives for inclusion or incorporation by reference in the Proxy Statement or the Schedule
13E-3 will, at the date of mailing to stockholders of the Company, at the time of the Company Stockholders Meeting or at the time of filing with the SEC (as applicable), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
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(c) If at any time prior to the Company Stockholders Meeting, any
information relating to the Company and Buyer, or any of their respective Affiliates or its or their respective Representatives, should be discovered by a Party, which information should be set forth in an amendment or supplement to the
Proxy Statement or the Schedule 13E-3, so that either the Proxy Statement or the Schedule 13E-3, as applicable, would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they are made, not misleading, the Party that discovers such information will as promptly as practicable following such discovery notify the other Party or Parties (as the case may be)
and after such notification (A) the Company will, as and to the extent required by applicable Law, promptly prepare an amendment or supplement to the Proxy Statement, (B) the Company and Buyer will, as and to the extent required by
applicable Law, promptly prepare an amendment or supplement to the Schedule 13E-3, and (C) the Company will cause the Proxy Statement or Schedule 13E-3 as so amended or supplemented to be filed with the SEC and, if required by applicable
Law, to be disseminated to its stockholders.
(d) The Company will (i) provide Buyer, its Affiliates and their
respective Representatives with a reasonable opportunity to review and comment on drafts of the Proxy Statement and other documents and communications related to the Company Stockholders Meeting prior to filing, furnishing or delivering
such documents with or such communications to the applicable Governmental Authority and dissemination of such documents or communications to the Company’s stockholders and (ii) consider in good faith any comments thereto reasonably proposed
by Buyer, its Affiliates and their respective Representatives, and the Company agrees that all information relating to the Investor Group Members, Buyer, their Subsidiaries and its and their respective Representatives included in the Proxy
Statement will be in form and content reasonably satisfactory to Buyer. The Company and Buyer will (1) provide each other with a reasonable opportunity to review and comment on drafts of the Schedule 13E-3 prior to filing it with the SEC
and (2) consider in good faith any comments thereto reasonably proposed by the other Party and its Representatives, and each of the Company and Buyer agree that all information relating to the other Party, its Affiliates and its and their
respective Representatives included in the Schedule 13E-3 will be in form and content satisfactory to such other Party.
(e) Each Party will promptly notify
each other Party of the receipt of any comments from the SEC with respect to the Proxy Statement or the Schedule 13E-3 and of any request by the SEC for any amendment or supplement to the Proxy Statement or the Schedule 13E-3 or for
additional information and will as promptly as reasonably possible following receipt thereof provide the other Party with copies of all material written correspondence between itself or any of its Representatives and the SEC with respect
to the Proxy Statement or the Schedule 13E–3 (or where the correspondence is not written, a reasonably detailed description thereof) and provide the other Party and its Representatives a reasonable opportunity to participate in any
discussions or meetings with the SEC (or portions of any such discussions or meetings that relate to the Proxy Statement or the Schedule 13E-3) unless pursuant to a telephone call initiated by the SEC or with respect to procedural or
administrative matters. The Company and Buyer (as the case may be) will, subject to the requirements of Section 5.12(d), promptly provide responses to the SEC with respect to
any comments received on the Proxy Statement or the Schedule 13E-3 by the SEC and any requests by the SEC for any amendment or supplement to the Proxy Statement or the Schedule 13E-3 or for additional information. The Company will cause
the definitive Proxy Statement and the Schedule 13E-3 to be mailed as promptly as reasonably possible after the date the SEC staff confirms that the SEC does not intend to review the preliminary Proxy Statement or advises that it has no
further comments thereon or that the Company may commence mailing of the Proxy Statement.
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(f) If the Company
determines that it is required to file any document other than the Proxy Statement and the Schedule 13E-3 with the SEC in connection with the Merger pursuant to applicable Law (such document, as amended or supplemented, an “Other Required Company Filing”), then the Company will use its reasonable best efforts to promptly prepare and file such Other Required Company Filing with the SEC. The Company will
use its reasonable best efforts to cause any Other Required Company Filing to comply as to form and substance with the provisions of the Exchange Act in all material respects. Except in connection with an Adverse Recommendation Change, the
Company may not file any Other Required Company Filing with the SEC without first providing Buyer, its Affiliates and their respective Representatives a reasonable opportunity to review and comment thereon, and the Company will give good
faith consideration to all reasonable additions, deletions or changes suggested by Buyer, its Affiliates or their respective Representatives.
(g) If Buyer
determines that it or any of its Affiliates is required to file any document with the SEC other than the Schedule 13E-3 in connection with the Merger or the Company Stockholders Meeting pursuant to applicable Law (an “Other Required Buyer Filing”), then Buyer will, and will cause its applicable Affiliates to, use its or their respective reasonable best efforts to promptly prepare and file such Other
Required Buyer Filing with the SEC. Buyer will cause any Other Required Buyer Filing to comply as to form and substance with the provisions of the Exchange Act in all material respects. Buyer may not file any Other Required Buyer Filing
with the SEC without first providing the Company and its Representatives a reasonable opportunity to review and comment thereon, and Buyer will give good faith consideration to all reasonable additions, deletions or changes suggested by the
Company or its Representatives.
(a) The Company will
take all action necessary in accordance with applicable Law and the Company Charter Documents to establish a record date for (including conducting, as promptly as practicable after the date hereof and in consultation with Buyer, one or more
“broker searches” in accordance with Rule 14a-13 of the Exchange Act to enable such record date to be so set), duly call, give notice of, convene and hold a meeting of the Company Stockholders (including any adjournment, postponement or
other delay thereof, the “Company Stockholders Meeting”) as promptly as reasonably practicable following the mailing of the Proxy Statement and the Schedule 13E-3 to the Company
Stockholders for the purpose of, among other things, (i) seeking the Company Stockholder Approval and (ii) in accordance with Regulation 14A under the Exchange Act, seeking advisory approval of a proposal in connection with a non-binding,
advisory vote to approve certain compensation that may become payable to the Company’s named executive officers in connection with the consummation of the Merger. Notwithstanding anything to the contrary in this Agreement, and regardless
of whether the Special Committee or the Company Board has made, or publicly proposed to make, an Adverse Recommendation Change in accordance with Section 5.02, the Company’s
obligation to duly call, give notice of, convene and hold the Company Stockholders Meeting, and to submit this Agreement to a vote of the Company Stockholders thereat, will continue in full force and effect and will not be limited, altered,
suspended or otherwise affected by any Adverse Recommendation Change, any Takeover Proposal or Superior Proposal, or any determination, communication or other action by the Special Committee or the Company Board with respect thereto.
Unless and until this Agreement is validly terminated pursuant to Section 7.01 (including, for the avoidance of doubt, pursuant to Section
7.01(c)(ii) (Adverse Recommendation Change) or Section 7.01(d)(ii) (Superior Proposal)), the Company will (A) submit this Agreement for adoption by a vote of the Company Stockholders at the Company Stockholders Meeting and (B) use
reasonable best efforts to solicit proxies to obtain the Company Stockholder Approval and the vote of the Company Stockholders required by applicable Law to effect the Merger. The Company will cooperate with
and keep Buyer informed on a reasonably current basis regarding its solicitation efforts and voting results following dissemination of the definitive Proxy Statement. Without the prior written consent of
Buyer (such consent not to be unreasonably withheld, conditioned or delayed), the adoption of this Agreement, a vote on any proposal to adjourn the meeting in accordance with Section 5.13(b)
and a non-binding, advisory vote to approve certain compensation that may become payable to the Company’s named executive officers in connection with the consummation of the Merger will be the only matters (other than matters of procedure
and matters required by applicable Law to be voted upon by the Company Stockholders in connection with the Transactions) that the Company will propose to be acted upon at the Company Stockholders Meeting.
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(b) Notwithstanding anything to the
contrary in this Agreement, the Company will be permitted to postpone or adjourn the Company Stockholders Meeting if (i) there are holders of insufficient shares of the Company Common Stock present or represented by proxy at the Company
Stockholders Meeting to constitute a quorum at the Company Stockholders Meeting, (ii) the Company is required to postpone or adjourn the Company Stockholders Meeting by applicable Law, order or a request from the SEC, (iii) to ensure that
any supplement or amendment to the Proxy Statement or Schedule 13E-3 required by applicable Law is provided to Company Stockholders with a reasonable amount of time in advance of the Company Stockholders Meeting, (iv) Buyer has so consented
in writing, or (v) to allow additional time for the solicitation of votes in order to obtain the Company Stockholder Approval. If requested by Buyer on no more than two separate occasions in order to allow additional time for the
solicitation of votes in order to obtain the Company Stockholder Approval, the Company will postpone or adjourn the meeting for up to ten Business Days. Without the prior written consent of Buyer (which will not be unreasonably withheld,
conditioned or delayed), the Company Stockholders Meeting will not be postponed or adjourned by more than ten Business Days in the aggregate pursuant to clauses (i), (iii) and (v) above, and, except pursuant to clauses (ii) or (iv) above,
in no event will the Company Stockholders Meeting, as postponed or adjourned, be held later than three Business Days prior to the Outside Date. In no event will the record date of the Company Stockholders Meeting be changed without Buyer’s
prior written consent (such consent not to be unreasonably withheld, conditioned or delayed), unless required by applicable Law.
(a) Prior to the Closing Date, the Company Group will use its reasonable best efforts to provide, and will cause its Representatives to use reasonable best efforts to provide (in each case, subject to Section 5.14(f) and Section 5.14(g), at Buyer’s sole expense), to Buyer and its Affiliates the following cooperation to the extent reasonably
requested by Buyer to assist Buyer with the arrangement of the Debt Financing, and that is customary in connection with efforts to obtain financing of the type of the Debt Financing (including any offering or private placement of debt
securities pursuant to Rule 144A under the Securities Act):
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(i) (x) furnish Buyer
with the Required Financial Information and other historical financial information regarding the Company Group as may be reasonably requested by Buyer to the extent such information is customarily included in marketing materials or offering
documents for financings similar to the financings contemplated by the Debt Commitment Letter, (y) inform Buyer if the chief executive officer, chief financial officer, treasurer, controller or comparable officer of the Company or any
member of the audit committee of the Company Board has knowledge of any facts as a result of which a restatement of any financial statements (or portion thereof) comprising a portion of the Required Financial Information is reasonably
likely or under consideration in order for such financial statements (or portion thereof) to comply with GAAP, and (z) provide financial information and timely assistance necessary for Buyer to prepare pro forma financial information and
pro forma financial statements of the type that would be required by Regulation S-X if the offering of debt securities contemplated by the Debt Commitment Letter were conducted as a registered offering and reasonably requested by Buyer to
be included in any marketing materials or offering documents or of the type required by or referred to in the Debt Commitment Letter; provided that, for the avoidance of doubt,
the Company Group will not be required to actually (A) prepare any such pro forma financial statements, (B) prepare projections or other forward-looking information covering any period after the Closing, or (C) provide any information
relating to (I) the proposed aggregate amount of the Financing, together with assumed interest rates, dividends (if any) or any fees and expenses relating to the incurrence of the Financing, (II) any post-Closing or pro forma cost savings,
synergies, capitalization, ownership or other pro forma adjustments desired to be incorporated into any information used in connection with the Debt Financing, or (III) any financial information related to Buyer, its Affiliates (other than
the Company and its Subsidiaries) or any adjustments that are not directly related to the Merger of the Company with Buyer;
(ii) reasonably
cooperate with the due diligence of any Debt Financing Source, including by taking reasonable actions necessary to permit the Debt Financing Sources to evaluate the Company’s and its Subsidiaries’ current assets, cash management and
accounting systems and equipment for the purpose of establishing collateral arrangements and assisting with other collateral audits and collateral appraisals;
(iii) assist in
preparation for and cause management of an appropriate level to participate in a reasonable number of meetings and calls (that are requested in advance with or by the parties acting as lead arrangers or agents for, and prospective lenders
and purchasers of, the Debt Financing), presentations, roadshows, due diligence sessions (including accounting due diligence sessions), drafting sessions and sessions with rating agencies, in each case, upon reasonable advance notice from,
and as reasonably requested by, Buyer and at reasonable times and locations (which may be virtual) to be mutually agreed and any telephonic meetings, roadshows, drafting sessions, due diligence sessions and sessions with rating agencies
will be reasonable in number, scheduled on reasonable advance notice, limited to management of an appropriate level and conducted in a manner that does not unreasonably interfere with the business or operations of the Company Group), and
assisting Buyer and its Affiliates in obtaining ratings in connection with the Debt Financing;
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(iv) assist Buyer with the timely preparation of (A) materials for rating agency presentations and (B) bank information memoranda, lender presentations, investor presentations, offering documents,
prospectuses, roadshows, rating agency presentations and similar documents customary or reasonably required for use in connection with the Debt Financing, including reviewing and commenting on Buyer’s draft of a business description to be
included in marketing materials or offering documents, executing certificates of the chief financial officer (or other comparable officer) of the Company Group with respect to financial information (excluding pro forma financial
information) included in the marketing materials, in each case to the extent reasonably requested by Buyer;
(v) request and facilitate its independent auditors to (A) provide, consistent with customary practice and applicable auditor policies, (x) reasonable assistance to Buyer and its Affiliates with respect
to the historical financial information of the Company Group, including to the extent such historical financial information is used in connection with Buyer’s and its Affiliates’ preparation of pro forma financial statements and
information, and (y) customary auditors’ consents (including consents of accountants for use of their reports in any material relating to the Debt Financing) and customary comfort letters (including “negative assurance” comfort and change
period comfort, in each case, solely to the extent customary and available under applicable professional standards and the applicable independent auditors’ customary policies for the applicable type, timing and structure of the Debt
Financing) with respect to financial information relating to the Company Group included in any offering memorandum used in connection with the Debt Financing and delivered upon “pricing” and “closing” of the Debt Financing as reasonably
requested by Buyer or the Debt Financing Sources; provided that no comfort letter or certificate will be required with respect to Buyer-prepared pro forma information, synergies or financing terms and (B) attend accounting due diligence
sessions;
(vi) assist in the
preparation of and execute and deliver as of (but not prior to) the Closing any guarantee, pledge and security documents, mortgages, supplemental indentures, currency or interest rate hedging arrangements, other definitive financing
documents, or other certificates or documents as may be reasonably requested by Buyer, its Affiliates or the Debt Financing Sources, certificates of the chief financial officer (or other executive officer) of the Company with respect to
solvency matters in the form set forth as an exhibit to the Debt Commitment Letter and otherwise reasonably facilitate the pledging of collateral and the granting of security interests in respect of the Debt Financing (including reasonable
best efforts to deliver any original stock certificates and related powers, any original promissory notes and related powers, or other certificates intended to constitute collateral as contemplated by the Debt Commitment Letter) (it being
understood that such documents will not take effect prior to the Effective Time and will be contingent on the Closing occurring);
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(vii)
provide customary authorization letters to the extent reasonably requested by Debt Financing Sources authorizing the distribution of information to prospective lenders or investors, subject to
customary confidentiality provisions (which may include customary “click through” confidentiality arrangements or other confidentiality arrangements customary for syndication and arrangement procedures), and containing a customary
representation to the Debt Financing Sources as contemplated by the Debt Commitment Letter, including that the public side versions of such documents do not include material non-public information about the Company Group or their securities
and as to the accuracy of the information contained in the disclosure and marketing materials related to the Debt Financing;
(viii)
promptly and in any event at least four Business Days prior to the Closing Date, provide Buyer and Debt Financing Sources with all documentation and other information about the Company Group
that is required in connection with Debt Financing under applicable “know your customer” and anti-money laundering rules and regulations including the USA PATRIOT Act and a beneficial ownership certificate for any entity that qualifies as a
“legal entity customer” under the Beneficial Ownership Regulation (31 C.F.R. § 1010.230), in each case to the extent reasonably requested in writing at least nine days in advance of the Closing;
(ix) assist in the
taking of customary corporate and other similar actions, subject to and contingent upon the occurrence of the Closing, reasonably necessary to permit the consummation of the Debt Financing on the Closing Date; and
(x) reasonably
cooperate with the outside and internal counsel of Buyer in connection with providing back-up certificates and factual information related to any legal opinion that such counsel may be required to deliver in connection with any Debt
Financing.
(b) Prior
to the Closing Date, the Company Group will use its reasonable best efforts to provide, and will cause its Representatives to use reasonable best efforts to provide (in each case, subject to Section
5.14(f) and Section 5.14(g), at Buyer’s sole expense), to Buyer and its Affiliates the following cooperation to the extent reasonably requested by Buyer to assist
Buyer with the arrangement of any Company Credit Agreement Amendment and borrowings under the Company Credit Agreement on the Closing Date, and that is customary in connection with efforts to obtain financing of the type provided under the
Company Credit Agreement:
(i) deliver to the
agent under the Company Credit Agreement, at Buyer’s reasonable request and within the time periods required thereunder, a borrowing notice (which may be conditioned upon the occurrence of the Closing and may be revoked or the requested
borrowing date extended) requesting a borrowing on the Closing Date of loans under the Company Credit Agreement in the amounts and of the types specified by Buyer, and take such other actions within the Company’s control as are reasonably
requested by Buyer to satisfy, as of the Closing Date, any conditions to such borrowing that are to be satisfied by the Company;
(ii) assist in the
preparation of and execute and deliver as of (but not prior to) the Closing, certificates or documents as may be reasonably requested by Buyer, its Affiliates or the Credit Agreement Financing Sources, including, without limitation, a
borrowing base certificate (it being understood that such documents will not take effect prior to the Effective Time and will be contingent on the Closing occurring);
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(iii) assist in the
taking of customary corporate and other similar actions, subject to and contingent upon the occurrence of the Closing, reasonably necessary to permit the consummation of commitment increase and borrowings under the Company Credit
Agreement on the Closing Date;
(iv) reasonably
cooperate with the outside and internal counsel of Buyer in connection with providing back-up certificates and factual information related to any legal opinion that such counsel may be required to deliver in connection with any Company
Credit Agreement Amendment or any borrowings under the Company Credit Agreement; and
(v) at Buyer’s
reasonable request, facilitate discussions and negotiations between Buyer and the Credit Agreement Financing Sources regarding any further amendments, consents, waivers or commitment increases relating to the borrowing capacity available
thereunder on the Closing Date, including by making appropriate officers of the Company available for such discussions and, to the extent agreed by the Credit Agreement Financing Sources and reasonably requested by Buyer, executing any
such amendment, consent or waiver; provided that the effectiveness of any such amendment, consent, waiver or commitment increase (other than any provisions that impose no cost or obligation on the Company Group that is not paid directly
by or reimbursed by the Buyer pursuant to Section 5.14(f) or Section 5.14(g)) will be conditioned upon the
occurrence of the Closing.
(c) The Company hereby consents to the
use of its and its Subsidiaries’ logos in connection with the Debt Financing solely in connection with a description of the Company Group or the Transactions; provided that such
logos are used solely in a manner that is accurate and is not intended to, nor reasonably likely to, harm or disparage the Company or the Company’s Subsidiaries and that complies with the Company’s usage requirements and guidelines to the
extent made available to Buyer prior to such use.
(d) Notwithstanding anything in this Section 5.14 to the contrary, nothing in Section 5.14(a) or Section
5.14(b) will require any such cooperation or assistance to the extent that it could result in the Company or any of its Subsidiaries being required to:
(i) pledge any assets
as collateral or enter into any definitive loan documents or agreements related to the Debt Financing that is not contingent upon the Closing or that would be effective prior to the Effective Time;
(ii) agree to pay any
fee, bear any cost or expense, incur any other liability or give any indemnities to any third party or otherwise commit to take any similar action in connection with the Debt Financing or the Company Credit Agreement (including any Company
Credit Agreement Amendment) prior to the Closing, in each case, that has not been or will not be reimbursed or indemnified by Buyer to the extent required pursuant to Section 5.14(f)
or Section 5.14(g);
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(iii) take any actions
to the extent such actions would (A) unreasonably interfere with the ongoing business or operations of the Company or any of its Subsidiaries, (B) subject any director, manager,
officer or employee of the Company or any of its Affiliates to any actual or potential personal liability with respect to matters related to the Debt Financing, (C) conflict with, or result in any violation or
breach of, or default (with or without notice, or lapse of time or both) under, the organizational documents of the Company or any of its Subsidiaries, any applicable Law or Judgment or rules or regulations of any applicable securities
exchange, quotation system or other listing authority or any material Contract to which the Company or any of its Subsidiaries is a party or by which any of their respective properties or assets is bound, (D)
require any such entity to change any fiscal period, or (E) cause (I) any closing condition set forth in Article VI of
this Agreement to fail to be satisfied or (II) any other breach of this Agreement;
(v) commit to take
any action under any certificate, document or instrument or enter into any definitive agreement that is not contingent upon the Closing (other than representation letters and authorization letters referred to above and the documentation
referred to in Section 5.14(a)(iv) and Section 5.14(a)(viii));
(vi) provide access to
or disclose information that the Company determines, in its reasonable judgment, would jeopardize any attorney-client privilege, attorney work product or other legal privilege of, or conflict with any confidentiality requirements owing to a
third party applicable to, the Company or its Affiliates; provided that the Company will, and will cause its Affiliates to, use reasonable best efforts to find a suitable
alternative to disclose information in such a way that such disclosure does not cause loss or waiver of such privilege or violate any such confidentiality obligations as applicable;
(vii) cause any
representation, warranty, covenant, agreement or obligation in this Agreement to be breached by the Company or any of its Subsidiaries;
(viii) cause the
Company or any of its Subsidiaries, prior to the Closing, to be an issuer or other obligor with respect to the Debt Financing;
(ix) cause any
director, manager or equivalent, or any officer or employee of the Company or any of its Subsidiaries to pass resolutions to approve the Debt Financing or authorize the creation of any agreements, documents or actions in connection
therewith, or to execute or deliver any certificate in connection with the Debt Financing (other than any director, manager or equivalent, or officer or employee of the Company or any of its Subsidiaries who will continue in such a position
following the Closing and the passing of such resolutions), in each case, that are not contingent on the Closing or would be effective prior to the Closing (other than representation letters and authorization letters referred to above and
documentation referred to in Section 5.14(a)(iv)); or
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(e) The Company Group will use its reasonable best efforts to periodically update any Required Financial Information provided to Buyer and the Debt Financing Sources as
may be necessary so that such Required Financial Information (i) is Compliant and (ii) meets the applicable requirements set forth in the definition of “Required Financial Information;” provided
that (x) the Company shall not be required to update, supplement, or provide Required Financial Information more frequently than would be required to maintain compliance with the periodic reporting requirements of the Exchange Act, except
to the extent expressly required pursuant to clause (z) below, (y) the Company’s obligations under this Section 5.14(e) shall be subject to the limitations set forth in Section 5.14(d) and the Excluded Information carve-outs set forth in the definition of “Required Financial Information,” and (z) upon Buyer’s reasonable written request, the Company
Group shall use its reasonable best efforts to provide customary recent-development or “flash” financial information, which may be provided in the form of a reasonable range or estimate, to the extent reasonably necessary so that the
Required Financial Information is Compliant for purposes of a customary offering memorandum for private placements of non-convertible high-yield debt securities pursuant to Rule 144A promulgated under the Securities Act of the type
contemplated by the Debt Commitment Letter; provided, further, that the Company Group shall have no obligation to provide any such information unless such information (A) is
customarily included in such an offering memorandum for comparable debt securities, (B) is reasonably available from the Company Group’s ordinary-course books and records without undue burden, (C) does not constitute Excluded Information,
(D) is consistent with the Company’s disclosure controls and procedures, the Company’s internal control over financial reporting, applicable auditor policies and applicable Law, including applicable securities Laws, and (E) if such
information constitutes material non-public information regarding the Company Group or their securities, is included in any marketing materials or offering documents related to the Debt Financing only after consultation with the Company and
subject to such filing on Form 8-K or other public disclosure or cleansing, if any, as the Company determines in good faith is required or appropriate. For the avoidance of doubt, nothing in this Section 5.14(e) shall limit the protections afforded to the Company Group under Sections 5.14(d), 5.14(h)
or 5.14(l) or otherwise expand Buyer’s rights under Article VI or Article
VII.
(f) Buyer will (i) on the Closing Date
or upon the earlier termination of this Agreement pursuant to its terms, reimburse the Company for all reasonable and documented out-of-pocket costs and expenses (including reasonable and documented out-of-pocket attorneys’ fees) incurred
by the Company or any of its Subsidiaries and their respective Representatives in connection with the Financing, including the cooperation of the Company Group and Representatives contemplated by this Section 5.14; provided that such reimbursement will not include, and Buyer will not be responsible for, (x) any ordinary course amounts payable to existing
employees of, or consultants to, the Company, its Subsidiaries or any of their respective Affiliates and (y) costs and expenses incurred in connection with the preparation of any historical financial statements or other financial
information prepared in the ordinary course of business and (ii) indemnify and hold harmless the Company, its Subsidiaries and their respective Representatives from and against any and all losses, damages, claims, costs or expenses suffered
or incurred by any of them in connection with their cooperation in the arrangement of the Financing or pursuant to Section 5.14(b) and the provision of any information used in
connection therewith (other than information provided by the Company Group), in each case, other than to the extent any of the foregoing was suffered or incurred as a result of the bad faith, gross negligence or willful misconduct of, or
material breach of this Agreement by, the Company, its Subsidiaries or their Representatives.
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(g) Notwithstanding anything to the
contrary set forth in this Agreement, none of the Company, its Subsidiaries or their respective Representatives will be required to bear or pay or agree to pay any consent, amendment, waiver, upfront, arrangement, commitment, ticking,
unused line or other fees, increased interest or margin, breakage costs, costs and expenses (including fees and expenses of counsel to any agent or lender thereunder) or other amounts payable to any Credit Agreement Financing Source
pursuant to or in connection with the Company Credit Agreement (A) on or about the date of this Agreement in connection with the Company Credit Agreement Amendment or (B) from and after the date of this Agreement, to the extent attributable
to any Company Credit Agreement Amendment (including in respect of any increased commitments, fees, margin, interest rates or other obligations thereunder) (collectively, the “Financing Costs”).
The Company Group may pay any Financing Costs as and when due, and Buyer will reimburse the Company for all Financing Costs paid by the Company Group within five Business Days after written request therefor (together with supporting
documentation), whether or not the Closing occurs. The Company’s determination of the amount of any Financing Costs (including any portion thereof attributable to any Company Credit Agreement Amendment) set forth in any such request will be
conclusive and binding on Buyer absent manifest error.
(h) Subject to Section 7.03 and the limitations on specific enforcement set forth in Section 8.08, Buyer acknowledges and agrees the
obligations of Buyer to consummate the Transactions on the terms contemplated by this Agreement are not contingent upon or otherwise subject to Buyer’s consummation of any financing arrangement, Buyer or any of its Affiliates obtaining any
financing (including the Financing or any Alternative Financing) or the availability, grant, provision or extension of any financing to Buyer or any of its Affiliates (including the Financing or any Alternative Financing).
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(i) Subject to the terms and conditions
of this Agreement, Buyer will, and will cause its applicable Affiliates to, use reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things that are within Buyer’s or its Affiliates’ control
reasonably necessary, proper or advisable to consummate and obtain the Financing on the terms and subject only to the conditions (including the “market flex” provisions in any fee letter associated with the Commitment Letters) set forth in
the Commitment Letters (or on terms, other than with respect to conditionality, not materially less favorable to Buyer than the terms and conditions (including “market flex” provisions in any fee letter associated with the Commitment
Letters) set forth in the Commitment Letters), including using reasonable best efforts to (i) maintain in effect and comply with the Commitment Letters, (ii) negotiate and enter into definitive agreements with respect to the Debt Financing
on the terms and subject only to the conditions (including the “market flex” provisions in any fee letter associated with the Commitment Letters) set forth in the Debt Commitment Letter (or on terms, other than with respect to
conditionality, not materially less favorable to Buyer than the terms and conditions (including “market flex” provisions in any fee letter associated with the Commitment Letters) set forth in the Debt Commitment Letter), (iii) satisfy (and
cause its Affiliates to satisfy) on a timely basis all conditions to the funding or investing of the Financing required to satisfy the Financing Uses applicable to Buyer and its Affiliates in the Commitment Letters and the definitive
agreements related thereto that are within their control that are to be satisfied by Buyer, (iv) consummate the Financing in an amount required to satisfy the Financing Uses at or prior to the Closing Date, including, in the event that all
conditions contained in the Commitment Letters or the definitive financing documents applicable to the funding or investing of the Financing required to satisfy the Financing Uses (except those that, by their nature, are to be satisfied at
the Closing) have been satisfied or waived, using its (and causing its Affiliates to use) reasonable best efforts to cause the lenders and the other Persons committing to fund the Financing to fund the Financing at the Closing, and (v)
enforce its rights under the Commitment Letters and the definitive agreements relating to the Financing. Buyer will not, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or
delayed), agree to or permit any termination of or material amendment or modification to be made to, or grant any material waiver of any provision under, the Commitment Letters if such termination, amendment, modification or waiver would
reasonably be expected to (x) reduce the aggregate amount of the Financing below the amount necessary to satisfy the Financing Uses (including by increasing the amount of fees to be paid or original issue discount) or (y) impose new or
additional conditions precedent to the availability of the Financing or otherwise adversely expand, amend or modify any of the conditions to the receipt of any portion of the Financing necessary to consummate the Transactions, or otherwise
expand, amend or modify any other provision of the Commitment Letters in a manner that would reasonably be expected to (1) delay or prevent the funding of the Financing in an amount required to satisfy the Financing Uses on the Closing Date
or (2) adversely impact the ability of Buyer to enforce its rights against other parties to the Commitment Letters in any material respect; provided that Buyer may amend the Debt
Commitment Letter to add lenders, arrangers, bookrunners, syndication agents or other entities who had not executed the Debt Commitment Letter as of the date of this Agreement, to increase the amount of funds available thereunder and, in
connection therewith, amend the economic and other arrangements with respect to the appointment of such existing and additional lenders, arrangers, bookrunners, syndication agents or other entities, or to reallocate the commitments provided
thereunder. Buyer will promptly deliver to the Company copies of any such amendment, modification or waiver of a Commitment Letter (which may be redacted in a manner consistent with the redactions permitted by Section 4.05(b)). Buyer will fully pay, or cause to be paid, all commitment and other fees under or arising pursuant to the Debt Commitment Letter that are due and payable prior to the Closing Date as
and when they become due and payable. Without the prior written consent of the Company, Buyer will not, and will cause its Affiliates not to, voluntarily reduce or terminate any commitments under the Debt Commitment Letter, or take any
action that would result in a mandatory reduction thereof, unless, immediately after giving effect thereto, the sum of (w) the remaining commitments under the Debt Commitment Letter, (x) the Equity Financing, (y) the net cash proceeds of
any debt securities or other Indebtedness that are held in escrow or a segregated account for the purpose of funding the Financing Uses at the Closing and are not subject to repayment, sweep, cash dominion or reduction prior to the Closing
and (z) the unfunded commitments under any other executed commitment letter or definitive financing agreement (i) the conditions precedent to the funding of which are no less favorable to Buyer than the conditions precedent set forth in the
Debt Commitment Letter as in effect on the date hereof, (ii) the commitments under which do not terminate prior to the termination of the commitments under the Debt Commitment Letter as in effect on the date hereof and (iii) a true,
complete and correct copy of which (subject to redactions consistent with Section 4.05(b)) has been delivered to the Company, is sufficient to fund the Financing Uses; it being
understood and agreed that (A) any financing the availability or funding of which is conditioned upon, subject to or limited by a borrowing base or similar asset-based borrowing criteria (including the Company Credit Agreement and the
Revolving Commitment Increase (as defined in the Company Credit Agreement)) shall be deemed not to satisfy clause (z)(i) and (B) any financing described in clause (y) or (z) shall constitute “Debt Financing,” and any commitment letter or
agreement in respect thereof shall constitute a “Debt Commitment Letter” for all purposes of this Agreement.
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(j) Upon the reasonable request of the Company, promptly (and in any event within a reasonable period of time under the circumstances), Buyer will keep the Company informed on a reasonably current basis and in reasonable detail of
the status of its efforts to arrange the Debt Financing and provide to the Company copies (including drafts) of the material definitive documents for the Debt Financing. Buyer will, promptly after obtaining Knowledge thereof, give the
Company notice of, and keep the Company informed on a current basis and in reasonable detail of (i) any breach, default, termination or repudiation by any party to any of the Commitment Letters or definitive documents related to the
Financing of which Buyer becomes aware, (ii) the receipt of any written notice or other written communication from any financing source with respect to any (A) actual or potential breach, default, termination or repudiation by any party to
any of the Commitment Letters or any definitive document related to the Financing of any provisions of the Commitment Letters or any definitive document related to the Financing or (B) material dispute or disagreement between or among any
parties to any of the Commitment Letters or any definitive document related to the Financing, in each case, that would reasonably be expected to prevent or delay the funding of the Financing in an amount required to satisfy the Financing
Uses on the Closing Date, and (iii) the occurrence of an event or development that could reasonably be expected to adversely impact the ability of Buyer to obtain all or any portion of the Financing in an amount required to satisfy the
Financing Uses. If any portion of the Debt Financing in an amount required to satisfy the Financing Uses becomes unavailable or Buyer becomes aware of any event or circumstance that would reasonably be expected to make any portion of the
Debt Financing in an amount required to satisfy the Financing Uses unavailable, in each case, on the terms and conditions (including any applicable “market flex” provisions in any fee letter associated with the Debt Commitment Letter)
contemplated by the Debt Commitment Letter, Buyer will use its reasonable best efforts to arrange and obtain in replacement thereof, and negotiate and enter into definitive agreements with respect to, alternative financing from alternative
sources (such financing, the “Alternative Financing”) (x) in an amount sufficient to satisfy the Financing Uses (after taking into consideration the portion of the Debt Financing
that is and remains available and the amount of Equity Financing ), (y) with terms (including “market flex” provisions in any fee letter associated with the Debt Commitment Letter), other than with respect to conditionality, not materially
less favorable to Buyer (or its Affiliates) than the terms and conditions (including the “market flex” provisions) set forth in the Debt Commitment Letter, and (z) which would not reasonably be expected to prevent or delay or make less
likely to occur the funding of the Financing (or the satisfaction of the conditions to the Financing) on the Closing Date, as promptly as reasonably practicable following the occurrence of such event (but not later than the date Buyer is
required to consummate the Closing in accordance with this Agreement); provided that the failure to obtain Alternative Financing will not relieve Buyer of any obligation
hereunder. Buyer will deliver to the Company true, complete and correct copies of the new executed commitment letter that provided for such Alternative Financing (which may be redacted in a manner consistent with the redactions permitted
by Section 4.05(b)). For purposes of this Agreement (other than with respect to representation in this Agreement made by Buyer as of the date of this Agreement), references to
(1) the “Financing” and “Debt Financing” includes any such Alternative Financing and (2) the “Debt Commitment Letter” and “Commitment Letters” includes such documents with respect to any such Alternative Financing.
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(k) Notwithstanding anything to the
contrary contained in this Agreement, nothing contained in this Section 5.14 will require, and in no event will the reasonable best efforts of Buyer be deemed or construed to
require, Buyer to (i) seek the Equity Financing from any source other than a counterparty to, or in any amount in excess of that contemplated by, the Equity Commitment Letters or (ii) pay any fees in excess of
those contemplated by the Equity Commitment Letters or the Debt Commitment Letter.
(l) Notwithstanding anything to the
contrary contained in this Agreement, the Parties acknowledge and agree that any action taken or omitted to be taken by the Company or any of its Affiliates or any of its or their respective Representatives with respect to the matters
contemplated by this Section 5.14, and compliance with the provisions hereof (unless (i) the Company or any of its Affiliates or any of its or their respective Representatives
have taken or failed to take an action that constitutes a Willful Breach of its obligations contained in this Section 5.14, (ii) such Willful Breach has not been cured within 10
days following written notice by Buyer (provided such notice describes such Willful Breach in reasonable specificity to enable the Company a reasonable opportunity to cure such Willful Breach), and (iii) such Willful Breach was a proximate
cause of Buyer’s failure to receive any material portion of the proceeds of the Debt Financing necessary to fund the Financing Uses), will not be taken into account for purposes of determining whether any of the conditions in Article VI have been satisfied or whether any right of termination arises under Article VII.
(a) Buyer will be permitted, at its option, to commence and conduct, in accordance with the terms of the Indenture, dated November 21, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as amended, modified and supplemented to the date hereof, including by the Ninth Supplemental Indenture, dated June 15, 2021, among the Company, the guarantors party thereto
and the Trustee (as so amended, modified and supplemented, the “Senior Subordinated Notes Indenture”), pursuant to which the Company issued its 3.75% Senior Subordinated Notes due
2029 (the “Senior Subordinated Notes”), one or more offers to purchase or (if it so elects) to conduct a consent solicitation with respect to the outstanding Senior Subordinated
Notes (any such offer to purchase, together with any such consent solicitation, a “Debt Offer”). Any such Debt Offer shall be consummated using funds provided by Buyer. If Buyer
elects to conduct a Debt Offer, Buyer will provide the Company with drafts of the necessary offer to purchase, letter of transmittal, supplemental indenture or other related documents in connection with the Debt Offer (collectively, the “Debt Offer Documents”) a reasonable period of time in advance of commencing the applicable Debt Offer to allow the Company and its counsel to review and comment on the related Debt
Offer Documents, and Buyer will give reasonable and good faith consideration to any comments made by the Company and its counsel. Buyer will reasonably consult with the Company regarding the timing and commencement of any Debt Offer and
any relevant tender or consent deadlines. The closing (or, if applicable, effectiveness) of any Debt Offer will be expressly conditioned on the consummation of the Merger (which condition will not be waivable by Buyer) and the acceptance
for purchase of the Senior Subordinated Notes by Buyer of all validly tendered and not validly withdrawn by the holders thereof in such Debt Offer. The Company will reasonably cooperate with Buyer to cause any such Debt Offer to close
concurrently with the consummation of the Merger. If Buyer elects to conduct a Debt Offer, (i) the Debt Offer will be conducted in compliance with the Senior Subordinated Notes Indenture and applicable Law, including all SEC rules and
regulations, and (ii) the Company will, and will cause its Subsidiaries and will use its reasonable best efforts to cause their respective Representatives to, provide all cooperation reasonably requested by Buyer in connection with any Debt
Offer, at the sole expense of Buyer. For the avoidance of doubt, (A) the consummation of a Debt Offer will not be a condition to Closing and (B) neither the Company nor any of its directors, officers, employees or Affiliates will be
obligated to make any recommendation with respect to any Debt Offer.
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(b) Subject to the receipt of any requisite consents as part of any Debt Offer including a consent solicitation, the Company will execute a supplemental indenture to the Senior Subordinated Notes
Indenture in accordance with the Senior Subordinated Notes Indenture, amending the terms and provisions of the Senior Subordinated Notes as described in the Debt Offer Documents as reasonably requested by Buyer, which supplemental indenture
will become operative no earlier than the consummation of such Debt Offer, and will use reasonable best efforts to cause the Trustee to enter into such supplemental indenture prior to or substantially simultaneously with the Closing; provided, however, that in no event will the Company or any of its officers, directors or other Representatives have any
obligation to authorize, adopt or execute any amendments or other agreement that is not permitted under applicable Law or would become operative prior to the Closing or the time of acceptance for purchase of the Senior Subordinated Notes by
Buyer. The Company will, and will use its reasonable best efforts to cause its Representatives to, provide all cooperation reasonably requested by Buyer in connection with the execution of the supplemental indentures referred to in the
immediately preceding sentence, at the sole expense of Buyer. If requested by Buyer, the Company will use reasonable best efforts to cause its legal counsel to provide customary legal opinions in customary form and scope and subject to
customary assumptions, qualifications and limitations, solely to the extent such opinions relate to the Company, the Senior Subordinated Notes Indenture, any supplemental indenture, any notice of redemption, or any other document required
to be delivered by the Company to the Trustee under the Senior Subordinated Notes Indenture in connection with the transactions contemplated by this Section 5.15 to the extent
such legal opinion relates to the Company and is required to be delivered prior to the Closing Date. For the avoidance of doubt, nothing in the preceding sentence shall require counsel to the Special Committee of the Company to render any
legal opinion. Notwithstanding the foregoing, in no event will the Company or its legal counsel be required to give an opinion with respect to a Debt Offer that in the opinion of the Company or its legal counsel does not comply with
applicable Laws or the Senior Subordinated Notes Indenture, or an opinion with respect to financing by Buyer.
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(c) If
requested by Buyer, in lieu of or in addition to Buyer commencing any Debt Offer, the Company will (i) send any notices of redemption with respect to all or a portion of the outstanding aggregate principal amount of any Senior Subordinated
Notes (which will be in the form required under the Senior Subordinated Notes Indenture and conditioned upon the consummation of the Closing, and will be in form and substance reasonably satisfactory to Buyer) to the Trustee, (ii) take such
actions as may be required under the Senior Subordinated Notes Indenture to cause the Trustee to proceed with the redemption of the Senior Subordinated Notes under the Senior Subordinated Notes Indenture and to provide the notice of
redemption (conditioned upon consummation of the Closing if provided prior to the Closing) to the holders of the Senior Subordinated Notes pursuant to the Senior Subordinated Notes Indenture, (iii) deliver all other documents required under
the Senior Subordinated Notes Indenture (including any officer’s certificates and legal opinions to the extent required to be delivered prior to the Closing) as may be required under the Senior Subordinated Notes Indenture to issue notices
of redemption (conditioned upon consummation of the Closing, if issued prior to the Closing) for the Senior Subordinated Notes in accordance with the Senior Subordinated Notes Indenture, and (iv) otherwise provide for (x) the redemption of
the Senior Subordinated Notes on the Closing Date or such later date as specified by Buyer and (y) the satisfaction and discharge of the applicable Senior Subordinated Notes on the Closing Date or such later date as specified by Buyer, in
each case, pursuant to the requisite provisions of the Senior Subordinated Notes Indenture. If permitted by the Senior Subordinated Notes Indenture, the notices of redemption delivered to the Trustee and holders of the Senior Subordinated
Notes (if delivered prior to Closing) may state that the redemption date may be delayed until such time as any condition to redemption stated therein is satisfied or such redemption may not occur and such notice may be rescinded in the
event such condition is not satisfied. Buyer will provide, or arrange for its Financing sources to provide, to the Company, the funds necessary to consummate any such redemption (including the payment of all
applicable premiums) on the applicable redemption date.
(d) Prior to the Effective Time, the
Company will take all actions required by the Senior Subordinated Notes Indenture to be performed by the Company as a result of the execution and delivery of this Agreement and the consummation of the Transactions, including the giving of
any notices that may be required in connection with the Senior Subordinated Notes Indenture and the delivery to the Trustee of any certificates, opinions, documents or instruments required to be delivered to the Trustee, in each case, in
connection with the Transactions or otherwise required pursuant to the terms of the Senior Subordinated Notes Indenture. Buyer and its counsel will be given a reasonable opportunity to review and comment on any such notice, certificate,
opinion, document or instrument, in each case before such document is provided to the Trustee, and the Company will give reasonable and good faith consideration to any comments made by Buyer and its counsel.
(e) Buyer will promptly, upon request by
the Company, reimburse the Company for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by the Company Group and its Representatives in connection with any Debt Offer or redemption of the
Senior Subordinated Notes and will indemnify and hold harmless each member of the Company Group and its respective Representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them
in connection with their cooperation in connection with any Debt Offer or redemption of the Senior Subordinated Notes and the provision of any information used in connection therewith (other than information provided by the Company Group),
in each case, other than to the extent any of the foregoing was suffered or incurred as a result of the bad faith, gross negligence or willful misconduct of, or material breach of this Agreement by, the Company, its Subsidiaries or their
Representatives.
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(f) Notwithstanding anything to the
contrary contained in this Agreement, the Parties acknowledge and agree that any action taken or omitted to be taken by the Company or any of its Affiliates or any of its or their respective Representatives with respect to the matters
contemplated by this Section 5.15, and compliance with the provisions thereof, will not be taken into account for purposes of determining whether any of the conditions in Article VI have been satisfied or whether any right of termination arises under Article VII (unless (i) the Company or any
of its Affiliates or any of its or their respective Representatives have taken or failed to take an action that constitutes a Willful Breach of its obligations contained in this Section 5.15,
(ii) such Willful Breach has not been cured within 10 days following written notice by Buyer (provided such notice describes such Willful Breach in reasonable specificity to enable the Company a reasonable opportunity to cure such Willful
Breach), and (iii) such Willful Breach was a proximate cause of the failure of the Senior Subordinated Notes Indenture to be performed; provided, that, notwithstanding the
foregoing, regardless of whether or not it constitutes a Willful Breach, such action taken or omitted to be taken shall not be taken into account for purposes of determining whether any of the conditions in Article VI have been satisfied or whether any right of termination arises under Article VII if the Debt Financing (or Alternative Financing) has been
funded in full in accordance with the terms thereof or will be funded in full in accordance with the terms thereof at the Closing if the Equity Financing is funded at the Closing).
5.16. Further Assurances. At and after the Effective Time, the officers and directors of the Company will be authorized to execute and deliver, in the name and on behalf of itself or Buyer,
any instruments or assurances and to take and do, in the name and on behalf of itself or Buyer, any other actions and things to vest, perfect or confirm of record or otherwise in the Company any and all right, title and interest in, to and
under any of the rights, properties or assets of the Company acquired or to be acquired by the Company as a result of, or in connection with, the Merger.
(a) FIRPTA Certificate. At the Closing, the Company will deliver to Buyer a statement (and an accompanying notice addressed to the IRS), dated no more than 30 days prior to the
Closing Date and executed by an officer of the Company, in accordance with Treasury Regulations Sections 1.1445-2(c)(3)(i) and 1.897-2(h), certifying that no equity interest in the Company is a U.S. real property interest within the
meaning of Section 897(c) of the Code, substantially in a form reasonably acceptable to Buyer; provided, however,
that Buyer’s sole recourse for any failure by the Company to deliver such statement to Buyer pursuant to this Section 5.17 will be the right to withhold pursuant to Section 2.02(g).
(b) Tax Treatment. The Parties acknowledge and agree that (i) for U.S. federal (and applicable state and local) income tax purposes, the Merger is intended
to be treated as a sale or exchange under Sections 1001 and 302(b) of the Code and (ii) no excise Tax under Section 4501 of the Code will be applicable to the Merger Consideration pursuant to Treasury Regulations Section
58.4501-2(e)(3)(ii). No Party will (and each Party will cause its Affiliates not to) take any position inconsistent with the tax treatment described in this Section 5.17(b) on
any Tax Return, in any Tax contest, Tax audit, or Tax proceeding, or otherwise with respect to any Tax, except as required under applicable Law.
(c) Transfer Taxes. Except as otherwise provided in Section 2.02(b)(iv), all transfer, documentary, sales, use, stamp, registration and other similar
Taxes and fees (including penalties and interest) incurred by the Company or the Subsidiaries of the Company in connection with the Merger shall be paid by the Surviving Corporation or the Subsidiaries of the Company, as applicable, when
due and expressly shall not be a liability of the holders of Company Common Stock.
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(a) As soon as practicable after the
date of this Agreement, the Company will coordinate with the trustee or other applicable fiduciary of the Company KSOP regarding the participant pass-through vote to be conducted in accordance with the voting requirements of Section
409(e)(2) of the Code and the terms of the Company KSOP in connection with the Transactions. The Company will request the trustee to provide to Buyer for review, reasonably in advance of such pass-through vote, but in any event at least
10 Business Days prior to distribution thereof to the participants, all materials (other than the Proxy Statement) prepared by the Company and approved by the trustee proposed to be disclosed to the participants in connection with such
pass-through vote, and the Company shall incorporate any comments reasonably proposed by Buyer with respect to any portion of such materials that discusses the terms of this Agreement or the Transactions.
(b) The Company shall use reasonable
best efforts to obtain, prior to the delivery of the Proxy Statement to Company Stockholders, a written opinion from an independent valuation firm selected by the Company KSOP’s named fiduciary and directed to the Company KSOP’s named
fiduciary to the effect that as of the date of such opinion and subject to the limitations, qualifications and assumptions set forth therein, the Merger Consideration to be received by the Company KSOP participants who have Company Common
Stock in their Company KSOP accounts pursuant to this Agreement represents “adequate consideration” within the meaning of Section 3(18) of ERISA (the “KSOP Adequate Consideration Opinion”).
A signed, true, correct and complete copy of the KSOP Adequate Consideration Opinion will be made available to Buyer promptly following receipt by the Company KSOP’s named fiduciary. As soon as administratively practicable after the date of
this Agreement, the Company shall take such actions reasonably necessary to suspend new eligibility, new entry and the opportunity to purchase or contribute additional shares under the employee stock ownership plan portion of the Company
KSOP (the “ESOP Component Plan”), such that no employees will be able to acquire additional Company Common Stock under the ESOP Component Plan, no further employee or employer
contributions shall be made to the ESOP Component Plan, and the Company KSOP shall not permit new investment in Company Securities, in each case other than with respect to Company dividends payable, in accordance with the terms of the
Company KSOP, on Company Common Stock invested under the ESOP Component Plan prior to such suspension.
(c) Prior to the Effective Time, the
Company Board will adopt resolutions and amendments relating to the Company KSOP, in each case, duly executed by the Company and, as required, the trustee of the Company KSOP (all such resolutions and amendments, collectively, the “KSOP Amendment”), that are effective as of and contingent upon the Effective Time, providing for (i) recharacterization of the ESOP Component Plan from an employee stock ownership plan
to a profit sharing plan (such portion, the “Recharacterized Plan”) that is no longer required or allowed to be invested in Company Securities, (ii) removal from the
Recharacterized Plan of the right to receive distributions in the form of Company Common Stock, (iii) suspending eligibility, entry and further benefit accruals under the Recharacterized Plan effective as of the Effective Time, such that no
further employees will become eligible under the Recharacterized Plan and no further contributions shall be made to the Recharacterized Plan, in each case after the Effective Time, and (iv) allocation of the Merger Consideration to
participants’ accounts under the Recharacterized Plan in accordance with the terms of the Recharacterized Plan and the KSOP Amendment.
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6.01. Conditions to Each Party’s Obligation To Effect the Merger. The respective obligations of each Party to
effect the Merger shall be subject to the satisfaction on or prior to the Closing Date of the following conditions:
(a) No Restraints. No Judgment enacted, promulgated, issued, entered, amended or enforced by any Governmental Authority of competent jurisdiction or any applicable Law
enacted (collectively, “Restraints”) shall be in effect enjoining, restraining or otherwise making illegal, preventing or prohibiting the consummation of the Merger;
(b) Required Regulatory Approvals; HSR. (i) The waiting period (and any extension thereof) applicable to the consummation of the Merger
under the HSR Act shall have expired or early termination thereof shall have been granted and (ii) the consents, approvals or other clearances set forth in Section 6.01(b) of the
Company Disclosure Letter shall have been obtained (collectively, the “Required Regulatory Approvals”); and
6.02. Conditions to the Obligations of Buyer. The obligations of Buyer to effect the Merger shall be subject
to the satisfaction on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of the Company (i) set forth in Section 3.02 (Capitalization) shall be true and correct in all but de
minimis respects as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent expressly made as of an earlier date or time, in which case as of such earlier date or time), (ii) set forth
in Section 3.07(b) (No Material Adverse Effect) shall be true and correct as of the Closing Date with the
same effect as though made as of the Closing Date (except to the extent expressly made as of an earlier date or time, in which case as of such earlier date or time), (iii) set forth in Section
3.01 (Organization; Standing) (other than the third sentence of Section 3.01), Section 3.04(a) through (d) (Authority; Noncontravention),
Section 3.20 (No Rights Agreement; Anti-Takeover Provisions), Section 3.21 (Opinion of Financial Advisor) and Section 3.22 (Brokers and Other Advisors) (clauses (i), (ii) and
(iii) collectively, the “Fundamental Representations”) (A) to the extent qualified by “materiality,” “Material Adverse
Effect” and words of similar import set forth therein, shall be true and correct in all respects as of the Closing Date as if made on the Closing Date (except to the extent expressly made as of an earlier date or time, in which case as of
such earlier date or time), and (B) to the extent not qualified by “materiality”, “Material Adverse Effect” and words of similar import set forth therein shall be true and correct in all material respects as of the Closing Date with the
same force and effect as if made on the Closing Date (except to the extent expressly made as of an earlier date or time, in which case as of such earlier date or time), and (iv) set forth in this Agreement, other than the Fundamental
Representations, shall be true and correct (disregarding all qualifications or limitations as to “materiality,” “Material Adverse Effect” and words of similar import set forth therein except for and within the defined term “Material
Contract”) as of the Closing Date with the same force and effect as if made as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except, in the case of this clause (iv), where the failure to be true and correct would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
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(b) Compliance with Covenants. The Company shall have complied with or performed in all material respects its obligations required to be complied with or performed by it
at or prior to the Effective Time under this Agreement;
(c) No Material Adverse Effect. Since the date of this Agreement, there shall not have occurred any change, event, development, occurrence, state of facts, circumstance
or effect that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect; and
(d) Company Closing Certificate. The Company shall have delivered to Buyer a certificate, dated as of the Closing Date and signed by an executive officer of the Company, certifying
to the effect that the conditions set forth in Sections 6.02(a), 6.02(b) and 6.02(c) have been satisfied.
6.03. Conditions
to the Obligations of the Company. The obligations of the Company to effect the Merger shall be subject to the satisfaction on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of Buyer (i) set forth in Section 4.01 (Organization; Standing) and Section 4.02(a) (Authority) shall be true and correct in all material respects (disregarding all qualifications or limitations as to “materiality,” “Buyer Material Adverse Effect” and
words of similar import set forth therein) as of the Closing Date with the same effect as though made as of the Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date) and (ii) other
than those Sections specifically identified in clause (i) of this paragraph, shall be
true and correct (disregarding all qualifications or limitations as to “materiality,” “Buyer Material Adverse Effect” and words of similar import set forth therein) as of the Closing Date with the same effect as though made as of the
Closing Date (except to the extent expressly made as of an earlier date, in which case as of such earlier date), except, in the case of this clause (ii), where the failure to be true and correct would not, individually or in the aggregate, reasonably be expected to have a Buyer Material Adverse Effect;
(b) Compliance with Covenants. Buyer shall have complied with or performed in all material respects its obligations required to be complied with or performed by it at or
prior to the Effective Time under this Agreement; and
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(c) Buyer Closing Certificate. Buyer shall have delivered to the Company a certificate, dated as of the Closing Date and signed by an executive officer of Buyer, certifying to the effect that the conditions set
forth in Section 6.03(a) and Section 6.03(b) have been satisfied.
7.01. Termination. This Agreement may be
terminated, and the Transactions abandoned at any time prior to the Effective Time, notwithstanding receipt of the Company Stockholder Approval (except as otherwise specified in this Section
7.01):
(i) the Effective Time has not occurred on or prior to 11:59 p.m. New York City time on October 15, 2027 (the “Outside Date”);
(ii) any Restraint
having the effect set forth in Section 6.01(a) (No Restraints) is in effect and has become final and
nonappealable; or
(iii) the Company Stockholder Approval has not been obtained at the Company Stockholders Meeting (including any adjournments or postponements thereof);
(i) the Company has breached any of its representations or warranties or failed to perform any of its covenants set forth in this Agreement, which breach or failure to perform (A) would give rise to the
failure of a condition set forth in Section 6.02(a) (Company Representations) or Section 6.02(b) (Compliance with Covenants) and (B) is incapable of being cured or, if capable of being cured,
has not been cured by the earlier of (I) 30 days following written notice thereof from Buyer to the Company and (II) the Outside Date; provided that Buyer shall not have the right
to terminate this Agreement pursuant to this Section 7.01(c)(i) if Buyer is then in breach of any of its representations, warranties or covenants under this Agreement so as to
cause any of the conditions set forth in Section 6.03(a) (Buyer Representations) or Section 6.03(b) (Compliance with Covenants) not to be satisfied or capable of being satisfied; or
(ii) at any time prior to obtaining the Company Stockholder Approval, the Special Committee or the Company Board (acting on the recommendation of the Special Committee) has made an Adverse Recommendation
Change; or
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(i) if Buyer has breached any of its
representations or warranties or failed to perform any of its covenants set forth in this Agreement, which breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 6.03(a) (Buyer Representations) or Section 6.03(b) (Compliance with Covenants) and (B) is incapable of being cured or, if capable of being cured, has not been cured by the earlier of (I) 30 days following written notice
thereof from the Company to Buyer and (II) the Outside Date; provided that the Company shall not have the right to terminate this Agreement pursuant to this Section 7.01(d)(i) if the Company is then in breach of any of its representations, warranties or covenants under this Agreement so as to cause any of the conditions set forth in Section 6.02(a) (Company Representations) or Section 6.02(b)
(Compliance with Covenants) not to be satisfied or capable of being satisfied;
(ii) at any time prior to obtaining the Company Stockholder Approval, in connection with the Company entering into a Company Acquisition Agreement in accordance with Section 5.02(e) (Solicitation; Change in Recommendation); provided that prior to
or concurrently with such termination the payment required by Section 7.03(a) (Company Termination Fee) is
paid in full to Buyer; or
(iii) if (A) on the date the Closing should have occurred pursuant to Section 1.02 (Closing), the conditions set forth in Section 6.01 (Conditions to Each Party’s Obligations)
and Section 6.02 (Conditions to the Obligations of Buyer) had been satisfied or waived (to the extent such
waiver is permitted by applicable Law) (other than those conditions that by their nature are to be satisfied at the Closing, but provided that such conditions were then capable of being satisfied when the Closing would have been required to
occur pursuant to Section 1.02 (Closing)), (B) on or after the date the Closing should have occurred
pursuant to Section 1.02 (Closing), the Company has irrevocably confirmed by written notice to Buyer that
all conditions set forth in Section 6.03 (Conditions to the Obligations of the Company) have been
satisfied (other than those conditions that by their nature are to be satisfied at the Closing, but provided that such conditions are then capable of being satisfied at Closing) or that the Company is willing to irrevocably waive any
unsatisfied conditions set forth in Section 6.03 (Conditions to the Obligations of the Company), and (C)
the Merger has not been consummated within three Business Days after the delivery of such notice.
Any termination of this Agreement by the Company pursuant to this Section 7.01, and any
determination by the Company to exercise or refrain from exercising any termination right pursuant to this Section 7.01, shall require the prior approval of the Special Committee.
7.02. Effect of Termination. In the event of the valid termination of this Agreement as provided in Section 7.01 (Termination), written notice thereof shall be given to the other Party specifying the provision
hereof pursuant to which such termination is made, and this Agreement will forthwith become null and void and of no effect, without liability or obligation on the part of any Party (or any of its Representatives) relating to, based on or
arising under or out of this Agreement or the Transactions, except that (a) the Confidentiality Agreement shall survive the termination of this Agreement and will remain in effect in accordance with its terms, (b) Section 5.04 (Public Announcements), the last sentence of Section 5.05
(Access to Information; Confidentiality), Section 5.14(f) and Section 5.14(g) (Financing), Section 5.15(e) (Indenture), this Section 7.02, Section 7.03 (Termination Fee) and Article VIII (Miscellaneous
Provisions) will survive the termination of this Agreement and remain in full force and effect, and (c) subject to Section 7.03, no such termination will relieve any
Party from any liability or damages resulting from any Fraud or any Willful Breach occurring prior to such termination or relieve any Party from any liability or damages resulting from any breach of the Confidentiality Agreement or the
Limited Guarantees (subject to any limitations therein), in which case the aggrieved Party shall be entitled to all rights and remedies available at law or in equity.
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(i) this Agreement is terminated by the Company pursuant to Section 7.01(d)(ii) (Superior Proposal);
(ii) this Agreement is terminated by Buyer pursuant to Section 7.01(c)(ii) (Adverse Recommendation Change);
or
(iii) (A) this Agreement is terminated by Buyer or the Company pursuant to Section 7.01(b)(i) (Outside Date)
or Section 7.01(b)(iii) (Failure to Obtain Company Stockholder Approval) or by Buyer pursuant to Section 7.01(c)(i) (Company Terminating Breach), (B) a bona fide Takeover Proposal has been publicly announced
or become publicly disclosed or publicly known after the date of this Agreement and prior to such termination and, in either case, has not been publicly withdrawn or otherwise publicly abandoned prior to such termination (or, in the case of
a termination pursuant to Section 7.01(b)(iii) (Failure to Obtain Company Stockholder Approval), at least
three Business Days prior to the Company Stockholders Meeting), and (C) within 12 months following such termination, the Company enters into a definitive written agreement providing for a Takeover Proposal that is later consummated or a
Takeover Proposal is consummated (provided that for purposes of this Section 7.03(a)(iii), the term “Takeover Proposal”
shall have the meaning given to such term in this Agreement, except that percentages included in the definition of “Takeover Proposal” shall be increased to 50%);
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then the Company will pay, as directed by the Equity Commitment Parties, the Company Termination Fee. Payment of the Company Termination Fee will be made by wire
transfer of same day funds to the account or accounts designated by the Equity Commitment Parties as follows: (1) in the case of Section 7.03(a)(i), prior to or substantially
concurrently with termination of this Agreement pursuant to Section 7.01(d)(ii); (2) in the case of Section 7.03(a)(ii),
within three Business Days after termination of this Agreement pursuant to Section 7.01(c)(ii); and (3) in the case of Section
7.03(a)(iii), within three Business Days of the consummation of the applicable Takeover Proposal. For the avoidance of doubt, any payment made by the Company under this Section
7.03(a) will be payable only once with respect to this Section 7.03(a), and not in duplication, even though such payment may be payable under one or more provisions
hereof. In any circumstance in which this Agreement is terminated and the Company Termination Fee is payable pursuant to this Section 7.03(a) the Company Termination Fee and, if
applicable, any Buyer Recovery Costs paid in accordance with this Section 7.03(a), will be (I) deemed to be liquidated damages for any and all losses or damages suffered or incurred
by Buyer, the Equity Commitment Parties or any of their Affiliates or Representatives or any other Person in connection with this Agreement (and the termination hereof), the Transactions (and the abandonment thereof) or any matter forming the
basis for such termination and (II) the sole and exclusive remedy of the Buyer Related Parties or any other Person for any and all losses or damages suffered or incurred in connection with this Agreement (and the termination hereof), the
Transactions (and the abandonment thereof) or any matter forming the basis for such termination. In any circumstances in which this Agreement is terminated and the Company Termination Fee is payable pursuant to this Section 7.03(a), upon payment of the Company Termination Fee and, if applicable, any Buyer Recovery Costs contemplated by this Section
7.03(a), none of the Company, any of its Subsidiaries or any of the Company’s or its Subsidiaries’ respective former, current or future officers, directors, partners, stockholders, managers, members, Affiliates or
Representatives, or any of the respective successors or assigns of any of the foregoing (collectively, the “Company Related Parties”) will have further liability, whether pursuant to
a claim at Law or in equity, to Buyer, the Equity Commitment Parties or any of their Affiliates or Representatives or any other Person in connection with this Agreement (and the termination hereof), the Transactions (and the abandonment
thereof) or any matter forming the basis for such termination, and none of Buyer, the Equity Commitment Parties or any of their Affiliates or Representatives or any other Person will be entitled to bring or maintain any Action against any
Company Related Party for damages or any equitable relief arising out of or in connection with this Agreement (and the termination hereof), the Transactions (and the abandonment thereof) or any matters forming the basis for such termination,
in each case other than an Action seeking equitable relief to require payment of the Company Termination Fee and any Buyer Recovery Costs. If the Company fails to pay the Company Termination Fee and Buyer or any Equity Commitment Party
commences a suit which results in a final, non-appealable judgment against the Company for the Company Termination Fee or any portion thereof, then the Company will pay Buyer or such Equity Commitment Party, as applicable, its reasonable,
documented out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) in connection with such suit, together with interest on the Company Termination Fee at the “prime rate” as published in The Wall Street Journal, Eastern Edition, in effect on the date such payment was required to be made through the date of payment (calculated daily on the basis of a year of
365 days and the actual number of days elapsed, without compounding) (the “Buyer Recovery Costs”). As used herein, “Company
Termination Fee” means a cash amount equal to three hundred eighty-three million dollars ($383,000,000).
(i) by the
Company pursuant to Section 7.01(d)(i) (Buyer Terminating Breach);
(ii) by the
Company pursuant to Section 7.01(d)(iii) (Buyer Failure to Close); or
(iii) by Buyer or
the Company pursuant to Section 7.01(b)(i) (Outside Date), and at the time of such termination the
Company would have been entitled to terminate this Agreement pursuant to Section 7.01(d)(i) (Buyer Terminating
Breach) or Section 7.01(d)(iii) (Buyer Failure to Close);
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then Buyer will pay, as directed by the Company, the Buyer Termination Fee. Payment of the Buyer Termination Fee will be made by wire transfer of same day funds
to the account or accounts designated by the Company within three Business Days after termination of this Agreement pursuant to this Section 7.03(b).
For the avoidance of doubt, any payment made by Buyer under this Section 7.03(b) will be payable only once with respect to this Section
7.03(b), and not in duplication, even though such payment may be payable under one or more provisions hereof. In any circumstance in which this Agreement is terminated and the Buyer Termination Fee is payable pursuant to this
Section 7.03(b), the Buyer Termination Fee and, if applicable, any Company Recovery Costs paid in accordance with this Section
7.03(b), will be (I) deemed to be liquidated damages for any and all losses or damages suffered or incurred by the Company Related Parties or any of their Affiliates or Representatives or any other Person in connection with
this Agreement (and the termination hereof), the Transactions (and the abandonment thereof) or any matter forming the basis for such termination and (II) the sole and exclusive remedy of the Company Related Parties or any other Person for any
and all losses or damages suffered or incurred in connection with this Agreement (and the termination hereof), the Transactions (and the abandonment thereof) or any matter forming the basis for such termination. In any circumstances in which
this Agreement is terminated and the Buyer Termination Fee is payable pursuant to this Section 7.03(b), upon payment of the Buyer Termination Fee and, if applicable, the Company
Recovery Costs contemplated by this Section 7.03(b), none of Buyer, any Investor Group Member, any Equity Commitment Party, any Guarantor, any of their respective Affiliates, or any
of their or their Affiliates’ respective former, current or future officers, directors, partners, stockholders, managers, members or Representatives, or any of the respective successors or assigns of any of the foregoing (collectively, the “Buyer Related Parties”) will have any further liability, whether pursuant to a claim at Law or in equity, to the Company or any of its Affiliates or Representatives or any other Person
in connection with this Agreement (and the termination hereof), the Transactions (and the abandonment thereof) or any matter forming the basis for such termination, and none of the Company or any of its Affiliates or Representatives or any
other Person will be entitled to bring or maintain any Action against any Buyer Related Party for damages or any equitable relief arising out of or in connection with this Agreement (and the termination hereof), the Transactions (and the
abandonment thereof) or any matter forming the basis for such termination, in each case other than (i) an Action seeking equitable relief to require payment of the Buyer Termination Fee and the Company Recovery Costs by Buyer in accordance
with this Section 7.03(b) and (ii) claims against a Guarantor solely pursuant to, and subject to the terms and conditions of, the applicable Limited Guarantee. If Buyer fails to
pay the Buyer Termination Fee and the Company commences a suit which results in a final, non-appealable judgment against Buyer for the Buyer Termination Fee, or any portion thereof, then Buyer will pay the Company its reasonable, documented
out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) in connection with such suit, together with interest on the Buyer Termination Fee at the “prime rate” as published in The Wall Street Journal, Eastern Edition, in effect on the date such payment was required to be made through the date of payment (calculated daily on the basis of a year of 365 days and the actual
number of days elapsed, without compounding) plus any amounts payable or reimbursable by Buyer in accordance with this Agreement (the “Company Recovery Costs”). As used herein, “Buyer Termination Fee” means a cash amount equal to four hundred eighty-eight million dollars ($488,000,000).
(c) Notwithstanding anything to the
contrary in this Agreement, while each of the Company and Buyer may, prior to the valid termination of this Agreement, pursue both a grant of specific performance in accordance with Section
8.08 (Specific Enforcement) and the Buyer Termination Fee or the Company Termination Fee, as applicable, if, as and when required to be paid pursuant to
this Section 7.03, under no circumstances will the Company or Buyer, directly or indirectly, be permitted or entitled to receive both (i) a grant of specific performance that
results in a Closing (including, with respect to the Company, to cause the Equity Financing to be funded (whether under this Agreement or the Equity Commitment Letters)), on the one hand, and (ii) any monetary damages whatsoever, the
Company Termination Fee (plus the Buyer Recovery Costs, if any) or the Buyer Termination Fee (plus the Company Recovery Costs, if any), as applicable, on the other hand.
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(d) In connection with any losses or
damages suffered by Buyer or any Buyer Related Party as a result of the failure of the Transactions to be consummated or for a breach or failure to perform hereunder or otherwise, other than in the circumstances in which Buyer is entitled
to receive the Company Termination Fee in accordance with Section 7.03(a) (in which case Section 7.03(a) will
apply), and without limiting the Company’s obligations in respect of the Buyer Recovery Costs, Buyer agrees, on behalf of itself and the Buyer Related Parties, that the maximum aggregate monetary liability of the Company and the Company
Related Parties (including under or in respect of any Ancillary Document, other than the Confidentiality Agreement), if any, will be limited to the amount of the Company Termination Fee, and in no event will Buyer or any Buyer Related
Party seek or be entitled to recover from the Company or any Company Related Party, and Buyer on behalf of itself and the Buyer Related Parties hereby irrevocably waives and relinquishes any right to seek or recover, any monetary damages
in the aggregate in excess of such amount, including for the liability of the Company for any such losses or damages arising in the case of or resulting from Fraud or Willful Breach.
(e) In connection with any losses or
damages suffered by the Company or any Company Related Party as a result of the failure of the Transactions to be consummated or for a breach or failure to perform hereunder or otherwise, other than in the circumstances in which the
Company is entitled to receive the Buyer Termination Fee in accordance with Section 7.03(b) (in which case Section 7.03(b)
will apply), and without limiting the Buyer’s obligations in respect of the Company Recovery Costs, the Company agrees, on behalf of itself and the Company Related Parties, that the maximum aggregate monetary liability of Buyer and the
Buyer Related Parties (including under or in respect of any Ancillary Document, other than the Confidentiality Agreement), if any, will be limited to the amount of the Buyer Termination Fee, and in no event will the Company or any Company
Related Party seek or be entitled to recover from Buyer or any Buyer Related Party, and the Company on behalf of itself and the Company Related Parties hereby irrevocably waives and relinquishes any right to seek or recover, any monetary
damages in the aggregate in excess of such amount, including for the liability of Buyer for any such losses or damages arising in the case of or resulting from Fraud or Willful Breach.
8.01. No Survival of Representations and Warranties. None of the representations or warranties in this
Agreement or in any document or instrument delivered pursuant to or in connection with this Agreement will survive the Effective Time. This Section 8.01 will not limit any
covenant contained in this Agreement or in any document or instrument delivered pursuant to or in connection with this Agreement that by its terms applies in whole or in part after the Effective Time.
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8.02. Amendment or Supplement. Subject to compliance with applicable Law, at any time prior to the Effective
Time, this Agreement may be amended or supplemented by written agreement of the Parties; provided that any amendment or supplement to this Agreement by or on behalf of the Company
will require the prior approval of the Special Committee; provided, however, that following receipt of the Company
Stockholder Approval, there will be no amendment or change to the provisions hereof which by Law would require further approval by the stockholders of the Company; provided, further, that any modification or amendment of Section 7.03, this proviso of Section
8.02, Section 8.04 (solely to the extent that it relates to the Debt Financing Sources Related Parties), clause (v) of Section 8.06, Section 8.07(c)
(solely to the extent that it relates to the Debt Financing Sources Related Parties), Section 8.08 (solely to the extent that it relates to the Debt Financing Sources Related
Parties), Section 8.13 (solely to the extent that it relates to the Debt Financing Sources Related Parties), Section 8.15
(solely to the extent that it relates to the Debt Financing Sources Related Parties) or the definitions of Debt Commitment Letter, Debt Financing, Debt Financing Sources or Debt Financing Sources Related Parties that is adverse in any
respect to the interests of the Debt Financing Sources Related Parties, will not be effective against the Debt Financing Sources Related Parties without the prior written consent of the Debt Financing Sources.
8.03. Extension of Time, Waiver, etc. At any time prior to the Effective Time, Buyer and the Company may, subject to applicable Law, (a) waive any inaccuracies
in the representations and warranties of the other Party contained herein or in any document delivered pursuant hereto, (b) extend the time for the performance of any of the obligations or acts of the other
Party, or (c) waive compliance by the other Party with any of the agreements contained herein applicable to such Party or, except as otherwise provided herein, waive any of such Party’s conditions; provided that any such extension or waiver by or on behalf of the Company will require the prior approval of the Special Committee; provided,
however, that following receipt of the Company Stockholder Approval, there will be no waiver or extension of this Agreement that would require further approval of the stockholders
of the Company. Notwithstanding the foregoing, no failure or delay by the Company or Buyer in exercising any right hereunder will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder. Any agreement on the part of a Party to any such extension or waiver will be valid only if set forth in an instrument in writing signed on behalf of such Party.
8.04. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder will be
assigned, in whole or in part, by operation of Law or otherwise, by any of the Parties without the prior written consent of the other Parties (such consent not to be unreasonably withheld, conditioned or delayed); provided that Buyer will have the right, without the prior written consent of the Company, to assign all or any portion of its respective rights, interests and obligations hereunder to (i) an Affiliate of Buyer or (ii) any debt financing sources (including the Debt Financing Sources) for purposes of creating a security interest herein or otherwise assigning as collateral in respect of any debt
financing (including the Debt Financing), so long as, with respect to clauses (i) and (ii) above, such assignment
would not result in a Buyer Material Adverse Effect. No assignment by any Party will relieve such Party of any of its obligations hereunder. Subject to the immediately preceding two sentences, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any purported assignment not permitted under this Section 8.04 will be
null and void.
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8.05. Counterparts. This Agreement may be executed in counterparts (including by facsimile or electronic mail), each of which will be deemed to be an original but all of which taken together
will constitute one and the same agreement and will become effective when one or more counterparts have been signed by each Party and delivered to the other Parties.
8.06. Entire Agreement; No Third-Party Beneficiaries.
This Agreement, together with the Ancillary Documents, constitute the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the Parties and their Affiliates, or any of them, with
respect to the subject matter hereof and thereof. This Agreement is not intended to and does not confer upon any Person other than the Parties any rights or remedies hereunder, except for (i) if the Effective Time occurs, the right of
the Company’s stockholders to receive the Merger Consideration as provided in Section 2.01(c) and dividends or distributions in accordance with the first sentence of Section 2.02(c), in each case, without
interest, (ii) if the Effective Time occurs, the right of the holders of Equity-Based Awards to receive such amounts as provided for in Article II, (iii) if the Effective Time occurs, the rights of the Indemnitees set forth in Section
5.06 of this Agreement, (iv) the rights of the Company Related Parties set forth in Section 7.03(a), and the rights of the Buyer Related Parties set forth in Section 7.03(b), which are intended
for the benefit of, and will be enforceable by the applicable Company Related Parties and Buyer Related Parties, (v) each Debt Financing Sources Related Party will be an express third-party beneficiary of, and may enforce, Section 7.03,
the proviso in Section 8.02, Section 8.04 (solely to the extent that it relates to the Debt Financing Sources Related Parties), this clause (v) of Section 8.06,
Section 8.07(c) (solely to the extent that it relates to the Debt Financing Sources Related Parties), Section 8.08 (solely to the extent that it relates to the Debt Financing Sources Related Parties) and Section
8.13 (solely to the extent that it relates to the Debt Financing Sources Related Parties) and Section 8.15 (solely to the extent that it relates to the Debt Financing Sources Related Parties), and (vi) the
Related Parties will be express third-party beneficiaries of Section 8.13.
(a) This Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed
entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of Laws principles.
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(b) All Actions arising out of or relating to this Agreement or the Transactions will be heard and determined in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the
State of Delaware declines to accept jurisdiction over any Action, any state or federal court within the State of Delaware). The Parties hereby irrevocably (i) submit to the exclusive jurisdiction and
venue of such courts in any such Action, (ii) waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such Action, (iii) agree to not attempt to deny or defeat such jurisdiction by motion or
otherwise request for leave from any such court, and (iv) agree to not bring any Action arising out of or relating to this Agreement or the Transactions in any court other than the Court of Chancery of the State of Delaware (or, if the
Court of Chancery of the State of Delaware declines to accept jurisdiction over any Action, any state or federal court within the State of Delaware), except for Actions brought to enforce the judgment of any such court. The consents to
jurisdiction and venue set forth in this Section 8.07(b) will not constitute general consents to service of process in the State of Delaware and will have no effect for any purpose except as provided in this paragraph
and will not be deemed to confer rights on any Person other than the Parties. Each Party agrees that service of process upon such Party in any Action arising out of or relating to this Agreement will be effective if notice is given by
overnight courier at the address set forth in Section 8.09 of this Agreement. The Parties agree that a final judgment in any such Action will be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by applicable Law; provided, however, that nothing in the foregoing will restrict any Party’s rights to seek any post-judgment relief regarding, or any appeal from, a final trial
court judgment.
(c) Notwithstanding anything to the contrary in this Agreement, each Party acknowledges and irrevocably agrees (i) that any legal action, whether at law or in equity, whether in contract or in tort or otherwise, involving any Debt Financing Sources Related Party arising out of or relating to this Agreement or the Debt
Commitment Letter, the Debt Financing or any of the agreements entered into in connection with the Debt Financing or any of the transactions contemplated hereby or thereby or the performance thereunder will be subject to the exclusive
jurisdiction of the Supreme Court of the State of New York, County of New York, or, if under applicable Law exclusive jurisdiction is vested in Federal courts, the United States District Court for the Southern District of New York
sitting in the Borough of Manhattan, New York, New York (and appellate courts thereof) and each Party irrevocably submits itself and its property with respect to any such legal action to the exclusive jurisdiction of such court, (ii)
that, except to the extent relating to the interpretation of any provisions in this Agreement or the Equity Commitment Letters, any such legal action, whether at law or in equity, whether in contract or in tort or otherwise, against any
Debt Financing Sources Related Party will be governed by, construed and enforced in accordance with, the Laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the
laws of another state), (iii) not to bring or permit any of their Affiliates to bring any such legal action in any other court, (iv) that service of process upon any such Party in any such action or proceeding shall be effective if
notice is given in accordance with Section 8.09 and irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such action in any such court, and
(v) that the provisions of this Section 8.07(c) will apply to any such legal action.
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(a) The Parties agree that, subject to Section 8.08(b), irreparable damage for which monetary relief (including any fees payable pursuant to Section 7.03), even if
available, would not be an adequate remedy, would occur in the event that any provision of this Agreement is not performed in accordance with its specific terms or is otherwise breached, including if the Parties fail to take any action
required of them hereunder to consummate this Agreement and the Transactions. Subject to the following sentence and Section 8.08(b), the Parties acknowledge and agree that (i) the Parties will be entitled to an
injunction or injunctions, specific performance or other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 8.07(b)
without proof of damages or otherwise, this being in addition to any other remedy to which they are entitled under this Agreement, (ii) the provisions set forth in Section 7.03 (A) are not intended to and do not
adequately compensate for the harm that would result from a breach of this Agreement and (B) will not be construed to diminish or otherwise impair in any respect any Party’s right to specific enforcement, and (iii) the right of specific
enforcement is an integral part of the Transactions and without that right neither the Company nor Buyer would have entered into this Agreement. The Parties acknowledge and agree that any Party seeking an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 8.08 will not be required to provide any bond or other security in connection with
any such order or injunction.
(b) Notwithstanding the foregoing, it is explicitly agreed that the right of the Company to seek an injunction, specific performance or other
equitable remedies in connection with enforcing Buyer’s obligation to cause the Equity Financing to be funded and Buyer’s obligations to effect the Closing is subject to the requirements that (i) all of the
conditions set forth in Section 6.01 and Section 6.02 were satisfied or waived (to the extent such waiver is permitted by applicable Law) at the time when Closing would have been required to occur
pursuant to Section 1.02 (other than those conditions that by their nature are to be satisfied at the Closing, but provided that such conditions were then capable of being satisfied when Closing would have been required
to occur), (ii) the Debt Financing has been funded in full in accordance with the terms thereof or will be funded in full in accordance with the terms thereof at the Closing if the Equity Financing is funded at the Closing, and (iii)
the Company has irrevocably confirmed in writing that if the Equity Financing and Debt Financing are funded, then it would take such actions required of it by this Agreement to cause the Closing to occur. The Parties agree not to
assert that a remedy of specific enforcement is unenforceable, invalid, contrary to Law or inequitable for any reason, and not to assert that a remedy of monetary damages would provide an adequate remedy or that the Parties otherwise
have an adequate remedy at law.
(c) Any determination by the Company to commence, settle, compromise or otherwise resolve any Action to enforce this Agreement, any Equity Commitment Letter or any Limited
Guarantee against Buyer, any Investor Group Member, any Equity Commitment Party, any Guarantor or any of their respective Affiliates or Representatives will require the prior approval of the Special Committee.
8.09. Notices. All notices, requests and other
communications to any Party hereunder will be in writing and will be deemed given if delivered personally, emailed (provided no “bounce back” or similar message of non-delivery is received) or sent by overnight courier (providing proof
of delivery) to the Parties at the following addresses:
If to Buyer, to it at:
Motown Acquisition Corp.
c/o Penske Corporation
2555 Telegraph Road
Bloomfield Hills, Michigan 48302
Attention: Lawrence N. Bluth
Email: [***]
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with a copy to:
Mitsui & Co., Ltd.
2-1, Otemachi 1-chome,
Chiyoda-ku, Tokyo 100-8631, Japan
Attention: Hidenori Yamano
Email: [***]
with copies (which will not constitute notice) to:
Jones Day
250 Vesey Street
New York, New York 10281
Attention: Andrew M. Levine; Zachary R. Brecheisen; Justin T. Roland
Email: [***]; [***]; [***]
and
Debevoise & Plimpton LLP
66 Hudson Boulevard East
New York, New York 10001
Attention: William D. Regner; Ezra Borut
Email: [***]; [***]
If to the Company, to it at:
Penske Automotive Group, Inc.
2555 Telegraph Road
Bloomfield Hills, Michigan 48302
Attention: Shane Spradlin
Email: [***]
with a copy (which will not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Jeffrey D. Marell; Lara B. Solomons
Email: [***]; [***]
and
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Freshfields US LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Attention: Damien Zoubek; Oliver Board
Email: [***]; [***]
or such other address or email address as such Party may hereafter specify by like notice to the other Parties. All such notices, requests and other communications will be deemed received on the date of actual receipt by the
recipient thereof.
8.10. Severability. If any term, condition or other provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms, provisions and conditions of this Agreement will nevertheless remain in full
force and effect. Upon such determination that any term, condition or other provision is invalid, illegal or incapable of being enforced, the Parties will negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible to the fullest extent permitted by applicable Law.
8.11. Fees and Expenses. Subject to Section 5.14(f), Section 5.14(g) and
Section 5.15(e), whether or not the Transactions are consummated, all fees and expenses incurred in connection with this Agreement and the Transactions will be paid by the Party incurring or required to incur such fees or
expenses, except as otherwise expressly set forth in this Agreement; provided that expenses incurred in connection with the filing fees for the Transaction Regulatory Filings, the Proxy Statement, Schedule 13E-3 and printing and
mailing the Proxy Statement, Schedule 13E-3 and any reasonable out-of-pocket expenses incurred by the Company in connection with the performance of its obligations pursuant to Sections 5.12 and 5.13 (such fees
and expenses collectively, the “Transaction Expenses”) will be borne by the Parties as follows:
(a) In the event the Merger is consummated, the Transaction Expenses will be borne by the Surviving Corporation.
(b) In the event the Merger is not consummated, the Transaction Expenses relating to the Transaction Regulatory Filings will be borne and paid by Buyer when due and the
Transaction Expenses relating to the preparation, printing and mailing of the Proxy Statement and the Schedule 13E-3 and the Company Stockholders Meeting will be borne and paid by the Company when due.
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(a) When a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference will be to an Article, Section,
Exhibit or Schedule of or to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation”. The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “date hereof” when used in this Agreement refer to the date of this
Agreement. The word “will” shall be construed to have the same meaning as the word “shall.” The terms “or,” “any” and “either” are not exclusive. The word “extent” in the phrase “to the extent” means the degree to which a subject or
other thing extends, and such phrase does not mean simply “if.” The words “made available to Buyer” and words of similar import refer to documents (i) posted to the “Project Motown” electronic datasite
hosted by the Company prior to the date hereof or (ii) delivered in person or electronically to Buyer or their respective Representatives, in each case, at least two Business Days prior to the date of this
Agreement. Any reference to “ordinary course of business” will be interpreted to mean “ordinary course of business consistent with past practice.” All accounting terms used and not defined herein have the respective meanings given to
them under GAAP. All terms defined in this Agreement have the defined meanings when used in any document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any statute defined or referred to herein means such statute as from time to time amended, modified
or supplemented, including by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References herein to any statute includes all rules and regulations promulgated
thereunder. Unless otherwise specifically indicated, all references to “dollars” or “$” refer to the lawful money of the U.S. References to a Person are also to its permitted assigns and successors.
(b) The Parties have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as jointly drafted by the Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement.
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8.13. Non-Recourse. Each Party agrees, on behalf of itself and its Related Parties, that all Actions (whether in
Contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine,
including alter ego or otherwise) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to (a) this Agreement, any of the Ancillary Documents or
any of the transactions contemplated hereunder or thereunder (including the Financing), (b) the negotiation, execution or performance of this Agreement or any of the Ancillary Documents (including any
representation or warranty made in connection with, or as an inducement to, this Agreement or any of the Ancillary Documents), (c) any breach or violation of this Agreement or any of the Ancillary
Documents, and (d) any failure of any of the transactions contemplated hereunder or thereunder (including the Financing) to be consummated, in each case, may be made only against (and are those solely of)
the Persons that are, in the case of this Agreement, expressly identified as Parties, and in the case of the Ancillary Documents, Persons expressly identified as parties to such Ancillary Documents and in accordance with, and subject to
the terms and conditions of, this Agreement or such Ancillary Documents, as applicable. Notwithstanding anything in this Agreement or any of the Ancillary Documents to the contrary, each Party agrees, on behalf of itself and its
Related Parties, that no recourse under this Agreement or any of the Ancillary Documents or in connection with any of the transactions contemplated hereunder (including the Financing) or under any Ancillary Document will be sought or
had against any other Person, including any Related Party and any Debt Financing Sources Related Party, and no other Person, including any Related Party and any Debt Financing Sources Related Party, will have any liabilities or
obligations (whether in Contract or in tort, in Law or in equity or otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any
other theory or doctrine, including alter ego or otherwise), for any claims, causes of action, obligations or liabilities arising under, out of, in connection with or related in any manner to the items in the immediately preceding clauses
(a) through (d), it being expressly agreed and acknowledged that no personal liability or losses whatsoever will attach to, be imposed on or otherwise be
incurred by any of the aforementioned, as such, arising under, out of, in connection with or related in any manner to the items in the immediately preceding clauses (a) through (d), in each case, except for claims (subject, with respect to the following clauses (ii) and (iii), in all respects to the limitations set forth in
this Agreement) (i) against any Person that is party to, and solely pursuant to the terms and conditions of, the Confidentiality Agreement, (ii) against each Guarantor under, if, as and when required
pursuant to the terms and conditions of the Limited Guarantee, (iii) against each Equity Commitment Party for specific performance of its obligation to fund its committed portions of the Equity Financing solely in accordance with, and
pursuant to the terms and conditions of the applicable Equity Commitment Letter and Section 8.08, (iv) against the Company and Buyer solely in accordance with, and pursuant to the terms and conditions of, this Agreement,
or (v) against any Person expressly identified as a party to any Ancillary Document in accordance with the terms and conditions thereof. For the avoidance of doubt, notwithstanding that a Guarantor, Equity Commitment Party, Investor
Group Member or any other Person may constitute a Buyer Related Party, no such Person will have any liability or obligation under or in connection with this Agreement or the Transactions, whether or not arising from or based upon any
allegation or claim of Fraud or breach of this Agreement, except solely to the extent expressly provided in an Ancillary Document to which such Person is a party and subject in all respects to the limitations, conditions and other terms
thereof. Notwithstanding anything to the contrary in this Agreement or any of the Ancillary Documents, (i) no Related Party or Debt Financing Sources Related Party will be responsible or liable for any special, consequential,
exemplary, punitive or indirect damages that may be alleged as a result of this Agreement or any of the Ancillary Documents or any of the transactions contemplated hereunder or thereunder (including the Financing), or the valid
termination or abandonment of any of the foregoing, (ii) none of the Debt Financing Sources Related Parties shall have any liability to the Company, any of its Subsidiaries or any of their respective Affiliates or representatives
relating to or arising out of this Agreement, the Debt Commitment Letter, the Debt Financing or any of the agreements entered into in connection with the Debt Financing or any of the transactions contemplated hereby or thereby or the
performance thereunder (subject to the last sentence of this Section 8.13), and (iii) the Company (on behalf of itself and its Affiliates) (A) waives any and all rights or claims against the Debt Financing Sources Related Parties in
connection with this Agreement, the Debt Commitment Letter, the Debt Financing or any of the agreements entered into in connection with the Debt Financing or any of the transactions contemplated hereby or thereby or the performance
thereunder, whether in law or equity, contract, tort or otherwise, and (B) agrees not to commence (and if commenced agrees to dismiss or otherwise terminate) any proceeding or legal or equitable action against any Debt Financing Sources
Related Party in connection with this Agreement, the Debt Commitment Letter, the Debt Financing or any of the agreements entered into in connection with the Debt Financing or any of the transactions contemplated hereby or thereby or the
performance thereunder. Notwithstanding the foregoing, nothing in this Section 8.13 shall in any way limit or modify the rights and obligations of the Buyer under this Agreement or any Debt Financing Source’s obligations to the Buyer
under the Debt Commitment Letter or definitive agreement entered into in connection with the Debt Financing (it being understood that following consummation of the Merger, nothing in this Section 8.13 shall limit the rights of any of
the parties to any such definitive agreement).
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8.14. Disclosure Letter. The Company Disclosure Letter and the Buyer Disclosure Letter may include items and information the disclosure of which is not required either in response to an
express disclosure requirement of this Agreement or as an exception to one or more provisions set forth in this Agreement. Inclusion of any such items or information in the Company Disclosure Letter or the Buyer Disclosure Letter will
not be deemed to be an acknowledgement or agreement that any such item or information (or any non-disclosed item or information of comparable or greater significance) is “material” or that it has had or would have a Material Adverse
Effect or a Buyer Material Adverse Effect, as the case may be. Further, nothing in the Company Disclosure Letter or the Buyer Disclosure Letter will be deemed to be an admission by any Party to any third Person of any matter
whatsoever, including any violation or breach of law or contract. The Parties agree that the disclosure set forth in any particular section of the Company Disclosure Letter will be deemed to be an
exception to or disclosure for the purposes of, as applicable, (a) the representations or warranties of the Company in the corresponding Section of this Agreement and (b) any other representation or warranty of the Company that is set
forth in this Agreement to the extent the relevance of such exception or disclosure is reasonably apparent on its face.
8.15. WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH (INCLUDING THE DEBT FINANCING) OR THE TRANSACTIONS OR THEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B)
IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (C) IT MAKES SUCH WAIVER VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION
8.15.
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8.16. Special Committee Approval. Notwithstanding anything to the contrary herein, prior to the Effective Time, none of the following actions shall be taken by or on
behalf of the Company without the prior approval or authorization of the Special Committee: (i) any amendment, restatement, modification or supplement of any provision of this Agreement or any Ancillary Document, (ii) any waiver of any
right or provision under this Agreement or any Ancillary Document or extension of the time for performance of any obligation hereunder or thereunder, (iii) any determination as to whether any condition set forth in Article VI has been
satisfied (and any disputes relating thereto or arising therefrom), (iv) any exercise or enforcement or defense of any exercise or enforcement of any rights under this Agreement or any Ancillary Document, (v) any termination of this
Agreement or any Ancillary Document, (vi) any action under this Agreement or any Ancillary Document that expressly requires the approval of the Special Committee or is expressly contemplated to be taken by the Special Committee, (vii)
any action in respect of the declaration or payment by the Company of any dividends or distributions contemplated by Section 5.01(b)(iii), and (viii) agreeing to do any of the foregoing.
ARTICLE IX
“Acceptable Confidentiality Agreement” means a legally binding confidentiality agreement entered into by the Company from and after the date of this Agreement that contains confidentiality provisions
that are not materially less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement, except that such confidentiality agreement (i) need not include explicit or implicit standstill provisions or
otherwise restrict the making of or amendment or modification to Takeover Proposals, (ii) will not prohibit the Company from complying with Section 5.02 or contain terms that would restrict in any manner the Company’s
ability to consummate the Merger Transactions, and (iii) will not include any provision calling for an exclusive right to negotiate with the Company prior to the valid termination of this Agreement.
“Action” means any legal, regulatory or administrative proceeding, suit, demand, arbitration or other action.
“Adverse Recommendation Change” has the meaning set forth in Section 5.02(d).
“Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, “control”
(including, with its correlative meanings, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether
through the ownership of securities or partnership or other ownership interests, by contract or otherwise; provided that, for purposes of this Agreement and the Ancillary Documents, the Investor Group Members will not be deemed
Affiliates of the Company and its Subsidiaries and the Company and its Subsidiaries will not be deemed Affiliates of the Investor Group Members.
“Agreement” has the meaning set forth in the Preamble.
“AI” means artificial intelligence.
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“AI Technology” means any and all machine learning, deep learning, and other AI technologies, including generative AI, AI models (including large language models) and neural networks.
“Alternative Financing” has the meaning set forth in Section 5.14(j).
“Ancillary Documents” means the Company Disclosure Letter, Buyer Disclosure Letter, Confidentiality Agreement, each Limited Guarantee, each Commitment Letter, the Support Agreements, and any other
agreement, document, instrument or certificate contemplated by this Agreement or to be executed by Buyer, the Company or their respective Affiliates, as applicable, in connection with the consummation of the Transactions.
“Announcement” has the meaning set forth in Section 5.04.
“Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act of 2010, Laws adopted in furtherance of the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions, or any other applicable Laws relating to combating domestic or international bribery and corruption.
“Antitrust Laws” means the Sherman Act, the Clayton Act, the HSR Act, the Federal Trade Commission Act, all applicable foreign antitrust Laws and all other applicable Laws issued by a Governmental
Authority that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.
“Anti-Money Laundering Laws” means all applicable financial recordkeeping, reporting and registration requirements, including the money laundering statutes of any jurisdiction applicable to the
Company or its Subsidiaries and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority from time to time.
“Appraisal Shares” has the meaning set forth in Section 2.05(a).
“Audited Balance Sheet Date” has the meaning set forth in Section 3.06(c).
“Book-Entry Share” has the meaning set forth in Section 2.01(c).
“Business Day” means a day except a Saturday, a Sunday or other day on which the banking institutions in the City of New York, New York, Detroit, Michigan or Tokyo, Japan are authorized or required
by Law or executive order to be closed.
“Buyer” has the meaning set forth in the Preamble.
“Buyer Disclosure Letter” means the confidential disclosure letter delivered by Buyer to the Company concurrently with or prior to the execution of this Agreement.
“Buyer Material Adverse Effect” means any effect, change, event or occurrence that, individually or in the aggregate, would or would reasonably be expected to prevent or delay beyond the Outside
Date, materially interfere with, materially hinder or materially impair (i) the consummation by Buyer of any of the Transactions on a timely basis or (ii) the compliance by Buyer with its obligations under this Agreement.
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“Buyer Recovery Costs” has the meaning set forth in Section 7.03(a).
“Buyer Related Parties” has the meaning set forth in Section 7.03(b).
“Buyer Termination Fee” has the meaning set forth in Section 7.03(b).
“Bylaws” has the meaning set forth in Section 1.05(b).
“Capitalization Date” has the meaning set forth in Section 3.02(a).
“Certificate of Merger” has the meaning set forth in Section 1.03.
“CFIUS” means the Committee on Foreign Investment in the United States.
“C.F.R.” means the U.S. Code of Federal Regulations.
“Charter” has the meaning set forth in Section 1.05(a).
“Claim” has the meaning set forth in Section 5.06(c).
“Closing” has the meaning set forth in Section 1.02.
“Closing Date” has the meaning set forth in Section 1.02.
“Code” means the Internal Revenue Code of 1986.
“Collective Bargaining Agreement” means each collective bargaining, works council or other labor union Contract or labor arrangement covering any employee of the Company or any of its Subsidiaries,
excluding any national, industry or similar generally applicable Contract or arrangement.
“Commitment Letters” means the Equity Commitment Letters and the Debt Commitment Letter.
“Company” has the meaning set forth in the Preamble.
“Company Acquisition Agreement” has the meaning set forth in Section 5.02(d).
“Company Board” has the meaning set forth in the Recitals.
“Company Charter Documents” means the Company’s certificate of incorporation and bylaws, each as amended, restated or amended and restated, as the case may be, and as in effect on the date hereof.
“Company Class C Common Stock” has the meaning set forth in Section 3.02(a).
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“Company Common Stock” has the meaning set forth in the Recitals.
“Company Credit Agreement” is defined in the definition of Credit Facilities.
“Company Credit Agreement Amendment” means (a) the Limited Consent and Thirteenth Amendment to the Company Credit Agreement, dated as of the date hereof, pursuant to which, among other things, the
requisite Credit Agreement Financing Sources have consented to the Transactions and have agreed to a conditional increase of the commitments under the Company Credit Agreement subject to certain conditions set forth in the Company
Credit Agreement and (b) any subsequent amendment, restatement, amendment and restatement, supplement, consent, waiver, commitment increase or joinder with respect to the Company Credit Agreement entered into after the date hereof
pursuant to Section 5.14(b).
“Company Disclosure Letter” has the meaning set forth in Article III.
“Company Deferred Cash Award” means any deferred cash amount (including any notional investment gains or losses credited thereto) credited to a deferred fees account of a current or former director
of the Company Board under the Company Non-Employee Director Compensation Plan.
“Company DSU” means each deferred stock unit credited to a deferred fees account of a current or former director of the Company Board (including, for the avoidance of doubt, any dividend equivalent
units credited thereto) under the Company Non-Employee Director Compensation Plan.
“Company Group” means, collectively, the Company and its Subsidiaries.
“Company Intellectual Property” has the meaning set forth in Section 3.14(b).
“Company IT Assets” means the IT Assets owned by the Company or any of its Subsidiaries and used in the operation of the businesses of the Company or any of its Subsidiaries.
“Company KSOP” means the Penske Automotive Group Employee Stock Ownership 401(k) Plan.
“Company Lease” means any lease, sublease, sub-sublease, license or other agreement (including any amendments, assignments, guaranties or other agreements related thereto) pursuant to which the
Company or any of its Subsidiaries leases, subleases, licenses, uses or occupies any Leased Real Property.
“Company Non-Employee Director Compensation Plan” means the Penske Automotive Group, Inc. Non-Employee Director Compensation Plan, as amended.
“Company Non-Voting Common Stock” has the meaning set forth in Section 3.02(a).
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“Company Performance Awards” means each performance-based award granted under the 2020 Equity Plan in respect of the 2026 performance period, which has not yet been completed as
of immediately prior to the Effective Time, that, if earned, are payable in Company RSAs.
“Company Plan” means each (i) “employee benefit plan” within the meaning of Section 3(3) of ERISA (whether or not subject to ERISA), (ii) stock option, stock purchase, restricted stock, restricted
stock unit, performance stock, performance stock unit, long-term cash or other equity, equity-based or long-term incentive plan, program, policy or arrangement, (iii) individual employment, consulting, change-in-control, severance or
retention agreement, plan, program, policy or arrangement, (iv) bonus, incentive, deferred compensation, profit-sharing, retirement, post-retirement, vacation, severance or termination pay, gross-up, medical, dental, life, restrictive
covenant, relocation, clawback, cafeteria, disability, sick leave, death benefit, group insurance, employee benefit or fringe benefit agreement, plan, program, policy or arrangement, and (v) other similar agreement, plan, program,
policy or arrangement (whether or not subject to ERISA and whether written or unwritten, formal or informal), in each of clauses (i)-(v), that is sponsored, administered, maintained or contributed to by the Company or any
of its Subsidiaries, to which the Company or any of its Subsidiaries is obligated to sponsor, administer, maintain or contribute or to which a member of the Company Group is a party, other than (A) any “multiemployer plan” (as defined
in Section 3(37) or 4001(a)(3) of ERISA) or (B) any agreement, plan, program or policy mandated by applicable Law or Governmental Authority.
“Company Preferred Stock” has the meaning set forth in Section 3.02(a).
“Company Products” means the products, applications or services offered, performed, licensed, sold, distributed or otherwise made commercially available by the Company or any of its Subsidiaries.
“Company Recommendation” has the meaning set forth in the Recitals.
“Company Recovery Costs” has the meaning set forth in Section 7.03(b).
“Company Related Parties” has the meaning set forth in Section 7.03(a).
“Company RSA” means each restricted share of Company Common Stock granted under the 2020 Equity Plan.
“Company RSU” means each restricted stock unit (including any dividend equivalent units credited thereto) with respect to Company Common Stock granted under the 2020 Equity Plan.
“Company SEC Documents” means all reports, schedules, forms, statements or other documents (including exhibits) filed or furnished by the Company with the SEC since January 1, 2024 and publicly
available, in each case as such materials have been supplemented, modified or amended since the date of filing.
“Company Securities” has the meaning set forth in Section 3.02(b).
“Company Stockholder Approval” has the meaning set forth in Section 3.04(d).
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“Company Stockholders” has the meaning set forth in the Recitals.
“Company Stockholders Meeting” has the meaning set forth in Section 5.13(a).
“Company Subsidiary Securities” has the meaning set forth in Section 3.03(b).
“Company Termination Fee” has the meaning set forth in Section 7.03(a).
“Comparability Period” has the meaning set forth in Section 5.07(a).
“Compliant” means, with respect to the Required Financial Information, that (i) such Required Financial Information is, and remains, compliant in all material respects with all applicable
requirements of Regulations S-K and S-X under the Securities Act applicable to offerings of debt securities on a registration statement on Form S-1 that are applicable to such Required Financial Information (other than such provisions
for which compliance is not customary in a Rule 144A offering of non-convertible high yield debt securities and, for the avoidance of doubt, provisions to the extent solely applicable to any Excluded Information, and other than any
information, financial statements, financial data or other materials not required to be included in the Required Financial Information or that constitute Excluded Information) and does not contain any untrue statement of a material fact
regarding the Company Group, or omit to state any material fact regarding the Company Group necessary in order to make such Required Financial Information not misleading under the circumstances (giving effect to all supplements and
updates provided therewith), (ii) with respect to any audited financial statements included in the Required Financial Information, (a) the Company’s independent public accountants have not withdrawn their audit opinion with respect to
such audited financial statements (unless a new unqualified audit opinion has been issued in respect thereof by such accountants or another nationally recognized independent registered public accounting firm reasonably acceptable to
Buyer), and (b) the Company has not publicly announced its intention to restate, and the Company’s independent public accountants have not informed the Company that a restatement of, any such financial statements is required (it being
understood that the Required Financial Information will be deemed Compliant if such restatement is completed and the applicable Required Financial Information has been amended and updated, or the Company or its independent public
accountants have concluded that no restatement is required), and (iii) the financial statements and other historical financial information included in such Required Financial Information would not be deemed stale or otherwise be
unusable under customary practices for offerings and private placements of non-convertible high-yield debt securities under Rule 144A promulgated under the Securities Act and are sufficient to permit the Company’s independent public
accountants to issue a customary “comfort” letter (including “negative assurance” comfort and change period comfort, in each case, solely to the extent customary and available under applicable professional standards and the applicable
independent auditors’ customary policies for the applicable type, timing and structure of the Debt Financing) to the Debt Financing Sources when customarily required to be delivered, subject to their completion of customary procedures
(and such accountants have confirmed they are prepared to issue a comfort letter subject to their completion of customary procedures).
“Confidentiality Agreement” has the meaning set forth in Section 5.05.
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“Continuing Employee” has the meaning set forth in Section 5.07(a).
“Contract” means any loan or credit agreement, indenture, debenture, note, bond, mortgage, deed of trust, lease, sublease, license, hedge, derivative, contract or other agreement.
“Conversion Ratio” means the quotient of (i) the quotient of (A) the aggregate Equity Contributions divided by (B) the Merger Consideration (expressed as a price per share of Company Common
Stock), divided by (ii) the total number of issued and outstanding shares of Buyer held by the Investor Group immediately prior to the Effective Time.
“Copyright” is defined in the definition of Intellectual Property.
“Credit Agreement Financing Sources” is defined in the definition of Credit Facilities.
“Credit Facilities” means (i) the Fifth Amended and Restated Credit Agreement, dated as of May 1, 2015 as amended, restated, supplemented or otherwise modified from time to time including by that
certain Limited Consent and Thirteenth Amendment to Fifth Amended and Restated Credit Agreement, dated as of the date hereof, among the Company, Mercedes-Benz Financial Services USA LLC, Toyota Motor Credit Corporation and Daimler Truck
Financial Services USA, LLC (the “Company Credit Agreement,” and the lenders, agents, arrangers and other financing sources party thereto from time to time (including any that become party thereto pursuant to any Company Credit
Agreement Amendment or joinder), together with their respective Affiliates and their Affiliates’ respective Representatives, successors and assigns, in each case, in their capacities as such, the “Credit Agreement Financing Sources”),
(ii) the Amended and Restated Revolving Facility Agreement, dated January 31, 2023, among PAG International Limited, Sytner Group Limited, National Westminster Bank plc, BMW Financial Services (GB) Limited and the other parties thereto,
(iii) the Amended and Restated Revolving Loan and Security Agreement, dated as of June 29, 2021, between Penske Automotive Group, Inc. and Toyota Motor Credit Corporation, as amended or otherwise modified from time to time, (iv) Working
Capital Loan Agreement (Revolving), dated as of 18 November 2022, by and between Penske Australia Pty Ltd and Daimler Truck Financial Services Australia Pty Ltd, (v) Revolving Line of Credit Promissory Note, dated December 12, 2025, in
the principal amount of $200,000,000, made by PTG Mississauga Enterprises Limited Partnership, payable on demand to Daimler Truck Financial Services Canada Corporation, and (vi) Commercial Mortgage Facility Agreement, dated as of May
31, 2023, by and among Sytner Vehicles Limited, Sytner Group Limited, and Toyota Financial Services (UK) plc, as amended.
“Data Privacy Laws” means any Law related to the Processing of Personal Information.
“Data Security and Privacy Requirements” means, collectively, all of the following to the extent relating to the Processing of Personal Information or otherwise relating to privacy, data security or
security breach notification requirements and applicable to the Company Group or to the conduct of the businesses of the Company Group: (i) the Company Group’s public-facing privacy policies; (ii) all applicable Data Privacy Laws and
binding regulatory guidance, rules and requirements promulgated thereunder, each as amended from time to time; and (iii) applicable provisions of contracts by which the Company Group is bound.
“D&O Tail Policy” has the meaning set forth in Section 5.06(d).
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“Dealership Agreement” means any franchise, dealer, sales and service or similar agreement or arrangement between a member of the Company Group, on the one hand, and any Manufacturer or any of its
Affiliates, on the other hand, or arising under any applicable dealer franchise or motor vehicle dealer Law.
“Dealer Arrangements” means (i) Framework Agreements, Dealership Agreements, shipping, floorplan, wholesale, inventory, demonstrator, loaner, courtesy, service, rental or fleet vehicle financing
arrangements or any other similar agreements or arrangements between a member of the Company Group, on the one hand, and any Manufacturer or any of its Affiliates, on the other hand, or otherwise arising under any applicable dealer
franchise or motor vehicle dealer Law; (ii) any program, agreement or arrangement between one or more members of the Company Group and a third party provider of retail customer financing; and (iii) any program, agreement or arrangement
between one or more members of the Company Group and any third party providers of vehicle-related products or services sold by a member of the Company Group to customers in the ordinary course of business.
“Debt Commitment Letter” means the executed commitment letter dated as of the date hereof, from the Debt Financing Sources party thereto (including all exhibits, schedules and annexes thereto)
pursuant to which the Debt Financing Sources have committed, subject to the terms and conditions set forth therein, to provide the aggregate amounts set forth therein for the purposes of funding a portion of the Financing Uses (the “Debt
Financing”).
“Debt Financing” is defined in the definition of Debt Commitment Letter.
“Debt Financing Sources” means the Persons (including parties to any joinder agreement or amendments joining such Persons to the Debt Commitment Letter) that have committed to provide or arrange any
debt financing contemplated by the Debt Commitment Letter or alternative debt financings in connection with the Transactions; it being understood that the Credit Agreement Financing Sources shall not be considered Debt Financing Sources
in their capacities as lenders, agents, arrangers or other financing sources under the Credit Facilities (including any Company Credit Agreement Amendment).
“Debt Financing Sources Related Party” means the Debt Financing Sources together with their respective Affiliates, and the respective directors, officers, employees, partners, members, managers,
agents, advisors, controlling persons and the other representatives, successors and assigns of each of the foregoing; provided that no Credit Agreement Financing Source shall be a Debt Financing Sources Related Party in its
capacity as a lender, agent, arranger or other financing source under the Credit Facilities (including any Company Credit Agreement Amendment).
“Debt Offer” has the meaning set forth in Section 5.15(a).
“Debt Offer Documents” has the meaning set forth in Section 5.15(a).
“DGCL” has the meaning set forth in the Recitals.
“DOJ” means the U.S. Department of Justice.
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“Domain Name” is defined in the definition of Intellectual Property.
“DTC” has the meaning set forth in Section 2.02(b)(i).
“Effective Time” has the meaning set forth in Section 1.03.
“Encumbrance” means any pledge, lien, charge, mortgage, deed of trust, security interest, lease, license, condition, covenant, restriction, hypothecation, option to purchase or lease or otherwise
acquire any interest, right of first refusal or offer, conditional sale or other title retention agreement, adverse claim of ownership or use, easement, encroachment, right-of-way or other title defect, third-party right or encumbrance
of any kind or nature.
“Enforceability Exception” has the meaning set forth in Section 3.04(a).
“Environmental Law” means all present applicable Laws, as amended (including common law) as of the Closing Date that relate to the protection of the environment, natural resources, human health and
safety of employees or the public (in each case, as it relates to exposure to Hazardous Materials) or to any emission, discharge, generation, processing, storage, Release, or transportation of Hazardous Materials, including, all
requirements pertaining to reporting, licensing, permitting, investigation or remediation of emissions, discharges, Release or threatened Release of Hazardous Materials into the air, surface water, ground water, or land, or relating to
the processing, distribution, use, sale, treatment, storage, disposal, transport or handling of Hazardous Materials.
“Equity-Based Awards” means, collectively, Company RSUs, Company RSAs, Company Performance Awards and Company DSUs.
“Equity Commitment Letters” means the executed equity commitment letters dated as of the date hereof, from each of PC and Mitsui, including all annexes, exhibits, schedules and other attachments
thereto, pursuant to which each of PC and Mitsui, respectively, has committed to provide equity financing to Buyer in an amount set forth therein (the “Equity Financing”).
“Equity Commitment Parties” has the meaning set forth in the Recitals.
“Equity Contribution” means, with respect to any Investor Group Member, the amount of cash, if any, actually contributed by such Investor Group Member to the paid-in capital of Buyer immediately
prior to the Effective Time in exchange for shares of common stock of Buyer, excluding, for the avoidance of doubt, any debt financing.
“Equity Financing” is defined in the definition of Equity Commitment Letters.
“Equity Plans” means, collectively, the Penske Automotive Group, Inc. 2020 Equity Incentive Plan (the “2020 Equity Plan”) and the Amended and Restated Penske Automotive
Group, Inc. Non-Employee Director Compensation Plan dated December 9, 2020, in each case as may be amended from time to time.
“ERISA” means the Employee Retirement Income Security Act of 1974.
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“ERISA Affiliate” means any Person or entity that, together with the Company or any of its Subsidiaries, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.
“ESOP Component Plan” has the meaning set forth in Section 5.18(b).
“Exchange Act” means the Securities Exchange Act of 1934.
“Exchange Fund” has the meaning set forth in Section 2.02(a).
“Excluded Benefits” has the meaning set forth in Section 5.07(a).
“Excluded Information” means (i) pro forma financial statements, (ii) information regarding any post-Closing or pro forma cost savings, synergies, capitalization, ownership or other post-Closing pro
forma adjustments, desired to be incorporated into any information used in connection with the Debt Financing, (iii) description of all or any portion of the Financing, including any “description of notes,” “plan of distribution” or any
information customarily provided by a lead arranger, underwriter or initial purchaser in a customary information memorandum or offering memorandum for a secured bank financing or offering of high-yield debt securities, as applicable,
(iv) risk factors relating to all or any component of the Financing, (v) any other information required by Rules 3-09, 13-01 or 13-02 of Regulation S-X under the Securities Act, (vi) any compensation discussion and analysis or other
information required by Item 402 and Item 601 of Regulation S-K under the Securities Act and any executive compensation and related person disclosure rules related to SEC Release Nos. 33-8732A, 34-54302A and IC-27444A or any other
information customarily excluded from an offering memorandum for private placements of any non-convertible high-yield debt securities under Rule 144A promulgated under the Securities Act or (vii) any information with respect to any
Person other than the Company Group and the Joint Venture Entities.
“Excluded Shares” means all shares of Company Common Stock held by one or more of the Investor Group Members immediately prior to the Effective Time.
“Export-Import Laws” means applicable Laws relating to export, re-export, transfer or import controls, including the Export Administration Regulations administered by the U.S. Department of Commerce,
the International Traffic in Arms Regulations and customs and import laws administered by U.S. Customs and Border Protection.
“FDI Authorities” means CFIUS, the Minister of Industry and other Canadian Governmental Authorities charged with administering the Investment Canada Act, and any other comparable Governmental
Authorities with jurisdiction to review the Transactions.
“FDI Laws” means any applicable regulations and rules promulgated under applicable Laws that are designed or intended to screen, prohibit, restrict or regulate foreign investments into such
jurisdiction or country, including on the basis of cultural, public order or safety, privacy, national or economic security grounds.
“Financing” means the Debt Financing and the Equity Financing.
“Financing Costs” has the meaning set forth in Section 5.14(g).
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“Financing Uses” has the meaning set forth in Section 4.05(f).
“Framework Agreement” means any framework, agency, distribution or similar agreement or arrangement between a member of the Company Group, on the one hand, and any Manufacturer or any of its
Affiliates, on the other hand, that governs or relates to the ownership, operation, acquisition, or disposition of multiple dealerships, franchises or similar arrangements by the Company Group, excluding Dealership Agreements.
“Fraud” means the actual, knowing and intentional common law fraud (and not a constructive fraud, negligent misrepresentation or omission or any form of fraud premised on recklessness or negligence)
of any Person as finally determined by a court of competent jurisdiction in the making of the representations and warranties set forth in Article III and Article IV.
“FTC” means the U.S. Federal Trade Commission.
“Fundamental Representations” has the meaning set forth in Section 6.02(a).
“GAAP” means generally accepted accounting principles in the U.S., consistently applied.
“Government Contract” means any material Contract between a member of the Company Group, on the one hand, and (i) a Governmental Authority or (ii) any prime contractor of a Governmental Authority
that, to the Knowledge of the Company, is acting in its capacity as a prime contractor; provided that a task, purchase, work or delivery order under a Government Contract will not constitute a separate Government Contract, for
purposes of this definition, but will be part of the Government Contract to which it relates.
“Governmental Authority” means any government, court, regulatory or administrative agency, commission or authority or other legislative, executive or judicial governmental entity (in each case
including any self-regulatory organization), whether federal, state or local, domestic, foreign or multinational, including each of the Transportation Regulators.
“Guarantor” has the meaning set forth in the Recitals.
“Hazardous Materials” means any substance, material, or waste defined, listed or regulated as “hazardous,” “toxic,” a “pollutant,” “contaminant,” or words of similar import under any Environmental
Law, including per- and polyfluoroalkyl substances.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“Indebtedness” means, with respect to any Person, (i) indebtedness for borrowed money, whether current or funded, secured or unsecured, (ii) debt securities (including notes, bonds, debentures or
other similar instruments) or warrants, (iii) any other rights to acquire any debt securities of the Company or any of its Subsidiaries, (iv) guarantees of any of the indebtedness or the debt securities of another Person or any “keep
well” or other agreement to maintain any financial statement condition of another Person, or (v) obligations with respect to leases required to be accounted for as capital or finance leases in accordance with GAAP or recorded as capital
or finance leases in the consolidated financial statements of the Company.
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“Indemnitee” has the meaning set forth in Section 5.06(a).
“Indemnitees” has the meaning set forth in Section 5.06(a).
“Intellectual Property” means all of the following, in each case in any jurisdiction throughout the world: (i) any patent or patent applications, patentable inventions, together with, all extensions,
adjustments, renewals, divisions, continuations, continuations-in-part, reissues and re-examinations thereof (collectively, “Patents”); (ii) any trademark, service marks, trade dress, logos, brand names, corporate names,
taglines, and any other indicia of origin, together with the goodwill associated with any of the foregoing, and any application, registration or renewal thereof (collectively, “Trademarks”); (iii) any social media identifiers
(such as an Instagram® handle) and related accounts; (iv) any and all copyrightable works of authorship, including registered and unregistered copyrights in both published works and unpublished works, and all copyright applications or
registrations thereof (collectively, “Copyrights”); (v) any internet domain name and uniform resource locators (“Domain Name”); and (vi) any trade secret, confidential know-how, concepts, methods, processes,
specifications, inventions, databases, customer lists, mailing lists or business plans, and other confidential and proprietary information (collectively, “Trade Secrets”).
“Intervening Event” means any event, effect, development or change in circumstances with respect to the Company Group that (i) becomes known, or the consequences of which become known, to the Special
Committee after execution and delivery of this Agreement and prior to the Company Stockholder Approval and (ii) was not reasonably foreseeable (with respect to substance or timing) by the Special Committee as of or prior to the
execution and delivery of this Agreement; provided that (A) the receipt of a Takeover Proposal or a Superior Proposal or any inquiry or communications or matters relating thereto, (B) the fact, in and of itself, that the Company
meets or exceeds any internal or analysts’ expectations or projections, or (C) any changes or lack thereof, in and of themselves, after the date hereof in the market price or trading volume of the shares of Company Common Stock will
not, in each case, be deemed to constitute an Intervening Event.
“Investor Group” means Penske Corporation, a Delaware corporation (“PC”), Penske Automotive Holdings Corp., a Delaware corporation and wholly owned subsidiary of PC (“PAHC” and, together with
PC, collectively the “Penske Parties” and each a “Penske Party”), Mitsui & Co., Ltd., a Japanese company (“Mitsui”), and Mitsui & Co. (U.S.A.), Inc., a New York corporation and wholly owned subsidiary of
Mitsui (“Mitsui USA” and, together with Mitsui, collectively the “Mitsui Parties” and each a “Mitsui Party”). Each of the foregoing members of the Investor Group being an “Investor Group Member.”
“Investor Group Affiliates” means the executive officers and directors of any Investor Group Member.
“Investor Group Member” has the meaning set forth in the definition of “Investor Group.”
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“IRS” means the U.S. Internal Revenue Service.
“IT Assets” means computer and other information technology systems, including hardware, software, computer systems, databases, electronic data processing, information, record keeping,
communications, telecommunications, networks, interfaces, platforms, servers, peripherals, including any outsourced systems and processes, and documentation, reference and resource materials relating thereto, owned, licensed, leased or
otherwise used by the Company Group.
“Joint Venture Entity” has the meaning set forth in Section 3.03(c).
“Judgment” has the meaning set forth in Section 3.08.
“JV Interest” has the meaning set forth in Section 3.03(c).
“Knowledge” means (i) with respect to the Company, the actual knowledge after reasonable inquiry, as of the date of this Agreement, of the individuals listed on Section
9.01(a)-1(A) of the Company Disclosure Letter, and (ii) with respect to Buyer, the actual knowledge after reasonable inquiry, as of the date of this Agreement, of any of the individuals listed on Section 9.01(a)-1(B) of the Buyer Disclosure Letter.
“KSOP Amendment” has the meaning set forth in Section 5.18(c).
“KSOP Adequate Consideration Opinion” has the meaning set forth in Section 5.18(b).
“Law” means any law (including common law), statute, ordinance, act, code, rule, directive, determination or regulation, enacted, issued or promulgated by any Governmental Authority.
“Leased Real Property” means any real property that is leased, subleased, sub-subleased or licensed by any member of the Company Group from any third party as lessee, sublessee or other occupant with
an aggregate base rental payment for the calendar year ending December 31, 2026 in excess of $4,000,000.
“Limited Guarantee” has the meaning set forth in the Recitals.
“Mitsui” has the meaning set forth in the definition of “Investor Group.”
“Mitsui Parties” has the meaning set forth in the definition of “Investor Group.”
“Mitsui USA” has the meaning set forth in the definition of “Investor Group.”
“Malicious Code” has the meaning set forth in Section 3.15(c).
“Manufacturers” means any Person that manufactures, assembles, produces, distributes or imports motor vehicles or motor vehicle parts and with which a member of the Company Group has a franchise,
dealer, sales and service, agency or distribution relationship.
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“Material Adverse Effect” means any effect, change, event or occurrence that has, or would be reasonably expected to have, a material adverse effect on the business, results of operations or
financial condition of the Company Group, taken as a whole; provided, however, that none of the following, and no effect, change, event or occurrence arising out of, or resulting from, the following, will constitute or
be taken into account in determining whether a Material Adverse Effect has occurred, is continuing or would reasonably be expected to occur: any effect, change, event or occurrence (A) generally affecting the industry in which the
Company Group operates or the economy, political conditions, credit or financial or capital markets generally, in the U.S. or elsewhere in the world, including changes in interest or exchange rates, monetary policy or inflation, or (B)
to the extent arising out of, resulting from or attributable to (1) changes or prospective changes in Law or in GAAP or in accounting standards, in each case after the date of this Agreement, or any changes in the interpretation or
enforcement of any of the foregoing, in each case after the date of this Agreement, or any changes in general legal, regulatory, political or social conditions, in each case after the date of this Agreement, (2) the negotiation,
execution, announcement or performance of this Agreement or the consummation of the Transactions (other than any effect, change, event or occurrence resulting from a breach of this Agreement by the Company Group) (other than for
purposes of any representation or warranty contained in Section 3.04(e) and Section 3.05), (3) acts of war (whether or not declared), military activity, sabotage, civil disobedience, terrorism,
cyberattacks, or any escalation or worsening of any such acts of war (whether or not declared), military activity, sabotage, civil disobedience, terrorism or cyberattacks, (4) pandemics, earthquakes, fires, floods, hurricanes, tornados
or other natural disasters, weather-related events, casualty events, force majeure events or other comparable events, (5) any action taken by the Company Group that is required by this Agreement or at Buyer’s written request, (6) any
change or prospective change in the Company’s credit ratings, (7) any decline in the market price, or change in trading volume, of the shares of the Company, (8) any failure to meet any internal or public projections, forecasts,
guidance, estimates, milestones, budgets or internal or published financial or operating predictions of revenue, earnings, cash flow or cash position, (9) any Transaction Litigation or stockholder litigation (or a derivative or similar
claim) or other Action brought in connection with this Agreement or any of the Transactions, including breach of fiduciary duty or inadequate disclosure claims, or (10) any breach of this Agreement by Buyer (it being understood that the
exceptions in clauses (6), (7) and (8) will not prevent or otherwise affect a determination that the underlying cause of any such change, decline or failure referred to therein (if not otherwise falling within
any of the exceptions provided by clause (A) and clauses (B)(1) through (9)) is a Material Adverse Effect); provided further, however, that any effect, change, event or occurrence referred
to in clause (A) or clauses (B)(1), (3) or (4) may be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect to the extent such effect,
change, event or occurrence has a disproportionate adverse effect on the Company Group, taken as a whole, as compared to other participants in the industry in which the Company Group operates (in which case only the incremental
disproportionate impact or impacts may be taken into account in determining whether there has been, is occurring or would reasonably be expected to be, a Material Adverse Effect).
“Material Contract” has the meaning set forth in Section 3.17(a).
“Maximum Amount” has the meaning set forth in Section 5.06(d).
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“Merger” has the meaning set forth in the Recitals.
“Merger Consideration” has the meaning set forth in Section 2.01(c).
“Merger Transactions” means, collectively, the Transactions, including the Merger, but excluding the Financing.
“Moelis” has the meaning set forth in Section 3.21.
“Notice Period” has the meaning set forth in Section 5.02(e).
“NYSE” has the meaning set forth in Section 3.05.
“OFAC” is defined in the definition of Sanctioned Person.
“Open Source Software” means any computer software program whose source code is published and made available under a license meeting the Open Source Definition (as promulgated by the Open Source
Initiative) or the Free Software Definition (as promulgated by the Free Software Foundation).
“Other Required Buyer Filing” has the meaning set forth in Section 5.12(g).
“Other Required Company Filing” has the meaning set forth in Section 5.12(f).
“Outside Date” has the meaning set forth in Section 7.01(b)(i).
“Owned Company Intellectual Property” means all Intellectual Property owned or purported to be owned by the Company Group that is material to the conduct of the business of the Company Group, taken
as a whole, as currently conducted.
“Owned Real Property” means all land, together with all buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto, owned
by any member of the Company Group.
“PAHC” has the meaning set forth in the definition of “Investor Group”.
“PC” has the meaning set forth in the definition of “Investor Group”.
“Penske Parties” has the meaning set forth in the definition of “Investor Group”.
“Party” has the meaning set forth in the Preamble.
“Patent” is defined in the definition of Intellectual Property.
“Paying Agent” has the meaning set forth in Section 2.02(a).
“Permits” has the meaning set forth in Section 3.09(b).
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“Permitted Encumbrances” means (i) easements, rights-of-way, encroachments, restrictions, conditions and other similar non-monetary Encumbrances incurred or suffered in the ordinary course of
business and which, individually or in the aggregate, do not and would not reasonably be expected to materially impair the use or utility of the applicable real property or otherwise materially impair the present or reasonably
contemplated business operations at such location, (ii) zoning, entitlement, building and other land use regulations imposed by Governmental Authorities having jurisdiction over such real property which are not violated by the current
use and operation of such real property or any violation of which would not materially impair the use or utility of the applicable real property or otherwise materially impair the present or reasonably contemplated business operations
at such location, (iii) Encumbrances under any Owned Real Property or Leased Real Property with respect to any rights of first refusal, rights of first offer, purchase options or conditional sale or other title retention agreement, (iv)
any Encumbrance, defect, irregularity or imperfection of title that is or would be disclosed by an accurate survey or current title report or that is reflected as an exception in any title insurance policy or title commitment, each of
which could not materially impair the present or reasonably contemplated business operations at such location, (v) Encumbrances for Taxes not delinquent or the amount or validity of which are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established in accordance with GAAP, (vi) mechanics’, materialmen’s, carriers’, workmen’s, warehouseman’s, repairmen’s, landlords’ and similar Encumbrances arising or incurred in
the ordinary course of business for amounts not yet due and payable, or the amount or validity of which is being contested in good faith by appropriate proceedings by the Company Group and for which adequate reserves have been
established in accordance with GAAP, (vii) pledges or deposits under workmen’s compensation Laws, unemployment insurance Laws or similar legislation, or good-faith deposits in connection with bids, tenders, Contracts (other than for the
payment of Indebtedness) or leases to which such entity is a party, or deposits to secure public or statutory obligations of such entity or to secure surety or appeal bonds to which such entity is a party, or deposits as security for
contested Taxes, in each case incurred or made in the ordinary course of business, (viii) Encumbrances which are imposed on the underlying fee or other interest in real property subject to a Company Lease, (ix) licenses granted to third
parties in the ordinary course of business, (x) Encumbrances discharged at or prior to the Effective Time, (xi) Encumbrances set forth in Section 9.01(a)-3 of the Company Disclosure Letter, (xii) Encumbrances securing
Indebtedness or other obligations outstanding under the Credit Facilities or under any other credit, term loan, real estate, mortgage, deed of trust or note purchase facility of the Company Group in effect on the date of this Agreement,
and any renewal, extension, refinancing or replacement of any of the foregoing not prohibited by this Agreement, (xiii) Encumbrances securing floorplan, wholesale, inventory, demonstrator, loaner, courtesy, service, rental or fleet
vehicle financing arrangements (including any such arrangements with any Manufacturer or any of its finance Affiliates), and Encumbrances on vehicles, parts or other inventory held on consignment, bailment or similar arrangements, in
each case, in the ordinary course of business, (xiv) purchase money Encumbrances, Encumbrances securing capitalized or finance lease obligations and Encumbrances securing insurance premium financing, in each case incurred in the
ordinary course of business, and precautionary Uniform Commercial Code or other similar filings in respect of operating leases, consignments or bailments, (xv) Encumbrances, rights of first refusal, rights of first offer, options or
rights to purchase, buy-sell rights, repurchase rights, capital and working capital requirements, restrictions on the pledge or transfer of equity interests or assets and other similar rights or restrictions arising under any Dealer
Arrangement, (xvi) bankers’ liens, rights of setoff and Encumbrances arising in the ordinary course of business in favor of depositary banks or securities intermediaries under customary deposit account, cash management, netting or
pooling arrangements, and Encumbrances securing obligations under hedging or other derivative arrangements entered into in the ordinary course of business and not for speculative purposes, (xvii) Encumbrances, holdbacks, chargeback
obligations and reserve arrangements arising in the ordinary course of business in respect of customer deposits or arrangements with finance, insurance, extended service contract, warranty or similar providers, (xviii) transfer
restrictions and other Encumbrances on the equity or assets of any Joint Venture Entity set forth in any joint venture agreement or in the organizational documents of any Joint Venture Entity, (xix) restrictions on transfer imposed by
applicable federal, state or foreign securities Laws, and (xx) such other non-monetary Encumbrances that do not materially detract from the value of or materially impair the existing use of the asset or property affected by such
Encumbrance.
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“Person” means an individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization or any other entity, including a Governmental
Authority.
“Personal Information” means any (i) information that identifies or could reasonably be used to identify an individual, and (ii) any data that is defined as personal information, personal data,
personally identifying information or equivalent term under any applicable Data Privacy Laws.
“Processing” means the access, collection, use, processing, storage, sharing, distribution, transfer, disclosure, destruction or disposal of Personal Information.
“Proxy Statement” has the meaning set forth in Section 3.05.
“Recharacterized Plan” has the meaning set forth in Section 5.18(c).
“Registered Company Intellectual Property” means all Patent issuances and applications therefor, Trademark registrations and applications therefor, Copyright registrations and applications therefor
and Domain Name registrations included in the Owned Company Intellectual Property.
“Related Party” means a Company Related Party or a Buyer Related Party, as applicable.
“Release” means any spilling, emitting, emptying, escaping, pouring, leaking, pumping, injecting, disposal, dumping, discharging, migrating or leaching into the environment (including indoor and
outdoor air, soil, sediment, surface water and groundwater).
“Representatives” means, with respect to any Person, its officers, directors, employees, consultants, agents, financial advisors, investment bankers, attorneys, accountants, other advisors,
Affiliates and other representatives.
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“Required Financial Information” means (i) audited annual and unaudited interim historical financial statements, audit reports and other historical financial data of the Company Group of the type and
form customarily included in an offering memorandum for a private placement of non-convertible high-yield debt securities pursuant to Rule 144A promulgated under the Securities Act and required by the Debt Commitment Letter as in effect
on the date of this Agreement, including applicable comparison periods and (ii) (A) such other historical financial data and other information regarding the Company Group as may be reasonably requested by Buyer solely to the extent
customarily included in (I) such an offering memorandum or (II) marketing documents used to syndicate credit facilities of the type contemplated by the Debt Commitment Letter and required by the Debt Commitment Letter as in effect on
the date of this Agreement or (B) as otherwise necessary to permit the Company’s independent public accountants (and any other accountant to the extent that financial statements audited or reviewed by such accountants are or would be
included in such offering memorandum) to issue customary “comfort” (including “negative assurance” comfort and change period comfort, in each case, solely to the extent customary and available under applicable professional standards and
the applicable independent auditors’ customary policies for the applicable type, timing and structure of the Debt Financing), together with drafts of customary comfort letters that such independent public accountants are prepared to
deliver upon the “pricing” of any high-yield bonds being issued in connection with the Debt Financing, in each case with respect to the historical financial information to be included in such offering memorandum, in each case of clauses
(i) and (ii), assuming that such offering or syndication of the credit facilities were consummated at the same time during the Company’s fiscal year as such offering or syndication will be made, (iii) solely to the extent
obtainable through the Company Group’s compliance with Section 5.14(a)(v), and subject in all respects to customary practice, applicable auditor policies and the Company Group’s reasonable best efforts obligations
thereunder, customary auditors’ consents and draft customary comfort letters with respect to historical financial information of the Company Group included in any offering memorandum used in connection with the Debt Financing and (iv)
the authorization letters referred to in Section 5.14(a)(vii). Notwithstanding anything to the contrary in clauses (i) and (ii) of this definition, Required Financial Information will not include any
Excluded Information. For the avoidance of doubt, no comfort letter or certificate will be required with respect to any Buyer-prepared pro forma information, synergies or financing terms.
“Required Regulatory Approvals” has the meaning set forth in Section 6.01(b).
“Requisite Stockholder Approval” has the meaning set forth in Section 3.04(d).
“Restraints” has the meaning set forth in Section 6.01(a).
“Sanctioned Jurisdiction” means any country or region that is the subject of a comprehensive country-wide or region-wide Sanctions including Cuba, Iran, North Korea, Syria (prior to July 1, 2025),
and the Crimea region, so-called Donetsk People’s Republic, and so-called Luhansk People’s Republic of Ukraine.
“Sanctioned Person” means any Person who is the target of Sanctions, including by virtue of being (i) listed on any Sanctions-related list of designated or blocked persons, including the list of
Specially Designated Nationals and Blocked Persons maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), (ii) a Governmental Authority of, resident in, or organized under the Laws of a
Sanctioned Jurisdiction, or (iii) 50% or more owned, directly or indirectly, by any of the foregoing.
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“Sanctions” means any applicable economic or financial sanctions or trade embargoes administered or enforced by (i) the U.S. government, including by OFAC and the U.S. Department of State, (ii) the
United Nations Security Council, (iii) the European Union or any member state, (iv) His Majesty’s Treasury, or (v) any other relevant sanctions authority.
“Sarbanes-Oxley Act” means the U.S. Sarbanes-Oxley Act of 2002.
“Schedule 13E-3” has the meaning set forth in Section 5.12(a).
“SEC” has the meaning set forth in Section 3.05.
“Secretary of State of Delaware” has the meaning set forth in Section 1.03.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Senior Subordinated Notes” has the meaning set forth in Section 5.15(a).
“Senior Subordinated Notes Indenture” has the meaning set forth in Section 5.15(a).
“Share Certificate” has the meaning set forth in Section 2.01(c).
“Significant Manufacturer” means the five largest Manufacturers, based on dealership revenue of the Company Group with such Manufacturers in fiscal year 2025.
“Solvent” has the meaning set forth in Section 4.07.
“Special Committee” has the meaning set forth in the Recitals.
“Special Committee Recommendation” has the meaning set forth in the Recitals.
“Subsidiary”, when used with respect to any Person, means (i) any corporation, limited liability company, partnership, association, trust or other entity of which securities or other ownership
interests representing more than 50% of the ordinary voting power (or, in the case of a partnership, more than 50% of the general partnership interests) are, as of such date, owned by such Person or one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person or (ii) of which such Person or one of its Subsidiaries is a general partner or manager; provided that, for purposes of this Agreement and the Ancillary
Documents, the Company and its Subsidiaries will not be deemed to be Subsidiaries of any Investor Group Member.
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“Superior Proposal” means a bona fide written Takeover Proposal that did not result from a material breach of Section 5.02(a) made after the
date of this Agreement by a third Person (with references in the definition of Takeover Proposal to 20% being deemed to be replaced with references to 50%) that the Company Board (acting on the recommendation of the Special Committee)
or the Special Committee determines in good faith, after consultation with its outside legal counsel, and after taking into account such legal, financial, regulatory, likelihood of consummation and other aspects of such proposal as the
Company Board (acting on the recommendation of the Special Committee) or the Special Committee deems relevant, contemplates a transaction that is reasonably capable of being consummated in accordance with its terms and if so
consummated, would result in a transaction that is more favorable to the Company Stockholders, including the Unaffiliated Company Stockholders, from a financial point of view than the Merger (after taking into account any revisions to
the terms and conditions of this Agreement proposed by Buyer pursuant to Section 5.02(e)).
“Support Agreements” has the meaning set forth in the Recitals.
“Surviving Corporation” has the meaning set forth in the Recitals.
“Takeover Law” has the meaning set forth in Section 3.20(b).
“Takeover Proposal” means any inquiry, proposal, offer or indication of interest (other than an inquiry, proposal, offer or indication of interest by Buyer or the Investor Group) relating to (i) a
merger, joint venture, partnership, exclusive license, consolidation, dissolution, liquidation, tender offer, share exchange, recapitalization, reorganization, spin-off, plan of arrangement, asset purchase, business combination,
acquisition or any other similar transaction (or series of related transactions) involving the Company or any of its Subsidiaries by any third Person or group or (ii) a direct or indirect acquisition, exchange, transfer or other similar
transaction (or series of related transactions) by any third Person or group of assets or equity securities of the Company or any of its Subsidiaries that, in the case of clauses (i) or (ii), if consummated would result
in any third Person or group, directly or indirectly, becoming the beneficial owner of 20% or more of the (A) total voting power of any class of equity securities of the Company or (B) consolidated net revenues, consolidated net income
or consolidated total assets of the Company in each case of the foregoing clauses (A) and (B) of this definition, after giving effect to the consummation of the transaction contemplated by such proposal, offer, inquiry
or indication of interest.
“Takeover Proposal Notice” has the meaning set forth in Section 5.02(e).
“Tax Returns” mean any reports, returns, declarations, elections, disclosures, estimates, information returns, filings, claims for refund or statements filed or required to be filed with a
Governmental Authority in connection with Taxes, including any schedules or attachments thereto, and any amendments to any of the foregoing.
“Taxes” means all taxes, imposts, levies, fees, withholdings or other like assessments or charges, in each case in the nature of a tax, imposed by a Governmental Authority, together with all
interest, assessments, penalties and additions imposed with respect to such amounts, including taxes imposed on, or measured by, income, franchise, profits or gross receipts, and ad valorem, value added, capital gains, sales, goods and
services, use, real or personal property, capital stock, license, branch, payroll, estimated, withholding, employment, social security (or similar), unemployment, compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, and transfer and gains taxes.
110
“Trade Secret” is defined in the definition of Intellectual Property.
“Trademark” is defined in the definition of Intellectual Property.
“Transaction Expenses” has the meaning set forth in Section 8.11.
“Transaction Litigation” has the meaning set forth in Section 5.08(a).
“Transaction Regulatory Filing” means, collectively, all regulatory filings required to be made pursuant to the HSR Act, any other Antitrust Laws, and the laws and regulations administered by the FDI
Authorities.
“Transactions” means the transactions contemplated by this Agreement, including the Merger.
“Transportation Regulators” means any U.S. federal, state, local or non-U.S. Governmental Authority that has jurisdiction over the licensing, registration, permitting, supervision or regulation of
motor vehicle dealers, motor vehicle franchises, motor vehicle sales, leasing, servicing or repair operations, vehicle auctions, vehicle wholesale activities, vehicle titling or registration, consumer motor vehicle financing or leasing,
fleet sales or related automotive retail operations, including any state motor vehicle department, motor vehicle commission, dealer licensing board, department of transportation, department of revenue or similar Governmental Authority.
“Treasury Regulations” means the final and temporary Treasury regulations issued under the Code.
“Trustee” has the meaning set forth in Section 5.15(a).
“Unaffiliated Company Stockholder” means the holders of the outstanding Company Common Stock, excluding (a) the Investor Group and the Investor Group Affiliates and their respective Affiliates and
family members, (b) those members of the Company Board who are not members of the Special Committee, and (c) any Person that the Company has determined to be an “officer” of the Company within the meaning of Section 16a-1(f) of the
Exchange Act.
“U.S.” means United States of America.
“Willful Breach” means a breach of any representation or warranty or failure to perform or comply with any covenant, in each case that is the consequence of a deliberate action
or omission (including a failure to cure circumstances) by a Party with the knowledge that the taking of, or failure to take, such act would, or would reasonably be expected to, result in a breach of this Agreement.
[signature page follows]
111
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered as of the date first above written.
|
MOTOWN ACQUISITION CORP.
|
|||
|
by
|
|||
|
/s/ J. Patrick Conroy
|
|||
|
Name: J. Patrick Conroy
|
|||
|
Title: Vice President
|
|||
[Signature Page to Agreement and Plan of Merger]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered as of the date first above written.
|
MOTOWN ACQUISITION CORP.
|
|||
|
by
|
|||
|
/s/ Hidenori Yamano
|
|||
|
Name: Hidenori Yamano
|
|||
|
Title: Vice President
|
|||
[Signature Page to Agreement and Plan of Merger]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and delivered as of the date first above written.
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|||
|
by
|
|||
|
/s/ Michelle Hulgrave
|
|||
|
Name: Michelle Hulgrave
|
|||
|
Title: Executive Vice President and
|
|||
|
Chief Financial Officer
|
|||
[Signature Page to Agreement and Plan of Merger]
Exhibit A
FORM OF FIFTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF SURVIVING CORPORATION
FIFTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PENSKE AUTOMOTIVE GROUP, INC.
A STOCK CORPORATION
The present name of the Corporation is Penske Automotive Group, Inc. and the original name of the Corporation was EMCO Motor Holdings, Inc. The Corporation’s original Certificate of
Incorporation was filed with the Secretary of State of Delaware on December 6, 1990.
This Fifth Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242, 245 and 251 of the General Corporation Law of the
State of Delaware in connection with the merger of Motown Acquisition Corp., a Delaware corporation, with and into the Corporation, with the Corporation continuing as the surviving company of such merger.
The text of the Certificate of Incorporation of the Corporation is hereby amended and restated in its entirety to read as follows:
FIRST: The name of the corporation (the “Corporation”) is:
Penske Automotive Group, Inc.
SECOND: The address of the Corporation’s registered office in the State of Delaware is 1209 Orange Street in the City of Wilmington, County of New Castle, Delaware 19801. The name of
the Corporation’s registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the
“DGCL”).
FOURTH: The total number of shares of stock which the Corporation is authorized to issue is one hundred million (100,000,000) shares of Common Stock, par value of $0.0001 per share.
FIFTH: Elections of directors need not be by written ballot except and to the extent provided in the bylaws of the Corporation.
SIXTH: The Corporation shall indemnify to the fullest extent permitted under and in accordance with the laws of the State of Delaware any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that that person is or was, or has agreed to become, a director,
officer, trustee, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, trustee, employee or agent of or in any other capacity with another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by that person in connection with such action, suit or proceeding if that
person acted in good faith and in a manner that person reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful.
Expenses incurred in defending a civil or criminal action, suit or proceeding shall (in the case of any action, suit or proceeding against a director or officer of the Corporation) or
may (in the case of any action, suit or proceeding against a trustee, employee or agent) be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors upon
receipt of an undertaking by or on behalf of the indemnified person to repay such amount if it shall ultimately be determined that that person is not entitled to be indemnified by the Corporation as authorized in this Article Sixth.
The indemnification and other rights set forth in this Article Sixth shall not be exclusive of any provisions with respect thereto in the bylaws of the Corporation or any other contract
or agreement between the Corporation and any director, officer, trustee, employee or agent of the Corporation, shall continue as to a person who has ceased to be a director, officer, trustee, employee or agent, and shall inure to the
benefit of the heirs, executors and administrators of such person. The Corporation may enter into agreements with any such person providing for indemnification and advancement of expenses greater than that provided in this Article
Sixth.
Neither the amendment nor repeal of this Article Sixth, nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article Sixth, shall eliminate or
reduce the effect of this Article Sixth in respect of any matter occurring before such amendment, repeal or adoption of an inconsistent provision or in respect of any cause of action, suit or claim relating to any such matter which
would have given rise to a right of indemnification or right to receive expenses pursuant to this Article Sixth, if such provision had not been so amended or repealed or if a provision inconsistent therewith had not been so adopted.
SEVENTH: To the fullest extent permitted by the DGCL, as the same presently exists or may hereafter be amended, no director or officer shall be personally liable to the Corporation or
to any stockholder for monetary damages for breach of fiduciary duty as a director or officer, except for any matter in respect of which (a) such director shall be liable under Section 174 of the DGCL or any amendment thereto or
successor provision thereto, (b) such officer shall be liable in any action by or in the right of the Corporation, or (c) such director or officer shall be liable by reason that, in addition to any and all other requirements for
liability, that person (A) shall have breached their duty of loyalty to the Corporation or its stockholders, (B) shall not have acted in good faith or, in failing to act, shall not have acted in good faith, (C) shall have acted in a
manner involving intentional misconduct or a knowing violation of law or, in failing to act, shall have acted in a manner involving intentional misconduct or a knowing violation of law or (D) shall have derived an improper personal
benefit.
Any repeal or modification of this Article Seventh shall not adversely affect any right or protection of a director or officer with respect to any act or omission occurring prior to
such repeal or modification. If the DGCL is amended after the date of incorporation to authorize corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or
officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
EIGHTH: In furtherance and not in limitation of the rights, powers, privileges and discretionary authority granted or conferred by the DGCL, the Board of Directors is expressly
authorized to make, alter, amend or repeal the bylaws of the Corporation, without any action on the part of the stockholders, but the stockholders may make additional bylaws and may alter, amend or repeal any bylaw whether adopted by
them or otherwise. The Corporation may in its bylaws confer powers upon the Board of Directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board of Directors by applicable law.
NINTH: The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, and other
provisions authorized by the DGCL may be added or inserted, in the manner now or hereafter prescribed herein or by applicable law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or
any other persons whomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to this reservation.
TENTH: The Corporation hereby expressly states that it will not be bound or governed by, or otherwise subject to, Section 203 of the DGCL.
Exhibit 4.1
CERTAIN INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT AND REPLACING IT WITH [***] BECAUSE IT IS BOTH: (I) NOT MATERIAL AND (II) THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
EXECUTION VERSION
LIMITED CONSENT AND THIRTEENTH AMENDMENT TO
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
This LIMITED CONSENT AND THIRTEENTH AMENDMENT TO FIFTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 15, 2026 (this “Amendment”),
is to the Fifth Amended and Restated Credit Agreement (as heretofore amended, the “Credit Agreement”), dated as of May 1, 2015 among PENSKE AUTOMOTIVE GROUP, INC., a Delaware corporation (the “Company”),
various financial institutions party thereto (the “Lenders”) and MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as agent for the Lenders (the “Agent”). Unless otherwise defined herein, terms defined in the Credit Agreement are used
herein as defined in the Credit Agreement (including as amended hereby).
WHEREAS, the Company has notified the Agent and the Lenders that it intends to (i) enter into that certain Agreement and Plan of Merger, dated as of the date hereof (as
amended, restated, supplemented or otherwise modified from time to time, the “Merger Agreement”), pursuant to which, should all relevant closing conditions be satisfied, Motown Acquisition Corp., a Delaware corporation (“MergerCo”)
will be merged with and into the Company, with the Company being the entity surviving the Merger (the “Merger”), and (ii) at the effective time of the Merger, consummate the Public Shareholder Buyout Transactions;
WHEREAS, the Company has requested that the Agent and the Lenders (i) consent to the Public Shareholder Buyout Transactions, (ii) agree to a conditional increase of the
Revolving Commitment Amount by an aggregate of up to $900,000,000, which will include an Overadvance Commitment Amount of up to $400,000,000, to become effective only upon satisfaction of the conditions set forth in Section 2.1.2 of the Amended
Credit Agreement (as defined below) and (iii) further amend the Credit Agreement as set forth herein; and
WHEREAS, on the terms and conditions set forth herein, the Agent and the Lenders party hereto constituting all Lenders under the Credit Agreement have agreed to consent to the
Public Shareholder Buyout Transactions and amend the Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties
hereto agree as follows:
SECTION 1 LIMITED CONSENT. Subject to and in
accordance with the terms and conditions set forth herein, notwithstanding anything in the Credit Agreement or any other Loan Document, the Agent and the Lenders party hereto hereby consent to the Public Shareholder Buyout Transactions,
consummated in all material respects in accordance with the terms and conditions of the Merger Agreement, and waive non-compliance (if any) with the Credit Agreement, including, but not limited to, Sections 9.10, 9.11, 9.12
and 9.14, to the extent necessary to permit the same without giving rise to an Event of Default under the Credit Agreement; provided that such consent shall be effective only if the Public Shareholder Buyout Transactions are
consummated on or before five (5) Business Days after the Outside Date (as defined in the Merger Agreement as in effect on the date hereof); provided, further, that the Merger Agreement shall not have been amended, or
supplemented or any provision or condition therein waived, nor any consent granted, by the Company, if such amendment, supplement, waiver or consent would be materially adverse to the interests of the Lenders (in their capacities as such,)
without the prior written consent of the Lenders (such consent not to be unreasonably withheld, delayed or conditioned) (provided that each Lender shall be deemed to have consented to such amendment, supplement, waiver or consent
unless they shall object thereto within two (2) Business Days after receipt of written notice of such amendment, supplement, waiver or consent) (it being understood and agreed that (a) any amendment, supplement, waiver, consent or other
modification that decreases the purchase price in respect of the Merger shall be deemed not to be materially adverse to the interests of the Lenders so long as any such decrease in purchase price (together with any other decrease in purchase
price pursuant to any other amendment, waiver, consent or other modification) is less than 10% of the total purchase price, and (b) any amendment, supplement, waiver, consent or other modification that increases the purchase price in respect
of the Merger shall be deemed not to be materially adverse to the interests of the Lenders so long as such increase is funded by issuance by MergerCo of common equity or such increase is pursuant to any working capital and/or purchase price
(or similar) adjustment provision set forth in the Merger Agreement. The parties hereto agree that the consent set forth in this Section shall be limited precisely as written and, except as expressly set forth in this Section, shall not be
deemed to be a consent to or amendment, waiver or modification of any other term or condition of the Credit Agreement or any other Loan Document
SECTION 2 AMENDMENT. Subject to and in accordance
with the terms and conditions set forth herein, and upon the Thirteenth Amendment Effective Date (as defined below), the Credit Agreement and Schedule 2.1 thereof (excluding any other annexes, exhibits and schedules thereto), as in effect
immediately prior to the effectiveness of this Amendment, are hereby amended and replaced in their entirety in the form set forth on Exhibit A hereto.
SECTION 3 REPRESENTATIONS AND WARRANTIES. The
Company represents and warrants to the Agent and the Lenders that, as of the Thirteenth Amendment Effective Date: (a) the representations and warranties made in Section 8 of the Credit Agreement are true and correct on and as of the
date hereof with the same effect as if made on and as of the date hereof (except to the extent relating solely to an earlier date, in which case they were true and correct as of such earlier date); (b) no Event of Default or Unmatured Event
of Default exists or will result from the execution of this Amendment; (c) no event or circumstance has occurred since the Effective Date that has resulted, or would reasonably be expected to result, in a Material Adverse Effect; (d) the
execution and delivery by the Company of this Amendment and the performance by the Company of its obligations under the Credit Agreement as amended hereby (as so amended, the “Amended Credit Agreement”) (i) are within the corporate
powers of the Company, (ii) have been duly authorized by all necessary corporate action, (iii) have received all necessary approval from any governmental authority and (iv) do not and will not contravene or conflict with any provision of any
law, rule or regulation or any order, decree, judgment or award which is binding on the Company or any of its Subsidiaries or of any provision of the certificate of incorporation or bylaws or other organizational documents of the Company or
of any agreement, indenture, instrument or other document which is binding on the Company or any of its Subsidiaries; and (e) the Amended Credit Agreement is the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.
SECTION 4 EFFECTIVENESS; CONDITIONS SUBSEQUENT.
4.1 Conditions Precedent. This Amendment shall be effective when each of the following
conditions precedent have been fulfilled to the satisfaction of and in form and substance reasonably satisfactory to the Agent (such date, the “Thirteenth Amendment Effective Date”):
(a) The Agent shall have received each of the following:
(i) This Amendment duly executed by the Company, the Lenders and the Agent; and
2
(ii) A Reaffirmation, dated as of the date hereof, duly executed by each Subsidiary of the Company (other than Foreign Subsidiaries, UAG Connecticut I, LLC (“UAG Connecticut I”)
and MB Greenwich) (the “Reaffirmation”);
(iii) Certified copies of resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance by the Company of this Amendment and
the other Loan Documents to which the Company is a party, including the delivery of a Revolving Commitment Increase request by an authorized officer of the Company; and certified copies of resolutions of the Board of Directors of each other
Loan Party (other than UAG Connecticut I) (such Loan Parties, the “Amendment Loan Parties”) authorizing the execution, delivery and performance by such Amendment Loan Party of the related Reaffirmation and each other Loan Document to
which such entity is a party;
(iv) Certified copies of all documents evidencing any necessary corporate, limited liability company or partnership action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each other Amendment Loan Party of the documents referred to in this Section 4.1(a);
(v) A certificate of the Secretary or an Assistant Secretary (or other appropriate representative) of each Amendment Loan Party, dated as of the date hereof, certifying
the names of the officer or officers of such entity authorized to sign the Loan Documents to which such entity is a party, together with a sample of the true signature of each such officer (it being understood that the Agent and each Lender may
conclusively rely on each such certificate until formally advised by a like certificate of any changes therein);
(vi) A certificate of the Secretary or Assistant Secretary (or other appropriate representative) of each Amendment Loan Party, dated as of the date hereof, certifying
that either (i) there has been no change or amendment (other than those attached to such certificate) to its respective articles of incorporation, by-laws, certificate of formation or operating agreement (as applicable) or other governing
documents since certified copies of such documents were previously provided to the Agent or (ii) such documents have been delivered to the Agent in connection with the closing hereunder;
(vii) A certificate signed by a Vice President of the Company, dated as of the date hereof, affirming the matters set forth in Section 3 as of the date hereof.
(b) The Company shall have paid the reasonable costs and expenses of the Agent and the Lenders in connection with the preparation, execution and delivery of this
Amendment and reimbursable under Section 13.6 of the Credit Agreement to the extent invoiced to the Company or MergerCo in writing prior to the date hereof.
4.2 Conditions Subsequent. Within five Business Days of the Thirteenth Amendment
Effective Date (or such later date as the Agent may agree in its reasonable discretion) (such date, the “Post-Closing Date”), the Agent shall have received the following from UAG Connecticut I:
(a) A Reaffirmation, duly executed by UAG Connecticut I (the “UAG Reaffirmation”);
(b) Certified copies of resolutions of the governing body of UAG Connecticut I authorizing the execution, delivery and performance by the company of the UAG Reaffirmation
and the other Loan Documents to which UAG Connecticut I is a party;
3
(c) Certified copies of all documents evidencing any necessary limited liability action, consents and governmental approvals (if any) required for the execution, delivery and
performance by UAG Connecticut I of the documents referred to in this Section 4.2;
(d) A certificate of the Secretary or an Assistant Secretary (or other appropriate representative) of UAG Connecticut I, dated as of the Post-Closing Date, certifying
the names of the officer or officers of the company authorized to sign the Loan Documents to which UAG Connecticut I is a party, together with a sample of the true signature of each such officer (it being understood that the Agent and each
Lender may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein);
(e) A certificate of the Secretary or Assistant Secretary (or other appropriate representative) of UAG Connecticut I, dated as of the Post-Closing Date, certifying that
either (i) there has been no change or amendment (other than those attached to such certificate) to its respective certificate of formation, operating agreement or other governing documents since certified copies of such documents were
previously provided to the Agent or (ii) such documents have been delivered to the Agent in connection with the closing hereunder;
(f) A certificate signed by an authorized signatory of UAG Connecticut I, affirming the matters set forth in Section 3 as of the Post-Closing Date.
SECTION 5 MISCELLANEOUS.
5.1 Continuing Effectiveness, etc. As hereby amended, the Credit Agreement shall remain
in full force and effect and is hereby ratified and confirmed in all respects. All references in the Credit Agreement, the Notes, each other Loan Document and any similar document to the “Credit Agreement” or similar terms shall refer to the
Credit Agreement as amended hereby.
5.2 Counterparts. This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts, and each such counterpart shall be deemed to be an original but all such counterparts shall together constitute one and the same Amendment.
5.3 Expenses. The Company agrees to pay the reasonable costs and expenses of the Agent and
the Lenders in connection with the preparation, execution and delivery of this Amendment.
5.4 Severability of Provisions. In the event that any provision in or obligation under this
Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
5.5 Section Headings. The various headings of this Amendment are inserted for convenience
only and shall not affect the meaning or interpretation of this Amendment or the Credit Agreement or any provision hereof or thereof.
5.6 Governing Law. This Amendment shall be a contract made under and governed by the
laws of the State of New York applicable to contracts made and to be wholly performed within the State of New York.
5.7 Successors and Assigns. This Amendment shall be binding upon the Company, the Lenders
and the Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Lenders and the Agent and the successors and assigns of the Lenders and the Agent.
4
5.8 Loan Document. This Amendment is a Loan Document.
[Signatures Immediately Follow]
5
Delivered as of the day and year first above written.
|
PENSKE AUTOMOTIVE GROUP, INC., as Company
|
|||
|
By:
|
/s/ Aaron Michael
|
||
|
Name: Aaron Michael
|
|||
|
Title: Executive Vice President, Financial Services and Global Risk Management, and Treasurer
|
|||
|
MERCEDES-BENZ FINANCIAL SERVICES USA LLC, as Agent and as a Lender
|
|||
|
By:
|
/s/ Farrah Vaughn-Dixon
|
||
|
Name: Farrah Vaughn-Dixon
|
|||
|
Title: Regional Dealer Credit Manager – National Accounts
|
|||
|
TOYOTA MOTOR CREDIT CORPORATION,
|
|||
|
as a Lender
|
|||
|
By:
|
/s/ Gerald Jules
|
||
|
Name: Gerald Jules
|
|||
|
Title: Senior Manager, National Accounts
|
|||
|
DAIMLER TRUCK FINANCIAL SERVICES USA LLC, as a Lender
|
|||
|
By:
|
/s/ Lori Wood
|
||
|
Name: Lori Wood
|
|||
|
Title: Dealer Credit Manager
|
|||
Signature Page to Limited Consent and Thirteenth Amendment
EXHIBIT A
Amended Credit Agreement
[See attached]
EXECUTION VERSION
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
dated as of May 1, 2015
as amended as of October 15, 2026
among
PENSKE AUTOMOTIVE GROUP, INC.,
VARIOUS FINANCIAL INSTITUTIONS
and
MERCEDES-BENZ FINANCIAL SERVICES USA LLC,
as Agent
as Agent
|
CONTENTS
|
|||
|
Section
|
Subject Matter
|
Page
|
|
|
SECTION 1
|
DEFINITIONS
|
1
|
|
|
1.1
|
Definitions
|
1
|
|
|
1.2
|
Other Interpretive Provisions
|
26
|
|
|
1.3
|
Effective Date
|
26
|
|
|
|
|||
|
1.4
|
Domestic Subsidiaries
|
27
|
|
|
|
|||
|
1.5
|
Capital Lease Accounting
|
27
|
|
|
SECTION 2
|
COMMITMENTS OF THE LENDERS; BORROWING PROCEDURES
|
27
|
|
|
2.1
|
Commitments
|
27
|
|
|
|
|||
|
2.2
|
Loan Procedures
|
30
|
|
|
|
|||
|
2.3
|
Commitments Several
|
31
|
|
|
|
|||
|
2.4
|
Certain Conditions
|
31
|
|
|
|
|||
|
2.5
|
Extension of Termination Date
|
31
|
|
|
|
|||
|
2.6
|
Defaulting Lenders
|
31
|
|
|
|
|||
|
2.7
|
Letter of Credit Procedures
|
32
|
|
|
SECTION 3
|
NOTES EVIDENCING LOANS
|
34
|
|
|
3.1
|
Notes
|
34
|
|
|
|
|||
|
3.2
|
Recordkeeping
|
34
|
|
|
SECTION 4
|
INTEREST
|
35
|
|
|
4.1
|
Interest Rate
|
35
|
|
|
|
|||
|
4.2
|
Interest Payment Dates
|
35
|
|
|
|
|||
|
4.3
|
Computation of Interest
|
35
|
|
|
|
|||
|
4.4
|
Inability To Determine Rates
|
35
|
|
|
|
|||
|
4.5
|
Benchmark Replacement Setting
|
35
|
|
|
|
|||
|
4.6
|
Term SOFR Conforming Changes
|
37
|
|
|
SECTION 5
|
FEES
|
37
|
|
|
5.1
|
Non-Use Fee
|
37
|
|
|
|
|||
|
5.2
|
Agent’s Fees
|
37
|
|
|
|
|||
|
5.3
|
Letter of Credit Fee
|
37
|
|
|
|
|||
|
5.4
|
All Fees
|
38
|
|
|
SECTION 6
|
REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT; PREPAYMENTS
|
38
|
|
i
| CONTENTS | |||
|
Section
|
Subject Matter
|
Page
|
|
|
6.1
|
Voluntary Reduction of Revolving Commitment Amount; Fee; Termination
|
38
|
|
|
|
|||
|
6.2
|
Voluntary Prepayments
|
38
|
|
|
|
|||
|
6.3
|
Mandatory Prepayments
|
39
|
|
|
SECTION 7
|
MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES
|
39
|
|
|
7.1
|
Making of Payments
|
39
|
|
|
|
|||
|
7.2
|
Application of Certain Payments
|
39
|
|
|
|
|||
|
7.3
|
Due Date Extension
|
40
|
|
|
|
|||
|
7.4
|
Setoff
|
40
|
|
|
|
|||
|
7.5
|
Proration of Payments
|
40
|
|
|
|
|||
|
7.6
|
Taxes
|
40
|
|
|
SECTION 8
|
WARRANTIES
|
41
|
|
|
|
|||
|
8.1
|
Organization
|
41
|
|
|
|
|||
|
8.2
|
Authorization; No Conflict
|
42
|
|
|
|
|||
|
8.3
|
Validity and Binding Nature
|
42
|
|
|
|
|||
|
8.4
|
Financial Condition
|
42
|
|
|
|
|||
|
8.5
|
No Material Adverse Change
|
42
|
|
|
|
|||
|
8.6
|
Litigation and Contingent Liabilities
|
42
|
|
|
|
|||
|
8.7
|
Ownership of Properties; Liens
|
42
|
|
|
|
|||
|
8.8
|
Subsidiaries
|
42
|
|
|
|
|||
|
8.9
|
Pension Plans
|
43
|
|
|
|
|||
|
8.10
|
Investment Company Act
|
43
|
|
|
|
|||
|
8.11
|
Regulation U
|
43
|
|
|
|
|||
|
8.12
|
Taxes
|
43
|
|
|
|
|||
|
8.13
|
Solvency, etc
|
44
|
|
|
|
|||
|
8.14
|
Environmental Matters
|
44
|
|
|
|
|||
|
8.15
|
Insurance
|
45
|
|
|
|
|||
|
8.16
|
Information
|
45
|
|
|
|
|||
|
8.17
|
Intellectual Property
|
45
|
|
|
|
|||
|
8.18
|
Burdensome Obligations
|
45
|
|
|
|
|||
|
8.19
|
Labor Matters
|
45
|
|
ii
| CONTENTS | |||
| Section | Subject Matter | Page | |
|
8.20
|
No Default
|
46
|
|
|
|
|||
|
8.21
|
Senior Debt
|
46
|
|
|
|
|||
|
8.22
|
Dealer Agreements; Material Business Relationships
|
46
|
|
|
|
|||
|
8.23
|
Anti-Money Laundering and Anti-Terrorism Finance Laws
|
46
|
|
|
|
|||
|
8.24
|
Foreign Corrupt Practices Act
|
46
|
|
|
|
|||
|
8.25
|
Sanctions Laws
|
46
|
|
|
SECTION 9
|
COVENANTS
|
47
|
|
|
9.1
|
Reports, Certificates and Other Information
|
47
|
|
|
|
|||
|
9.2
|
Books, Records and Inspections
|
50
|
|
|
|
|||
|
9.3
|
Maintenance of Property; Insurance
|
50
|
|
|
|
|||
|
9.4
|
Compliance with Laws; Payment of Taxes and Liabilities
|
51
|
|
|
|
|||
|
9.5
|
Maintenance of Existence, etc
|
51
|
|
|
|
|||
|
9.6
|
Financial Covenants
|
51
|
|
|
|
|||
|
9.7
|
Limitations on Debt
|
52
|
|
|
|
|||
|
9.8
|
Liens
|
54
|
|
|
|
|||
|
9.9
|
Restricted Payments
|
55
|
|
|
|
|||
|
9.10
|
Mergers, Consolidations, Sales
|
56
|
|
|
|
|||
|
9.11
|
Modification of Organizational Documents
|
56
|
|
|
|
|||
|
9.12
|
Use of Proceeds
|
56
|
|
|
|
|||
|
9.13
|
Further Assurances
|
57
|
|
|
|
|||
|
9.14
|
Transactions with Affiliates
|
57
|
|
|
|
|||
|
9.15
|
Employee Benefit Plans
|
58
|
|
|
|
|||
|
9.16
|
Environmental Matters
|
58
|
|
|
|
|||
|
9.17
|
Inconsistent Agreements
|
58
|
|
|
|
|||
|
9.18
|
Business Activities
|
58
|
|
|
|
|||
|
9.19
|
Investments
|
59
|
|
|
9.20
|
Restriction of Amendments to Certain Documents
|
60
|
|
|
|
|||
|
9.21
|
Limitation on Dealer Financing Amendments
|
60
|
|
|
|
|||
|
9.22
|
Eligible Real Estate Collateral
|
60
|
|
|
|
|||
|
9.23
|
Changes in Fiscal Periods
|
60
|
|
iii
| CONTENTS | |||
| Section | Subject Matter | Page | |
|
9.24
|
Anti-Money Laundering and Anti-Terrorism Finance Laws; Foreign Corrupt Practices Act; Sanctions Laws; Restricted Person
|
60 |
|
|
SECTION 10
|
EFFECTIVENESS; CONDITIONS OF LENDING, ETC
|
61
|
|
|
10.1
|
Conditions to Effectiveness
|
61
|
|
|
|
|||
|
10.2
|
Conditions
|
62
|
|
|
SECTION 11
|
EVENTS OF DEFAULT AND THEIR EFFECT
|
63
|
|
|
11.1
|
Events of Default
|
63
|
|
|
|
|||
|
11.2
|
Effect of Event of Default
|
65
|
|
|
SECTION 12
|
THE AGENT
|
66
|
|
|
12.1
|
Appointment and Authorization
|
66
|
|
|
|
|||
|
12.2
|
Delegation of Duties
|
66
|
|
|
|
|||
|
12.3
|
Liability of Agent
|
66
|
|
|
|
|||
|
12.4
|
Reliance by Agent
|
67
|
|
|
|
|||
|
12.5
|
Notice of Default
|
67
|
|
|
|
|||
|
12.6
|
Credit Decision
|
67
|
|
|
|
|||
|
12.7
|
Indemnification
|
68
|
|
|
|
|||
|
12.8
|
Agent in Individual Capacity
|
68
|
|
|
|
|||
|
12.9
|
Successor Agent
|
68
|
|
|
|
|||
|
12.10
|
Collateral Matters
|
69
|
|
|
|
|||
|
12.11
|
Funding Reliance
|
70 |
|
|
|
|||
|
12.12
|
Enforcement
|
71
|
|
|
|
|||
|
12.13
|
Agent May File Proofs of Claim
|
71
|
|
|
SECTION 13
|
GENERAL
|
72
|
|
|
13.1
|
Waiver; Amendments
|
72
|
|
|
|
|||
|
13.2
|
Confirmations
|
72
|
|
|
|
|||
|
13.3
|
Notices
|
72
|
|
|
|
|||
|
13.4
|
Computations
|
73
|
|
|
|
|||
|
13.5
|
Regulation U
|
73
|
|
|
|
|||
|
13.6
|
Costs, Expenses and Taxes
|
73
|
|
|
|
|||
|
13.7
|
Subsidiary References
|
73
|
|
|
|
|||
|
13.8
|
Captions
|
73
|
|
iv
| CONTENTS | |||
| Section | Subject Matter | Page | |
|
13.9
|
Assignments; Participations
|
74
|
|
|
|
|||
|
13.10
|
Governing Law
|
76
|
|
|
|
|||
|
13.11
|
Counterparts
|
76
|
|
|
|
|||
|
13.12
|
Successors and Assigns
|
76
|
|
|
|
|||
|
13.13
|
Indemnification
|
76
|
|
|
|
|||
|
13.14
|
Waiver of Consequential Damages, etc
|
77
|
|
|
|
|||
|
13.15
|
Nonliability of Lenders
|
77
|
|
|
|
|||
|
13.16
|
Forum Selection and Consent to Jurisdiction
|
78
|
|
|
|
|||
|
13.17
|
Waiver of Jury Trial
|
78
|
|
|
|
|||
|
13.18
|
Confidentiality
|
79
|
|
v
| CONTENTS | ||
| Section | Subject Matter | Page |
|
SCHEDULES
|
|
|
SCHEDULE 2.1
|
Lenders and Pro Rata Shares
|
|
SCHEDULE 8.6
|
Litigation and Contingent Liabilities
|
|
SCHEDULE 9.7
|
Permitted Existing Debt
|
|
SCHEDULE 9.8
|
Permitted Existing Liens
|
|
SCHEDULE 9.17
|
Permitted Restrictions
|
|
SCHEDULE 9.19
|
Investments
|
|
SCHEDULE 13.3
|
Addresses for Notices
|
|
EXHIBITS
|
|
|
EXHIBIT A
|
Form of Note (Section 3.1)
|
|
EXHIBIT B
|
Form of Compliance Certificate (Section 9.1.3)
|
|
EXHIBIT C
|
Guaranty (Section 1.1)
|
|
EXHIBIT D
|
Security Agreement (Section 1.1)
|
|
EXHIBIT E
|
Pledge Agreement (Section 1.1)
|
|
EXHIBIT F
|
Form of Solvency Certificate (Section 10.1.8)
|
|
EXHIBIT G
|
Form of Assignment Agreement (Section 13.9.1)
|
|
EXHIBIT H
|
Form of Reaffirmation of Loan Documents (Section 10.1.5)
|
|
EXHIBIT I
|
Subordination Terms (Section 1.1)
|
|
EXHIBIT J
|
Form of L/C Application
|
|
EXHIBIT K
|
Form of Borrowing Base Certificate (Section 9.1.8)
|
|
EXHIBIT L
|
Intercreditor Agreement (Section 1.1)
|
|
EXHIBIT M
|
Conditions Precedent to Eligible Real Estate Collateral (Section 1.1)
|
vi
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 1, 2015 and as amended as of October 15, 2026 (this “Agreement”) is entered into among PENSKE AUTOMOTIVE
GROUP, INC. (the “Company”), the financial institutions that are or may from time to time become parties hereto (together with their respective successors and assigns, the “Lenders”) and MERCEDES-BENZ FINANCIAL SERVICES USA LLC (in
its individual capacity, “MBFS”), as agent for the Lenders.
WHEREAS, the Company, the Lenders and the Agent are parties to a Fourth Amended and Restated Credit Agreement, dated as of April 1, 2014 (as amended or otherwise modified from time
to time prior to the date hereof, the “Existing Agreement”);
WHEREAS, the Company and the Lenders desire to amend and restate the Existing Agreement; it being the intention of the Company, the Agent and the Lenders that this Agreement and
the execution and delivery of any substituted promissory notes not effect a novation of the obligations of the Company and the Lenders under the Existing Agreement but merely a restatement and, where applicable, substitution of the terms governing
and evidencing such obligations hereafter; and
WHEREAS, the Company and the Lenders have agreed that on the Effective Date (as defined below) the Existing Agreement shall be amended and restated and the outstanding loans under
the Existing Agreement shall be deemed to be Loans hereunder.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the following meanings:
Account Receivable means, with respect to any Person, any right of such Person to payment for goods sold or leased or for services rendered, whether or not evidenced by an
instrument or chattel paper and whether or not yet earned by performance.
Acquisition means an acquisition by the Company or any Subsidiary of all or substantially all the assets of a business unit or a controlling interest in the Capital Stock or
other ownership interests of an Automotive Investment, whether through a purchase, merger, consolidation or otherwise.
Acquisition Capital Expenditure means any Capital Expenditure that is comprised of the purchase price paid to the seller in connection with any Acquisition permitted under
this Agreement.
Acquisition Cost means, as of any date, (x) with respect to any New Motor Vehicle, the wholesale purchase price charged by the Manufacturer thereof as reflected in the
invoice in respect of such New Motor Vehicle issued by such Manufacturer to the Company, the applicable Subsidiary or any other licensed dealer from which such New Motor Vehicle was purchased by the Company or the applicable Subsidiary less any
related deductions set forth on such invoice, and (y) with respect to any Used Motor Vehicle or Auction Motor Vehicle, the price paid by the Company or its applicable Subsidiary to purchase such Used Motor Vehicle or Auction Motor Vehicle, provided
that, in the case of this clause (y), in the event the Agent reasonably concludes that the Acquisition Cost of a Used Motor Vehicle or Auction Motor Vehicle exceeds its fair market value, the Agent may make market value adjustments to the
Acquisition Cost of a Used Motor Vehicle or Auction Motor Vehicle based upon the latest publication of the N.A.D.A. Official Used Car Guide, as long as such publication has been released within the past three months and, if not, such other
objective criteria as the Company and the Required Lenders may agree from time to time.
Adjusted Daily Simple SOFR means, for purposes of any calculation, the rate per annum equal to (a) Daily Simple SOFR for such calculation plus (b) the SOFR Adjustment; provided
that if Adjusted Daily Simple SOFR as so determined shall ever be less than the Floor, then Adjusted Daily Simple SOFR shall be deemed to be the Floor.
Adjusted Term SOFR means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the SOFR Adjustment; provided that
if Adjusted Term SOFR as so determined shall ever be less than the Floor, then Adjusted Term SOFR shall be deemed to be the Floor.
Adjusted Term SOFR Rate - see definition of “Interest Rate.”
Affiliate of any Person means (i) any other Person that, directly or indirectly, controls or is controlled by or is under common control with such Person and (ii) any
officer or director of such Person. A Person shall be deemed to be “controlled by” any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted basis) having ordinary voting
power for the election of directors or managers or power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
Agent means MBFS in its capacity as agent for the Lenders hereunder and any successor thereto in such capacity.
Agreement - see the Preamble.
Anti-Terrorism Law – see Section 8.23.
Approved Swap Document – see Section 9.8(i).
Approved Swap Lien – see Section 9.8(i).
Assignee – see Section 13.9.1.
Assignment Agreement – see Section 13.9.1.
- 2 -
Attorney Costs means, with respect to any Person, all reasonable fees and charges of any counsel to such Person, the reasonable allocable cost of internal legal services of
such Person, all reasonable disbursements of such internal counsel and all court costs and similar legal expenses.
Auction Motor Vehicles means Motor Vehicles purchased at Manufacturer- or Floor Plan Financing provider-sponsored dealer-only closed auctions.
Automotive Investment means a business that operates a dealership or dealerships for the retail sales of new and/or used vehicles, a vehicle distributorship and/or other
transportation related businesses or other businesses ancillary to the operation of such businesses.
Available Tenor means, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for
such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component
thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date.
Benchmark means, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or
the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 4.5(a).
Benchmark Replacement means, with respect to any Benchmark Transition Event, the first alternative set forth in the order below that can be determined by the Agent for the
applicable Benchmark Replacement Date:
(a) Adjusted Daily Simple SOFR; or
(b) the sum of: (i) the alternate benchmark rate that has been selected by the Agent and the Company giving due consideration to (A) any selection or
recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (B) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the
then-current Benchmark for Dollar-denominated syndicated credit facilities and (ii) the related Benchmark Replacement Adjustment.
If the Benchmark Replacement as determined pursuant to clause (a) or (b) above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the
purposes of this Agreement and the other Loan Documents.
Benchmark Replacement Adjustment means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or
method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Agent and the Company giving due consideration to (a) any selection or recommendation of a spread
adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market
convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit
facilities at such time.
- 3 -
Benchmark Replacement Date means a date and time determined by the Agent, which date shall be no later than the earliest to occur of the following events with respect to the
then-current Benchmark:
(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or
publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such
Benchmark (or such component thereof); or
(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published
component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such
non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.
For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event
or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
Benchmark Transition Event means the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component
used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such
statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published
component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with
jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator
of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
- 4 -
(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published
component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set
forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
Benchmark Unavailability Period means, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred
if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 4.5 and (b) ending at the time that a Benchmark Replacement has replaced
the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 4.5.
Borrowing Base means, at any time, the sum of the following: (a) an amount equal to 100% of the sum of (i) all cash on deposit at such time in deposit accounts of the
Company and its Domestic Subsidiaries in which the Agent has a perfected first priority security interest pursuant to a Control Agreement, (ii) the amount at such time requested to be funded to the Company and its Domestic Subsidiaries in respect
of retail installment contracts with respect to, and retail leases of, Motor Vehicles where the underlying contracts and leases have been submitted in the ordinary course of business to a third party purchaser that is a financial institution and
that is not a Restricted Affiliate for which purchase the Company and its Domestic Subsidiaries have not yet been paid plus all other amounts owing at such time to the Company and its Domestic Subsidiaries from purchasers or lessees of such Motor
Vehicles in respect of such purchases or leases and (iii) the difference between (x) the Acquisition Cost of that portion of the Inventory of the Company and its Domestic Subsidiaries that consists of New Motor Vehicles and (y) the aggregate amount
of Floor Plan Financing of the Company and its Domestic Subsidiaries incurred in connection with such New Motor Vehicles; (b) an amount equal to 65% of the sum of (i) the amount of all Accounts Receivable of the Company and its Domestic
Subsidiaries that consist of Factory Receivables or Accounts Receivable owing from customers for service and parts plus (ii) the amount of all Accounts Receivable of the Company and its Domestic Subsidiaries (to the extent not otherwise covered by
the other clauses of this definition) owing from third parties that are not Restricted Affiliates in the ordinary course of business; (c) an amount equal to 65% of the Accounts Receivable of the Company and its Domestic Subsidiaries consisting of
finance reserve owing to the Company and its Domestic Subsidiaries from financial institutions, not Restricted Affiliates, that provide loans or other financing to customers of the Company and its Domestic Subsidiaries in connection with the
purchase and/or lease of Motor Vehicles by such customers, which finance reserve is in the nature of amounts payable to the Company and its Domestic Subsidiaries; (d) an amount equal to 65% of the book value of the Inventory of the Company and its
Domestic Subsidiaries that consists of parts and accessories; (e) an amount equal to 80% of the difference between (i) the Acquisition Cost of that portion of the Inventory of the Company and its Domestic Subsidiaries that constitutes Used Motor
Vehicles and/or Auction Motor Vehicles (without duplication) and (ii) the aggregate amount of any Floor Plan Financing of the Company and its Domestic Subsidiaries incurred in connection with such Used Motor Vehicles and Auction Motor Vehicles;
(f) an amount equal to 45% of the difference between (i) the book value of the Equipment of the Company and its Domestic Subsidiaries and (ii) the aggregate amount of purchase money Debt of the Company and its Domestic Subsidiaries incurred to
finance the purchase price of such Equipment; (g) an amount equal to the lesser of (i) 75% of the Eligible Real Estate Collateral Value and (ii) 25% of the sum of clauses (a) through (f) above; and (h) an amount equal to 50% of the
Eligible Tangible Net Worth of PTL. For purposes of greater clarity, service loaners and daily rental vehicles shall not constitute Inventory for the purpose of calculating the Borrowing Base, but shall constitute Equipment for such purpose.
Notwithstanding the foregoing, (i) all assets (including daily rental vehicles, goodwill, franchise value and cash on deposit in deposit accounts) of MB Greenwich shall be excluded from the Borrowing Base for all purposes, (ii) all Motor Vehicles
that are being leased by the Company or any Subsidiary as lessor shall be excluded from the Borrowing Base for all purposes and (iii) all retail installment contracts and retail leases of Motor Vehicles that have been pledged to secure any Pledge
Line Financing shall be excluded from the Borrowing Base for all purposes.
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Borrowing Base Certificate means a certificate in substantially the form set forth in Exhibit K.
Business Day means any day of the year (other than any Saturday or Sunday) which is not a day on which commercial banks are authorized or required by law to close in
Detroit, Michigan; provided that, in relation to any borrowing that bears interest at a rate based on the Adjusted Term SOFR Rate, any such day that is a U.S. Government Securities Business Day.
Capital Expenditures means all expenditures for property, plant and equipment that, in accordance with GAAP, would be required to be capitalized and shown on the
consolidated balance sheet of the Company, but excluding expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (x) from insurance proceeds (or other similar recoveries) paid on account of
the loss of or damage to the assets being replaced or restored or (y) with awards of compensation arising from the taking by eminent domain or condemnation of the assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, in
conformity with GAAP, but subject to Section 1.5, is accounted for as a capital lease on the balance sheet of such Person.
Capital Stock of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity securities of such
Person.
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Cash Collateralize means to deliver cash collateral to the Agent, to be held as cash collateral for outstanding Letters of Credit, pursuant to documentation reasonably
satisfactory to the Agent and the Company. Derivatives of such term have corresponding meanings.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt, maturing not more than one year after such time, issued or guaranteed by the United States
Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case rated at least A-l by Standard & Poor’s Ratings Services or P-l by Moody’s Investors
Service, Inc., (c) any certificate of deposit (or time deposits represented by such certificates of deposit) or banker’s acceptance, maturing not more than one year after such time, or overnight Federal Funds transactions that are issued or sold by
any Lender or its holding company or by a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000, (d) any repurchase agreement entered
into with MBFS (or with a commercial banking institution of the stature referred to in clause (c)) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c)
and (ii) has a market value at the time such repurchase agreement is entered into of not less than 100% of the repurchase obligation of MBFS (or such commercial banking institution) thereunder, (e) shares of money market mutual funds within the
definition of Rule 2a-7 promulgated by the SEC under the Investment Company Act of 1940 and (f) other cash equivalent investments approved by the Agent.
CERCLA – see Section 8.14.
Code means the Internal Revenue Code of 1986.
Collateral Documents means the Security Agreement, the Pledge Agreement, each Control Agreement, each Mortgage and any other agreement or instrument pursuant to which the
Company, any Subsidiary or any other Person grants collateral to the Agent for the benefit of the Lenders to secure the obligations hereunder and under the other Loan Documents.
Commitment means, as to any Lender, such Lender’s Revolving Commitment and/or Overadvance Commitment, as applicable.
Company - see the Preamble.
Computation Period means each period of four consecutive Fiscal Quarters ending on the last day of a Fiscal Quarter.
Conforming Changes means, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement,
any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “U.S. Government Securities Business Day” or any similar or analogous definition, timing and frequency of determining
rates and making payments of interest, timing of borrowing requests or prepayment, the applicability and length of lookback periods and other technical, administrative or operational matters) that the Agent decides in its reasonable discretion (in
consultation with the Company) may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent
decides that adoption of any portion of such market practice is not administratively feasible or if the Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Agent
decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents, in each case, in consultation with the Company).
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Consolidated Current Assets means, at any time, the aggregate amount of all assets of the Company and its Subsidiaries, as shown on the most recent consolidated balance
sheet of the Company and its Subsidiaries, that would be classified as current assets (including cash, marketable securities, accounts receivable, inventory and prepaid expenses) in accordance with GAAP; provided that, at the election of
the Company delivered by completing the appropriate section of a compliance certificate delivered to the Agent in accordance with Section 9.1.3 (a “Current Assets Election”), Consolidated Current Assets at any time while such Current
Assets Election remains in effect shall be deemed to include the Current Assets Commitment Amount at such time.
Consolidated Current Liabilities means, at any time, the aggregate amount of all liabilities of the Company and its Subsidiaries, as shown on the most recent consolidated
balance sheet of the Company and its Subsidiaries, that would be classified as current liabilities in accordance with GAAP, but excluding Capital Leases to the extent set forth in Section 1.5; provided that if at any time within one
year prior to the Termination Date a Current Assets Election shall be in effect, Consolidated Current Liabilities shall be deemed to include the Current Assets Commitment Amount at such time.
Consolidated Net Income means, with respect to the Company and its Subsidiaries for any period, the net income (or loss) of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP for such period, excluding any gains (or losses) from asset sales, any extraordinary or unusual non-recurring gains (or losses) and any gains (or losses) from discontinued operations.
Control Agreement means an agreement in form and substance reasonably satisfactory to the Agent giving the Agent control (within the meaning of Section 8-106 or 9-104 of the
Uniform Commercial Code) over a deposit account or securities account of the Company or a Domestic Subsidiary.
Controlled Group means all members of a controlled group of corporations and all members of a controlled group of trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Current Assets Commitment Amount means, with respect to any Current Assets Election, the lesser of (A) an amount equal to the Maximum Availability at the time of such
election and (B) the Specified Current Assets Commitment Amount.
Current Assets Election – see the definition of “Consolidated Current Assets”. A Current Assets Election shall become effective on the date on which the compliance
certificate electing the same is delivered to the Agent in accordance with Section 9.1.3 and shall remain in effect until the next compliance certificate is due under Section 9.1.3.
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Daily Simple SOFR means, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by Agent in accordance with the conventions
for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided that if the Agent decides that any such convention is not administratively feasible for the
Agent, then Agent may establish another convention in its reasonable discretion.
Dealer Agreements means the dealer, framework and distribution agreements, including the standard provisions, entered into by the Company and its Subsidiaries with various
Manufacturers.
Dealer Financing means Floor Plan Financing and Pledge Line Financing.
Dealer Financing Provider means each provider of Dealer Financing to the Company and its Subsidiaries.
Debt of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, whether or not evidenced by bonds, debentures, notes or similar
instruments, (b) all obligations of such Person as lessee under Capital Leases which have been recorded as liabilities on a balance sheet of such Person in accordance with GAAP, subject to Section 1.5, (c) all obligations of such Person to
pay the deferred purchase price of property or services (excluding trade accounts payable and accrued expenses in the ordinary course of business), (d) all indebtedness secured by a Lien on the property of such Person, whether or not such
indebtedness shall have been assumed by such Person, (e) all obligations, contingent or otherwise, with respect to the face amount of all letters of credit (whether or not drawn) and banker’s acceptances issued for the account of such Person,
(f) all Hedging Obligations of such Person, (g) all Suretyship Liabilities of such Person in respect of Debt described in the foregoing clauses (a) through (f) and (h) except to the extent the terms of such Debt provide that such
Person is not liable thereunder, all Debt of any partnership of which such Person is a general partner. Notwithstanding the foregoing, leases of real property by the Company and its Subsidiaries and guarantees of such leases shall not be
considered Debt for any purpose hereunder.
Debtor Relief Laws means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the United States or other applicable jurisdictions.
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Defaulting Lender means, subject to Section 2.6(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date
such Loans were required to be funded hereunder, unless such Lender notifies the Agent and the Company in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which
conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Agent or any other Lender any other amount required to be paid by it hereunder within two
Business Days of the date when due, (b) has notified the Company or the Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public
statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default,
shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Agent or the Company, to confirm in writing to the Agent and the Company that it
will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Agent and the Company) or
(d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided
that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest
does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to
reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.6(b)) upon delivery of written notice of such determination to the Company and each Lender.
Disposal - see the definition of “Release”.
Disposition, with respect to any property, means any sale, lease, assignment, conveyance, transfer or other disposition thereof.
Disqualified Stock means, with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise or is redeemable at the option of the holder of such Capital Stock, (ii) is convertible or exchangeable for
Debt or Disqualified Stock at the option of the holder of such Capital Stock or (iii) is mandatorily redeemable or must be purchased upon the occurrence of certain events or otherwise, in whole or in part; in each case on or prior to the 91st day
following the Termination Date as in effect from time to time; provided that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof (or of any security into which it is convertible
or for which it is exchangeable) the right to require such Person to purchase or redeem such Capital Stock (or such security into which it is convertible or for which it is exchangeable) upon the occurrence of a “change of control” occurring prior
to the 91st day following the Termination Date shall not constitute Disqualified Stock if (i) the “change of control” provisions applicable to such Capital Stock (and all such securities into which it is convertible or for which it is exchangeable)
are not more favorable to the holders of such Capital Stock (and all such securities into which it is convertible or for which it is exchangeable) than the terms applicable to the obligations hereunder and under the other Loan Documents and
(ii) any such requirement only becomes operative after compliance with such terms applicable to, and is subordinated (on terms satisfactory to the Required Lenders) to, the obligations of the Company hereunder, including the acceleration (and
payment in full in cash) of the obligations hereunder and under the other Loan Documents upon the occurrence of an Event of Default under Section 11.1.12.
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Dollar and the sign “$” mean lawful money of the United States of America.
Dollar Equivalent means, at any time, with respect to any amount denominated in any currency other than Dollars, the equivalent amount thereof in Dollars at the spot rate
for the purchase of Dollars with such other currency as published in the “Exchange Rates” table in The Wall Street Journal (Midwest edition) at the time such equivalent amount is determined (or, if such currency is not listed in such table,
as determined by the Agent).
Domestic Blue Sky Value means, at any time, the aggregate value of the items classified as “Goodwill” and “Franchise Value” of the Company attributable to the Domestic
Subsidiaries, as shown on a consolidated balance sheet of the Company and its Domestic Subsidiaries at such time.
Domestic Subsidiary means any Subsidiary of the Company or another Subsidiary that is incorporated or organized in the United States or in any State thereof (excluding U.S.
territories).
EBITDA means, for any period, Consolidated Net Income for such period plus, to the extent deducted in determining such Consolidated Net Income, Interest Expense,
income tax expense, depreciation and amortization, minority interest and franchise taxes for such period, all calculated for the Company and its Subsidiaries on a consolidated basis.
EBITDAR means, for any period, EBITDA for such period plus, to the extent deducted in determining Consolidated Net Income for such period, Rental Expense for such
period.
Effective Date means the date on which all conditions precedent set forth in Section 10.1 shall be satisfied or waived.
Eligible Real Estate means real property of the Company or any Domestic Subsidiary which meets each of the following requirements:
(a) such real property is located in the
United States;
(b) the Company or Domestic Subsidiary, as
applicable, is the lawful owner of 100% of the fee simple interest in such real property, free and clear of Liens (other than Liens in favor of the Agent for the benefit of the Lenders and Liens permitted by Section 9.8 or otherwise
listed as a permitted exception on a policy of lender’s title insurance with respect to such real property accepted by the Agent);
(c) such real property houses completed
facilities at which the Company or a Domestic Subsidiary operates an Automotive Investment;
(d) no material portion of such real
property has suffered any casualty loss (whether or not insured) or condemnation;
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(e) such real property is in compliance with all Environmental Laws;
(f) such real property and the improvements constructed thereon are in good condition, repair and working order and
are insured in accordance with Section 9.3;
(g) the Agent is the holder of a perfected first priority Lien for the benefit of the Agent and the Lenders in the
ownership interest of the Company or Domestic Subsidiary, as applicable, therein; and
(h) such real property is otherwise satisfactory to the Agent in its sole discretion.
Any parcel of real property which is Eligible Real Estate, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be Eligible Real Estate;
provided, however, that in the event that any parcel of real property fails to meet any of the requirements set forth in the foregoing clauses (d), (e), (f) and (h) then such parcel shall not cease to
be Eligible Real Estate for a period of thirty days from the earlier of (x) the Company becoming aware of such requirement failing to be met and (y) the Agent providing notice to the Company of such requirement failing to be met.
Eligible Real Estate Collateral means each parcel of Eligible Real Estate with respect to which the Company or Domestic Subsidiary owning such parcel of Eligible Real Estate
has satisfied the conditions set forth on Exhibit M.
Eligible Real Estate Collateral Value means the appraised value of each parcel of the Eligible Real Estate Collateral, as evidenced by the MAI appraisal most recently
delivered to the Agent, either in connection with such parcel of real estate becoming Eligible Real Estate Collateral or as required pursuant to Section 9.22.
Eligible Tangible Net Worth means, with respect to PTL, as of any date of determination, an amount equal to the product of (x) the Stockholders’ Equity of PTL on that date
less Intangible Assets of PTL on that date times (y) the then outstanding ownership percentage of the Company in PTL.
Environmental Claims means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any
Environmental Law, or for release or injury to the environment.
Environmental Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case relating to Environmental Matters.
Environmental Matters means any matter arising out of or relating to health and safety, or pollution or protection of the environment or workplace, including any of the
foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, discharge, release, control or cleanup of any Hazardous Substance.
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Equipment has the meaning assigned thereto in the Uniform Commercial Code.
Equity Contribution means the direct or indirect cash contributions on or substantially concurrently with the Increase Effective Date to MergerCo by Penske Corporation,
Penske Automotive Holdings Corp., Mitsui & Co., Ltd. and Mitsui & Co. (U.S.A.), Inc. (or any direct parent of any of the foregoing) in connection with the Merger Agreement and the transactions contemplated thereby.
Equity Interests means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
ERISA means the Employee Retirement Income Security Act of 1974.
Event of Default means any of the events described in Section 11.1.
Executive Order – see Section 8.25.
Existing Agreement - see the recitals.
Existing Letter of Credit means the Letter of Credit issued on the date hereof.
Extension Notice – see Section 2.5.
Factory Receivables of any Person means all of such Person’s rights to receive payment, credit and other compensation (including incentive payments, stock rebates,
allowances and additional “factory credits”) from any Manufacturer.
Federal Funds Rate means, for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal
Reserve Bank of New York on the preceding Business Day opposite the caption “Federal Funds (Effective)”; or, if for any relevant day such rate is not so published on any such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 A.M. (New York City time) on that day by each of three leading brokers of Federal funds transactions in New York City selected by the
Agent.
Financed Capital Expenditures means any Capital Expenditure that is financed (other than with the proceeds of a Loan hereunder) by a Person other than the Company and its
Subsidiaries (x) in the case of a Capital Expenditure to purchase, construct or improve real property or leasehold improvements thereon, within 270 days of the making thereof (or, if a committed credit facility is put in place to so finance such
Capital Expenditure within 270 days of the making thereof, within 450 days of the making thereof) or (y) in the case of any other Capital Expenditure, within 60 days of the making thereof.
First Amendment Effective Date means July 27, 2016.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
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Fiscal Year means the fiscal year of the Company and its Subsidiaries, which period shall be the 12-month period ending on December 31 of each year. References to a Fiscal
Year with a number corresponding to any calendar year (e.g., “Fiscal Year 2015”) refer to the Fiscal Year ending on December 31 of such calendar year.
Fixed Charge Coverage Ratio means, for any Computation Period, the ratio of (a) the total for such period of EBITDAR minus Capital Expenditures (other than, without
duplication, Acquisition Capital Expenditures and Financed Capital Expenditures) to (b) the sum of (i) Interest Expense for such period to the extent paid in cash plus (ii) Rental Expense for such period plus (iii) income tax
expense for such period of the Company and its Subsidiaries to the extent paid in cash plus (iv) scheduled payments of principal of Debt for such period for the Company and its Subsidiaries.
Floor means a rate of interest equal to 0.00%.
Floor Plan Financing means a financing undertaken by the Company or any Subsidiary (a) all of the proceeds of which are (i) used to purchase Motor Vehicles to be sold or
leased in the ordinary course of business by the Company and its Subsidiaries, (ii) relating to funds expended by the Company or such Subsidiary initially to acquire such Motor Vehicles or (iii) used to refinance any financing within the scope of clause
(a)(i) or (ii) above or (b) pursuant to a borrowing base line of credit secured by Used Motor Vehicles owned by the Company and its Subsidiaries.
Foreign Acquisition means an acquisition of all or any substantial portion of the assets of a business unit of a Foreign Person or all or any substantial portion of the
Capital Stock or other ownership interests of a Foreign Person, whether through a purchase, merger, consolidation or otherwise. For purposes of covenant compliance, the amount of any payment of consideration for a Foreign Acquisition made in a
currency other than Dollars shall be calculated at the Dollar Equivalent thereof as of the date such payment is made, and shall not be recalculated thereafter to reflect fluctuations in currency values.
Foreign Employee Benefit Plan means any employee benefit plan as defined in Section 3(3) of ERISA which is maintained or contributed to for the benefit of the employees of
the Company, any of its Subsidiaries or any other member of its Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4).
Foreign Investment means any Investment in a Foreign Person.
Foreign Person means any Person that is incorporated or organized outside the United States or any State thereof (it being understood and agreed that any Person that is
incorporated or organized in any U.S. territory shall be deemed to be a Foreign Person), including any Foreign Subsidiary.
Foreign Subsidiary, of any Person, means any Subsidiary of such Person that is a Foreign Person. Unless the context otherwise requires, each reference to Foreign
Subsidiaries shall be a reference to Foreign Subsidiaries of the Company or its Subsidiaries.
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FRB means the Board of Governors of the Federal Reserve System or any successor thereto.
Funded Debt means all Debt of the Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, excluding (i) contingent obligations in respect
of Suretyship Liabilities (except to the extent constituting Suretyship Liabilities in respect of Debt of a Person other than the Company or any Subsidiary), (ii) Hedging Obligations and (iii) Debt of the Company to Subsidiaries and Debt of
Subsidiaries to the Company or to other Subsidiaries; provided that, for purposes of this definition, if the Company has made a Current Assets Election, Funded Debt at any time while such Current Assets Election remains in effect shall be
deemed to include the Current Assets Commitment Amount at such time.
Funded Debt to EBITDA Ratio means, as of the last day of any Fiscal Quarter, the ratio of (i) Funded Debt as of such day (minus Debt under Dealer Financings, Subordinated
Debt and Real Estate Debt) to (ii) EBITDA for the Computation Period ending on such day. If during any Computation Period (a) the Company or any Subsidiary shall have made any Material Disposition, the EBITDA for such Computation Period shall be
reduced by an amount equal to the EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Computation Period or increased by an amount equal to the EBITDA (if negative) attributable thereto for
such Computation Period and (b) if during such Computation Period the Company or any Subsidiary shall have made a Material Acquisition, the EBITDA for such Computation Period will be determined on a pro forma basis as if such
Material Acquisition were made, and all Debt incurred or assumed in connection therewith, was incurred or assumed on the first day thereof, provided that any pro forma adjustment related to cost savings or other synergies is
reasonably acceptable to the Required Lenders. As used in this definition, “Material Acquisition” means any Acquisition that involves the payment of consideration by the Company and its Subsidiaries in excess of $5,000,000; and “Material
Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Company and its Subsidiaries in excess of $5,000,000.
GAAP means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or organizations with similar functions of comparable stature and authority within the U.S. accounting profession), which are
applicable to the circumstances as of the date of determination.
Governmental Authority means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state, regional or local,
and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).
Guaranty means the Guaranty dated as of October 8, 1999, executed by certain Subsidiaries of the Company, a copy of which is attached as Exhibit C.
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Hazardous Substances - see Section 8.14.
Hedging Agreement means any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to
protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices.
Hedging Obligation means, with respect to any Person, any liability of such Person under any Hedging Agreement.
Increase Effective Date means the date of effectiveness of the Revolving Commitment Increase specified in the written request therefor delivered to the Agent in accordance
with Section 2.1.2(a); provided that the Increase Effective Date shall not occur unless each of the conditions set forth in Section 2.1.2 has been satisfied on or prior to such date (unless waived in writing by the Lenders
in accordance with Section 13.1).
Indemnified Liabilities - see Section 13.13.
Intangible Assets means, as to any Person, all assets of such Person that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer
software, copyrights, trade names, trademarks, patents, domain names, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.
Intercreditor Agreement means the Eighth Amended and Restated Intercreditor Agreement, dated as of September 26, 2011, among MBFS and the other Dealer Financing Providers
that are parties thereto from time to time, a copy of which (as in effect on the Effective Date) is attached hereto as Exhibit L.
Interest Expense means for any period the consolidated interest expense of the Company and its Subsidiaries for such period (including all imputed interest on Capital Leases
but excluding interest expense on Dealer Financings).
Interest Rate means, for each day, a rate per annum equal to the sum of (a) (i) in the case of any day from and including the first day of each calendar month through and
including the 15th day of such calendar month, Adjusted Term SOFR for the first day of such calendar month and (ii) in the case of any day from and including the 16th day of each calendar month through and including the last day of such calendar month, Adjusted Term SOFR for the 16th day of such calendar month (the rate set forth in this clause (a) being the “Adjusted Term SOFR Rate”) plus (b) (x) if the Total Outstandings are less than or equal to the Borrowing Base plus
35% of the Domestic Blue Sky Value at such time, a margin of 1.50% per annum, and (y) if the Total Outstandings exceed the Borrowing Base plus 35% of the Domestic Blue Sky Value at such time, then (A) a margin of 2.10% per annum shall apply
to the portion of the Loans equal to the amount by which the Total Outstandings exceed the Borrowing Base plus 35% of the Domestic Blue Sky Value at such time and (B) a margin of 1.50% per annum shall apply to the portion of Loans not
described in the foregoing clause (A) (with each determination of the Borrowing Base in this clause (b) to be effective as of the first day of the calendar month during which the applicable Borrowing Base Certificate is delivered).
Notwithstanding the foregoing, at any time an Event of Default exists, the applicable margin then applicable shall be increased by two percent (2.00%) per annum.
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Inventory has the meaning assigned thereto in the Uniform Commercial Code.
Investment means, relative to any Person, any investment in another Person, whether by acquisition of any debt or equity security, by making any loan or advance or by
becoming obligated with respect to a Suretyship Liability in respect of obligations of such other Person (other than travel and similar advances to employees in the ordinary course of business). For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested (with respect to Investments made in currencies other than Dollars, calculated at the Dollar Equivalent thereof as of the date such Investment is made, without any recalculation thereafter to
reflect fluctuations in currency values), without adjustment for subsequent increases or decreases in the value of such Investment.
Issuing Lender means MBFS in its capacity as the issuer of Letters of Credit and its successors and assigns in such capacity.
L/C Application means, with respect to any request for the issuance of a Letter of Credit, a letter of credit application in the form of Exhibit J.
L/C Commitment Amount – see Section 2.1.3.
Lender - see the Preamble. References to the “Lenders” shall include the Issuing Lender; for purposes of clarification only, to the extent that MBFS (or any
successor Issuing Lender) may have any rights or obligations in addition to those of the other Lenders due to its status as Issuing Lender, its status as such will be specifically referenced.
Lender Party - see Section 13.13.
Letter of Credit - see Section 2.1.3.
Letter of Credit Fee - see Section 5.3.
Leverage Ratio means, as of the last day of any Fiscal Quarter, the ratio of (i) Non-Vehicle Long Term Debt as of such day to (ii) Leverage EBITDA for the Computation Period
ending on such day.
Leverage EBITDA means, for any period, Consolidated Net Income for such period (a) plus, to the extent deducted in determining such Consolidated Net Income, Interest
Expense, income tax expense, depreciation and amortization, minority interest and franchise taxes for such period, all calculated for the Company and its Subsidiaries on a consolidated basis and (b) plus or minus any one-time items (e.g.,
impairments, write-downs, extraordinary losses, extraordinary gains) identified by the Company in its quarterly or annual earnings press releases filed with or furnished to the SEC.
Liabilities has the meaning assigned thereto in the Security Agreement.
Lien means, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned or being purchased or acquired by
such Person which secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise.
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Loan Documents means this Agreement, the Notes, the Guaranty, the Letters of Credit and the Collateral Documents.
Loan Party means the Company and each Subsidiary that is a party to any Loan Document.
Loans means the Revolving Loans.
Manufacturer means the manufacturer or distributor of a New Motor Vehicle.
Margin Stock means any “margin stock” as defined in Regulation U.
Material Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the financial condition, operations, assets, business, properties or
prospects of the Company and its Subsidiaries taken as a whole, (b) a material impairment of the ability of the Company or any Subsidiary to perform any of its obligations under any Loan Document or (c) a material adverse effect upon any
substantial portion of the collateral under the Collateral Documents or upon the legality, validity, binding effect or enforceability against the Company or any Subsidiary of any Loan Document.
Maximum Availability means, at any time, (a) the Borrowing Base plus 35% of the Domestic Blue Sky Value at such time plus, on and after the Increase
Effective Date, the Overadvance Amount minus (b) the Total Outstandings at such time.
MBFS – see the Preamble.
MB Greenwich means PAG Greenwich M1, LLC, a Delaware limited liability company.
Merger – see the Thirteenth Amendment.
MergerCo means Motown Acquisition Corp., a Delaware corporation.
Merger Agreement – see the Thirteenth Amendment.
Mortgage means a mortgage, deed of trust, or similar instrument granting the Agent a Lien on Eligible Real Estate of the Company or any Subsidiary, in form and substance
reasonably satisfactory to the Agent.
Motor Vehicle means an automobile, truck, van
or other motor vehicle, including New Motor Vehicles, Used Motor Vehicles and Auction Motor Vehicles, that constitutes Inventory of the Company and its Subsidiaries, excluding any motor vehicle not held for sale or lease.
Multiemployer Pension Plan means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Company or any member of the Controlled Group may have any
liability.
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New Motor Vehicle means any Motor Vehicle purchased by the Company or any of its Subsidiaries directly from the Manufacturer of such Motor Vehicle or from another licensed
dealer that has not been previously owned by any other Person.
Non-Defaulting Lender means, at any time, each Lender that is not a Defaulting Lender at such time.
Non-Use Fee – see Section 5.1.
Non-Vehicle Long Term Debt means all debt of the Company determined on a consolidated basis in accordance with GAAP, other than Floor Plan Financing.
Note – see Section 3.1.
OFAC – see Section 8.25.
Operating Lease means any lease of (or other agreement conveying the right to use) any property by the Company or any Subsidiary, as lessee, other than any Capital Lease.
Overadvance Commitment means, as to any Lender, from and after the Increase Effective Date, such Lender’s portion of its Revolving Commitment designated as its Overadvance
Commitment on Schedule 2.1, as updated pursuant to Section 2.1.2.
Overadvance Commitment Amount means, subject to and after the Increase Effective Date, an amount of up to $400,000,000 as requested by the Company under Section 2.1.2,
in each case, as reduced from time to time pursuant to Section 6.1.
PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.
Pension Plan means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer Pension Plan), and
to which the Company or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or
by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
Periodic Term SOFR Determination Day has the meaning specified in the definition of “Term SOFR”.
Permitted Restrictions means restrictions on the ability of any Subsidiary to declare or pay any dividend or make other distributions, or to advance or loan funds, to the
Company or any other Subsidiary or to grant Liens on the Capital Stock of a Subsidiary: (i) as set forth on Schedule 9.17, including restrictions imposed by existing Dealer Financing arrangements; (ii) pursuant to modifications to any
Dealer Financing arrangement, provided that such modifications are not materially more restrictive; (iii) applicable to a Person at the time such Person becomes a Subsidiary and not created in contemplation of such an event; (iv) resulting
from Manufacturer-imposed modifications to any Dealer Agreement; (v) imposed by applicable law; or (vi) pursuant to the Project Motown Senior Unsecured Bridge Facility or Debt permitted by Section 9.7(s).
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Person means any natural person, corporation, partnership, joint venture, trust, limited liability company, association, Governmental Authority or any other entity, whether
acting in an individual, fiduciary or other capacity.
Pledge Agreement means the Pledge Agreement dated as of October 8, 1999, executed by the Company and each Subsidiary which itself owns any Subsidiary (to the extent not
prohibited by a Permitted Restriction in favor of a Manufacturer), a copy of which is attached as Exhibit E.
Pledge Line Financing means a financing undertaken by the Company or any Subsidiary with a Dealer Financing Provider in connection with which a Motor Vehicle is sold or
leased by the Company or such Subsidiary to a customer in the ordinary course of business under a retail installment contract or retail lease, and pursuant to which financing (i) such Dealer Financing Provider provides funds to the Company or such
Subsidiary, all of which funds are used to (A) pay off the Floor Plan Financing obligation secured by such Motor Vehicle or (B) acquire such Motor Vehicle in the ordinary course of business from another source, and (ii) pursuant to which the
Company or such Subsidiary grants such Dealer Financing Provider a security interest in such retail installment contract or retail lease (and in any retail installment contract or retail lease entered into in replacement or substitution thereof,
whether with the same or a different customer) and in any security interest securing the payment and performance rights represented thereby.
Project Motown Permanent Financing means any combination of (a) the Revolving Commitment Increase and (b) unsecured senior subordinated notes, in form and substance
reasonably acceptable to the Agent, issued pursuant to one or more Rule 144A/Regulation S offerings or other private placement transactions, in each case, incurred or issued, as applicable, by, prior to the consummation of the Merger, MergerCo and,
as of and after the Effective Time (as defined in the Merger Agreement as in effect on the date hereof), the Company in lieu of then Project Motown Senior Unsecured Bridge Facility to finance a portion of the Public Shareholder Buyout or to
refinance the Project Motown Senior Unsecured Bridge Facility (the “Project Motown Subordinated Notes”).
Project Motown Senior Unsecured Bridge Facility means a senior unsecured 364-day bridge loan facility in an aggregate principal amount not to exceed $1,800,000,000 to be
incurred by, prior to the consummation of the Merger, MergerCo and, as of and after the Effective Time (as defined in the Merger Agreement as in effect on the date hereof) the consummation of the Merger, the Company in connection with the Public
Shareholder Buyout Transactions to the extent Project Motown Permanent Financing resulting in the proceeds of at least $1,800,000,000 have not been incurred or issued by, prior to the consummation of the Merger, MergerCo and, as of and from the
Effective Time (as defined in the Merger Agreement as in effect on the date hereof), the Company or prior to the Closing Date (as defined in the Merger Agreement as in effect on the date hereof).
Project Motown Subordinated Notes – see the definition of “Project Motown Permanent Financing”.
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Pro Rata Share means, with respect to any Lender, the percentage which (a) the aggregate amount of such Lender’s Commitments is of (b) the Commitments of all Lenders; provided
that, after any of the Commitments have been terminated, “Pro Rata Share” shall mean, as to any Lender, the percentage which the sum of the aggregate principal amount of such Lender’s Revolving Loans plus the participations of such Lender
in all Letters of Credit plus the Stated Amount of all Letters of Credit. The Pro Rata Share of each Lender as of (a) the Thirteenth Amendment Effective Date and (b) the Increase Effective Date is set forth on Schedule 2.1.
PTL means Penske Truck Leasing Co., L.P., a Delaware limited partnership.
Public Shareholder Buyout means, collectively, (a) the Merger and (b) at the effective time of the Merger, the cancelation of each share of common stock of the Company not
held by Penske Corporation, Penske Automotive Holdings Corp., Mitsui & Co., Ltd. and Mitsui & Co. (U.S.A.), Inc. and conversion of each such share into only the right to receive the per share merger consideration set forth in the Merger
Agreement.
Public Shareholder Buyout Transactions means (a) the Public Shareholder Buyout, (b) the incurrence of the Project Motown Senior Unsecured Bridge Facility, to the extent
applicable, (c) the incurrence or issuance, as applicable, of any Project Motown Subordinated Notes, (d) the payment of fees and expenses in connection with the foregoing clauses (a) through (c) and (e) all transactions contemplated
by the Merger Agreement.
RCRA - see Section 8.14.
Reaffirmation means a reaffirmation of loan documents in substantially the form of Exhibit H.
Real Estate Debt means any Debt incurred to acquire or improve real estate used or to be used by the Company or its Subsidiaries in their businesses and secured by Liens on
such real estate, improvements and fixtures, which Liens attach solely to such real estate and improvements (and any fixtures thereon) and other assets of the owner of such real estate, but to no other property of the Company or its other
Subsidiaries.
Refinancing Debt means Debt that refunds or refinances any Debt, including Debt that refinances other Refinancing Debt; provided that (i) the Refinancing Debt has a
maturity no earlier than the maturity of the Debt being refinanced, (ii) the Refinancing Debt has a weighted average life to maturity no earlier than the weighted average life to maturity of the Debt being refinanced, (iii) the Refinancing Debt is
incurred in an aggregate principal amount (or, if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or, if issued with original issue discount, the aggregate accreted value)
then outstanding of the Debt being refinanced, (iv) if the Debt being refinanced is Subordinated Debt, the subordination terms of the Refinancing Debt are at least as favorable to the Lenders as the subordination terms of the Debt being refinanced
and (v) if the Debt being refinanced is unsecured, the Refinancing Debt shall also be unsecured (except to the extent secured by Liens that are separately permitted by Section 9.8).
Regulation U means Regulation U of the FRB.
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Release has the meaning specified in CERCLA and the term “Disposal” (or “Disposed”) has the meaning specified in RCRA; provided that in the event
either CERCLA or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply as of the effective date of such amendment; and provided, further, that to the extent that the laws of a
state wherein any affected property lies establish a meaning for “Release” or “Disposal” which is broader than is specified in either CERCLA or RCRA, such broader meaning shall apply.
Relevant Governmental Body means the Federal Reserve Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve
Board or the Federal Reserve Bank of New York, or any successor thereto.
Rental Expense means, with respect to any period, all payments made or required to be made by the Company and its Subsidiaries, as lessee or sublessee under any Operating
Lease or any Capital Lease, as rental payments or contingent rentals, as calculated in accordance with GAAP.
Required Lenders means Lenders having Pro Rata Shares aggregating more than 70%. The Pro Rata Share of any Defaulting Lender shall be disregarded in determining Required
Lenders at any time.
Restricted Affiliate means (x) the Company and its Subsidiaries, (y) any Person that, directly or indirectly, controls or is controlled by or is under common control with
the Company or any Subsidiary and (z) any “insider” of the Company or any Subsidiary, within the meaning of Section 101(31) of the United States Bankruptcy Code; for purposes of clause (y) of this definition, “control” means the power to
direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
Restricted Person – see Section 8.25.
Revolving Commitment means, as to any Lender, such Lender’s commitment to make Revolving Loans and/or issue or participate in Letters of Credit under this Agreement. Each
Lender’s Pro Rata Share of the Revolving Commitment Amount and the L/C Commitment Amount as in effect on (a) the Thirteenth Amendment Effective Date is set forth on Schedule 2.1 and (b) the Increase Effective Date shall be set forth on Schedule
2.1, as updated pursuant to Section 2.1.2.
Revolving Commitment Amount means (i) prior to the Increase Effective Date, $1,500,000,000 and (ii) subject to and after the Increase Effective Date, an amount of up to
$2,400,000,000 as requested by the Company under Section 2.1.2, in each case, as reduced from time to time pursuant to Section 6.1.
Revolving Commitment Increase – see Section 2.1.2.
Revolving Loan – see Section 2.1.1.
Revolving Outstandings means, at any time, the aggregate principal amount of all outstanding Revolving Loans.
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Same Day Loan means a Revolving Loan, in an aggregate amount (for all such Same Day Loans to be made on a particular Business Day) not to exceed Thirty Million and 00/100
Dollars ($30,000,000.00) for such particular Business Day, that is funded by the Agent and the Lenders on the same Business Day as the Company’s request therefor, all as more completely set forth in Section 2.2(b).
Same Day Prepayment means a voluntary prepayment of the Revolving Outstandings, in an amount not to exceed Thirty Million and 00/100 Dollars ($30,000,000.00) for any
particular Business Day, that is made by the Company on the same Business Day as Agent receives notice of such prepayment, all as more completely set forth in Section 6.2(b).
SEC means the Securities and Exchange Commission or any other Governmental Authority succeeding to any of the principal functions thereof.
Security Agreement means the Second Amended and Restated Security Agreement dated as of September 8, 2004, by the Company and certain Subsidiaries in the form attached
hereto as Exhibit D.
Seller Subordinated Debt means unsecured indebtedness of the Company that:
(a) is subordinated, substantially upon the terms set forth in Exhibit I or other terms that are more favorable to the Agent and
the Lenders, in right of payment to the payment in full in cash of the Loans and all other amounts owed under the Loan Documents (whether or not matured or due and payable); and
(b) represents all or part of the purchase price payable by the Company in connection with an Acquisition permitted under this Agreement.
SOFR means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
SOFR Adjustment means a percentage equal to 0.05% per annum.
SOFR Administrator means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
Specified Current Assets Commitment Amount means, with respect to any Current Assets Election, the amount specified by the Company as the “Specified Current Assets
Commitment Amount” in such Current Assets Election.
Specified Merger Agreement Representations means the representations made by, or with respect to, the Company and its Subsidiaries in the Merger Agreement as are material to
the interests of the Lenders, but only to the extent that MergerCo (or its Affiliates) have the right (taking into account any applicable cure provisions) to terminate MergerCo’s (or its Affiliates’) obligations under the Merger Agreement or to
decline to consummate the Merger without resulting in liability to MergerCo (or any such Affiliate) as a result of a breach of such representations in the Merger Agreement.
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Specified Representations means those representations and warranties made in respect to the Loan Parties by the Company in Section 8.1 (with respect to
organizational existence of the Loan Parties only), the first sentence of Section 8.2 (as it relates to the due authorization, execution, delivery and performance of the Loan Documents by the Loan Parties), the second sentence of Section
8.2 (limited to clause (b)(ii) thereof and to the execution, delivery and performance of the Loan Documents by the Loan Parties and the borrowings of the Company thereunder), Section 8.3, Section 8.10, Section 8.11,
Section 8.13, and Section 8.25 (provided that, for purposes of Section 8.25, such representation and warranty shall only apply to the use of proceeds of the Loans made on the Increase Effective Date).
Stated Amount means, with respect to any Letter of Credit at any date of determination, (a) the maximum aggregate amount available for
drawing thereunder under any and all circumstances plus (b) the aggregate amount of all unreimbursed payments and disbursements under such Letter of Credit.
Stockholders’ Equity, of any Person, means the excess of total assets over total liabilities of such Person and its Subsidiaries, as reported on such Person’s consolidated
financial statements.
Subordinated Debt means (i) the Subordinated Notes, (ii) Seller Subordinated Debt, (iii) the Project Motown Subordinated Notes, as applicable, and (iv) any other unsecured
Debt of the Company which has subordination terms, covenants, pricing and other terms which have been approved in writing by the Required Lenders.
Subordinated Notes means (i) the 3.50% Senior Subordinated Notes due 2025 of the Company (and related guarantees) in the aggregate principal amount of $550,000,000 and (ii)
the 3.75% Senior Subordinated Notes due 2029 of the Company (and related guarantees) in the aggregate principal amount of $500,000,000.
Subsidiary means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person and/or its other Subsidiaries own,
directly or indirectly, such number of outstanding shares or other ownership interests as have more than 50% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or
other entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Company.
Suretyship Liability means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct
or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or\ otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation or other liability of any other
Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person’s obligation in respect of any Suretyship
Liability shall (subject to any limitation set forth therein) be deemed to be the principal amount of the debt, obligation or other liability supported thereby and shall in all cases exclude any guarantees by the Company or any Subsidiary of an
operating lease of the Company or any Subsidiary.
Taxes - see Section 7.6.
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Term SOFR means, for any calculation with respect to a borrowing, the Term SOFR Reference Rate for a one (1) month tenor (such day, the “Periodic Term SOFR Determination
Day”) that is two (2) U.S. Government Securities Business Days prior to the date of such borrowing, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic
Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR
will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR
Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day.
Term SOFR Administrator means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Agent in its
reasonable discretion).
Term SOFR Reference Rate means the forward-looking term rate based on SOFR.
Termination Date means the earlier to occur of (a) September 30, 2029 (or any later date that may be established as the Termination Date pursuant to Section 2.5) or (b) such
other date on which the Commitments terminate pursuant to Section 6 or 11.
Thirteenth Amendment means the Limited Consent and Thirteenth Amendment to Fifth Amended and Restated Credit Agreement, dated as of the Thirteenth Amendment Effective Date,
among the Company, the Lenders and the Agent.
Thirteenth Amendment Effective Date means October 15, 2026.
TMCC means Toyota Motor Credit Corporation.
Total Outstandings means, at any time, the sum of (a) the Revolving Outstandings plus (b) the Stated Amount of all Letters of Credit.
Unadjusted Benchmark Replacement means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
Uniform Commercial Code means the Uniform Commercial Code as in effect from time to time in the State of New York.
Unmatured Event of Default means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of Default.
U.S. Government Securities Business Day means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association
recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
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Used Motor Vehicle means, at any time, a Motor
Vehicle that is not a New Motor Vehicle or an Auction Motor Vehicle.
Wholly Owned Subsidiary means, as to any Person, any other Person all of the Equity Interests of which (other than directors’ qualifying shares required by law) are owned by
such Person directly and/or through other Wholly Owned Subsidiaries.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are equally applicable to the singular and plural forms of
the defined terms.
(b) Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(c) The term “including” is not limiting and means “including
without limitation.”
(d) In the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.”
(e) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited
by the terms of any Loan Document and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.
(f) This Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and each shall be performed in accordance with its terms.
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the Company, the Lenders and the other parties thereto and are the products of all parties. Accordingly, they shall not be construed against the Agent or the Lenders merely
because of the Agent’s or Lenders’ involvement in their preparation.
(h) References herein to the “knowledge” of the Company or any
Subsidiary shall mean the actual knowledge of the officers of the Company or such Subsidiary.
1.3 Effective Date. On the Effective Date, (i) the Company agrees that it will pay to the Agent for the account of each Lender
that is a party to the Existing Agreement all interest and fees owed to such Lender under the Existing Agreement, (ii) each Lender’s Pro Rata Share shall be as set forth on Schedule 2.1 to this Agreement, (iii) all revolving loans under
the Existing Agreement outstanding on the Effective Date shall become Revolving Loans hereunder, (iv) [reserved], (v) each Lender that will have a greater principal amount of Revolving Loans outstanding hereunder on the Effective Date than such
Lender had revolving loans outstanding under the Existing Agreement immediately prior to the Effective Date will fund to the Agent the amount of the difference, (vi) [reserved] and (vii) the Agent will, if necessary, apply the proceeds of such
fundings to disburse funds to the Lenders such that, after giving effect to such disbursements, each Lender has the correct amount of Loans outstanding on the Effective Date.
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1.4 Domestic Subsidiaries. Wherever herein the allocation, ownership, character or amount of any asset or liability or item of
income or expense is said to be “of”, “to” or “attributable to” the Domestic Subsidiaries, such phrase means of, to or attributable to the Domestic Subsidiaries disregarding any interest of the Domestic Subsidiaries in, any amount received or
receivable by the Domestic Subsidiaries from, and any assets or liabilities of, the Foreign Subsidiaries of the Domestic Subsidiaries.
1.5 Capital Lease Accounting. Notwithstanding anything to the contrary set forth herein, any change in accounting for leases
pursuant to GAAP resulting from the adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) (“FAS 842”), to the extent such adoption would require treating any lease (or similar arrangement
conveying the right to use) as a capital lease where such lease (or similar arrangement) would not have been required to be so treated under GAAP as in effect on December 31, 2015, such lease shall not be considered a capital lease, and all
calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith. Further, vehicle lease transactions that qualify as sales-type leases under ASC 840 whereby the
Company is party to a guaranteed residual value or buyback obligation, shall not be considered a capital lease.
SECTION 2 COMMITMENTS OF THE LENDERS; BORROWING PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this Agreement, each of the Lenders, severally and for itself
alone, agrees to make Loans to, and to issue or participate in Letters of Credit for the account of, the Company as follows:
2.1.1 Revolving Loan Commitment. Each Lender will make loans on a revolving basis (“Revolving Loans”) to the Company from
time to time until the Termination Date in such Lender’s Pro Rata Share of such aggregate amounts as the Company may request; provided that (x) the Revolving Outstandings will not at any time exceed the Revolving Commitment Amount and
(y) the Total Outstandings will not, at any time, exceed the Borrowing Base by more than the sum of (I) on and after the Increase Effective Date, the Overadvance Commitment Amount and (II) 35% of the Domestic Blue Sky Value at such time.
2.1.2 Conditional Increase of Revolving Commitment Amount. The Revolving Commitment Amount may be increased one time at the option
of the Company by an aggregate of up to $900,000,000 (such increase, the “Revolving Commitment Increase”), of which up to $400,000,000 can be designated as Overadvance Commitments, and the Revolving Commitment and Overadvance Commitment,
as applicable, of each Lender shall increase to an amount equal to the Pro Rata Share of such Lender thereupon be the amount set forth opposite such Lender’s name on Schedule 2.1 under the heading “Subject to and after the Increase
Effective Date”, effective as of the Increase Effective Date, subject to the satisfaction of the following conditions (unless waived in writing by the Lenders in accordance with Section 13.1):
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(a) the Agent shall have received a written request, executed
by an authorized officer of the Company, for such Revolving Commitment Increase which shall indicate (i) the desired Increase Effective Date (which shall not be less than one (1) Business Day following the date of such request), (ii) the
aggregate amount by which the Revolving Commitment Amount will be increased (up to $900,000,000) and (iii) the aggregate amount of such increase that will be designated as Overadvance Commitments (up to $400,000,000), if any; provided
that such Revolving Commitment Increase request may be conditioned on the occurrence of any subsequent event, including, without limitation, the consummation of the Public Shareholder Buyout, in which case upon the failure of such subsequent
event to close, such Revolving Commitment Increase request may be cancelled by written notice to the Agent on or prior to the proposed Increase Effective Date;
(b) the Agent shall have received the following:
(i) certified copies of resolutions of the
board of directors (or similar body) of the Company and each other Loan Party authorizing the Revolving Commitment Increase;
(ii) a certificate of the Secretary or an
Assistant Secretary (or other appropriate representative) of each Loan Party certifying the names of the officer or officers of such entity authorized to sign the Loan Documents to which such entity is a party, together with a sample of the
true signature of each such officer (it being understood that the Agent and each Lender may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein);
(iii) a counterpart of a Reaffirmation executed
by the Company and each Subsidiary of the Company (other than Foreign Subsidiaries and MB Greenwich);
(iv) an opinion of counsel reasonably
satisfactory to the Agent; and
(v) a certificate of the Secretary or
Assistant Secretary (or other appropriate representative) of each Loan Party certifying that either (i) there has been no change or amendment (other than those attached to such certificate) to its respective articles of incorporation, by-laws,
certificate of formation or operating agreement (as applicable) or other governing documents since certified copies of such documents were provided to the Agent in connection with this Agreement or (ii) such documents have been delivered to the
Agent in connection with the Revolving Commitment Increase;
(c) the Agent shall have received evidence that, substantially
concurrently with the initial funding of the Revolving Commitment Increase, the Merger will be consummated in all material respects in accordance with the Merger Agreement (without giving effect to any amendment, waiver or consent by the
Company and/or any Affiliate thereof that is materially adverse to the interests of the Lenders in their respective capacities as such without the consent of the Lenders (which approval shall not be unreasonably withheld, conditioned or
delayed) (provided that the Lenders shall be deemed to have consented to such amendment, supplement, waiver or consent unless they shall object thereto within two (2) Business Days after receipt of written notice of such amendment, supplement,
waiver or consent) (it being understood and agreed that (a) any amendment, supplement, waiver, consent or other modification that decreases the purchase price in respect of the Merger shall be deemed not to be materially adverse to the
interests of the Lenders so long as any such decrease in purchase price (together with any other decrease in purchase price pursuant to any other amendment, waiver, consent or other modification) is less than 10% of the total purchase price,
and (b) any amendment, supplement, waiver, consent or other modification that increases the purchase price in respect of the Merger shall be deemed not to be materially adverse to the interests of the Lenders so long as such increase is funded
by the issuance by MergerCo of common equity or such increase is pursuant to any working capital and/or purchase price (or similar) adjustment provision set forth in the Merger Agreement;
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(d) the Agent shall have received a certificate signed by an
authorized officer of the Company certifying that the Specified Merger Agreement Representations and the Specified Representations are true and correct in all material respects on and as of the Increase Effective Date with the same effect as if
then made (except, in the case of any Specified Representation, to the extent stated to relate to a specific earlier date, in which case such Specified Representation are true and correct as of such earlier date);
(e) the Agent shall have received a pro forma
Borrowing Base Certificate dated as of the Increase Effective Date and giving effect to the Public Shareholder Buyout and the borrowings to be made on such date;
(f) the Agent shall have received copies of the Merger
Agreement and each other material (as determined by the Company in good faith) agreement executed by the Company or a Subsidiary thereof in connection with the Public Shareholder Buyout Transactions, together with evidence that the Equity
Contribution in an aggregate amount not less than $2,200,000,000 has been, or substantially concurrently with the borrowing on the Increase Effective Date will be, funded; and
(g) the Company shall have paid to the Agent all accrued and unpaid interest, fees, costs and expenses to the extent then due and payable on the Increase Effective Date and reimbursable under Section 13.6 to the extent invoiced to the Company in
writing prior to the Increase Effective Date.
If the Increase Effective Date has not occurred on or prior to five (5) Business Days after the Outside Date (as defined in the Merger Agreement as in effect on the Thirteenth Amendment Effective
Date), the Revolving Commitment Increase shall automatically expire and be of no further force or effect, and the Revolving Commitment Amount shall thereafter be determined without reference thereto. The Agent shall promptly notify the Company and
each Lender of the occurrence of the Increase Effective Date and shall provide an updated Schedule 2.1 which shall indicate the increased Revolving Commitment and Overadvance Commitment of each Lender as of the Increase Effective Date.
2.1.3 L/C Commitment. (a) The Issuing Lender will issue letters of credit, in each case containing such terms and conditions as are
permitted by this Agreement and are reasonably satisfactory to the Issuing Lender (each, a “Letter of Credit”), at the request of and for the account of the Company from time to time before the date which is 30 days prior to the
Termination Date and (b) as more fully set forth in Section 2.7.2, each Lender agrees to purchase a participation in each such Letter of Credit; provided that (i) the aggregate Stated Amount of all Letters of Credit shall not at
any time exceed $75,000,000 (the “L/C Commitment Amount”) and (ii) the Total Outstandings will not, at any time, exceed the Borrowing Base by more than the sum of (A) on and after the Increase Effective Date, the Overadvance Commitment
Amount and (B) 35% of the Domestic Blue Sky Value at such time.
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2.2 Loan Procedures. (a) Except for Same Day Loans funded under Section 2.2(b) and the Revolving Commitment Increase
extended pursuant to Section 2.1.2, the Company shall give written notice or telephonic notice (followed immediately by written confirmation thereof) to the Agent of each proposed borrowing not later than 10:00 A.M., Detroit time, at
least one Business Days prior to the proposed date of such borrowing. Each such notice shall be effective upon receipt by the Agent, shall be irrevocable and shall specify the date and amount of the proposed borrowing. Within one Business Day
after receipt of such notice, the Agent shall advise each Lender thereof. Not later than 1:00 P.M., Detroit time, on the date of a proposed borrowing, each Lender shall provide the Agent at the office specified by the Agent with immediately
available funds covering such Lender’s Pro Rata Share of such borrowing and, so long as the Agent has not received written notice that the conditions precedent set forth in Section 10 with respect to such borrowing have not been
satisfied, the Agent shall pay over the funds received by the Agent to the Company on the requested borrowing date. Each borrowing shall be on a Business Day.
(b) In addition to borrowings under Section 2.2(a), the
Company may give written or electronic notice or telephonic notice (followed immediately by written or electronic confirmation thereof) to the Agent of a proposed Same Day Loan not later than 11:00 A.M., Detroit time, on any Business Day that
the Company has not made (and will not make) a Same Day Prepayment. Each such notice shall be effective upon receipt by the Agent, shall be irrevocable, shall specify the amount of the proposed Same Day Loan, which amount may not exceed Thirty
Million and 00/100 Dollars ($30,000,000.00) for any particular Business Day and shall specify whether such proposed Same Day Loan is to be a Revolving Loan. By 11:30 A.M., Detroit time, on the Business Day that the Agent receives a notice of a
proposed Same Day Loan, the Agent shall advise each Lender thereof. Not later than 3:00 P.M., Detroit time, on the Business Day that the Agent receives a notice of a proposed Same Day Loan, each Lender shall provide the Agent at the office
specified by the Agent with immediately available funds covering such Lender’s Pro Rata Share of such Same Day Loan and, so long as the Agent has not received written notice from a Lender (before 3:00 P.M., Detroit time, on the Business Day
that the Agent receives a notice of a proposed Same Day Loan) that the conditions precedent set forth in Section 10 with respect to such borrowing have not been satisfied, the Agent shall pay over the funds received by the Agent by a
federal wire transfer to the Company’s bank account, which federal wire transfer must be initiated by the Agent on or before 4:00 P.M., Detroit time, on the Business Day that the Agent receives a notice of the proposed Same Day Loan. Each Same
Day Loan for which the above requirements are satisfied shall be treated as being made by the Lenders (and shall be part of the Revolving Outstandings) on the Business Day that the Agent initiates the federal wire transfer, even if the Company
cannot confirm the receipt of such funds until the next Business Day. Each Same Day Loan must be requested (and shall be made) on a Business Day. The Company may not request a Same Day Loan on any Business Day if the Company has notified the
Agent that the Company is making a Same Day Prepayment on such Business Day. The Company may request a Same Day Loan on the same Business Day that it has previously requested a borrowing under Section 2.2(a) and/or on the same Business
Day for which the Company has notified the Agent of a voluntary prepayment under Section 6.2(a) and such Same Day Loan shall be funded in addition to, separately from and without any netting for such other borrowing and/or voluntary
prepayment.
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(c) All borrowings and repayments of Loans shall be effected in accordance with
each Lender’s Pro Rata Share.
2.3 Commitments Several. The failure of any Lender to
make a requested Loan on any date shall not relieve any other Lender of its obligation (if any) to make a Loan on such date, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other
Lender.
2.4 Certain Conditions. Notwithstanding any other
provision of this Agreement, no Lender shall have an obligation to make any Loan, if an Event of Default or Unmatured Event of Default has occurred and is continuing.
2.5 Extension of Termination Date. On or prior to September 30th of the year which is two (2) years prior to the then current Termination Date, the Termination Date shall be extended for an additional year if the Agent (acting at the request of all of the Lenders) shall notify the Company
in writing on or prior to such date that the Termination Date is so extended for an additional year (such notice, an “Extension Notice”). If the Agent shall have issued an Extension Notice by the time required above, the Agent shall
promptly notify the Company and each Lender of the new Termination Date. If no Extension Notice is received by the Company on or prior to such date or any such anniversary, as the case may be, the Termination Date shall not be extended on such
date.
2.6 Defaulting Lenders.
(a) Defaulting Lender Adjustments. Notwithstanding
anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i) Waivers and Amendments. Such
Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement or any other Loan Document shall be restricted as set forth in the definition of Required Lenders.
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(ii) Defaulting Lender Waterfall. Any
payment of principal, interest, fees or other amounts received by the Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 11 or otherwise), or received by the Agent from a
Defaulting Lender pursuant to Section 7.4, shall be applied at such time or times as may be determined by the Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Agent hereunder; second,
as the Company may request (so long as no Event of Default or Unmatured Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as
determined by the Agent; third, if so determined by the Agent in its discretion, to be held in a deposit account as cash collateral for release in such order as the Agent shall determine in order to satisfy (x) such Defaulting Lender’s
potential future funding obligations with respect to Loans under this Agreement and (y) such Defaulting Lender’s future indemnity obligations to the Agent under this Agreement; fourth, to the payment of any amounts owing to the Lenders
as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Event of
Default or Unmatured Event of Default exists, to the payment of any amounts owing to the Company as a result of any judgment of a court of competent jurisdiction obtained by the Company against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that, if (x) such payment is a payment of the
principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share and (y) such Loans were made at a time when the conditions set forth in Section 10.2 were satisfied or waived, such
payment shall be applied solely to pay the Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all Loans are held by the Lenders
pro rata in accordance with the Commitments hereunder. Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash
collateral pursuant to this Section 2.6(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii) Certain Fees. No Defaulting
Lender shall be entitled to receive any Non-Use Fee pursuant to Section 5.1 for any period during which that Lender is a Defaulting Lender (and the Company shall not be required to pay any such fee that otherwise would have been
required to have been paid to that Defaulting Lender).
(b) Defaulting Lender Cure. If the Company and the Agent
agree in writing that a Lender is no longer a Defaulting Lender, the Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include
arrangements with respect to any cash collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Agent may determine to be necessary to cause
the Loans to be held pro rata by the Lenders in accordance with the Commitments hereunder, whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustment will be made retroactively with respect to
fees accrued or payments made by or on behalf of the Company while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.
2.7 Letter of Credit Procedures.
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2.7.1 L/C Applications. The Company shall give notice to the Agent and the Issuing Lender of the proposed issuance of each Letter of Credit (other than
the Existing Letter of Credit) on a Business Day which is at least three Business Days (or such lesser number of days as the Agent and the Issuing Lender shall agree in any particular instance in their sole discretion) prior to the proposed date
of issuance of such Letter of Credit. Each such notice shall be accompanied by an L/C Application, duly executed by the Company and in all respects reasonably satisfactory to the Agent and the Issuing Lender, together with such other
documentation as the Agent or the Issuing Lender may reasonably request in support thereof, it being understood that each L/C Application shall specify, among other things, the date on which the proposed Letter of Credit is to be issued, the
expiration date of such Letter of Credit (which shall not be later than the earlier to occur of (x) one year after the date of issuance thereof and (y) thirty days prior to the scheduled Termination Date) and whether such Letter of Credit is to
be transferable in whole or in part. So long as the Issuing Lender has not received written notice that the conditions precedent set forth in Section 10 with respect to the issuance of such Letter of Credit have not been satisfied, the
Issuing Lender shall issue such Letter of Credit on the requested issuance date. The Issuing Lender shall promptly advise the Agent and each Lender of the issuance of each Letter of Credit and of any amendment thereto, extension thereof or event
or circumstance changing the amount available for drawing thereunder. In the event of any inconsistency between the terms of any L/C Application and the terms of this Agreement, the terms of this Agreement shall control.
2.7.2 Participations in Letters of Credit. Concurrently with the issuance of each Letter of Credit (or, in the case of the Existing Letter of Credit, on
the Effective Date), the Issuing Lender shall be deemed to have sold and transferred to each other Lender, and each other Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender, without
recourse or warranty, an undivided interest and participation, to the extent of such other Lender’s Pro Rata Share, in such Letter of Credit and the Company’s reimbursement obligations with respect thereto. For the purposes of this Agreement,
the unparticipated portion of each Letter of Credit shall be deemed to be the Issuing Lender’s “participation” therein. The Issuing Lender hereby agrees, upon request of the Agent or any Lender, to deliver to the Agent or such Lender a list of
all outstanding Letters of Credit issued by the Issuing Lender, together with such information related thereto as the Agent or such Lender may reasonably request.
2.7.3 Reimbursement Obligations. The Company hereby unconditionally and irrevocably agrees to reimburse the Issuing Lender for each payment or
disbursement made by the Issuing Lender under any Letter of Credit honoring any demand for payment made by the beneficiary thereunder, in each case on the date that such payment or disbursement is made. If any amount of such payment or
disbursement is not reimbursed on the date thereof, a Revolving Loan shall be deemed to have been made in such amount and shall bear interest from the date thereof at the interest rate applicable to Revolving Loans. The Issuing Lender shall
notify the Company and the Agent whenever any demand for payment is made under any Letter of Credit by the beneficiary thereunder; provided that the failure of the Issuing Lender to so notify the Company shall not affect the rights of the
Issuing Lender or the Lenders in any manner whatsoever.
2.7.4 Limitation on Obligations of Issuing Lender. In determining whether to pay under any Letter of Credit, the Issuing Lender shall not have any
obligation to the Company or any Lender other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Lender under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence and willful misconduct, shall not impose upon the Issuing Lender any
liability to the Company or any Lender and shall not reduce or impair the Company’s reimbursement obligations set forth in Section 2.7.3 or the obligations of the Lenders pursuant to Section 2.7.5.
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2.7.5 Funding by Lenders to Issuing Lender. If the Issuing Lender makes any payment or disbursement under any Letter of Credit and the Company has not
reimbursed the Issuing Lender in full for such payment or disbursement by 10:00 A.M., Detroit time, on the date of such payment or disbursement, or if any reimbursement received by the Issuing Lender from the Company is or must be returned or
rescinded upon or during any bankruptcy or reorganization of the Company or otherwise, each other Lender shall be obligated to pay to the Agent for the account of the Issuing Lender, in full or partial payment of the purchase price of its
participation in such Letter of Credit, its Pro Rata Share of such payment or disbursement (but no such payment shall diminish the obligations of the Company under Section 2.7.3), and, upon notice from the Issuing Lender, the Agent shall
promptly notify each other Lender thereof. Each other Lender irrevocably and unconditionally agrees to so pay to the Agent in immediately available funds for the Issuing Lender’s account the amount of such other Lender’s Pro Rata Share of such
payment or disbursement. If and to the extent any Lender shall not have made such amount available to the Agent by 2:00 P.M., Detroit time, on the Business Day on which such Lender receives notice from the Agent of such payment or disbursement
(it being understood that any such notice received after noon, Detroit time, on any Business Day shall be deemed to have been received on the next following Business Day), (a) the Agent shall be entitled to retain (for the benefit of the Issuing
Lender) all interest payments paid by the Company allocable to such Lender’s Pro Rata Share of the unpaid reimbursement obligations for the period from the time such Lender was required to make such amount available to the Agent until such Lender
actually makes such amount available or such amount is indefeasibly paid to the Agent by the Company and (b) such Lender agrees to pay to the Issuing Lender forthwith upon demand the greater of (x) all reasonable and actual costs incurred by the
Issuing Lender as a result of such failure and (y) interest on such amount for the Issuing Lender’s account, for each day from the date such amount was to have been delivered to the Agent to the date such amount is paid, at a rate per annum equal
to the Federal Funds Rate from time to time in effect. Any Lender’s failure to make available to the Agent its Pro Rata Share of any such payment or disbursement shall not relieve any other Lender of its obligation hereunder to make available to
the Agent such other Lender’s Pro Rata Share of such payment, but no Lender shall be responsible for the failure of any other Lender to make available to the Agent such other Lender’s Pro Rata Share of any such payment or disbursement.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Lender shall be evidenced by
a promissory note (each a “Note”) substantially in the form set forth in Exhibit A, with appropriate insertions, payable to the order of such Lender in full on the Termination Date.
3.2 Recordkeeping. Each Lender shall record in its
records, or at its option on the schedule attached to its Note, the date and amount of each Loan made by such Lender and each repayment thereof. The aggregate unpaid principal amount so recorded shall be rebuttable presumptive evidence of the
principal amount owing and unpaid on such Note. The failure to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the obligations of the Company hereunder or under any Note to
repay the principal amount of the Loans evidenced by such Note together with all interest accruing thereon.
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SECTION 4 INTEREST.
4.1 Interest Rate. The Company promises to pay interest on the unpaid principal amount of each Loan for the period commencing on
the date of such Loan until such Loan is paid in full at the Interest Rate.
4.2 Interest Payment Dates. Accrued interest on each Loan shall be payable in arrears for each month on the 20th day of the next
succeeding month and at maturity. After maturity, accrued interest on all Loans shall be payable on demand.
4.3 Computation of Interest. Interest shall be computed for the actual number of days elapsed on the basis of a year of 360
days. The Interest Rate shall change simultaneously with each change in the Adjusted Term SOFR Rate referred to in the definition of “Interest Rate.”
4.4 Inability To Determine Rates.
(a) Subject to Section 4.5, if, on or prior to the
date any Interest Rate for any Loan is determined:
(i) the Agent determines (which
determination shall be conclusive and binding absent manifest error) that Adjusted Term SOFR cannot be determined pursuant to the definition thereof, or
(ii) the Required Lenders determine that for
any reason in connection with any request for a borrowing that Adjusted Term SOFR with respect to a proposed borrowing does not adequately and fairly reflect the cost to such Lenders of making and maintaining such Loan, and the Required Lenders
have provided notice of such determination to the Agent,
the Agent will promptly so notify the Company and each Lender.
(b) Upon notice thereof by the Agent to the Company, any
obligation of the Lenders to fund borrowings shall be suspended (to the extent of the affected borrowings) until the Agent (with respect to clause (a), at the instruction of the Required Lenders)
revokes such notice. Upon receipt of such notice, the Company may revoke any pending request for a borrowing (to the extent of the affected borrowings).
4.5 Benchmark Replacement Setting.
(a) Benchmark Replacement.
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(i) Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event and its related
Benchmark Replacement Date have occurred prior to any setting of the then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (a) of the definition of “Benchmark Replacement” for such Benchmark
Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or
consent of any other party to, this Agreement or any other Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (b) of the definition of “Benchmark Replacement” for such Benchmark Replacement Date, such
Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other
Loan Document so long as the Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders. If the Benchmark Replacement is Adjusted Daily Simple SOFR, all interest
payments will be payable on a monthly basis.
(b) Benchmark Replacement Conforming Changes. In connection with the use, administration, adoption or implementation of a Benchmark Replacement, the
Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any
further action or consent of any other party to this Agreement or any other Loan Document.
(c) Notices; Standards for Decisions and Determinations. The Agent will promptly notify the Company and the Lenders of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement and (iii) the effectiveness of any Conforming Changes in connection
with the use, administration, adoption or implementation of a Benchmark Replacement. The Agent will notify the Company of (x) the removal or reinstatement of any tenor of a Benchmark pursuant to Section
4.5(d) or (y) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 4.5,
including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and
binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 4.5.
(d) Unavailability of Tenor of Benchmark. Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in
connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Reference Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other
information service that publishes such rate from time to time as selected by the Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of
information announcing that any tenor for such Benchmark is not or will not be representative, then the Agent may modify the definition of “Interest Rate” (or any similar or analogous definition) for any Benchmark settings at or after such time
to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement)
or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Agent may modify the definition of “Interest Rate” (or any similar or analogous
definition) for all Benchmark settings at or after such time to reinstate such previously removed tenor.
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(e) Benchmark Unavailability Period. Upon the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Company may
revoke any pending request for a borrowing.
4.6 Term SOFR Conforming Changes. In connection with the
use or administration of Term SOFR, the Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming
Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document. The Agent will promptly notify the Company and the Lenders of the effectiveness of any Conforming Changes in
connection with the use or administration of Term SOFR.
SECTION 5 FEES.
5.1 Non-Use Fee. The Company agrees to pay to the Agent
for the account of the Lenders a non-use fee (the “Non-Use Fee”) equal to 0.20% per annum (computed for the actual number of days elapsed on the basis of a year of 360 days) of an amount equal to the Commitments (other than Commitments
to issue Letters of Credit or, until the Increase Effective Date, the Revolving Commitment Increase) less the Total Outstandings. Such Non-Use Fees shall accrue from and including the Effective Date to and excluding the Termination Date and be
payable in arrears (x) at all times prior to the Termination Date, on an annual basis for each year, on the 20th day of the next succeeding January and (y) on the Termination Date. Each Lender shall be entitled to receive such Lender’s Pro
Rata Share of the Non-Use Fee.
5.2 Agent’s Fees. (a) Each Lender hereto acknowledges
and agrees that the Agent may deduct from interest payments received by it from the Company an amount equal to 0.10% per annum of the daily unpaid principal amount of such Lender’s Pro Rata Share of the Loans for the period from and including
the Effective Date to and excluding the Termination Date, and that all payments of interest to such Lenders by the Agent shall be net of such amount.
(b) All of the Agent’s fees payable under Section 5.2(a)
shall be computed for the actual number of days elapsed on the basis of a year of 360 days.
(c) Each Lender hereto acknowledges and agrees that the Agent
may deduct from the Letter of Credit Fees received by it from the Company an amount equal to 50% of the Letter of Credit Fees payable to such Lender under Section 5.3, and that all payments of Letter of Credit Fees to such Lender by the
Agent shall be net of such amount.
5.3 Letter of Credit Fee. The Company agrees to pay to the Agent for the
account of the Lenders a fee for each Letter of Credit (the “Letter of Credit Fee”) equal to 1.50% per annum of the undrawn amount of such Letter of Credit. Such Letter of Credit Fees shall be payable with respect to each Letter of
Credit in advance on the date of issuance, increase or extension thereof. Subject to Section 5.2(c), each Lender shall be entitled to receive such Lender’s Pro Rata Share of the Letter of Credit Fee.
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5.4 All Fees. All fees under this Section 5 are
nonrefundable.
SECTION 6 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT; PREPAYMENTS.
6.1 Voluntary Reduction of Revolving Commitment Amount; Fee;
Termination. (a) Subject to Section 6.1(c) below, the Company may from time to time on at least one Business Day’s prior written notice to the Agent (which shall promptly advise each Lender thereof) permanently reduce the
Revolving Commitment Amount to an amount not less than the Revolving Outstandings and/or reduce the Overadvance Commitment Amount. All reductions of the Revolving Commitment Amount or the Overadvance Commitment Amount shall reduce the
Revolving Commitments or the Overadvance Commitments, as applicable, pro rata among the Lenders according to their respective Pro Rata Shares.
(b) [Reserved].
(c) The Company may not reduce the Revolving Commitment Amount
or the Overadvance Commitments unless it pays the fees required pursuant to this Section 6.1(c). If the Revolving Commitment Amount or the Overadvance Commitment Amount is reduced pursuant to this Section 6.1, the Company shall
pay to the Agent, for the ratable account of the Lenders, an early termination fee upon each such reduction equal to 0.25% of the amount of such reduction.
6.2 Voluntary Prepayments. (a) Except for Same Day
Prepayments under Section 6.2(b), the Company may, upon not less than one Business Day’s prior written notice to the Agent, from time to time prepay the Loans in whole or in part, without premium or penalty.
(b) In addition to voluntary prepayments under Section
6.2(a), the Company may make a Same Day Prepayment of the Total Outstandings on any Business Day that the Company has not requested (and will not request) a Same Day Loan. In order to make a Same Day Prepayment, the Company must give
written or electronic notice or telephonic notice (followed immediately by written or electronic confirmation thereof) to the Agent of the Same Day Prepayment not later than 11:00 A.M., Detroit time, on the Business Day that the Company desires
to make such Same Day Prepayment. Each such notice shall be effective upon receipt by the Agent, shall be irrevocable, shall specify the amount of the proposed Same Day Prepayment, which amount may not exceed Thirty Million and 00/100 Dollars
($30,000,000.00) for any particular Business Day and shall specify whether such proposed Same Day Prepayment is to be applied to the Revolving Loans. By 11:30 A.M., Detroit time, on the Business Day that the Agent receives a notice of a
proposed Same Day Prepayment, the Agent shall advise each Lender thereof. Each Same Day Prepayment must be paid to the Agent by a federal wire transfer to the Agent’s designated bank account, which federal wire transfer must be initiated by
the Company on or before 4:00 P.M., Detroit time, on the Business Day that the Agent receives the notice of such Same Day Prepayment. Each Same Day Prepayment for which the above requirements are satisfied shall be treated as being made by the
Company (and shall reduce the Revolving Outstandings) on the Business Day that the Company initiates the federal wire transfer, even if the Agent cannot confirm the receipt of such funds until the next Business Day. If the federal wire
transfer for any Same Day Prepayment is not initiated by the Company on or before 4:00 P.M., Detroit time, on the Business Day that the Agent received the notice of such Same Day Prepayment, such Same Day Prepayment shall be deemed to have been
received by the Agent on the following Business Day, unless the Agent can actually confirm (on such following Business Day) that such wire transfer was actually received into the Agent’s designated bank account on the Business Day that the
Agent received the notice of such Same Day Prepayment. Each Same Day Prepayment must be made on a Business Day. The Company may not make a Same Day Prepayment on any Business Day that the Company has requested a Same Day Loan. The Company
may make a Same Day Prepayment on the same Business Day that it has previously requested a borrowing under Section 2.2(a) and/or on the same Business Day for which the Company has notified the Agent of a voluntary prepayment under Section
6.2(a) and such Same Day Prepayment shall be made in addition to, separately from and without any netting for such other borrowing and/or voluntary prepayment. All Same Day Prepayments may be made without premium or penalty.
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6.3 Mandatory Prepayments. If at any time (A) the Total
Outstandings exceed (B) the sum of (i) the Borrowing Base in effect at such time plus (ii) on and after the Increase Effective Date, the Overadvance Commitment Amount plus (iii) 35% of the Domestic Blue Sky Value at such time, the Company shall
immediately prepay Loans and/or Cash Collateralize Letters of Credit, or do a combination of the foregoing, in an amount sufficient to eliminate such excess. To the extent Cash Collateral is provided for any Letter of Credit as provided in the
immediately preceding sentence, the Agent agrees, upon request of the Company, to release such Cash Collateral if at any time when no Event of Default exists clause (A) of the immediately preceding sentence does not exceed clause
(B) of such sentence.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal and/or
interest on the Notes, and of all fees, shall be made by the Company to the Agent in immediately available funds, without defense, deduction, recoupment, set-off or counterclaim, at the office specified by the Agent not later than noon, Detroit
time, on the date due and funds received after that hour shall be deemed to have been received by the Agent on the following Business Day; provided, that Same Day Prepayments shall be subject to Section 6.2(b). The Agent shall
remit to each Lender its share of all such payments (other than Same Day Prepayments) received in collected funds by the Agent for the account of such Lender as follows: (i) on the Business Day deemed received, in the case of payments
specified by the Company as principal payments; and (ii) on the following Business Day after the Business Day deemed received, in the case of other amounts. All Same Day Prepayments shall be made to (and shall be deemed to have been received
by) the Agent as set forth in Section 6.2(b) and shall, subject to the terms of Section 12.11(c), be remitted by the Agent to each Lender by a federal wire transfer to such Lender’s designated bank account, which federal wire
transfer must be initiated by the Agent on or before 4:00 P.M., Detroit time, on the Business Day that the Agent receives the notice of such Same Day Prepayment. Each Same Day Prepayment for which the above requirements are satisfied shall be
treated as being remitted by the Agent to the Lenders on the Business Day that the Agent initiates the federal wire transfer, even if the Lenders cannot confirm the receipt of such funds until the next Business Day.
7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by the Agent on or before the date of such payment. Concurrently with each remittance to any Lender of its share of any such payment, the Agent shall advise such Lender
as to the application of such payment.
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7.3 Due Date Extension. If any payment of principal or
interest with respect to any of the Loans, or of any fees, falls due on a day which is not a Business Day, then such due date shall be extended to the immediately following Business Day and, in the case of principal, additional interest shall
accrue and be payable for the period of any such extension.
7.4 Setoff. The Company agrees that the Agent and each
Lender have all rights of setoff provided by applicable law, and in addition thereto, the Company agrees that at any time any Event of Default exists, the Agent and each Lender may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits, accounts or moneys of the Company then or thereafter with the Agent or such Lender. The Agent or the Lender exercising the setoff shall promptly notify the Company
thereof after making such exercise; provided that failure to give such notice shall not affect the validity of the setoff; provided, further, that in the event that any Defaulting Lender shall exercise any such right of setoff,
(x) all amounts so set off shall be paid over immediately to the Agent for further application in accordance with the provisions of Section 2.6 and, pending such payment, shall be segregated by such Defaulting Lender from its other
funds and deemed held in trust for the benefit of the Agent and the Lenders and (y) the Defaulting Lender shall provide promptly to the Agent a statement describing in reasonable detail all amounts owing to such Defaulting Lender as to which it
exercised such right of setoff.
7.5 Proration of Payments. If any Lender shall obtain
any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise, but excluding any payment pursuant to Section 13.9 and excluding any payment made pursuant to any application of funds arising from
the existence of a Defaulting Lender) on account of principal of or interest on any Loan (or on account of its exposure under any Letter of Credit) in excess of its share of payments and other recoveries obtained by all Lenders on account of
principal of and interest on the Loans (or such exposure) then held by them, such Lender shall purchase from the other Lenders such participations in the Loans and Letters of Credit held by them as shall be necessary to cause such purchasing
Lender to share the excess payment or other recovery ratably with each of them; provided that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery.
7.6 Taxes. All payments of principal of, and interest
on, the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any
nature whatsoever imposed by any taxing authority, excluding franchise taxes and taxes imposed on or measured by any Lender’s net income or receipts (all non-excluded items being called “Taxes”). If any withholding or deduction from any
payment to be made by the Company hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority
the full amount required to be so withheld or deducted;
(b) promptly forward to the Agent an
official receipt or other documentation satisfactory to the Agent evidencing such payment to such authority; and
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(c) pay to the Agent for the account
of the Lenders such additional amount as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender with respect to any payment received by the Agent or such Lender hereunder, the Agent or such Lender may pay such
Taxes and the Company will promptly pay such additional amounts (including any penalty, interest or expense) as is necessary in order that the net amount received by such Person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Person would have received had such Taxes not been asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Agent, for the account of the respective Lenders, the required
receipts or other required documentary evidence, the Company shall indemnify the Lenders for any incremental Taxes, interest or penalties that may become payable by any Lender as a result of any such failure. For purposes of this Section
7.6, a distribution hereunder by the Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Company.
Each Lender that (a) is organized under the laws of a jurisdiction other than the United States of America or a state thereof and (b)(i) is a party hereto on the Effective
Date or (ii) becomes an assignee of an interest under this Agreement under Section 13.9.1 after the Effective Date (unless such Lender was already a Lender hereunder immediately prior to such assignment) shall execute and deliver to
the Company and the Agent one or more (as the Company or the Agent may reasonably request) United States Internal Revenue Service Form W-8ECI or Form W-8BEN or such other forms or documents, appropriately completed, as may be applicable to
establish that such Lender is exempt from withholding or deduction of Taxes. The Company shall not be required to pay additional amounts to any Lender pursuant to this Section 7.6 to the extent that the obligation to pay such
additional amounts would not have arisen but for the failure of such Lender to comply with this paragraph.
| SECTION 8 |
WARRANTIES.
|
To induce the Agent and the Lenders to enter into this Agreement and to induce the Lenders to make Loans hereunder, the Company warrants to the Agent and the Lenders that:
8.1 Organization. The Company is a corporation
validly existing and in good standing under the laws of the State of Delaware; each Subsidiary is validly existing and in good standing under the laws of the jurisdiction of its organization; and each of the Company and each Subsidiary is
duly qualified to do business in each jurisdiction where, because of the nature of its activities or properties, such qualification is required, except for such jurisdictions where the failure to so qualify could not reasonably be expected
to have a Material Adverse Effect.
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8.2 Authorization; No Conflict. Each of the Company
and each other Loan Party is duly authorized to execute and deliver each Loan Document to which it is a party, the Company is duly authorized to borrow monies hereunder and each of the Company and each other Loan Party is duly authorized to
perform its obligations under each Loan Document to which it is a party. The execution, delivery and performance by the Company of this Agreement and by each of the Company and each other Loan Party of each Loan Document to which it is a
party, and the borrowings by the Company hereunder, do not and will not (a) require any consent or approval of any Governmental Authority (other than any consent or approval which has been obtained and is in full force and effect), (b)
conflict with (i) any provision of law, (ii) the charter, by-laws or other organizational documents of the Company or any other Loan Party or (iii) any agreement, indenture, instrument or other document, or any judgment, order or decree,
which is binding upon the Company or any other Loan Party or any of their respective properties or (c) require, or result in, the creation or imposition of any Lien on any asset of the Company, any Subsidiary or any other Loan Party (other
than Liens in favor of the Agent created pursuant to the Collateral Documents).
8.3 Validity and Binding Nature. Each of this
Agreement and each other Loan Document to which the Company or any other Loan Party is a party is the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting the enforceability of creditors’ rights generally and to general principles of equity.
8.4 Financial Condition. (a) The audited
consolidated financial statements of the Company and its Subsidiaries as at December 31, 2021 and the unaudited consolidated condensed financial statements of the Company and its Subsidiaries as at September 30, 2022 and (b) the audited
financial statements of PTL as at December 31, 2021 and the unaudited financial statements of PTL as at September 30, 2022, copies of each of which have been delivered to the Agent for distribution to each Lender, were prepared in
accordance with GAAP.
8.5 No Material Adverse Change. Since December 31,
2021 there has been no material adverse change in the financial condition, operations, assets, business, properties or prospects of the Company and its Subsidiaries taken as a whole, recognizing the increased borrowings by the Company as a
result of the Public Buyout Transactions.
8.6 Litigation and Contingent Liabilities. No
litigation (including derivative actions), arbitration proceeding or governmental investigation or proceeding is pending or, to the Company’s knowledge, threatened against the Company or any Subsidiary which might reasonably be expected to
have a Material Adverse Effect. Other than any liability incident to such litigation or proceedings, neither the Company nor any Subsidiary has, to the best of the Company’s knowledge, any material contingent liabilities not listed on Schedule
8.6 or permitted by Section 9.7.
8.7 Ownership of Properties; Liens. Each of the
Company and each Subsidiary owns good and, in the case of real property, marketable title to all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names,
service marks and copyrights), free and clear of all Liens, charges and claims (including infringement claims with respect to patents, trademarks, service marks, copyrights and the like) except as permitted by Section 9.8.
8.8 Subsidiaries. As of the Effective Date, the
Company has no Subsidiaries other than those previously notified to the Agent in writing.
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8.9 Pension Plans. (a) During the
twelve-consecutive-month period prior to the date of the execution and delivery of this Agreement or the making of any Loan, (i) no steps have been taken to terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which could result in the incurrence by the Company of
any material liability, fine or penalty.
(b) All contributions (if any) have been made to any
Multiemployer Pension Plan that are required to be made by the Company or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law; neither the Company nor any
other member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to any such plan or received notice of any claim or demand for withdrawal
liability or partial withdrawal liability from any such plan, and no condition has occurred which, if continued, might result in a withdrawal or partial withdrawal from any such plan; and neither the Company nor any other member of the
Controlled Group has received any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan
is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.
(c) Each Foreign Employee Benefit Plan is in compliance in
all respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such plan, except for any non-compliance the consequences of which, in the aggregate, would not result in
a Material Adverse Effect. There are no actions, suits or claims pending or, to the knowledge of the Company, threatened against the Company or any Subsidiary or any other member of the Controlled Group with respect to any Foreign
Employee Benefit Plan, other than routine claims for benefits and other than claims which, individually and in the aggregate, would not result in a Material Adverse Effect.
8.10 Investment Company Act. Neither the Company nor
any Subsidiary is an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940.
8.11 Regulation U. The Company is not engaged
principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock.
8.12 Taxes. Each of the Company and each Subsidiary
has filed all Federal and other material tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.
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8.13 Solvency, etc.. On the Effective Date, and
immediately prior to and after giving effect to each borrowing hereunder and the use of the proceeds thereof, (a) the assets of the Company and the other Loan Parties, taken as a whole, will exceed the liabilities of the Company and the
other Loan Parties, taken as a whole, and (b) the Company and the other Loan Parties, taken as a whole, will be solvent, will be able to pay their debts as they mature, will own property with fair saleable value greater than the amount
required to pay their debts and will have capital sufficient to carry on their business as then constituted.
(a) No Violations. Neither the Company nor any
Subsidiary, nor any operator of the Company’s or any Subsidiary’s properties, is in violation, or alleged violation, of any judgment, decree, order, law, permit, license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act (“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986
or any other Environmental Law which individually or in the aggregate otherwise might reasonably be expected to have a Material Adverse Effect.
(b) Notices. Except for matters arising after the
Effective Date, in each case none of which could singly or in the aggregate be expected to have a Material Adverse Effect, neither the Company nor any Subsidiary has received notice from any third party, including any Governmental
Authority: (a) that any one of them has been identified by the U.S. Environmental Protection Agency as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300
Appendix B; (b) that any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substance as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33) or any toxic substance, oil or hazardous
material or other chemical or substance regulated by any Environmental Law (all of the foregoing, “Hazardous Substances”) which any one of them has generated, transported or disposed of has been found at any site at which a
Federal, state or local agency or other third party has conducted a remedial investigation, removal or other response action pursuant to any Environmental Law; (c) that the Company or any Subsidiary must conduct a remedial investigation,
removal, response action or other activity pursuant to any Environmental Law; or (d) of any Environmental Claim.
(c) Handling of Hazardous Substances. (i) No
portion of the real property or other assets of the Company or any Subsidiary has been used for the handling, processing, storage or disposal of Hazardous Substances except in accordance in all material respects with applicable
Environmental Laws and no underground tank or other underground storage receptacle for Hazardous Substances is located on any such properties located in the United States; (ii) in the course of any activities conducted by the Company, any
Subsidiary or the operators of any real property of the Company or any Subsidiary, no Hazardous Substances have been generated or are being used on such properties except in accordance in all material respects with applicable
Environmental Laws; (iii) there have been no Releases or threatened Releases of Hazardous Substances on, upon, into or from any real property or other assets of the Company or any Subsidiary, which Releases singly or in the aggregate
might reasonably be expected to have a Material Adverse Effect; (iv) there have been no Releases on, upon, from or into any real property in the vicinity of the real property or other assets of the Company or any Subsidiary which, through
soil or groundwater contamination, may have come to be located on, and which might reasonably be expected to have a Material Adverse Effect; and (v) any Hazardous Substances generated by the Company and its Subsidiaries have been
transported offsite only by properly licensed carriers and delivered only to treatment or disposal facilities maintaining valid permits as required under applicable Environmental Laws, which transporters and facilities have been and are
operating in compliance in all material respects with such permits and applicable Environmental Laws.
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8.15 Insurance. The Agent has previously been
notified in writing of the property and casualty insurance program of the Company and its Subsidiaries as of the Effective Date (including the names of all insurers, policy numbers, expiration dates, amounts and types of coverage, annual
premiums, exclusions, deductibles, self-insured retention and a description in reasonable detail of any self-insurance program, retrospective rating plan, fronting arrangement or other risk assumption arrangement involving the Company or
any Subsidiary).
8.16 Information. All information heretofore or
contemporaneously herewith furnished in writing by the Company or any Subsidiary to the Agent or any Lender for purposes of or in connection with this Agreement and the transactions contemplated hereby is, and all written information
hereafter furnished by or on behalf of the Company or any Subsidiary to the Agent or any Lender pursuant hereto or in connection herewith will be, true and accurate in every material respect on the date as of which such information is dated
or certified, and none of such information is or will be materially incomplete by omitting to state any material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by
the Agent and the Lenders that any projections and forecasts provided by the Company are based on good faith estimates and assumptions believed by the Company to be reasonable as of the date of the applicable projections or forecasts and
that actual results during the period or periods covered by any such projections and forecasts may differ materially from projected or forecasted results).
8.17 Intellectual Property. The Company and each
Subsidiary owns and possesses or has a license or other right to use all patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights and copyrights as are necessary for the
conduct of the business of the Company and its Subsidiaries, without any infringement upon rights of others, except to the extent that failure to comply with any of the foregoing could not reasonably be expected to have a Material Adverse
Effect.
8.18 Burdensome Obligations. Neither the Company nor
any Subsidiary is a party to any agreement or contract or subject to any corporate or partnership restriction which might reasonably be expected to have a Material Adverse Effect.
8.19 Labor Matters. Neither the Company nor any
Subsidiary is subject to any labor or collective bargaining agreement that could reasonably be expected to have a Material Adverse Effect. There are no existing or threatened strikes, lockouts or other labor disputes involving the Company
or any Subsidiary that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of the Company and its Subsidiaries are not in violation of the Fair Labor
Standards Act or any other applicable law, rule or regulation dealing with such matters, in each case that singly or in the aggregate could reasonably be expected to have a material adverse effect on the condition (financial or otherwise),
business, assets, operations, properties or prospects of the Company and its Subsidiaries, taken as a whole.
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8.20 No Default. No Event of Default or Unmatured
Event of Default exists or would result from the incurring by the Company of any Debt hereunder or under any other Loan Document.
8.21 Senior Debt. The obligations of the Company and
each Loan Party under the Loan Documents constitute “Senior Indebtedness” or “Senior Guarantor Indebtedness” of the Company or such Loan Party, as applicable, under and as defined under the indentures relating to the Subordinated Notes and
the Project Motown Subordinated Notes, if any.
8.22 Dealer Agreements; Material Business Relationships.
The Company and its Domestic Subsidiaries have such rights under Dealer Agreements as are necessary for the operation of their business. Each of such Dealer Agreements is currently in full force and effect, and neither the Company nor any
Subsidiary has received any notice of termination with respect to any such agreement, except, in each case, for such failures to remain in full force and effect and notices that could not reasonably be expected to have a Material Adverse
Effect; and neither the Company nor any Subsidiary is aware of any event that with notice, lapse of time or both would allow any Manufacturer that is a party to any such Dealer Agreement to terminate any such agreement except for such
terminations that could not reasonably be expected to have a Material Adverse Effect (for the avoidance of doubt, the Public Shareholder Buyout Transactions shall not constitute a Material Adverse Effect). There exists no actual or
threatened termination, cancellation or limitation of, or any modification of or change in, the business relationship between the Company or any of its Subsidiaries and any customer or any group of customers or with any Manufacturer that,
in any case, could reasonably be expected to have a Material Adverse Effect.
8.23 Anti-Money Laundering and Anti-Terrorism Finance Laws.
To the extent applicable, the Company and each of its Subsidiaries is in compliance, in all material respects, with anti-money laundering laws and anti-terrorism finance laws including the Bank Secrecy Act and the PATRIOT Act (the “Anti-Terrorism
Laws”).
8.24 Foreign Corrupt Practices Act. No part of the
proceeds of the Loans shall be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.
8.25 Sanctions Laws. Neither the Company nor any of
its Subsidiaries, and to the knowledge of the Company, no Affiliate or broker or other agent of any of the Company or any of its Subsidiaries acting or benefiting in any capacity in connection with the Loans is any of the following (a “Restricted
Person”): (i) a Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”); (ii) a Person that is
named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) at its official website or any replacement website or other
replacement official publication of such list or similarly named by any similar foreign Governmental Authority; (iii) an agency of the government of a country, an organization controlled by a country, or a Person resident in a country that
is subject to a sanctions program identified on the lists maintained by OFAC; or (iv) a Person that derives more than 10% of its assets or operating income from investments in or transactions with any such country, agency, organization or
person. Further, none of the proceeds from the Loans shall be used to finance any operations, investments or activities in, or make any payments to, any such country, agency, organization or Person subject to OFAC sanctions.
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| SECTION 9 |
COVENANTS.
|
Until the expiration or termination of the Commitments and thereafter until all obligations of the Company hereunder and under the other Loan Documents are paid in full, the
Company agrees that, unless at any time the Required Lenders shall otherwise expressly consent (except as provided in Section 13.1) in writing, it will:
9.1.1 Annual Report. Promptly when available and in
any event within 90 days after the close of each Fiscal Year: (a) a copy of the annual report of the Company and its Subsidiaries for such Fiscal Year, including therein consolidated balance sheets and statements of earnings and cash
flows of the Company and its Subsidiaries for such Fiscal Year, certified (without any qualification arising from the scope of the audit or as to the ability of the Company and its Subsidiaries to operate as a going concern) by Deloitte
& Touche LLP or other independent auditors of recognized standing selected by the Company and reasonably acceptable to the Agent, together with (i) a written statement from such accountants to the effect that in making the examination
necessary for the signing of such annual audit report by such accountants, nothing came to their attention that caused them to believe that the Company was not in compliance with any provision of Section 9.6, 9.7 or 9.9
of this Agreement insofar as such provision relates to accounting matters or, if something has come to their attention that caused them to believe that the Company was not in compliance with any such provision, describing such
non-compliance in reasonable detail and (ii) a comparison with the financial results of the previous Fiscal Year; and (b) consolidating balance sheets of the Company and its Subsidiaries as of the end of such Fiscal Year and a
consolidating statement of earnings for the Company and its Subsidiaries for such Fiscal Year.
9.1.2 Interim Reports. Promptly when available and
in any event within 45 days after the end of each Fiscal Quarter (except the last Fiscal Quarter of each Fiscal Year), consolidated and consolidating balance sheets of the Company and its Subsidiaries as of the end of such Fiscal Quarter,
together with consolidated and consolidating statements of earnings and cash flows for such Fiscal Quarter and for the period beginning with the first day of such Fiscal Year and ending on the last day of such Fiscal Quarter, together
with a comparison with the corresponding period of the previous Fiscal Year; provided, that so long as the Company is a registrant within the meaning of Rule 1-01 of Regulation S-X of the SEC, the Company may deliver a copy of its
report on Form 10Q for such Fiscal Quarter, together with consolidating balance sheets and consolidating statements of earnings for the relevant period, in lieu of the foregoing within such 45-day period.
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9.1.3 Compliance Certificates. Contemporaneously
with the furnishing of a copy of each annual audit report pursuant to Section 9.1.1(a) and each set of quarterly statements pursuant to Section 9.1.2, a duly completed compliance certificate in the form of Exhibit B,
with appropriate insertions, dated the date of such annual report or such quarterly statements and signed by the Chief Financial Officer or the Controller of the Company, containing (i) a computation of each of (x) the financial ratios
and restrictions set forth in Section 9.6 and (y) the Leverage Ratio as of the applicable Computation Period, (ii) the Current Assets Commitment Amount, if any, to be included in the financial ratios specified hereunder for the
period until the next compliance certificate is due, (iii) the total amount of all consideration paid for all Foreign Acquisitions made by the Company and its Domestic Subsidiaries during the period covered by such compliance certificate
(including cash and noncash purchase price, noncompetition payments, earnout payments, debt assumption and other similar consideration), (iv) the aggregate amount of all Foreign Investments by the Company and its Domestic Subsidiaries
made during the period covered by such compliance certificate and (v) a statement to the effect that such officer has not become aware of any Event of Default or Unmatured Event of Default that has occurred and is continuing or, if there
is any such event, describing it and the steps, if any, being taken to cure it and setting forth all Events of Default that had occurred but were cured or waived during the period covered by the related financial statements.
9.1.4 Reports to the SEC and to Shareholders.
Promptly upon the filing or sending thereof, copies of all regular, periodic or special reports of the Company or any Subsidiary filed with the SEC; copies of all registration statements of the Company or any Subsidiary filed with the SEC
(other than on Form S-8); and copies of all proxy statements or other communications made to security holders generally.
9.1.5 Notice of Default, Litigation and ERISA Matters.
Promptly upon the Company obtaining knowledge of any of the following, written notice describing the same and the steps being taken by the Company or the Subsidiary affected thereby with respect thereto:
(a) the occurrence of an Event of
Default or an Unmatured Event of Default;
(b) any litigation, arbitration or
governmental investigation or proceeding not previously disclosed by the Company to the Lenders which has been instituted or, to the knowledge of the Company, is threatened against the Company or any Subsidiary or to which any of the
properties of any thereof is subject which might reasonably be expected to have a Material Adverse Effect;
(c) the institution of any steps by
any member of the Controlled Group or any other Person to terminate any Pension Plan, or the failure of any member of the Controlled Group to make a required contribution to any Pension Plan (if such failure is sufficient to give rise to
a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of any action with respect to a Pension Plan which could result in the requirement that the Company furnish a bond or other security to the PBGC or
such Pension Plan, or the occurrence of any event with respect to any Pension Plan or Multiemployer Pension Plan which could result in the incurrence by any member of the Controlled Group of any material liability, fine or penalty
(including any claim or demand for withdrawal liability or partial withdrawal from any Multiemployer Pension Plan), or any material increase in the contingent liability of the Company with respect to any post-retirement welfare plan
benefit, or any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of an excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent;
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(d) any cancellation (unless
contemporaneously replaced with similar coverage) or material change in any insurance maintained by the Company or any Subsidiary;
(e) any material violation of law by
the Company or any Subsidiary or any officer or director of the Company or any Subsidiary related to the business of the Company or such Subsidiary; or
(f) any other event (including any
violation of any Environmental Law or the assertion of any Environmental Claim) which might reasonably be expected to have a Material Adverse Effect.
9.1.6 Management Reports. Promptly upon receipt
thereof, copies of all detailed financial and management reports submitted to the Company by independent auditors in connection with each audit made by such auditors of the books of the Company, to the extent such reports identify a
material weakness (as such term is defined in the Public Company Accounting Oversight Board Auditing Standard No. 2) in the Company’s internal controls.
9.1.7 Subordinated Debt Notices. Promptly from time
to time, copies of any material notices (including notices of default or acceleration) received from any holder, or any notice from any trustee, of, under or with respect to any Subordinated Debt.
9.1.8 Borrowing Base Certificates. Within 45 days of
the last day of each Fiscal Quarter, a Borrowing Base Certificate dated as of such last day and executed by the Chief Financial Officer or the Controller of the Company on behalf of the Company (provided that the Agent may at any
time require the Company to deliver Borrowing Base Certificates more frequently).
9.1.9 Notices of Casualty or Condemnation. Promptly,
and in any event within five days of the Company obtaining knowledge thereof, written notice of the occurrence of any material casualty loss (whether or not insured) or condemnation of any portion of any real property that is subject to a
Mortgage.
9.1.10 [Reserved].
9.1.11 PTL Annual Reports. Promptly when available,
and in any event within 90 days after the end of each fiscal year of PTL, a copy of the annual report of PTL for such fiscal year, including therein balance sheets and statements of earnings and cash flows of the PTL for such fiscal year,
certified (without any qualification arising from the scope of the audit or as to the ability of PTL to operate as a going concern) by Deloitte & Touche LLP or other independent auditors of recognized standing selected by PTL and
reasonably acceptable to the Agent, together with a comparison with the financial results of the previous fiscal year.
9.1.12 PTL Interim Reports. Promptly when available,
and in any event within 45 days after the end of each fiscal quarter of PTL (except the last fiscal quarter of a fiscal year), balance sheets of PTL as of the end of such fiscal quarter together with statements of earnings and cash flows
for such fiscal quarter and for the period beginning with the first day of such fiscal year and ending on the last day of such fiscal quarter, together with a comparison with the corresponding period of the previous fiscal year.
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9.1.13 Other Information. Promptly from time to time,
such other information concerning the Company and its Subsidiaries as any Lender or the Agent may reasonably request.
Documents required to be delivered pursuant to Section 9.1 (to the extent they consist of SEC filings that are publicly available or filings under the PTL investor
website or the PTL website) (i) shall be deemed delivered at such time as they are posted on the SEC website (www.sec.gov) and (ii) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the
date on which the Company provides a link to such documents in an email addressed to [***] at the Agent at [***] (or such other email address as the Agent shall provide to the Company from time to time).
9.2 Books, Records and Inspections. Keep, and cause
each Subsidiary to keep, its books and records in accordance with sound business practices sufficient to allow the preparation of financial statements in accordance with GAAP; permit, and cause each Subsidiary to permit, any Lender or the
Agent or any representative thereof to inspect the properties and operations of the Company or such Subsidiary; and permit, and cause each Subsidiary to permit, at any reasonable time and with reasonable notice (or at any time without
notice if an Event of Default exists), any Lender or the Agent or any representative thereof to visit any or all of its offices, to discuss its financial matters with its officers and its independent auditors (and the Company hereby
authorizes such independent auditors to discuss such financial matters with any Lender or the Agent or any representative thereof at all times when an Event of Default has occurred and is continuing), and to examine any of its books or
other records; and permit, and cause each Subsidiary to permit, the Agent (and any Lender that chooses to join the Agent for the purpose of such inspection) and its representatives to inspect the Inventory and other tangible assets of the
Company or such Subsidiary, to perform appraisals of the Equipment of the Company or such Subsidiary, and to inspect, audit, check and make copies of and extracts from the books, records, computer data, computer programs, journals, orders,
receipts, correspondence and other data relating to Inventory, Accounts Receivable and any other collateral. All such examinations, inspections, audits or appraisals by the Agent shall be at the Agent’s expense; provided that if an
Event of Default or Unmatured Event of Default exists, such examinations, inspections, audits and appraisals shall be at the Company’s expense.
9.3 Maintenance of Property; Insurance. (a) Keep,
and cause each Subsidiary to keep, all material property necessary in the business of the Company or such Subsidiary in good working order and condition, ordinary wear and tear excepted.
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(b) Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as may be required by any law or governmental regulation or court decree or order applicable to it and such other insurance, to such extent (including customary deductibles) and against such
hazards and liabilities, as is customarily maintained by companies similarly situated; and, upon request of the Agent or any Lender, furnish to the Agent or such Lender a certificate setting forth in reasonable detail the nature and
extent of all insurance maintained by the Company and its Subsidiaries. The Company shall cause each issuer of an insurance policy with respect to the Company and its Domestic Subsidiaries to provide the Agent with an endorsement (i)
naming the Agent as Lender’s loss payee with respect to each policy of property or casualty insurance and naming the Agent and each Lender as an additional insured with respect to each policy of insurance for liability for personal injury
or property damage, (ii) providing that 30 days’ notice will be given to the Agent prior to any cancellation of, material reduction or change in coverage provided by or other material modification to such policy and (iii) reasonably
acceptable in all other respects to the Agent. The Company shall execute and deliver, and shall cause each other Loan Party to execute and deliver, to the Agent a collateral assignment, in form and substance reasonably satisfactory to
the Agent, of each business interruption insurance policy maintained by such Loan Party.
9.4 Compliance with Laws; Payment of Taxes and
Liabilities. (a) Comply, and cause each Subsidiary to comply, with all applicable laws, rules, regulations, decrees, orders, judgments, licenses and permits, except where failure to comply could not reasonably be expected to have a
Material Adverse Effect; and (b) pay, and cause each Subsidiary to pay, prior to delinquency, all taxes and other governmental charges against it or any of its property, as well as claims of any kind which, if unpaid, might become a Lien on
any of its property; provided that the foregoing shall not require the Company or any Subsidiary to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and shall set
aside on its books adequate reserves with respect thereto in accordance with GAAP.
9.5 Maintenance of Existence, etc.. Maintain and
preserve, and (subject to Section 9.10 and to the ability of the Company to dissolve Subsidiaries the dissolution of which could not have a Material Adverse Effect) cause each Subsidiary to maintain and preserve, (a) its existence
and good standing in the jurisdiction of its organization and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (except in those instances in
which the failure to be qualified or in good standing does not have a Material Adverse Effect).
9.6.1 Current Ratio. Not permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities at any time to be less than 1.00:1.0.
9.6.2 Fixed Charge Coverage Ratio. Not permit the
Fixed Charge Coverage Ratio for any Computation Period to be less than 1.10:1.0.
9.6.3 Ratio of Non-Floorplan Debt to Stockholders’ Equity.
Not permit the ratio of Funded Debt (less Debt under Dealer Financings and Real Estate Debt) to Stockholders’ Equity of the Company to be greater than 1.3:1 at any time. When calculating this ratio, to the extent the Company has recorded
an impairment after the date hereof to goodwill or franchise value, such impairment shall be added back to Stockholders’ Equity.
9.6.4 Funded Debt to EBITDA Ratio. Not permit the
Funded Debt to EBITDA Ratio as of the last day of any Computation Period to exceed 2.50:1.0.
9.6.5 Working Capital. Cause each Subsidiary to
maintain such level of working capital as is necessary to satisfy the requirements of such Subsidiary’s Dealer Agreements.
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9.7 Limitations on Debt. Not, and not permit any
Subsidiary to, create, incur, assume or suffer to exist any Debt, except:
(a) obligations under this Agreement
and the other Loan Documents, including, for the avoidance of doubt, obligations in respect of the Revolving Commitment Increase;
(b) Debt (other than Real Estate Debt)
secured by Liens permitted by Section 9.8(d), and extensions, renewals and refinancings thereof;
(c) unsecured Debt of Domestic
Subsidiaries to the Company or to any other Domestic Subsidiary, provided that, without the consent of the Required Lenders, neither the Company nor any Subsidiary shall make any Investment after the date hereof in MB Greenwich in
an aggregate amount exceeding $5,000,000 at any one time outstanding except as required to prevent any default under, any automotive framework, franchise or dealer agreement of MB Greenwich;
(d) unsecured Debt of the Company to
Domestic Subsidiaries, provided that, without the consent of the Required Lenders, neither the Company nor any Subsidiary shall make any Investment after the date hereof in MB Greenwich in an aggregate amount exceeding $5,000,000
at any one time outstanding except as required to prevent any default under, any automotive framework, franchise or dealer agreement of MB Greenwich;
(e) (i) the Subordinated Notes and
guaranties thereof provided by the Domestic Subsidiaries, so long as each such guaranty thereof is subordinated to the obligations of the respective Domestic Subsidiary under the Loan Documents on substantially the same basis as the
obligations of the Company under the Subordinated Notes are subordinated to the obligations of the Company under the Loan Documents, (ii) other Subordinated Debt (other than the Project Motown Subordinated Notes, as applicable) and (iii)
Refinancing Debt in respect thereof; provided that the aggregate principal amount of all Seller Subordinated Debt at any time outstanding shall not exceed $50,000,000;
(f) Hedging Obligations incurred for
bona fide hedging purposes and not for speculation;
(g) Debt described on Schedule 9.7
and any extension, renewal or refinancing thereof so long as the principal amount thereof is not increased and the obligors are not changed;
(h) Debt with respect to any Dealer
Financing provided to the Company or any Domestic Subsidiary by any Dealer Financing Provider that is a party to the Intercreditor Agreement or any other Person to whom the Required Lenders, in their sole discretion, consent;
(i) Debt to MBFS in respect of Dealer
Financings;
(j) other Debt, in addition to the
Debt listed above, of the Company and its Domestic Subsidiaries in an aggregate amount not at any time exceeding $250,000,000;
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(k) Debt of Foreign Subsidiaries to
(x) the Company or any Subsidiary or (y) any other Person as to which neither the Company nor any Domestic Subsidiary is directly or indirectly liable or provides any Suretyship Liability or credit support of any kind;
(l) recourse obligations, repurchase
obligations and Suretyship Liabilities of the Company (other than Suretyship Liabilities of the Company and its Domestic Subsidiaries with respect to obligations of Foreign Subsidiaries) and Domestic Subsidiaries arising in the ordinary
course of business in connection with the sale of retail installment contracts or retail leases involving Motor Vehicles to financial institutions that are not Restricted Affiliates;
(m) obligations arising from agreements
by the Company or a Subsidiary to provide for indemnification, customary purchase price closing adjustments, earn-outs or other similar obligations, in each case, incurred in connection with an Acquisition permitted hereunder;
(n) Debt of the Company or any of its
Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of
business, provided, however, that such Debt is extinguished within three Business Days of incurrence;
(o) Real Estate Debt;
(p) Suretyship Liabilities of the
Company or any of its Domestic Subsidiaries with respect to (i) Debt that is otherwise permitted under this Section 9.7 (other than the Debt permitted under Section 9.7(k)) or (ii) other obligations incurred in the
ordinary course of business of the Company and its Domestic Subsidiaries;
(q) other Suretyship Liabilities of
the Company and its Domestic Subsidiaries in an aggregate amount not at any time exceeding $50,000,000;
(r) Debt of MB Greenwich with respect
to Dealer Financings; and
(s) (i) Debt in the form of any Project
Motown Subordinated Notes and guaranties thereof provided by the Domestic Subsidiaries, so long as each such guaranty thereof is subordinated to the obligations of the respective Domestic Subsidiary under the Loan Documents on
substantially the same basis as the obligations of the Company under the Subordinated Notes are subordinated to the obligations of the Company under the Loan Documents, (ii) from and after the consummation of the Public Shareholder
Buyout, Debt incurred under the Project Motown Senior Unsecured Bridge Facility and any unsecured guaranties thereof provided by the Domestic Subsidiaries and (iii) any Refinancing Debt of the foregoing clauses (i) and (ii);
provided that the aggregate principal amount of all such Debt permitted under the foregoing clauses (i) through (iii) shall not collectively at any time exceed $1,800,000,000.
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9.8 Liens. Not, and not permit any Subsidiary to,
create or permit to exist any Lien on any of its real or personal properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other
governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith by appropriate proceedings and, in each case, for which it maintains adequate reserves;
(b) Liens arising in the ordinary
course of business (such as (i) Liens of carriers, warehousemen, mechanics and materialmen and other similar Liens imposed by law and (ii) Liens incurred in connection with worker’s compensation, unemployment compensation and other types
of social security (excluding Liens arising under ERISA) or in connection with surety bonds, bids, performance bonds and similar obligations) for sums not overdue or being contested in good faith by appropriate proceedings and not
involving any deposits or advances or borrowed money or the deferred purchase price of property or services and, in each case, for which it maintains adequate reserves;
(c) Liens described on Schedule 9.8
and replacements, extensions and renewals of such Liens upon or in the same property theretofore subject thereto (without increase in the amount of any Debt secured thereby);
(d) (i) Liens arising in connection
with Capital Leases (and attaching only to the property being leased); (ii) Liens existing on property at the time of the acquisition thereof by the Company or any Subsidiary (and not created in contemplation of such acquisition); (iii)
Liens on any property securing Debt (including Real Estate Debt) incurred for the purpose of financing all or any part of such property and attaching only to such property; and (iv) Liens created pursuant to those certain Mortgages dated
on or around September 28, 2008 between TMCC, the Company and various Subsidiaries of the Company on real property located in Royal Palm Beach, Florida owned by certain Subsidiaries, improvements thereon, easements related thereto,
fixtures on such real property (other than trade fixtures), leases and rents related to such real property, and condemnation and insurance proceeds, in each case relating to such real property, and proceeds of the foregoing;
(e) attachments, appeal bonds,
judgments and other similar Liens, for sums not exceeding $10,000,000 arising in connection with court proceedings, provided the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are
being actively contested in good faith and by appropriate proceedings;
(f) easements, rights of way,
restrictions, minor defects or irregularities in title and other similar Liens not interfering in any material respect with the ordinary conduct of the business of the Company or any Subsidiary;
(g) Liens arising under the Loan
Documents;
(h) Liens on any asset of a Domestic
Subsidiary securing Debt permitted by Sections 9.7(h) and (i);
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(i) Liens (the “Approved Swap Liens”
and individually, an “Approved Swap Lien”) arising in connection with any Hedging Agreement so long as the Required Lenders have provided their prior written consent to such Liens (each such Hedging Agreement, an “Approved Swap
Document”);
(j) Liens on Capital Stock or assets
of Foreign Subsidiaries securing Debt permitted by Section 9.7(k), to the extent such Capital Stock and assets are not required to be pledged to the Agent hereunder;
(k) Liens on real property of a Person
at the time such Person becomes a Subsidiary, provided that (x) such Liens are not created in contemplation of such Person becoming a Subsidiary and (y) such Liens may not extend to any other property;
(l) Liens of a collecting bank under
Section 4-210 of the Uniform Commercial Code and Liens arising solely by virtue of any statutory or common law provision relating to banker’s Liens and rights of setoff as to deposit accounts maintained with a bank in the ordinary course
of business (provided such deposit accounts are not dedicated cash collateral accounts);
(m) other Liens of the Company and its
Subsidiaries on property having an aggregate fair market value not at any time exceeding $40,000,000;
(n) [reserved];
(o) Liens on assets of MB Greenwich
securing Debt permitted by Section 9.7(r); and
(p) [reserved].
It is acknowledged and agreed by the Agent and Lenders that any Liens of TMCC (to the extent such Liens are duly perfected) described in clause (d)(iv) of this Section 9.8 on
any real property, improvements, fixtures (other than trade fixtures), condemnation and insurance proceeds, leases and rents related thereto and proceeds thereof are senior in priority to the Liens, if any, of the Agent and the Lenders in
such property under the Collateral Documents.
9.9 Restricted Payments. Not, and not permit any
Subsidiary to, (a) make any distribution to any of its shareholders, the Company or any other Subsidiary, (b) purchase or redeem any of its Equity Interests, (c) pay any management fees or similar fees to any of its shareholders, the
Company, any other Subsidiary or any Affiliate, (d) make any redemption, prepayment, defeasance or repurchase of any Subordinated Debt or (e) set aside funds for any of the foregoing; provided that (i) any Subsidiary may pay
dividends or make other distributions to the Company or another Subsidiary, (ii) so long as no Event of Default or Unmatured Event of Default has occurred and is continuing or would result therefrom and, immediately after giving effect
thereto, the Company is in pro forma compliance with all the financial ratios and restrictions set forth in Section 9.6, the Company and its Subsidiaries may (1) pay dividends or make other distributions to its
stockholders and purchase or redeem its Equity Interests, (2) pay management fees or similar fees as set forth under the relevant operating agreements of Subsidiaries to any of its shareholders, the Company, any other Subsidiary or any
Affiliate and (3) redeem, prepay, defease, repurchase or otherwise repay any Subordinated Debt and (iii) the Company may make distributions to its public stockholders and purchase or redeem its Equity Interests in connection with or to
facilitate the consummation of the Public Shareholder Buyout Transactions.
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9.10 Mergers, Consolidations, Sales. Not, and not
permit any Subsidiary to, be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any stock of any class of, or any membership or partnership or joint venture interest in, any
other Person, except for: (a) any such merger, consolidation, sale, transfer, conveyance, lease or assignment of or by any Domestic Subsidiary into the Company (provided, that in the case of any merger or consolidation, the Company
is the survivor) or into, with or to any other Domestic Subsidiary; (b) any such purchase or other acquisition by the Company or any Domestic Subsidiary of the assets or stock of any Domestic Subsidiary; (c) any such merger, consolidation,
sale, transfer, conveyance, lease or assignment of or by any Foreign Subsidiary into, with or to any other Foreign Subsidiary; (d) any such purchase or other acquisition by any Foreign Subsidiary of the assets or stock of any Foreign
Subsidiary; (e) any Acquisition by the Company or any Domestic Subsidiary if (1) immediately before and after giving effect to such Acquisition, no Event of Default or Unmatured Event of Default shall exist, (2) immediately after giving
effect to such Acquisition, the Company is in pro forma compliance with all the financial ratios and restrictions set forth in Section 9.6, (3) in the case of the Acquisition of any Person, the board of directors (or
similar body) of such Person has approved such Acquisition and all requisite Manufacturers have consented to such Acquisition (provided that such Manufacturers need not have consented to such Acquisition at the time of consummation
thereof if the Company or the Subsidiary making such Acquisition has an irrevocable option, on terms and conditions (including cash escrow) satisfactory to the Agent in its sole discretion, to put the Person acquired in such Acquisition
back to the seller thereof for a price in cash at least equal to the total amount of cash consideration paid by the Company or such Subsidiary in such Acquisition (including purchase price, noncompetition payments, earnout payments, debt
assumption and other similar consideration) within 180 days if such Manufacturers have not consented to such Acquisition, which option is otherwise unconditional, and which option must be exercised by the Company or the applicable
Subsidiary within such period if such consents are not obtained) and (4) prior to and after such Acquisition, the Chief Financial Officer of the Company shall have delivered a certificate to the Agent confirming that the conditions set
forth in clauses (1) - (3) above will be (in the case of a certificate delivered prior to such Acquisition) or have been (in the case of a certificate delivered after such Acquisition) met; and (f) the Company and its
Subsidiaries may enter into, or make additional Investments into, joint ventures permitted by Section 9.19(j) which joint ventures are engaged in businesses permitted by Section 9.18.
9.11 Modification of Organizational Documents. Not
permit the Certificate or Articles of Incorporation, By-Laws or other organizational documents of the Company or any Subsidiary to be amended or modified in any way which might reasonably be expected to materially adversely affect the
interests of the Lenders.
9.12 Use of Proceeds. (a) Use the proceeds of the
Revolving Loans solely for working capital, for Acquisitions permitted by Section 9.10, for Capital Expenditures, to make Investments permitted hereunder, to repurchase the Company’s Capital Stock and for other general corporate
purposes; provided, that the Company shall not use more than $400,000,000 in the aggregate of the Revolving Loans at any one time from and after the First Amendment Effective Date through the Termination Date directly or indirectly for
Investments outside of the United States including, without limitation, for Foreign Investments and Investments in Foreign Subsidiaries.
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(b) Not use or permit any proceeds of any Loan to be
used, either directly or indirectly, for any other purpose, including for the purpose, whether immediate, incidental or ultimate, of “purchasing or carrying” any Margin Stock.
(c) Use the Letters of Credit solely for working capital
and for other general corporate purposes.
9.13 Further Assurances. (a) Take, and cause each
Subsidiary (other than MB Greenwich) to take, such actions as are necessary or as the Agent or the Required Lenders may reasonably request from time to time (including the execution and delivery of guaranties, security agreements, pledge
agreements, mortgages, deeds of trust, financing statements and other documents, the filing or recording of any of the foregoing, and the delivery of stock certificates and other collateral with respect to which perfection is obtained by
possession) to ensure that (i) the obligations of the Company hereunder and under the other Loan Documents (x) are secured by substantially all of the assets (other than property in which the Company is prohibited from granting a security
interest, pledge or assignment pursuant to a Permitted Restriction) of the Company and (y) guaranteed by all of its Subsidiaries (other than MB Greenwich) (including, promptly upon the acquisition or creation thereof, any Subsidiary
acquired or created after the date hereof but excluding Foreign Subsidiaries (to the extent that such exclusion is necessary to avoid material adverse tax consequences for the Company)) by execution of a counterpart of the Guaranty and (ii)
the obligations of each Subsidiary (other than MB Greenwich) under the Guaranty are secured by substantially all of the assets (other than property in which such Subsidiary is prohibited from granting a security interest, pledge or
assignment pursuant to a Permitted Restriction) of such Subsidiary (other than Foreign Subsidiaries (to the extent that such exclusion is necessary to avoid material adverse tax consequences for the Company)), provided that (x) the
pledge by the Company or any Subsidiary (other than a Foreign Subsidiary) of the stock of any Foreign Subsidiary shall be limited to 65% of the stock of such Foreign Subsidiary to the extent the pledge of a greater percentage would have
material adverse tax consequences for the Company and (y) a pledge of the stock of a Subsidiary shall not be required if and to the extent that such pledge would violate a Permitted Restriction in favor of a Manufacturer.
(b) It is understood that none of the funds in any
deposit account will be included in the Borrowing Base unless and until such a Control Agreement with respect to such account is delivered to the Agent.
(c) [reserved].
9.14 Transactions with Affiliates. Not, and not permit
any Subsidiary to, enter into, or cause, suffer or permit to exist any transaction, arrangement or contract with any of its Affiliates which is on terms that are less favorable to the Company or such Subsidiary than are obtainable from any
Person which is not one of its Affiliates; provided that the foregoing shall not prohibit (i) transactions among the Company and its Domestic Subsidiaries (and not involving any Foreign Subsidiary), (ii) transactions among Foreign
Subsidiaries (and not involving the Company or any Domestic Subsidiary) and (iii) any transaction between the Company or a Domestic Subsidiary, on the one hand, and a Foreign Subsidiary, on the other hand, which is on terms no less
favorable to the Company or such Domestic Subsidiary than are obtainable from any Person which is not one of its Affiliates.
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9.15 Employee Benefit Plans. Maintain, and cause each
Subsidiary to maintain, each Pension Plan and Foreign Employee Benefit Plan in substantial compliance with all applicable requirements of law and regulations.
9.16 Environmental Matters. (a) If any Release or
Disposal of Hazardous Substances shall occur or shall have occurred on any real property or any other assets of the Company or any Subsidiary, the Company shall, or shall cause the applicable Subsidiary to, cause the prompt containment and
removal of such Hazardous Substances and the remediation of such real property or other assets as necessary to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the
generality of the foregoing, the Company shall, and shall cause each Subsidiary to, comply with any valid Federal or state judicial or administrative order requiring the performance at any real property of the Company or any Subsidiary of
activities in response to the Release or threatened Release of a Hazardous Substance.
(b) To the extent that the transportation of “hazardous
waste” as defined by RCRA is permitted by this Agreement, the Company shall, and shall cause its Subsidiaries to, dispose of such hazardous waste only at licensed disposal facilities operating in compliance with Environmental Laws.
9.17 Inconsistent Agreements. Not, and not permit any
Subsidiary to, enter into any agreement containing any provision which would (a) be violated or breached by any borrowing by the Company hereunder or by the performance by the Company or any Subsidiary of any of its obligations hereunder or
under any other Loan Document, (b) except for Permitted Restrictions and the terms of this Agreement, prohibit the Company or any Subsidiary from granting to the Agent, for the benefit of the Lenders, a Lien on any of its assets or (c)
except for Permitted Restrictions, create or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary to (i) pay dividends or make other distributions to the Company or any other applicable
Subsidiary, or pay any Debt owed to the Company or any other Subsidiary, (ii) make loans or advances to the Company or any other Subsidiary or (iii) transfer any of its assets or properties to the Company or any other Subsidiary.
9.18 Business Activities. Not, and not permit any
Subsidiary to, engage in any line of business other than the businesses engaged in on the Effective Date and businesses reasonably related thereto, including businesses that operate a dealership or dealerships for the retail sales and
leases of new and/or used motor vehicles, motor vehicle distribution businesses and other transportation related businesses and/or other businesses ancillary to the operation of such businesses, including businesses engaged in by PTL as of
the date the Company made the Investment referred to in Section 9.19(j). For the avoidance of doubt, for purposes of this Section, if the Company or any Subsidiary has made an Investment in any Person that is not a Subsidiary (a “Minority
Investee”), the businesses engaged in by such Minority Investee shall not be attributed to the Company or such Subsidiary.
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9.19 Investments. Not, and not permit any Subsidiary
to, make or permit to exist any Investment in any other Person, except (without duplication) the following:
(a) contributions by the Company to
the capital of any of its Subsidiaries, or by any such Subsidiary to the capital of any of its Subsidiaries; provided that, without the consent of the Required Lenders, neither the Company nor any Subsidiary shall make any
Investment after the date hereof in MB Greenwich in an aggregate amount exceeding $5,000,000 at any one time outstanding except as required to prevent any default under, any automotive framework, franchise or dealer agreement of MB
Greenwich;
(b) Investments by the Company in any
Subsidiary or by any Subsidiary in the Company, or by any Subsidiary in any other Subsidiary, by way of intercompany loans, advances or guaranties, all to the extent permitted by Section 9.7;
(c) Suretyship Liabilities permitted
by Section 9.7;
(d) Cash Equivalent Investments;
(e) bank deposits in the ordinary
course of business;
(f) Investments in securities of
account debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;
(g) Investments to consummate
Acquisitions permitted by Section 9.10;
(h) Investments in an aggregate amount
not exceeding $125,000,000 at any one time outstanding in Persons engaged in businesses in which the Company and its Subsidiaries are permitted to engage hereunder (provided that any Investment made with the proceeds of any
offering of Capital Stock (other than Disqualified Stock) or Subordinated Debt of the Company shall be disregarded when determining compliance with the aggregate dollar limit in this clause (h));
(i) consumer loans and leases entered
into, purchased or otherwise acquired by the Company or its Subsidiaries, as lender, lessor or assignee, as applicable, in the ordinary course of business;
(j) Investments in an aggregate not
to exceed 38.92% of the outstanding ownership interests in PTL;
(k) Foreign Investments;
(l) Investments set forth on Schedule
9.19;
(m) [reserved]; and
(n) such other Investments consented
to by the Required Lenders in their sole discretion;
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provided that (x) any Investment which when made complies with the requirements of the definition of the term “Cash Equivalent Investment” may continue to be held notwithstanding
that such Investment if made thereafter would not comply with such requirements; and (y) no Investment otherwise permitted by clause (a), (b), (c), (g), (h) or (j) shall be permitted to be made
if, immediately before or after giving effect thereto, any Event of Default or Unmatured Event of Default exists.
9.20 Restriction of Amendments to Certain Documents.
Not without the written consent of the Agent and the Lenders amend or otherwise modify, or waive any rights under, the notes or indentures relating to the Subordinated Notes or the Project Motown Subordinated Notes, if applicable (or any
instrument governing Refinancing Debt in respect of the Subordinated Notes or the Project Motown Subordinated Notes, if applicable), or the Approved Swap Documents, in any case, if such amendment, modification or waiver could reasonably be
expected to be adverse to the Lenders in any respect, if such amendment, modification or waiver could reasonably be expected to have a Material Adverse Effect; and not take any action to terminate any Approved Swap Document if it is a
condition to such termination that the Company make any payment to the counterparty under such Approved Swap Document, or if a consequence of such termination would permit such counterparty to retain or sell any collateral or to demand any
payment from the Company.
9.21 Limitation on Dealer Financing Amendments. Not
modify any Dealer Financing arrangement if such modification would have a Material Adverse Effect.
9.22 Eligible Real Estate Collateral. With respect to
each parcel of Eligible Real Estate Collateral, upon Agent’s request, the Company shall, at its expense, no more than once in any thirty-six (36) month period, but at any time or times as the Agent may request on or after an Event of
Default, deliver or cause to be delivered to the Agent written appraisals as to such Eligible Real Estate Collateral in form, scope and methodology acceptable to the Agent and by an appraiser acceptable to the Agent, addressed to the Agent
and the Lenders and upon which the Agent and Lenders shall be expressly permitted to rely.
9.23 Changes in Fiscal Periods. The Company shall not
permit the Fiscal Year of the Company or any other Loan Party to end on a day other than December 31 or change the Company’s or any other Loan Party’s method of determining fiscal quarters without the Agent’s prior written consent.
9.24 Anti-Money Laundering and Anti-Terrorism Finance
Laws; Foreign Corrupt Practices Act; Sanctions Laws; Restricted Person. The Company shall not, and shall not permit any Subsidiary to, (i) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any prohibition set forth in any Anti-Terrorism Law, (ii) cause or permit any of the funds that are used to repay the obligations under the Loan Documents to be derived from any unlawful
activity with the result that the making of the Loans would be in violation of any applicable law, (iii) use any part of the proceeds of the Loans, directly or indirectly, for any payment to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977 or (iv) use any of the proceeds from the Loans to finance any operations, investments or activities in, or make any payments to, any Restricted Person.
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| SECTION 10 |
EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
|
The effectiveness of this Agreement, and the obligation of each Lender to make its Loans hereunder, are subject to the following conditions precedent:
10.1 Conditions to Effectiveness. This Agreement shall
become effective on the Effective Date if the Agent shall have received on or prior to the Effective Date all of the following, each duly executed and dated the date hereof (or such other date as shall be satisfactory to the Agent), in form
and substance reasonably satisfactory to the Agent (unless waived in writing by the Agent and the Lenders):
10.1.1 Notes. A Note executed by the Company in favor
of each Lender.
10.1.2 Resolutions. Certified copies of resolutions of
the board of directors of the Company authorizing the execution, delivery and performance by the Company of this Agreement, the Notes and the other Loan Documents to which the Company is a party; and certified copies of resolutions of the
board of directors (or similar body) of each other Loan Party authorizing the execution, delivery and performance by such Loan Party of each Loan Document to which such entity is a party.
10.1.3 Consents, etc.. Certified copies of all
documents evidencing any necessary corporate, limited liability company or partnership action, consents and governmental approvals (if any) required for the execution, delivery and performance by the Company and each other Loan Party of
the documents referred to in this Section 10.
10.1.4 Incumbency and Signature Certificates. A
certificate of the Secretary or an Assistant Secretary (or other appropriate representative) of each Loan Party certifying the names of the officer or officers of such entity authorized to sign the Loan Documents to which such entity is a
party, together with a sample of the true signature of each such officer (it being understood that the Agent and each Lender may conclusively rely on each such certificate until formally advised by a like certificate of any changes
therein).
10.1.5 Reaffirmation. A counterpart of the
Reaffirmation executed by each Subsidiary of the Company (other than Foreign Subsidiaries and MB Greenwich).
10.1.6 Opinion of Counsel. An opinion of counsel
reasonably satisfactory to the Agent.
10.1.7 Payment of Interest and Fees. Evidence of
payment by the Company of all accrued and unpaid interest, fees, costs and expenses to the extent then due and payable on the Effective Date, together with all Attorney Costs of the Agent to the extent invoiced prior to the Effective
Date, plus such additional amounts of Attorney Costs as shall constitute the Agent’s reasonable estimate of Attorney Costs incurred or to be incurred by the Agent through the closing proceedings (provided that such estimate
shall not thereafter preclude final settling of accounts between the Company and the Agent).
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10.1.8 Solvency Certificate. A solvency certificate,
substantially in the form of Exhibit F, executed by the Chief Financial Officer of the Company.
10.1.9 Closing Certificate. A certificate signed by a
Vice President of the Company dated as of the Effective Date, affirming the matters set forth in Section 10.2.1 as of the Effective Date.
10.1.10 Governing Documents. A certificate of the
Secretary or Assistant Secretary (or other appropriate representative) of each Loan Party certifying that either (i) there has been no change or amendment (other than those attached to such certificate) to its respective articles of
incorporation, by-laws, certificate of formation or operating agreement (as applicable) or other governing documents since certified copies of such documents were provided to the Agent in connection with the Existing Agreement or (ii)
such documents have been delivered to the Agent in connection with the closing hereunder.
10.1.11 Borrowing Base Certificate. A Borrowing Base
Certificate dated as of the Effective Date.
10.1.12 Officer’s Certificate. A certificate of an
authorized officer of the Company certifying as to the completeness and accuracy of and attaching as an exhibit thereto (i) a list of all Subsidiaries of the Company as described in Section 8.8 and (ii) a summary of the property
and casualty insurance program of the Company and its Subsidiaries as described in Section 8.15, each as of the Effective Date.
10.1.13 Other. Such other documents as the Agent or any
Lender may reasonably request.
10.2 Conditions. The obligation (a) of each Lender to
make each Loan and (b) of the Issuing Lender to issue each Letter of Credit is subject to the following further conditions (unless waived in accordance with Section 13.1) that:
10.2.1 Compliance with Warranties, No Default, etc..
Both before and after giving effect to the making of any Loan or the issuance of any Letter of Credit (other than in connection with the incurrence of any Revolving Commitment Increase (including, for the avoidance of doubt, any
Overadvance Commitments) on the Increase Effective Date, which shall be governed by Section 2.1.2), the following statements shall be true and correct:
(a) the representations and warranties
of the Company and each Subsidiary set forth in this Agreement and the other Loan Documents shall be true and correct in all material respects with the same effect as if then made (except to the extent stated to relate to a specific
earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and
(b) no Event of Default or Unmatured
Event of Default shall have then occurred and be continuing.
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10.2.2 Confirmatory Certificate. If requested by the
Agent or any Lender, the Agent shall have received (in sufficient counterparts to provide one to each Lender) a certificate dated the date of such requested Loan or Letter of Credit and signed by a duly authorized representative of the
Company as to the matters set out in Section 10.2.1 (it being understood that each request by the Company for the making of a Loan or the issuance of a Letter of Credit shall be deemed to constitute a warranty by the Company that
the conditions precedent set forth in Section 10.2.1 will be satisfied at the time of the making of such Loan or the issuance of such Letter of Credit), together with such other documents as the Agent or any Lender may reasonably
request in support thereof.
| SECTION 11 |
EVENTS OF DEFAULT AND THEIR EFFECT.
|
11.1 Events of Default. Each of the following shall
constitute an Event of Default under this Agreement:
11.1.1 Non-Payment of the Loans, etc.. Default in the
payment when due of the principal of any Loan or reimbursement obligation with respect to any Letter of Credit by the Company hereunder; or default, and continuance thereof for five Business Days, in the payment when due of any interest,
fee or other amount payable by the Company hereunder or under any other Loan Document.
11.1.2 Non-Payment of Other Debt. Any default shall
occur under the terms applicable to any Debt of the Company or any Subsidiary in an aggregate amount (for all such Debt so affected) exceeding $25,000,000 (or the Dollar Equivalent thereof if denominated in a currency other than Dollars)
and such default shall (a) consist of the failure to pay such Debt when due, whether by acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit the holder or holders thereof, or any trustee or agent for such
holder or holders, to cause such Debt to become due and payable prior to its expressed maturity; or any such Debt shall be required to be prepaid or redeemed (other than by a regularly scheduled prepayment or redemption), purchased or
defeased or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or any default shall occur under any Dealer Financing provided by any Lender or any
Affiliate of a Lender to the Company or any Subsidiary.
11.1.3 Other Material Obligations. Default in the
payment when due, or in the performance or observance of, any material obligation of, or condition agreed to by, the Company or any Subsidiary with respect to any material purchase or lease of goods or services, or any agreement with a
Manufacturer, where such default, singly or in the aggregate with all other such defaults, might reasonably be expected to have a Material Adverse Effect or cause the loss of a material franchise.
11.1.4 Bankruptcy, Insolvency, etc.. The Company or
any Subsidiary becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or the Company or any Subsidiary applies for, consents to, or acquiesces in the appointment of a
trustee, receiver or other custodian for the Company or such Subsidiary or any property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee,
receiver or other custodian is appointed for the Company or any Subsidiary or for a substantial part of the property of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case
or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of the Company or any Subsidiary (other than a voluntary dissolution, not under any bankruptcy or insolvency law,
of an immaterial Subsidiary), and if such case or proceeding is not commenced by the Company or such Subsidiary, it is consented to or acquiesced in by the Company or such Subsidiary, or remains for 30 days undismissed; or the Company or
any Subsidiary takes any action to authorize, or in furtherance of, any of the foregoing.
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11.1.5 Non-Compliance with Loan Documents. (a) Failure
by the Company to comply with or to perform any covenant set forth in Sections 9.1.5(a), 9.5 through 9.14 (excluding Section 9.6.5), 9.19 through 9.21, and 9.24; (b) failure by the
Company to comply with the covenant set forth in Section 9.6.5 and continuance of such failure for 60 days; or (c) failure by any Loan Party to comply with or to perform any other provision of this Agreement or any other Loan
Document (and not constituting an Event of Default under any other provision of this Section 11) and continuance of such failure for 30 days.
11.1.6 Warranties. Any warranty made by the Company or
any Subsidiary herein or any other Loan Document is breached or is false or misleading in any material respect, or any schedule, certificate, financial statement, report, notice or other writing furnished by the Company or any Subsidiary
to the Agent or any Lender in connection herewith is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified.
11.1.7 Pension Plans. (i) Institution of any steps by
the Company or any other Person to terminate a Pension Plan if as a result of such termination the Company could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan or
Foreign Employee Benefit Plan, in excess of $25,000,000 (or the Dollar Equivalent thereof if denominated in a currency other than Dollars); (ii) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a
Lien under Section 302(f) of ERISA; or (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans as a result of
such withdrawal (including any outstanding withdrawal liability that the Company and the Controlled Group have incurred on the date of such withdrawal) exceeds $25,000,000.
11.1.8 Judgments. Final judgments which exceed an
aggregate of $25,000,000 (or the Dollar Equivalent thereof if denominated in a currency other than Dollars) shall be rendered against the Company or any Subsidiary and shall not have been paid, discharged or vacated or had execution
thereof stayed pending appeal within 60 days after entry or filing of such judgments.
11.1.9 Invalidity of Guaranty, etc.. The Guaranty
shall cease to be in full force and effect with respect to any Subsidiary, other than by virtue of the release of such Subsidiary after sale thereof in a transaction permitted hereunder or the voluntary dissolution of an immaterial
Subsidiary; or any Subsidiary (or any Person by, through or on behalf of such Subsidiary) shall contest in any manner the validity, binding nature or enforceability of the Guaranty with respect to such Subsidiary.
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11.1.10 Invalidity of Collateral Documents, etc.. Any
Collateral Document shall cease to be in full force and effect, other than by virtue of the release of such Subsidiary after sale thereof in a transaction permitted hereunder or the voluntary dissolution of an immaterial Subsidiary; or
the Company or any Subsidiary (or any Person by, through or on behalf of the Company or any Subsidiary) shall contest in any manner the validity, binding nature or enforceability of any Collateral Document.
11.1.11 Invalidity of Subordination Provisions, etc..
Any subordination provision in any document or instrument governing Subordinated Debt, or any subordination provision in any guaranty by any Subsidiary of any Subordinated Debt, shall cease to be in full force and effect, or the Company
or any other Person (including the holder of any applicable Subordinated Debt) shall contest in any manner the validity, binding nature or enforceability of any such provision.
11.1.12 Change of Control. Individuals who on the date
hereof constituted the board of directors of the Company (together with any new directors whose election to such board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either (x) directors on the date hereof or (y) whose election or nomination for election was previously so approved, but only if such directors were elected or nominated at such time as Penske
Corporation and any of its Affiliates collectively controlled the power to direct or cause the direction of the management and policies of the Company whether by contract or otherwise) shall cease for any reason to constitute a majority
of such board of directors then in office; provided that the foregoing shall not constitute an Event of Default if a majority of the members of the board of directors of the Company have been elected after having been nominated by
any of Roger S. Penske or Penske Capital Partners, LLC, International Motor Cars Group I, LLC, International Motor Cars Group II, LLC, Penske Corporation, Penske Automotive Holdings Corp. and their respective Subsidiaries, in each case so
long as Roger S. Penske (or his lineal descendants) is the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934) directly or indirectly of more than 50% of the voting stock of such entities.
11.2 Effect of Event of Default. If any Event of
Default described in Section 11.1.4 shall occur, the Commitments (if they have not theretofore terminated) shall immediately terminate and the Loans and all other obligations hereunder shall become immediately due and payable and
the Company shall become immediately obligated to Cash Collateralize all Letters of Credit, all without presentment, demand, protest or notice of any kind; and, if any other Event of Default shall occur and be continuing, the Agent (upon
written request of the Required Lenders) shall declare the Commitments (if they have not theretofore terminated) to be terminated and/or declare all Loans and all other obligations hereunder to be due and payable and/or demand that the
Company immediately Cash Collateralize all Letters of Credit, whereupon the Commitments (if they have not theretofore terminated) shall immediately terminate and/or all Loans and all other obligations hereunder shall become immediately due
and payable and/or the Company shall immediately become obligated to Cash Collateralize all Letters of Credit, all without presentment, demand, protest or notice of any kind. The Agent shall promptly advise the Company of any such
declaration, but failure to do so shall not impair the effect of such declaration. Notwithstanding the foregoing, the effect as an Event of Default of any event described in Section 11.1.1 or Section 11.1.4 may be waived by
the written concurrence of all of the Lenders, and the effect as an Event of Default of any other event described in this Section 11 may be waived by the written concurrence of the Required Lenders (except as provided in Section
13.1). Any cash collateral delivered hereunder shall be held by the Agent (without liability for interest thereon) and applied to reimbursement obligations under the Letters of Credit. After the expiration or termination of the
Letters of Credit, such cash collateral shall be applied by the Agent to any remaining obligations hereunder and any excess shall be delivered to the Company or as a court of competent jurisdiction may direct.
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| SECTION 12 |
THE AGENT.
|
12.1 Appointment and Authorization. (a) Each Lender
hereby irrevocably (subject to Section 12.9) appoints, designates and authorizes the Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. The provisions of this Section 12 are solely for the benefit of
the Agent and the Lenders, and neither the Company nor any of its Subsidiaries shall have any rights as a third-party beneficiary of any of such provisions. Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duty or responsibility except those expressly set forth herein, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent.
(b) The Issuing Lender shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents associated therewith. The Issuing Lender shall have all of the benefits and immunities (i) provided to the Agent in this Section 12 with respect to any acts
taken or omissions suffered by the Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as
if the term “Agent”, as used in this Section 12, included the Issuing Lender with respect to such acts or omissions and (ii) as additionally provided in this Agreement with respect to the Issuing Lender.
12.2 Delegation of Duties. The Agent may execute any
of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys‑in‑fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney‑in‑fact that it selects with reasonable care.
12.3 Liability of Agent. None of the Agent nor any of
its directors, officers, employees or agents shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by the Company or any Subsidiary or Affiliate of the
Company, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with,
this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of the Company or any other party to any Loan Document to
perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or records of the Company or any of the Company’s Subsidiaries or Affiliates.
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12.4 Reliance by Agent. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Company), independent accountants and other experts reasonably
selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate and, if it so requests, confirmation from the Lenders of their obligation to indemnify the Agent against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any
action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.
12.5 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent for the account of the
Lenders, unless the Agent shall have received written notice from a Lender or the Company referring to this Agreement, describing such Event of Default or Unmatured Event of Default and stating that such notice is a “notice of default”.
The Agent will notify the Lenders of its receipt of any such notice. The Agent shall take such action with respect to such Event of Default or Unmatured Event of Default as may be requested by the Required Lenders in accordance with Section
11; provided that unless and until the Agent has received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default or Unmatured
Event of Default as it shall deem advisable or in the best interest of the Lenders.
12.6 Credit Decision. Each Lender acknowledges that
the Agent has not made any representation or warranty to it, and that no act by the Agent hereafter taken, including any review of the affairs of the Company and its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that it has, independently and without reliance upon the Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Company and its Subsidiaries, and made its own decision to enter into this Agreement and to extend credit to the
Company hereunder. Each Lender also represents that it will, independently and without reliance upon the Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business, prospects, operations, property, financial or other condition or creditworthiness of the Company which may come into the possession of the Agent.
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12.7 Indemnification. Whether or not the transactions
contemplated hereby are consummated, each Lender shall indemnify upon demand the Agent and its directors, officers, employees and agents (to the extent not reimbursed by or on behalf of the Company and without limiting the obligation of the
Company to do so) from and against any and all Indemnified Liabilities in accordance with its Pro Rata Share; provided that no Lender shall be liable for any payment to any such Person of any portion of the Indemnified Liabilities
resulting from such Person’s gross negligence or willful misconduct. Without limitation of the foregoing, each Lender shall reimburse the Agent upon demand for such Lender’s Pro Rata Share of any costs or out‑of‑pocket expenses (including
Attorney Costs) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Company.
The undertaking in this Section shall survive repayment of the obligations hereunder, cancellation of the Notes, any foreclosure under, or modification, release or discharge of, any or all of the Collateral Documents, termination of this
Agreement and the resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. MBFS and its
Affiliates may make loans to, issue letters of credit for the account of, acquire equity interests in and generally engage in any kind of business with the Company and its Subsidiaries and Affiliates as though MBFS were not the Agent
hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, MBFS or its Affiliates may receive information regarding the Company or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Company or such Affiliate) and acknowledge that the Agent shall be under no obligation to provide such information to them. With respect to their Loans (if any), MBFS and its
Affiliates shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though MBFS were not the Agent, and the terms “Lender” and “Lenders” include MBFS and its Affiliates, to the extent
applicable, in their individual capacities.
12.9 Successor Agent. The Agent may resign as Agent
upon 30 days’ notice to the Lenders. If the Agent resigns under this Agreement, the Required Lenders shall, with (so long as no Event of Default exists) the consent of the Company (which shall not be unreasonably withheld or delayed),
appoint from among the Lenders a successor agent for the Lenders. If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after consulting with the Lenders and the Company, a
successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term “Agent” shall mean such
successor agent, and the retiring Agent’s appointment, powers and duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 12 and Sections 13.6 and 13.13
shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent’s
notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above.
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12.10 Collateral Matters. (a) The Lenders irrevocably
authorize the Agent, at its option and in its discretion, (i) to release any Lien granted to or held by the Agent under any Collateral Document (x) upon termination of the Commitments and payment in full of all Loans and all other
obligations of the Company hereunder, (y) constituting property sold or to be sold or disposed of as part of or in connection with any Disposition permitted hereunder or (z) subject to Section 13.1, if approved, authorized or
ratified in writing by the Required Lenders; and (ii) to subordinate its interest in any collateral to any holder of a Lien on such collateral which is permitted by clause (d)(i), (d)(iii), (d)(iv) or (h) of
Section 9.8. Upon request by the Agent at any time, the Lenders will confirm in writing the Agent’s authority to release, or subordinate its interest in, particular types or items of collateral pursuant to this Section 12.10.
(b) Any and all proceeds of disposition or other
realization on the collateral granted under the Collateral Documents (the “Collateral”) or from any realization on the Collateral received by the Agent in connection with any enforcement, sale, collection (including judicial or
non-judicial foreclosure) or similar proceedings with respect to the Collateral or a demand or other enforcement or collection with respect to the Collateral shall be applied by the Agent, as follows:
FIRST: To the payment of the costs and expenses of such disposition, collection or other realization, including Attorney Costs, and all costs, expenses,
liabilities and advances made or incurred by the Agent in connection therewith;
SECOND: To the payment of the Liabilities then due and owing in such order as shall be directed by the Required Lenders; and
THIRD: After payment in full of all Liabilities, any surplus then remaining from such proceeds shall be paid to the Company or to whomsoever may be
lawfully entitled to receive the same or paid as a court of competent jurisdiction may direct. Until such proceeds are so applied, the Agent shall hold such proceeds in its custody in accordance with its regular procedures for handling
deposited funds.
(c) Upon request by the Company, the Agent shall release
the Lien granted to and held by the Agent under any Mortgage, and shall, at the sole cost and expense of the Company, promptly provide all reasonably requested assistance to effect such release, so long as (i) no Event of Default or
Unmatured Event of Default has occurred and is continuing or would result from the release of such Lien and (ii) the Company has delivered to the Agent a pro forma Borrowing Base Certificate that demonstrates that,
immediately after giving effect to the removal of such real estate from the Borrowing Base, the Total Outstandings will not exceed the sum of (x) the Borrowing Base plus (y) on and after the Increase Effective Date, the
Overadvance Commitment Amount plus (z) 35% of the Domestic Blue Sky Value.
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12.11 Funding Reliance. (a) Unless the Agent receives
notice from a Lender by noon, Detroit time, on the day of a proposed borrowing for any borrowing other than a Same Day Loan (or by 3:00 P.M., Detroit time, on the day of a proposed borrowing for any Same Day Loan) that such Lender will not
make available to the Agent an amount equal to its Pro Rata Share of such borrowing, the Agent may assume that such Lender has made such amount available to the Agent and, in reliance upon such assumption, make a corresponding amount
available to the Company. If and to the extent such Lender has not made such amount available to the Agent: (i) the Company agrees to repay such amount to the Agent forthwith on demand, together with interest thereon at the interest rate
applicable to Loans comprising such borrowing, (ii) the Agent shall be entitled to retain all interest payments paid by the Company allocable to such Lender’s Pro Rata Share of such borrowing for the period from the time such Lender was
required to make such amount available to the Agent until such Lender actually makes such amount available or such amount is indefeasibly paid to the Agent by the Company and (iii) such Lender agrees to pay to the Agent forthwith upon
demand the greater of (x) all reasonable and actual costs incurred by the Agent as a result of such failure and (y) interest on such amount for the Agent’s account, for each day from the date such amount was to have been delivered to the
Agent until the date such amount is paid, at a rate per annum equal to the Federal Funds Rate from time to time in effect. Nothing set forth in this clause (a) shall relieve any Lender of any obligation it may have to make any Loan
hereunder.
(b) Unless the Agent receives notice from the Company prior
to the due date for any payment hereunder (other than a Same Day Prepayment) that the Company does not intend to make such payment, the Agent may assume that the Company has made such payment and, in reliance upon such assumption, make
available to each Lender its share of such payment. If and to the extent that the Company has not made any such payment to the Agent, each Lender which received a share of such payment shall repay such share (or the relevant portion
thereof) to the Agent forthwith on demand. With respect to all payments other than Same Day Prepayments, if and to the extent such Lender does not so repay the Agent on demand, (i) the Agent shall be entitled to retain all interest
payments paid by the Company allocable to such Lender’s Pro Rata Share of such payment for the period from the time such Lender was required to so repay the Agent until such Lender actually pays the Agent such amount or the amount of such
repayment is indefeasibly paid to the Agent by the Company and (ii) such Lender agrees to pay to the Agent forthwith upon demand the greater of (x) all reasonable and actual costs incurred by the Agent as a result of such failure to repay
and (y) interest on such amount for the Agent’s account, for each day from the date such Lender was required to so repay such amount to the Agent until the date such amount is paid, at a rate per annum equal to the Federal Funds Rate from
time to time in effect. Nothing set forth in this clause (b) shall relieve the Company of any obligation it may have to make any payment hereunder.
(c) The Agent may always assume that the Company has made
each Same Day Prepayment on the Business Day upon which the notice of the Same Day Prepayment was received by the Agent and may, in reliance upon such assumption, make available to each Lender its share of such Same Day Prepayment. With
respect to each Same Day Prepayment that is not made by the Company on the same Business Day as the Agent received the notice of such Same Day Prepayment, (i) each Lender which received a share of such Same Day Prepayment shall repay such
share to the Agent forthwith on demand, (ii) the Agent shall be entitled to retain all interest payments paid by the Company allocable to such Lender’s Pro Rata Share of such payment for the period from the Business Day that the Agent
received the notice of such Same Day Prepayment until such Lender actually pays the Agent such amount or the amount of such Same Day Prepayment is indefeasibly paid to the Agent by the Company and (iii) such Lender agrees to pay to the
Agent forthwith upon demand the greater of (x) all reasonable and actual costs incurred by the Agent as a result of such failure to repay and (y) interest on its Pro Rata Share of such Same Day Prepayment, for the Agent’s account, for
each day from the date that such Lender was required to so repay the Agent until the date such amount is paid, at a rate per annum equal to the Federal Funds Rate from time to time in effect. Nothing set forth in this clause (c)
shall relieve the Company of any obligation it may have to make any payment hereunder.
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12.12 Enforcement. Notwithstanding anything to the
contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against any Loan Party shall be vested exclusively in, and all actions and proceedings at law
in connection with such enforcement shall be instituted and maintained exclusively by, the Agent in accordance with Section 12.1 for the benefit of all the Lenders; provided that the foregoing shall not prohibit (a) the
Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under the other Loan Documents, (b) any Lender from enforcing its right to payment when due of the
principal of and interest on its Loans, fees and other amounts owing to such Lender under the Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 7.4 (subject to the terms of Section 7.5)
or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any bankruptcy or insolvency law; and provided, further,
that if at any time there is no Person acting as Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Agent pursuant to this Section 12 and (ii) in
addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 7.5, any Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it and as authorized by the Required Lenders.
12.13 Agent May File Proofs of Claim. In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Agent shall have made any demand on the Company) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans and all other amounts that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Agent
(including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Agent and their respective agents and counsel and all other amounts due the Lenders and the Agent under Sections 5,
13.6 and 13.13) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to
the Agent and, in the event that the Agent shall consent to the making of such payments directly to the Lenders, to pay to the Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Agent and its
agents and counsel, and any other amounts due the Agent under Sections 5, 13.6 and 13.13.
| SECTION 13 |
GENERAL.
|
13.1 Waiver; Amendments. No delay on the part of the
Agent or any Lender in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No amendment, modification, waiver or consent shall (i) amend, modify or waive Section 7.5, (ii) increase the Revolving Commitment Amount or the L/C Commitment Amount, (iii) extend the
date for payment of any principal of or interest on the Loans, any reimbursement obligation with respect to any Letter of Credit or any fees payable hereunder, (iv) reduce the principal amount of any Loan, the rate of interest thereon, any
reimbursement obligation with respect to any Letter of Credit or any fees payable hereunder, (v) release all or a substantial number of the guarantors from the Guaranty or all or any substantial part of the collateral granted under the
Collateral Documents, (vi) amend, modify or waive Section 6.3 or (vii) reduce the aggregate Pro Rata Share required to effect an amendment, modification, waiver or consent without, in each case, the consent of all Lenders. No
amendment, modification, waiver or consent shall (w) amend or modify Section 9.6.1 or Section 9.6.2 so as to reduce the minimum financial ratios set forth therein, (x) amend or modify Section 9.6.3 or Section
9.6.4 so as to increase the maximum financial ratios set forth therein, (y) amend or modify Section 9.6.5, or (z) amend, modify or waive Section 11.1.2 to the extent such Section expressly refers to Dealer Financings
without, in each case, the consent of the Required Lenders. No amendment, modification, waiver or consent shall increase or extend any Commitment of any Lender without the written consent of such Lender. The Agent shall not execute any
material amendment, modification or waiver of, or material consent with respect to, any provision of the Guaranty or any Collateral Document unless the same shall be approved in writing by the Required Lenders, and then any such amendment,
modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No provision of Section 12 or other provision of this Agreement affecting the Agent in its capacity as
such shall be amended, modified or waived without the consent of the Agent. No provision of this Agreement relating to the rights or duties of the Issuing Lender in its capacity as such shall be amended, modified or waived without the
consent of the Issuing Lender.
13.2 Confirmations. The Company and each holder of a
Note agree from time to time, upon written request received by it from the other, to confirm to the other in writing (with a copy of each such confirmation to the Agent) the aggregate unpaid principal amount of the Loans then outstanding
under such Note.
13.3 Notices. Except as otherwise provided in Section
2.2 and in the last paragraph of Section 9.1, all notices hereunder shall be in writing (including facsimile transmission) and shall be sent to the applicable party at its address shown on Schedule 13.3 or at such
other address as such party may, by written notice received by the other parties, have designated as its address for such purpose. Notices sent by facsimile transmission shall be deemed to have been given when sent and mechanical
confirmation of such transmission has been received; notices sent by mail shall be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or
overnight courier service shall be deemed to have been given when received. For purposes of Section 2.2, the Agent shall be entitled to rely on telephonic instructions from any person that the Agent in good faith believes is an
authorized officer or employee of the Company, and the Company shall hold the Agent and each other Lender harmless from any loss, cost or expense resulting from any such reliance.
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13.4 Computations. Where the character or amount of
any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, to
the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, consistently applied; provided that if the Company notifies the Agent that the Company wishes to amend any covenant in Section
9 to eliminate or to take into account the effect of any change in GAAP on the operation of such covenant (or if the Agent notifies the Company that the Required Lenders wish to amend Section 9 for such purpose), then the
Company’s compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Company and the Required Lenders.
13.5 Regulation U. Each Lender represents that it in
good faith is not relying, either directly or indirectly, upon any Margin Stock as collateral security for the extension or maintenance by it of any credit provided for in this Agreement.
13.6 Costs, Expenses and Taxes. The Company agrees to
pay on demand all reasonable out-of-pocket costs and expenses of the Agent (including Attorney Costs) in connection with the preparation, execution, syndication, delivery and administration of this Agreement, the other Loan Documents and
all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any amendment, supplement or waiver to any Loan Document), and all out-of-pocket costs and expenses (including Attorney
Costs) incurred by the Agent and each Lender after an Event of Default in connection with the enforcement of this Agreement, the other Loan Documents or any such other documents. In addition, the Company agrees to pay, and to save the
Agent and the Lenders harmless from all liability for, (a) any stamp or other taxes (excluding income taxes and franchise taxes based on net income) which may be payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution and delivery of any other Loan Document or any other document provided for herein or delivered or to be delivered hereunder or in connection herewith and (b) any fees of the
Company’s auditors in connection with any reasonable exercise by the Agent and the Lenders of their rights pursuant to Section 9.2. All obligations provided for in this Section 13.6 shall survive repayment of the
obligations hereunder, cancellation of the Notes and termination of this Agreement.
13.7 Subsidiary References. The provisions of this
Agreement relating to Subsidiaries shall apply only during such times as the Company has one or more Subsidiaries.
13.8 Captions. Section captions used in this
Agreement are for convenience only and shall not affect the construction of this Agreement.
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13.9.1 Assignments. Any Lender may, with the
prior written consents of the Agent and (so long as no Event of Default exists) the Company (which consents shall not be unreasonably delayed or withheld and, in any event, shall not be required for an assignment by a Lender to one of its
Affiliates or to any other Lender), at any time assign and delegate to one or more commercial banks or other Persons (any Person to whom such an assignment and delegation is to be made being herein called an “Assignee”) all or any
fraction of such Lender’s Loans and Commitments (which assignment and delegation shall be of a constant, and not a varying, percentage of all the assigning Lender’s Loans and Commitments) in a minimum aggregate amount equal to the lesser
of (i) the amount of the assigning Lender’s Pro Rata Share of the Revolving Commitment Amount and (ii) $25,000,000; provided that (a) no assignment and delegation may be made to any Person if, at the time of such assignment and
delegation, the Company would be obligated to pay any greater amount under Section 7.6 to the Assignee than the Company is then obligated to pay to the assigning Lender under such Section (and if any assignment is made in
violation of the foregoing, the Company will not be required to pay the incremental amounts), (b) no assignment and delegation may be made to any Person that does not assign and delegate to such Person an equal Pro Rata Share of the
Revolving Commitment Amount and the L/C Commitment Amount and all Revolving Loans and all Letters of Credit, (c) if, after giving effect to any assignment by the Agent, the Agent’s Pro Rata Share would be less than the Pro Rata Share of
any other Lender, the Agent shall give each such Lender 60 days’ prior written notice of such assignment, (d) no assignment and delegation may be made to any Defaulting Lender or any of its Subsidiaries or any Person who, upon becoming a
Lender hereunder, would constitute a Defaulting Lender or a Subsidiary thereof and (e) the Company and the Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned and
delegated to an Assignee until the date when all of the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the Agent and the assigning Lender shall agree) shall have passed after written notice of
such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee, shall have been given to the Company and the Agent by such assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have executed and delivered to the Company and the Agent an assignment agreement substantially in
the form of Exhibit G (an “Assignment Agreement”), together with any documents required to be delivered thereunder, which Assignment Agreement shall have been accepted by the Agent, and
(z) except in the case of an assignment by a Lender to one of its Affiliates or another Lender, the assigning Lender or the Assignee shall have paid
the Agent a processing fee of $3,500.
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From and after the date on which the conditions described above have been met, (x) such Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder and (y) the assigning Lender, to the extent that rights and obligations
hereunder have been assigned and delegated by it pursuant to such Assignment Agreement, shall be released from its obligations hereunder. Within five Business Days after the effectiveness of any assignment and delegation, the Company shall
execute and deliver to the Agent (for delivery to the Assignee) a new Note (unless the Assignee was already a holder of a Note immediately prior to such effectiveness). Each such Note shall be dated the effective date of such assignment.
Accrued interest on that part of the obligations being assigned shall be paid as provided in the Assignment Agreement. Accrued interest and fees on that part of the obligations not being assigned shall be paid to the assigning Lender.
Accrued interest and accrued fees shall be paid at the same time or times provided in the predecessor Note and in this Agreement. Any attempted assignment and delegation not made in accordance with this Section 13.9.1 shall be null
and void. Except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a
Defaulting Lender.
In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the
other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by
the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Company and the Agent, the applicable Pro Rata Share of Loans previously requested but not funded by the Defaulting
Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Agent and each other Lender hereunder (and interest
accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans in accordance with its Pro Rata Share. Notwithstanding the foregoing, in the event that any assignment of rights and obligations
of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this
Agreement until such compliance occurs.
Notwithstanding the foregoing provisions of this Section 13.9.1 or any other provision of this Agreement, any Lender may at any time assign all or any portion of its
Loans and its Note to a Federal Reserve Bank (but no such assignment shall release any Lender from any of its obligations hereunder).
13.9.2 Participations. Any Lender may at any time sell
to one or more commercial banks or other Persons participating interests in any Loan owing to such Lender, the Note held by such Lender, the Commitments of such Lender, the interest of such Lender in any Letter of Credit or any other
interest of such Lender hereunder (any Person purchasing such participating interest being herein called a “Participant”). In the event of a sale by a Lender of a participating interest to a Participant, (x) such Lender shall
remain the holder of its Note for all purposes of this Agreement, (y) the Company and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations hereunder and (z) all
amounts payable by the Company shall be determined as if such Lender had not sold such participation and shall be paid directly to such Lender. No Participant shall have any direct or indirect voting rights hereunder except with respect
to any of the events described in the fourth sentence of Section 13.1. Each Lender agrees to incorporate the requirements of the preceding sentence into each participation agreement which such Lender enters into with any
Participant. The Company agrees that if amounts outstanding under this Agreement and the Notes are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement or such Note; provided that
such right of setoff shall be subject to the obligation of each Participant to share with the Lenders, and the Lenders agree to share with each Participant, as provided in Section 7.5. The Company also agrees that each
Participant shall be entitled to the benefits of Section 7.6 as if it were a Lender (provided that no Participant shall receive any greater compensation pursuant to Section 7.6 than would have been paid to the
participating Lender if no participation had been sold).
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13.10 Governing Law. This Agreement and each Note shall
be a contract made under and governed by the laws of the State of New York applicable to contracts made and to be performed entirely within such State. Whenever possible each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Agreement. All obligations of the Company and rights of the Agent and the Lenders expressed herein or in any other Loan Document shall be in addition to and
not in limitation of those provided by applicable law.
13.11 Counterparts. This Agreement may be executed in
any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement.
13.12 Successors and Assigns. This Agreement shall be
binding upon the Company, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Company, the Lenders and the Agent and the successors and assigns of the Lenders and the Agent.
(a) Indemnification by the Company. In
consideration of the execution and delivery of this Agreement by the Agent and the Lenders and the agreement to extend the Commitments provided hereunder, the Company hereby agrees to indemnify, exonerate and hold the Agent, each Lender
and each of the officers, directors, employees, Affiliates and agents of the Agent and each Lender (each a “Lender Party”) free and harmless from and against any and all actions, causes of action, suits, losses, liabilities,
damages and expenses, including Attorney Costs (collectively, the “Indemnified Liabilities”), incurred by the Lender Parties or any of them as a result of, or arising out of, or relating to (i) any tender offer, merger, purchase of
stock, purchase of assets or other similar transaction financed or proposed to be financed in whole or in part, directly or indirectly, with the proceeds of any of the Loans, (ii) the use, handling, release, emission, discharge,
transportation, storage, treatment or disposal of any Hazardous Substance at any property owned or leased by the Company or any Subsidiary, (iii) any violation of any Environmental Laws with respect to conditions at any property owned or
leased by the Company or any Subsidiary or the operations conducted thereon, (iv) the investigation, cleanup or remediation of offsite locations at which the Company or any Subsidiary or their respective predecessors are alleged to have
directly or indirectly disposed of Hazardous Substances or (v) the execution, delivery, performance or enforcement of this Agreement or any other Loan Document by any of the Lender Parties, except for any such Indemnified Liabilities
arising on account of the applicable Lender Party’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final, non-appealable judgment. If and to the extent that the foregoing undertaking may
be unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. All obligations provided for in
this Section 13.13 shall survive repayment of the obligations hereunder, cancellation of the Notes, any foreclosure under, or any modification, release or discharge of, any or all of the Collateral Documents and termination of
this Agreement.
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(b) Reimbursement by Lenders. To the extent that
the Company for any reason fails to indefeasibly pay any amount required under Section 13.13(a) to be paid by it to the Agent (or any sub-agent thereof) or any Lender Party of any of the foregoing, each Lender severally agrees to
pay to the Agent (or any such sub-agent) or such Lender Party, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s
share of the Total Outstandings at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the Agent (or any such sub-agent) or against any Lender Party of any of the foregoing acting for the Agent (or any such sub-agent) in connection with
such capacity. The obligations of the Lenders under this Section 13.13(b) are several and not joint.
13.14 Waiver of Consequential Damages, etc.. To the
fullest extent permitted by applicable law, the Company shall not assert, and hereby waives, any claim against any Lender Party, on any theory of liability, for indirect, special, punitive, consequential or exemplary damages (as opposed to
direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the transactions contemplated hereby or thereby, any
Loan or the use of the proceeds thereof. No Lender Party referred to in Section 13.13 shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.
13.15 Nonliability of Lenders. The relationship between
the Company on the one hand and the Lenders and the Agent on the other hand shall be solely that of borrower and lender. Neither the Agent nor any Lender shall have any fiduciary responsibility to the Company. Neither the Agent nor any
Lender undertakes any responsibility to the Company to review or inform the Company of any matter in connection with any phase of the Company’s business or operations. The Company agrees that neither the Agent nor any Lender shall have
liability to the Company (whether sounding in tort, contract or otherwise) for losses suffered by the Company in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection therewith, unless it is determined in a final non-appealable judgment by a court of competent jurisdiction that such losses resulted from the gross negligence or willful
misconduct of the party from which recovery is sought. Neither the Agent nor any Lender shall have any liability with respect to, and the Company hereby waives, releases and agrees not to sue for, any special, indirect or consequential
damages suffered by the Company in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby.
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13.16 Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY
SUCH LITIGATION AS SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE COMPANY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
13.17 Waiver of Jury Trial. EACH OF THE COMPANY, THE
AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
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13.18 Confidentiality. Each Lender agrees to take, and
to cause its Affiliates to take, normal and reasonable precautions and exercise due care to maintain the confidentiality of all non-public information provided to it by the Company or any Subsidiary, or by the Agent on the Company’s or any
Subsidiary’s behalf, under this Agreement or any other Loan Document, and neither such Lender nor any of its Affiliates shall use any such information other than in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or contemplated with the Company or any Subsidiary, except to the extent such information was or becomes generally available to the public other than as a result of
disclosure by such Lender or was or becomes available on a non‑confidential basis from a source other than the Company (provided that such source is not bound by a confidentiality agreement with the Company or any Subsidiary known to
such Lender); provided, however, that any Lender may disclose such information (A) at the request or pursuant to any requirement of any Governmental Authority to which such Lender is subject or in connection with an
examination of such Lender by any such authority, (B) pursuant to subpoena or other court process, when required to do so in accordance with the provisions of any applicable requirement of law, (C) to the extent reasonably required in
connection with any litigation or proceeding to which the Agent or any Lender or any of their respective Affiliates may be party, (D) to the extent reasonably required in connection with the exercise of any remedy hereunder or under any
other Loan Document, (E) to such Lender’s independent auditors and other professional advisors, (F) to any participant or assignee, actual or potential, provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Lenders hereunder, (G) as to any Lender or its Affiliate, as expressly permitted under the terms of any other document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Lender or such Affiliate, (H) to its Affiliates and (I) to any nationally recognized rating agency that requires access to information about such Lender’s investment portfolio in connection
with ratings issued to such Lender.
- 79 -
SCHEDULE 2.1
LENDERS AND PRO RATA SHARES
(a) Prior to the Increase Effective Date:
|
Lender
|
Share of Revolving
Commitment Amount
|
Share of L/C
Commitment
Amount
|
Pro Rata Share
|
||||||||||
|
Mercedes-Benz Financial Services USA LLC
|
$
|
600,000,000
|
$
|
30,000,000
|
40.000000000
|
%
|
|||||||
|
Toyota Motor Credit Corporation
|
$
|
550,000,000
|
$
|
27,500,000
|
36.666666667
|
%
|
|||||||
|
Daimler Truck Financial Services USA LLC
|
$
|
350,000,000
|
$
|
17,500,000
|
23.333333333
|
%
|
|||||||
|
TOTAL
|
$
|
1,500,000,000
|
$
|
75,000,000
|
100.000000000
|
%
|
|||||||
(b) Subject to and after the Increase Effective Date:
|
Lender
|
Pro Rata Share
|
||||
|
Mercedes-Benz Financial Services USA LLC
|
37.083333333
|
%
|
|||
|
Toyota Motor Credit Corporation
|
36.666666667
|
%
|
|||
|
Daimler Truck Financial Services USA LLC
|
26.250000000
|
%
|
|||
|
TOTAL
|
100.000000000
|
%
|
|||
Exhibit 10.1
CERTAIN INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT AND REPLACING IT WITH [***] BECAUSE IT IS
BOTH: (I) NOT MATERIAL AND (II) THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
EXECUTION VERSION
VOTING AND SUPPORT AGREEMENT
This Voting and Support Agreement (this “Agreement”), dated as of October 15, 2026, is
entered into by and among (i) Penske Automotive Group, Inc., a Delaware corporation (the “Company”), (ii) Motown Acquisition Corp., a Delaware corporation (“Buyer”), and (iii) the Persons listed on Exhibit A hereto (collectively, the “Stockholders”
and each, individually, a “Stockholder”). Capitalized terms used but not defined herein shall have the meanings given to them in the Merger Agreement (as defined below).
RECITALS
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Company and Buyer are entering into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger Agreement”), which provides for the merger of Buyer with and into the Company (the “Merger”), with the Company surviving the Merger as the Surviving Corporation;
WHEREAS, as of the date hereof, each Stockholder is the record holder and “beneficial owner” (within the meaning of Rule
13d-3 under the Exchange Act) of the number of shares of Company Common Stock set forth opposite such Stockholder’s name on Exhibit A hereto under the heading “Owned Shares,” being all
of the shares of Company Common Stock owned of record or beneficially by such Stockholder as of the date hereof (as adjusted pursuant to Section 11, collectively, the “Owned Shares”); and
WHEREAS, as a material inducement to, and as a condition to, the willingness of the Company to enter into the Merger
Agreement, each Stockholder is entering into this Agreement with the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to
be legally bound hereby, each Stockholder, the Company and Buyer hereby agree as follows:
1. Agreement to Vote the Covered Shares.
1.1. From the date hereof until the
Termination Date (as defined below), at every meeting of the Company’s stockholders, however called, including any postponement, recess or adjournment thereof, or in any other circumstance in which the vote, consent or other approval of the
Company’s stockholders is sought, each Stockholder agrees to, and if applicable, to cause its controlled Affiliates to, affirmatively vote (including via proxy) or execute consents, with respect to (or cause to be voted (including via proxy)
or consents to be executed with respect to), and not to withdraw or modify any such vote or consent with respect to, all of such Stockholder’s Owned Shares and any
additional shares of Company Common Stock or other voting securities of the Company acquired by such Stockholder or its respective controlled Affiliates after the date hereof and prior to the Termination Date (as adjusted pursuant to Section 11, collectively, and together with the Owned Shares, the “Covered Shares”), to the extent such
Covered Shares are entitled to vote, as follows: (a) in favor of (i) the adoption of the Merger Agreement and the approval of the Merger, (ii) the approval of any proposal to adjourn or postpone any Company Stockholders Meeting to a later
date to the extent such adjournment or postponement is permitted or required in accordance with Section 5.13(b) of the Merger Agreement, (iii) the proposal to approve, on a
non-binding, advisory basis, the compensation that may become payable to the Company’s named executive officers in connection with the consummation of the Merger, and (iv) the approval of any other matter required by applicable Law to be
voted upon by the Company’s stockholders in connection with the Transactions, and (b) against (i) any proposal, action or agreement that would reasonably be expected to result in a breach of any covenant, representation, warranty or other
obligation or agreement of the Company contained in the Merger Agreement or that would reasonably be expected to result in the failure of any condition set forth in Sections 6.01 or
6.02 of the Merger Agreement to be satisfied prior to the Outside Date, (ii) any Takeover Proposal or any other proposal made in opposition to or in competition with, or which is
inconsistent with, the Merger Agreement or the Transactions, (iii) any recapitalization, reorganization, dissolution, liquidation, winding up or similar extraordinary transaction involving the Company (except as contemplated by the Merger
Agreement) and (iv) any other action, agreement or proposal which would reasonably be expected to prevent, materially impede or materially delay the consummation of the Transactions (clauses (a) and (b) collectively, the “Supported Matters”). Each Stockholder agrees to, and agrees to cause its applicable controlled Affiliates to, be present, in person or by proxy, at every meeting of the Company’s
stockholders, including any postponement, recess or adjournment thereof, at which any Supported Matter is to be considered or voted upon (in the manner described in this Section 1)
so that all of such Stockholder’s Covered Shares will be counted for purposes of determining the presence of a quorum at each such meeting, or otherwise cause such Stockholder’s Covered Shares to be counted as present thereat for purposes of
establishing a quorum at each such meeting. For the avoidance of doubt, (A) except with respect to the Supported Matters, no Stockholder has any obligation to vote such Stockholder’s Covered Shares in any particular manner and, with respect
to matters other than the Supported Matters, each Stockholder shall be entitled to vote such Stockholder’s Covered Shares (or abstain with respect to any matter) in its sole discretion, and (B) nothing in this Agreement shall require a
Stockholder to exercise, settle, convert or exchange any Equity-Based Award owned of record or beneficially by such Stockholder at any time.
1.2. From the date hereof until the
Termination Date, in the event that any Stockholder or any of its controlled Affiliates acquires record or beneficial ownership of, or the power to vote or direct the voting of, any additional shares of Company Common Stock or other voting
interests with respect to the Company (whether by purchase, upon exercise or conversion of any securities or otherwise), such shares of Company Common Stock or voting interests shall, without further action of the parties, be deemed Covered
Shares and subject to the provisions of this Agreement and Exhibit A hereto shall be deemed amended accordingly, and such shares of Company Common Stock or voting interests shall
automatically become subject to the terms of this Agreement. Each Stockholder shall promptly notify the Company and Buyer of any such event.
2
2. Termination. This Agreement shall terminate automatically and without further action by, or liability or obligation on the part of, the parties hereto upon the earliest to occur of: (i) the valid
termination of the Merger Agreement in accordance with its terms; (ii) the mutual written consent of the Company, Buyer and the Stockholders; and (iii) the Effective Time (the earliest such date set forth in clauses (i) through (iii), the “Termination Date”); provided that the provisions set forth in this Section 2,
Section 10, and Sections 13 through 29 hereof shall survive the
termination of this Agreement; provided, further, that, subject to Section
7.03 of the Merger Agreement, the termination of this Agreement shall not prevent any party hereto from seeking any remedies (at law or in equity) against any other party hereto for that party’s Fraud or Willful Breach of this
Agreement occurring prior to such termination. For the purposes hereof, (a) “Fraud” means the actual, knowing and intentional common law fraud (and not a constructive fraud, negligent misrepresentation or omission or any form of fraud premised on
recklessness or negligence) of any Person as finally determined by a court of competent jurisdiction in the making of the representations and warranties set forth in Section 5, Section 6 or Section 7 of this Agreement, and (b) “Willful Breach” means a breach of any representation or
warranty or failure to perform or comply with any covenant, in each case that is the consequence of a deliberate action or omission (including a failure to cure circumstances) by a party to this Agreement with the knowledge that the taking of, or
failure to take, such act would, or would reasonably be expected to, result in a breach of this Agreement.
3. Certain Covenants.
3.1. Transfers. Beginning on the date hereof until the Termination Date, each Stockholder hereby covenants and agrees that, except as expressly contemplated by this Agreement, such Stockholder shall not,
and shall cause its Affiliates and their respective Representatives not to, directly or indirectly, (i) tender any Covered Shares into any tender or exchange offer, (ii) offer, sell, transfer, assign, exchange, pledge, hypothecate, hedge, gift,
loan, encumber or otherwise dispose of (collectively, “Transfer”) or enter into any Contract, option, agreement, understanding or other arrangement with respect to the Transfer of, any
Covered Shares or beneficial ownership, voting power or any other interest thereof or therein (including by operation of law), (iii) grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting
agreement with respect to any Covered Shares, in each case, that is inconsistent with this Agreement, or (iv) commit or agree to take any of the foregoing actions. Any Transfer in violation of this Section
3.1 shall be void ab initio. Notwithstanding anything to the contrary in this Agreement, any Stockholder may Transfer any or all of the Covered Shares, in
accordance with applicable Law, (A) to such Stockholder’s Affiliates, or (B) to any custodian or nominee for the purpose of holding such Covered Shares for the account of such Stockholder; provided,
that, prior to and as a condition to the effectiveness of such Transfer contemplated by the foregoing clauses (A) and (B), each Person to whom any of such Covered Shares or any interest in any of such Covered Shares is or may be transferred shall
have executed and delivered to Buyer and the Company a counterpart of this Agreement in a form reasonably acceptable to Buyer and the Company pursuant to which such transferee shall be bound by all of the terms and provisions hereof in which case
such transferee shall be deemed a Stockholder hereunder, and the transferor shall remain liable for all of its obligations hereunder. From the date hereof until the Termination Date, subject to the immediately preceding sentence, the Stockholders
shall retain all of the Owned Shares. At all times from the date of this Agreement until the Termination Date, each Stockholder hereby authorizes the Company or its counsel to impose stop orders to prevent the Transfer of any Covered Shares in
violation of this Agreement; provided that the Company shall promptly cause any such stop orders to be removed upon the valid termination of this Agreement in accordance with Section 2.
3
3.2. Regulatory Matters.
(a) Subject to Section 3.2(c), each Stockholder shall, and shall cause its Affiliates to, use their respective reasonable best efforts, to (i) take such actions (and refrain from taking such actions)
and agree or commit to take such actions (and agree or commit to refrain from taking such actions) as are necessary or appropriate to enable Buyer to comply with its obligations pursuant to Section
5.03 of the Merger Agreement and Section 5.03 of the Buyer Disclosure Letter and (ii) consistent with the time frames set forth in Section 5.03 of the Merger
Agreement, supply and provide information that, to such Stockholder’s knowledge, is complete and accurate in all material respects to any Governmental Authority requesting such information in connection with filings or notifications under, or
relating to, applicable Laws (collectively, the “Regulatory Filings”) that are required or advisable as a result of, or pursuant to, the Merger Agreement and the related financings
and transactions, including information required or requested to be provided to any antitrust, regulatory, financial, national security or other Governmental Authorities in connection with any approvals reasonably sought in connection with
the Transactions (collectively, the “Regulatory Disclosures”). Notwithstanding anything to the contrary herein, the Stockholders may designate any Regulatory Disclosures that contain
sensitive, legally privileged, or confidential information in respect of the Stockholders or any of their Affiliates as exclusive to the Stockholders and the Stockholders may provide that any such sensitive, legally privileged, or
confidential information may only be provided on a counsel-only basis or directly to the applicable Governmental Authority requesting such information. No Stockholder shall make any filings or notifications in connection with the Merger
pursuant to any Antitrust Laws without the Company’s and Buyer’s prior written consent (not to be unreasonably withheld, delayed or conditioned). Neither Buyer nor the Company will file any Regulatory Filings that contain information with
respect to a Stockholder or its Affiliates without first providing such Stockholder and its counsel a reasonable opportunity to review and comment thereon, and will give good faith consideration to all reasonable additions, deletions or
changes suggested by such Stockholder and its counsel.
(b) Each Stockholder represents,
warrants and covenants to Buyer and the Company that: (i) none of the information supplied in writing by such Stockholder specifically for inclusion or incorporation by reference in the Regulatory Disclosures will contain a material
misstatement of fact or a material omission of fact necessary to make the information provided not misleading; and (ii) such Stockholder does not and will not permit any entity under the “control” (defined in Section 721 of the Defense
Production Act, as amended, including all implementing regulations thereof) of a People’s Republic of China national, or any entity under the “control” of a Russian Federation national, to obtain through any Affiliate, control with respect to
the Company.
(c) Each Stockholder shall (i)
promptly keep Buyer and the Company informed of any material communication received by or on behalf of such Stockholder from a Governmental Authority in connection with the Transactions and permit Buyer and the Company to review and discuss
in advance (and to consider in good faith any comments made by Buyer or the Company, as applicable, in relation to) any proposed draft notifications, formal notifications, filing (provided,
however, that filings made under the HSR Act need not be shared), submission or other written substantive communication made in connection with the Transactions to a Governmental
Authority, and (ii) to the extent permitted by the applicable Governmental Authority, promptly give Buyer and the Company reasonable prior notice of such meeting and the opportunity to attend and participate in any meeting (whether in person,
by telephone or videoconference) with or before any Governmental Authority in respect of the Transactions. However, the Stockholders may designate any non-public information provided to any Governmental Authority as restricted to “outside
counsel” only and any such information shall not be shared with employees, officers or directors or their equivalents of the other party without approval of the party providing the non-public information; provided, however, that the Stockholders may redact any valuation and related information, or information that is protected by legal privilege, before
sharing any information provided to any Governmental Authority with the other parties on an “outside counsel” only basis.
4
(d) Each Stockholder shall, and shall
cause its Affiliates to, use their respective reasonable best efforts to consummate and make effective the Transactions and to cause the conditions to the Closing set forth in the Merger Agreement to be satisfied as promptly as reasonably
practicable, and in any event, prior to the Outside Date. Notwithstanding anything to the contrary in this Section 3.2, the obligations of each Stockholder and its Affiliates under
this Section 3.2 shall be subject in all respects to the limitations set forth in Section 5.03(d) of the Merger
Agreement applicable to Investor Group Members and their respective Affiliates.
3.3. Additional Covenants. Each Stockholder shall permit Buyer and the Company to publish and disclose in all documents and schedules filed with the SEC, and any press release or other disclosure document Buyer or
the Company determines to be desirable or required by applicable Law in connection with the Merger and any other Transactions, such Stockholder’s identity and ownership of Covered Shares and the nature of such Stockholder’s commitments,
arrangements and understandings under this Agreement.
4. Proxy Statement; Schedule 13E-3 and Schedules 13D.
(a) As promptly as reasonably
practicable (but in any event within 30 Business Days) after the execution of the Merger Agreement, the Company will prepare (with Buyer’s reasonable cooperation) and file with the SEC a preliminary proxy statement to be sent to the
stockholders in connection with the Company Stockholders Meeting (the proxy statement, including any amendments or supplements thereto, the “Proxy Statement”). The Company, Buyer and
the Stockholders shall cooperate to, concurrently with the preparation and filing of the Proxy Statement, jointly prepare and file with the SEC a Rule 13e-3 Transaction Statement on Schedule 13E-3 (such transaction statement, including any
amendment or supplement thereto, the “Schedule 13E-3”) relating to the Merger and the other transactions contemplated by the Merger Agreement. The Stockholders shall promptly provide
information reasonably requested by the Company or Buyer in connection with the preparation of the Proxy Statement and the Schedule 13E-3. The information supplied by such Stockholder for inclusion or incorporation by reference in the Proxy
Statement or the Schedule 13E-3 or any other Required Regulatory Approvals will not, at the time that such information is provided, contain any untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. The Company and Buyer shall (i) provide the Stockholders and their counsel a reasonable opportunity to
review drafts of the Proxy Statement and the Schedule 13E-3 prior to filing the Proxy Statement and the Schedule 13E-3 with the SEC and (ii) consider in good faith all comments thereto reasonably proposed by the Stockholders, their counsel
and their other Representatives. Each Stockholder and its applicable Affiliates shall (i) provide the Company and its counsel a reasonable opportunity to review drafts of all required disclosure statements on Schedule 13D or any amendments or
supplements thereto, as applicable (such disclosure statements, including any amendments or supplements thereto, the “Schedule 13D Filings”), relating to the Company, the Merger
Agreement, this Agreement and the transactions contemplated hereby and thereby (including the Merger) prior to filing such materials with the SEC and (ii) consider in good faith all comments thereto reasonably proposed by the Company, its
counsel and their respective Representatives.
5
(b) Assistance. The Company, Buyer and the Stockholders will use their respective reasonable best efforts to furnish all information concerning such party and its controlled Affiliates to the other parties that is
reasonably necessary for the preparation and filing of the Proxy Statement, the Schedule 13E-3 and all Schedule 13D Filings and will otherwise reasonably assist and cooperate with the other parties in the preparation, filing and distribution
of the Proxy Statement, the Schedule 13E-3 and all Schedule 13D Filings and the resolution of any comments thereto received from the SEC.
5. Representations and Warranties of the Stockholders. Each Stockholder hereby represents and warrants to Buyer and the Company as follows:
5.1. Due Authority. Such Stockholder is a legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of formation. Such Stockholder has all requisite
corporate or other similar power and authority and has taken all corporate or other similar action necessary (including approval by the board of directors or applicable corporate bodies) to execute, deliver, comply with and perform its
obligations under this Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby, and no other action on the part of or, if such Stockholder is not a natural Person, vote of holders of any equity
securities of such Stockholder is necessary to authorize the execution and delivery of, compliance with and performance by such Stockholder of this Agreement. This Agreement has been duly executed and delivered by such Stockholder and, assuming
the due execution and delivery of this Agreement by all of the other parties hereto, constitutes a legal, valid and binding agreement of such Stockholder enforceable against such Stockholder in accordance with its terms, subject to the
Enforceability Exception.
5.2. No Conflict. The execution and delivery of, compliance with and performance of this Agreement by such Stockholder do not and will not (i) if an entity, conflict with or result in any violation or breach of
any provision of the certificate of incorporation, bylaws, certificate of formation or operating agreement or similar organizational documents of such Stockholder, (ii) conflict with or result in a violation or breach of any applicable Law, (iii)
require any consent by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or
obligation or the loss of any benefit to which such Stockholder is entitled, under any Contract binding upon such Stockholder, or to which any of its properties, rights or other assets are subject or (iv) result in the creation of an Encumbrance
(other than Permitted Encumbrances) on any of the properties or assets (including intangible assets) of such Stockholder, except in the case of clauses (i), (ii), (iii) and (iv) above, any such violation, breach, conflict, default, termination,
acceleration, cancellation, loss or Encumbrance that would not, individually or in the aggregate, reasonably be expected to restrict in any material respect, prohibit or impair in any material respect the consummation of the Merger or the
performance by such Stockholder of its obligations under this Agreement.
6
5.3. Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or any other Person is required by or with respect to such Stockholder
in connection with the execution and delivery of this Agreement or the performance by such Stockholder of its obligations hereunder, except (a) as required by the rules and regulations promulgated under the Exchange Act, the Securities Act, or
state securities, takeover, and “blue sky” Laws, (b) compliance with any applicable requirements of the HSR Act and any other Antitrust Laws or FDI Laws set forth on Section 3.05 of the Company Disclosure Letter, (c) the applicable rules and
regulations of the SEC or any applicable stock exchange, or (d) as would not, individually or in the aggregate, reasonably be expected to prohibit or, in any material respect, restrict, impair or delay the consummation of the Transactions or the
performance by such Stockholder of its obligations under this Agreement.
5.4. Ownership of the Owned Shares.
Such Stockholder is, as of the date hereof, the record holder and beneficial owner of the Owned Shares, all of which are free and clear of any and all Encumbrances, other
than those (i) created by this Agreement, (ii) arising under applicable securities Laws, or (iii) set forth on Schedule 5.4. Other than any Equity-Based Awards owned of record or
beneficially by such Stockholder, such Stockholder does not own, of record or beneficially, any shares of capital stock of the Company, or other rights to acquire shares of capital stock of the Company, in each case other than the Owned Shares and any rights or obligations arising under the Merger Agreement or any Equity Commitment Letter to acquire shares of Buyer or the Surviving Corporation in
connection with the transactions contemplated thereby. Such Stockholder has the sole right to dispose of the Owned Shares, and none of the Owned Shares is subject to any pledge, disposition, transfer or other agreement, arrangement or
restriction, except as set forth on Schedule 5.4 or otherwise contemplated by this Agreement. Except as set forth on Schedule 5.4,
as of the date hereof, such Stockholder has not entered into any agreement to Transfer any Owned Shares, and no Person has a right to acquire any of the Owned Shares held by such Stockholder. Notwithstanding anything to the contrary in this Agreement, the Merger Agreement or any other Ancillary Document, nothing set forth on Schedule 5.4 would, individually or in the aggregate, reasonably be expected to prohibit or, in any material respect, restrict, impair or delay the consummation of the Merger or the
performance by such Stockholder of its obligations under this Agreement.
5.5. Absence of Litigation. As of the date hereof, there is no Action pending against or, to the knowledge of such Stockholder, threatened against or affecting such Stockholder or any of its Affiliates (other than
the Company and its Subsidiaries) that would reasonably be expected to prevent, materially delay or materially impair the ability of such Stockholder to perform its obligations under this Agreement.
5.6. Finder’s Fee. Except as set forth in Section 4.09 of the Buyer Disclosure Letter, no broker, investment bank, financial advisor or other Person is entitled to any broker’s, finder’s, financial adviser’s or
similar fee or commission payable by the Company or its Subsidiaries on or prior to the Closing in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of such Stockholder.
6. Representations and Warranties of the Company. The Company hereby represents and warrants to the Stockholders and Buyer as follows:
7
6.1. Due Authority. The Company is a legal entity duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Company has all requisite corporate power and
authority and has taken all corporate action necessary (including approval by the Company Board (acting on the recommendation of the Special Committee) and the Special Committee) to execute, deliver, comply with and perform its obligations under
this Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby, and no other corporate action by the Company or vote of holders of any class of the capital stock of the Company is necessary to approve
and adopt this Agreement. This Agreement has been duly executed and delivered by the Company and, assuming the due execution and delivery of this Agreement by all of the other parties hereto, constitutes a legal, valid and binding agreement of
the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’
rights generally.
6.2. No Conflict. The execution and delivery of, compliance with and performance by the Company of this Agreement do not and will not, other than as provided in the Merger Agreement with respect to the Merger and
the other transactions contemplated thereby, (i) conflict with or result in any violation or breach of any provision of the certificate of incorporation, bylaws, certificate of formation or operating agreement of the Company or the similar
organizational documents of any of its Subsidiaries, (ii) conflict with or result in a violation or breach of any applicable Law, (iii) require any consent by any Person under, constitute a default, or an event that, with or without notice or
lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which the Company and any of its Subsidiaries are entitled, under
any Contract binding upon the Company or any of its Subsidiaries, or to which any of their respective properties, rights or other assets are subject or (iv) result in the creation of any Encumbrance (other than Permitted Encumbrances) on any of
the properties or assets (including intangible assets) of the Company or any of its Subsidiaries, except in the case of clauses (ii), (iii) and (iv) above, any such violation, breach, conflict, default, termination, acceleration, cancellation,
loss, or Encumbrance that would not reasonably be expected to restrict, prohibit or impair the performance by the Company of its obligations under this Agreement.
6.3. Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority, is required by or with respect to the Company in connection with the
execution and delivery of this Agreement or the consummation by the Company of the transactions contemplated hereby, except (a) as required by the rules and regulations promulgated under the Exchange Act, the Securities Act, or state securities,
takeover, and “blue sky” Laws, (b) Transaction Regulatory Filings, (c) the applicable rules and regulations of the SEC or any applicable stock exchange, or (d) as would not, individually or in the aggregate, reasonably be expected to prohibit or,
in any material respect, restrict, impair or delay the consummation of the Transactions or the performance by the Company of its obligations under this Agreement.
6.4. Absence of Litigation. As of the date hereof, there is no Action pending against or, to the knowledge of the Company, threatened against or affecting the Company that would reasonably be expected to prevent,
materially delay or materially impair the ability of the Company to perform its obligations under this Agreement.
8
7. Representations and Warranties of Buyer. Buyer hereby represents and warrants to the Stockholders and the Company as follows:
7.1. Due Authority. Buyer is a legal entity duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. Buyer has all requisite corporate power and authority and
has taken all corporate action necessary (including approval by the board of directors or applicable corporate bodies) to execute, deliver, comply with and perform its obligations under this Agreement in accordance with the terms hereof and to
consummate the transactions contemplated hereby, and no other corporate action by Buyer or vote of holders of any class of the capital stock of Buyer is necessary to approve and adopt this Agreement. This Agreement has been duly executed and
delivered by Buyer and, assuming the due execution and delivery of this Agreement by all of the other parties hereto, constitutes a legal, valid and binding agreement of Buyer enforceable against Buyer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally.
7.2. No Conflict. The execution and delivery of, compliance with and performance by Buyer of this Agreement do not and will not, other than as provided in the Merger Agreement with respect to the Transactions, (i)
conflict with or result in any violation or breach of any provision of the certificate of incorporation, bylaws, certificate of formation or operating agreement of Buyer or the similar organizational documents of any of its Subsidiaries, (ii)
conflict with or result in a violation or breach of any applicable Law, (iii) require any consent by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under, or
cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which Buyer and any of its Subsidiaries are entitled, under any Contract binding upon Buyer or any of its Subsidiaries, or to
which any of their respective properties, rights or other assets are subject or (iv) result in the creation of any Encumbrance (other than Permitted Encumbrances) on any of the properties or assets (including intangible assets) of Buyer or any of
its Subsidiaries, except in the case of clauses (ii), (iii) and (iv) above, any such violation, breach, conflict, default, termination, acceleration, cancellation, loss, or Encumbrance that would not reasonably be expected to restrict, prohibit
or impair the performance by Buyer of its obligations under this Agreement.
7.3. Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority, is required by or with respect to Buyer in connection with the execution and
delivery of this Agreement or the consummation by Buyer of the transactions contemplated hereby, except (a) as required by the rules and regulations promulgated under the Exchange Act, the Securities Act, or state securities, takeover, and “blue
sky” Laws, (b) compliance with any applicable requirements of the HSR Act and any other Antitrust Laws or FDI Laws set forth on Section 3.05 of the Company Disclosure Letter, (c) the applicable rules and regulations of the SEC or any applicable
stock exchange, or (d) as would not, individually or in the aggregate, reasonably be expected to prohibit or, in any material respect, restrict, impair or delay the consummation of the Transactions or the performance by Buyer of its obligations
under this Agreement.
9
7.4. Absence of Litigation. As of the date hereof, there is no Action pending against or, to the knowledge of Buyer, threatened against or affecting Buyer that would reasonably be expected to prevent, materially
delay or materially impair the ability of Buyer to perform its obligations under this Agreement.
7.5. Ownership Structure. Penske Corporation, a Delaware corporation (“PC”), and Mitsui & Co., Ltd., a Japanese corporation (“Mitsui Japan”), own beneficially and of record all of the outstanding shares of capital stock of Buyer, free and clear of all Encumbrances other than Encumbrances arising in connection with
the Financing or under the Interim Investors Agreement, dated as of the date hereof (the “Interim Investors Agreement”), among Buyer, PC, Penske Automotive Holdings Corp., a Delaware
corporation, Mitsui Japan and Mitsui & Co. (U.S.A.), Inc., a New York corporation, and transfer restrictions of general applicability as may be provided under the Securities Act or other applicable securities Laws; provided, in each case, that such Encumbrances would not, individually or in the aggregate, reasonably be expected to prohibit or, in any material respect, restrict, impair or delay the consummation of the
Merger or the performance by such Stockholder of its obligations under this Agreement. Except as contemplated by the Equity Commitment Letters, there are no options, warrants, rights, convertible or exchangeable securities, stock-based
performance units or Contracts to which Buyer is a party or by which Buyer is bound obligating Buyer to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of capital stock of, or any security convertible or
exchangeable for any shares of capital stock of, Buyer. Buyer was formed solely for the purpose of engaging in the Transactions, has no liabilities or obligations of any nature other than those incident to its formation or pursuant to the
Transactions and, prior to the Effective Time, will not engage in any other business activities other than those relating to the Transactions or those incident to its formation.
8. Stockholder Capacity. This Agreement is being entered into by each Stockholder solely in its capacity as a record and/or beneficial owner of the Owned Shares, and nothing in this Agreement shall
restrict or limit, or require any Stockholder to attempt to restrict or limit, the ability of any Stockholder or any of its Affiliates or Representatives who is a director or officer of the Company or any of the Company’s Subsidiaries to take, or
refrain from taking, any action in his or her capacity as a director or officer of the Company or any of its Affiliates, including the exercise of fiduciary duties to the Company or its stockholders, and any such action taken in such capacity or
any such inaction shall not constitute a breach of this Agreement.
9. Non-Survival of Representations, Warranties and Covenants. Other than the covenants and agreements in Section 2, Section 10, Sections 13 through 18 and Sections 20 through 29, which shall survive the Termination Date in accordance with their terms, the representations, warranties and covenants contained herein
shall not survive the Termination Date.
10. Waiver of Appraisal and Dissenter Rights and Certain Other Actions. Each Stockholder hereby irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, and agrees to cause to be waived
and not to assert any appraisal rights, any dissenter’s rights and any similar rights under Section 262 of the DGCL or otherwise with respect to such Stockholder’s Covered Shares with respect to the Transactions. Without limiting any rights
or remedies of the Stockholders, their Affiliates or Representatives under the Merger Agreement, this Agreement, the Limited Guarantees or the Equity Commitment Letters, each Stockholder agrees not to (and agrees to cause its Affiliates and
their respective Representatives not to) commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any Action against Buyer, the Company or any of their respective successors
relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the Merger, including any Action (x) challenging the validity of, or seeking to enjoin or delay the operation of, any
provision of this Agreement or the Merger Agreement or (y) alleging a breach of any fiduciary duty of the Company Board or the Special Committee in connection with this Agreement, the Merger Agreement, or the Transactions.
10
11. Certain Adjustments. In the event of a stock split, stock dividend or distribution, or any change in the Company Common Stock by reason of any split-up, reverse stock split, recapitalization, combination,
reclassification, exchange of shares or the like, the terms “Company Common Stock,” “Covered Shares” and “Owned Shares” and each other economic or equity-based term or
provision herein shall be (a) deemed to refer to and include, as applicable, such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or
which are received in such transaction and (b) otherwise equitably adjusted to reflect the effect of such transaction or transactions during the term of this Agreement.
12. Further Assurances. Each Stockholder shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and other instruments as Buyer or the
Company may reasonably request to the extent necessary to perform such Stockholder's obligations under, and effect the transactions contemplated by, this Agreement.
13. Notices. All notices and other communications under this Agreement must be in writing and will be deemed to have been duly delivered and received using one
or a combination of the following methods: (i) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service; (ii) immediately upon delivery by hand; or (iii) on the date
sent by email, in each case, to the following recipient:
(a) if to the Stockholders:
Mitsui & Co., Ltd.
2-1, Otemachi 1-chome,
Chiyoda-ku, Tokyo 100-8631, Japan
Attention: Hidenori Yamano
Email: [***]
with a copy to:
Mitsui & Co. (U.S.A.), Inc.
200 Park Avenue
New York, New York 10166
Attention: Masahiro Suzuki
Email: [***]
with a copy (which shall not constitute notice) to:
Debevoise & Plimpton LLP
66 Hudson Boulevard
New York, New York 10001
Attention: William D. Regner; Ezra Borut
Email: [***]
11
(b) if to Buyer:
Motown Acquisition Corp.
c/o Penske Corporation
2555 Telegraph Road
Bloomfield Hills, Michigan 48302
Attention: Lawrence N. Bluth
Email: [***]
with a copy to:
Mitsui & Co., Ltd.
2-1, Otemachi 1-chome,
Chiyoda-ku, Tokyo 100-8631, Japan
Attention: Hidenori Yamano
Email: [***]
with a copy (which shall not constitute notice) to:
Jones Day
250 Vesey Street
New York, New York 10281
Attention: Andrew M. Levine; Zachary R. Brecheisen; Justin T. Roland
Email: [***]
and
Debevoise & Plimpton LLP
66 Hudson Boulevard
New York, NY, 10001
Attention: William D. Regner; Ezra Borut
Email: [***]
12
(c) if to the Company (prior to the
Effective Time) to:
Penske Automotive Group, Inc.
2555 S. Telegraph Road
Bloomfield Hills, MI 48302
Attention: Shane Spradlin
Email: [***]
with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Jeffrey D. Marell
Lara B. Solomons
Email: [***]
[***]
and
Freshfields US LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Attention: Damien Zoubek; Oliver Board
Email: [***]
[***]
14. Interpretation. Where a reference in this Agreement is made to a section or exhibit, such reference shall be to a section of or exhibit to this Agreement unless otherwise indicated. If a term is
defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). Unless the context of this Agreement clearly requires otherwise, words importing the masculine gender
shall include the feminine and neutral genders and vice versa, and the definitions of terms contained in this Agreement are applicable to the singular as well as the plural forms of such terms. The words “includes” or “including” shall mean
“including without limitation,” the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Agreement shall refer to this Agreement as a whole and not any particular section or article in which such words appear, the terms “or”
and “either” are not exclusive, the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends and such phrase shall not mean simply “if,” any reference to a Law shall include any rules and
regulations promulgated thereunder, and any reference to any Law in this Agreement shall mean such Law as from time to time amended, modified or supplemented. Each reference to a “wholly owned Subsidiary” or “wholly owned Subsidiaries” of a
Person shall be deemed to include any Subsidiary of such Person where all of the equity interests of such Subsidiary are directly or indirectly owned by such Person (other than directors qualifying shares, nominee shares or other equity interests
that are required by Law to be held by a director or nominee). For all purposes under this Agreement, the Stockholders and Buyer shall be deemed not to be Affiliates of the Company and its Subsidiaries and vice versa.
15. Entire Agreement. This Agreement (along with the documents referenced herein and any other agreement entered into in connection herewith by any of the parties hereto), the Confidentiality Agreement, the
Limited Guarantees, the Equity Commitment Letters and the other Ancillary Documents collectively constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties both written and oral,
among the parties hereto, with respect to the subject matter hereof.
13
16. No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, except that each Non-Recourse Party referenced in Section 20 shall be an express third-party beneficiary of, and entitled to enforce, Section 20.
17. Governing Law; Waiver of Jury Trial.
(a) This Agreement will be governed
by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed entirely within that State, regardless of the laws that might otherwise govern under any applicable conflict of
Laws principles.
(b) All Actions arising out of or
relating to this Agreement or the Transactions will be heard and determined in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any Action, any state or
federal court within the State of Delaware). The parties hereto hereby irrevocably (i) submit to the exclusive jurisdiction and venue of such courts in any such Action, (ii) waive the defense of an inconvenient forum or lack of jurisdiction
to the maintenance of any such Action, (iii) agree to not attempt to deny or defeat such jurisdiction by motion or otherwise request for leave from any such court, and (iv) agree to not bring any Action arising out of or relating to this
Agreement or the Transactions in any court other than the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any Action, any state or federal court within the
State of Delaware), except for Actions brought to enforce the judgment of any such court. The consents to jurisdiction and venue set forth in this Section 17 will not constitute
general consents to service of process in the State of Delaware and will have no effect for any purpose except as provided in this paragraph and will not be deemed to confer rights on any Person other than the parties hereto. Each party
hereto agrees that service of process upon such party in any Action arising out of or relating to this Agreement will be effective if notice is given in accordance with Section 13
of this Agreement. The parties hereto agree that a final judgment in any such Action will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law; provided, however, that nothing in the foregoing will restrict any party’s rights to seek any post-judgment relief regarding,
or any appeal from, a final trial court judgment.
(c) EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH (INCLUDING THE DEBT FINANCING) OR THE TRANSACTIONS
CONTEMPLATED THEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (1) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, (2) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (3) IT MAKES SUCH WAIVER VOLUNTARILY, AND (4) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND
CERTIFICATIONS IN THIS SECTION 17.
14
18. Assignment; Successors. Other than as provided herein, neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by
operation of law or otherwise, by any party hereto without the prior written consent of the other parties hereto, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.
19. Enforcement. The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties hereto do not perform the
provisions of this Agreement (including any party hereto failing to take any actions that are required of it hereunder) in accordance with their specified terms or otherwise breach such provisions. The parties hereto acknowledge and agree that
(a) the parties hereto will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of this
Agreement or to enforce specifically the terms and provisions hereof and without bond or other security being required, (b) if any party hereto is seeking injunctive relief, specific performance or other equitable relief pursuant hereto, the
other parties hereto will not assert that a remedy of monetary damages would provide an adequate remedy for such breach, and (c) the right of specific enforcement is an integral part of the transactions contemplated hereby and without that right,
none of the Company, Buyer or the Stockholders would have entered into this Agreement. Notwithstanding the foregoing, nothing herein shall (i) in any way limit a party’s right to pursue a claim for monetary damages arising out of any other
party’s Fraud or Willful Breach of this Agreement, (ii) confer on any Person any right to specifically enforce the Merger Agreement, any Equity Commitment Letter, any Limited Guarantee or any obligation to fund the Equity Financing or consummate
the Closing, except in accordance with the terms, conditions and limitations of the applicable agreement, letter or guarantee, or (iii) eliminate any requirement for approval of the Special Committee in accordance with the Merger Agreement.
Notwithstanding anything to the contrary herein, any monetary damages payable by Buyer or any Stockholder, on the one hand, or the Company, on the other hand, arising under or in connection with this Agreement shall be subject in all respects to
Section 7.03 of the Merger Agreement and the maximum aggregate monetary liability applicable to such Person, as set forth therein.
20. Non-Recourse. Each party agrees, on behalf of itself and its Related Parties, that this Agreement may only be enforced against, and any Action based upon, arising out of, or related in any manner to
(i) this Agreement, (ii) the negotiation, execution or performance of this Agreement, and (iii) any breach or violation of this Agreement, in each case, may only be brought against the Persons that are expressly named as parties hereto and then
only with respect to the specific obligations set forth herein with respect to such party. No Related Party of any party hereto that is not itself expressly named as a party hereto (each, a “Non-Recourse
Party”) shall have any liability to any party hereto or any of its Related Parties for any obligations or liabilities of any party under this Agreement or for any Action (whether in contract or in tort, in Law or in equity or
otherwise, or granted by statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) based on, in
respect of or by reason of the matters described in the immediately preceding clauses (i) through (iii). Each Non-Recourse Party shall be an express third party beneficiary of, and entitled to enforce, this Section 20. For the avoidance of doubt, nothing in this Section 20 shall limit or otherwise affect any rights or remedies against any Person under any other
agreement to which such Person is a party.
15
21. Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties hereto further agree to
replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
22. Counterparts. This Agreement and any amendments hereto may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become effective when one or more
counterparts have been signed by each of the parties hereto and delivered to the other parties hereto, it being understood that all parties hereto need not sign the same counterpart. Any such counterpart, to the extent delivered by electronic
delivery, will be treated in all manners and respects as an original executed counterpart and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto may
raise the use of an electronic delivery to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of an electronic delivery, as a defense to the formation of a contract, and
each party hereto forever waives any such defense, except to the extent such defense relates to lack of authenticity.
23. Amendment; Waiver. This Agreement may be amended by the parties hereto, and the terms and conditions hereof may be waived, only by an instrument in writing signed on behalf of each of the parties hereto or,
in the case of a waiver, by an instrument signed on behalf of the party waiving compliance; provided that any amendment or waiver by the Company shall require the prior approval of the
Special Committee. No failure or delay on the part of a party in the exercise of any right or remedy hereunder shall impair such right or power or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right or power.
24. No Presumption Against Drafting Party. The Company, Buyer and the Stockholders acknowledge that each party to this Agreement has been represented by counsel in connection with this Agreement and the
transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.
16
25. Special Committee Approval. Notwithstanding anything to the contrary herein, prior to the Effective Time, no (i) amendment to or waiver of any provision of this Agreement or (ii) exercise or enforcement of
the rights of the Company hereunder, solely to the extent such rights expressly relate to transactions contemplated hereby, shall be taken by or on behalf of the Company without the approval or authorization of the Special Committee.
26. No Agreement until Executed. This Agreement shall not be effective unless and until (i) the Merger Agreement is executed by all parties thereto and (ii) this Agreement is executed and delivered by all parties
hereto.
27. Stockholder Obligations Several and Not Joint. The obligations of each Stockholder hereunder shall be several and not joint, and no Stockholder shall be liable for any breach of the terms of this Agreement by
any other Stockholder. For the avoidance of doubt, no Stockholder hereunder shall have any liability for any breach of any other Support Agreement by any party thereto.
28. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Buyer any direct or indirect ownership or incidence of ownership of or with respect to any Covered Shares. All ownership
and economic benefits of and relating to a Stockholder’s Covered Shares shall remain vested in and belong to the applicable Stockholder.
29. Expenses. Whether or not the Merger is consummated, all costs and expenses, including fees, expenses and disbursements of legal, financial, tax, accounting, advisory, valuation or other advisors or
consultants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.
[Signature pages follow]
17
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
|
STOCKHOLDERS:
|
|||
|
MITSUI & CO., LTD.
|
|||
|
By:
|
/s/Hidenori Yamano |
||
|
Name: Hidenori Yamano
|
|
|
Title: General Manager
|
|
MITSUI & CO. (U.S.A.), INC.
|
|||
|
By:
|
/s/Harumasa Suzuki |
||
|
Name: Harumasa Suzuki
|
|
|
Title: Senior Vice President
|
|
BUYER:
|
|||
|
MOTOWN ACQUISITION CORP.
|
|||
|
By:
|
/s/ J. Patrick Conroy
|
||
|
Name: J. Patrick Conroy
|
|||
|
Title: Vice President
|
|||
|
COMPANY:
|
|||
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|||
|
By:
|
/s/ Michelle Hulgrave
|
||
|
Name: Michelle Hulgrave
|
|||
|
Title: Executive Vice President and Chief Financial Officer
|
|||
Exhibit A
Owned Shares
Mitsui Support Agreement:
|
Stockholder
|
Owned Shares
|
|
Mitsui & Co., Ltd.
|
10,658,163 shares of
Company Common Stock
|
|
Mitsui & Co. (U.S.A.), Inc.
|
2,664,042 shares of Company
Common Stock
|
Schedule 5.4
Encumbrances and Other Arrangements
Mitsui & Co., Ltd.
| 1. |
The Interim Investors Agreement, dated as of the date of this Agreement, by and among Buyer, Penske Corporation, Penske Automotive Holdings Corp., Mitsui & Co., Ltd. and Mitsui & Co.
(U.S.A.), Inc., including any restrictions, obligations or arrangements thereunder relating to the ownership, transfer or disposition of the Owned Shares.
|
| 2. |
The Stockholders Agreement to be entered into in connection with the Transactions and contemplated by the Interim Investors Agreement (the “Penske/Mitsui
Stockholders Agreement”), including any restrictions, obligations or arrangements thereunder relating to the ownership, transfer or disposition of the Owned Shares.
|
| 3. |
The Stockholders Agreement, dated as of July 30, 2013, by and among Mitsui & Co., Ltd., Mitsui & Co. (U.S.A.), Inc., Penske Corporation and Penske Automotive Holdings Corp., as amended,
restated, supplemented or otherwise modified from time to time.
|
Mitsui & Co. (U.S.A.), Inc.
| 1. |
The Interim Investors Agreement described in paragraph 1 above.
|
| 2. |
The Penske/Mitsui Stockholders Agreement described in paragraph 2 above.
|
| 3. |
The Stockholders Agreement described in paragraph 3 above.
|
Exhibit 10.2
CERTAIN INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT AND REPLACING IT WITH [***] BECAUSE IT IS BOTH: (I) NOT MATERIAL AND (II)
THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
EXECUTION VERSION
VOTING AND SUPPORT AGREEMENT
This Voting and Support Agreement (this “Agreement”), dated as of October 15, 2026, is entered into by and among (i) Penske Automotive Group, Inc., a Delaware corporation (the “Company”),
(ii) Motown Acquisition Corp., a Delaware corporation (“Buyer”), and (iii) the Persons listed on Exhibit A hereto (collectively, the “Stockholders” and each, individually, a “Stockholder”). Capitalized terms used but
not defined herein shall have the meanings given to them in the Merger Agreement (as defined below).
RECITALS
WHEREAS, concurrently with the execution and delivery of this Agreement, the Company and Buyer are entering into an Agreement and Plan of Merger (as may be amended from time to time, the “Merger
Agreement”), which provides for the merger of Buyer with and into the Company (the “Merger”), with the Company surviving the Merger as the Surviving Corporation;
WHEREAS, as of the date hereof, each Stockholder is the record holder and “beneficial owner” (within the meaning of Rule 13d-3 under the Exchange Act) of the number of shares of Company Common
Stock set forth opposite such Stockholder’s name on Exhibit A hereto under the heading “Owned Shares,” being all of the shares of Company Common Stock owned of record or beneficially by such Stockholder as of the date hereof (as adjusted
pursuant to Section 11, collectively, the “Owned Shares”);
WHEREAS, the Company and Penske Corporation are parties to that certain Voting Agreement, dated as of January 23, 2024 (as amended, restated, supplemented or otherwise modified from time to time,
the “Voting Agreement”); and
WHEREAS, as a material inducement to, and as a condition to, the willingness of the Company to enter into the Merger Agreement, each Stockholder is entering into this Agreement with the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, each Stockholder, the Company and Buyer
hereby agree as follows:
1. Agreement to Vote the Covered Shares.
1.1. Subject to any limitations applicable to the voting of any Covered Shares pursuant to the Voting Agreement (including the requirements of Section 1.01(a) thereof with respect
to Excess Voting Securities (as defined in the Voting Agreement)), from the date hereof until the Termination Date (as defined below), at every meeting of the Company’s stockholders, however called, including any postponement, recess or
adjournment thereof, or in any other circumstance in which the vote, consent or other approval of the Company’s stockholders is sought, each Stockholder agrees to, and if applicable, to cause its controlled Affiliates to, affirmatively vote
(including via proxy) or execute consents, with respect to (or cause to be voted (including via proxy) or consents to be executed with respect to), and not to withdraw or modify any such vote or consent with respect to, all of such
Stockholder’s Owned Shares and any additional shares of Company Common Stock or other voting securities of the Company acquired by such Stockholder or its respective controlled Affiliates after the date hereof and prior to the Termination Date
(as adjusted pursuant to Section 11, collectively, and together with the Owned Shares, the “Covered Shares”), to the extent such Covered Shares are entitled to vote, as follows: (a) in favor of (i) the adoption of the Merger
Agreement and the approval of the Merger, (ii) the approval of any proposal to adjourn or postpone any Company Stockholders Meeting to a later date to the extent such adjournment or postponement is permitted or required in accordance with Section
5.13(b) of the Merger Agreement, (iii) the proposal to approve, on a non-binding, advisory basis, the compensation that may become payable to the Company’s named executive officers in connection with the consummation of the Merger, and
(iv) the approval of any other matter required by applicable Law to be voted upon by the Company’s stockholders in connection with the Transactions, and (b) against (i) any proposal, action or agreement that would reasonably be expected to
result in a breach of any covenant, representation, warranty or other obligation or agreement of the Company contained in the Merger Agreement or that would reasonably be expected to result in the failure of any condition set forth in Sections
6.01 or 6.02 of the Merger Agreement to be satisfied prior to the Outside Date, (ii) any Takeover Proposal or any other proposal made in opposition to or in competition with, or which is inconsistent with, the Merger Agreement or
the Transactions, (iii) any recapitalization, reorganization, dissolution, liquidation, winding up or similar extraordinary transaction involving the Company (except as contemplated by the Merger Agreement) and (iv) any other action, agreement
or proposal which would reasonably be expected to prevent, materially impede or materially delay the consummation of the Transactions (clauses (a) and (b) collectively, the “Supported Matters”). Each Stockholder agrees to, and agrees to
cause its applicable controlled Affiliates to, be present, in person or by proxy, at every meeting of the Company’s stockholders, including any postponement, recess or adjournment thereof, at which any Supported Matter is to be considered or
voted upon (in the manner described in this Section 1) so that all of such Stockholder’s Covered Shares will be counted for purposes of determining the presence of a quorum at each such meeting, or otherwise cause such
Stockholder’s Covered Shares to be counted as present thereat for purposes of establishing a quorum at each such meeting. For the avoidance of doubt, (A) subject to any limitations applicable to the voting of such Covered Shares pursuant to the
terms of the Voting Agreement, except with respect to the Supported Matters, no Stockholder has any obligation to vote such Stockholder’s Covered Shares in any particular manner and, with respect to matters other than the Supported Matters,
each Stockholder shall be entitled to vote such Stockholder’s Covered Shares (or abstain with respect to any matter) in its sole discretion, and (B) nothing in this Agreement shall require a Stockholder to exercise, settle, convert or exchange
any Equity-Based Award owned of record or beneficially by such Stockholder at any time.
1.2. From the date hereof until the Termination Date, in the event that any Stockholder or any of its controlled Affiliates acquires record or beneficial ownership of, or the power to
vote or direct the voting of, any additional shares of Company Common Stock or other voting interests with respect to the Company (whether by purchase, upon exercise or conversion of any securities or otherwise), such shares of Company Common
Stock or voting interests shall, without further action of the parties, be deemed Covered Shares and subject to the provisions of this Agreement and Exhibit A hereto shall be deemed amended accordingly, and such shares of Company Common
Stock or voting interests shall automatically become subject to the terms of this Agreement. Each Stockholder shall promptly notify the Company and Buyer of any such event.
2
2. Termination. This Agreement shall terminate automatically and without further action by, or liability or obligation on the part of, the parties hereto upon the earliest to
occur of: (i) the valid termination of the Merger Agreement in accordance with its terms; (ii) the mutual written consent of the Company, Buyer and the Stockholders; and (iii) the Effective Time (the earliest such date set forth in clauses (i)
through (iii), the “Termination Date”); provided that the provisions set forth in this Section 2, Section 10, and Sections 13 through 29 hereof shall survive the termination of this Agreement; provided,
further, that, subject to Section 7.03 of the Merger Agreement, the termination of this Agreement shall not prevent any party hereto from seeking any remedies (at law or in equity) against any other party hereto for that party’s
Fraud or Willful Breach of this Agreement occurring prior to such termination. For the purposes hereof, (a) “Fraud” means the actual, knowing and intentional common law fraud (and not a constructive fraud, negligent misrepresentation or
omission or any form of fraud premised on recklessness or negligence) of any Person as finally determined by a court of competent jurisdiction in the making of the representations and warranties set forth in Section 5, Section 6
or Section 7 of this Agreement, and (b) “Willful Breach” means a breach of any representation or warranty or failure to perform or comply with any covenant, in each case that is the consequence of a deliberate action or omission
(including a failure to cure circumstances) by a party to this Agreement with the knowledge that the taking of, or failure to take, such act would, or would reasonably be expected to, result in a breach of this Agreement.
3. Certain Covenants.
3.1. Transfers. Beginning on the date hereof until the Termination Date, each Stockholder hereby covenants and agrees that, except as expressly contemplated by this Agreement,
such Stockholder shall not, and shall cause its Affiliates and their respective Representatives not to, directly or indirectly, (i) tender any Covered Shares into any tender or exchange offer, (ii) offer, sell, transfer, assign, exchange,
pledge, hypothecate, hedge, gift, loan, encumber or otherwise dispose of (collectively, “Transfer”) or enter into any Contract, option, agreement, understanding or other arrangement with respect to the Transfer of, any Covered Shares or
beneficial ownership, voting power or any other interest thereof or therein (including by operation of law), (iii) grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting agreement with
respect to any Covered Shares, in each case, that is inconsistent with this Agreement, or (iv) commit or agree to take any of the foregoing actions. Any Transfer in violation of this Section 3.1 shall be void ab initio. Notwithstanding anything to the contrary in this Agreement, any Stockholder may Transfer any or all of the Covered Shares, in accordance with applicable Law, (A) to such Stockholder’s Affiliates, (B) to any
custodian or nominee for the purpose of holding such Covered Shares for the account of such Stockholder, (C) pursuant to bona fide (x) estate planning or estate administration purposes or (y)
contribution or gift to a charitable organization, or (D) solely to the extent the applicable Stockholder retains the sole power to vote such Covered Shares following any pledge made pursuant to this clause (D), by pledging such Covered Shares
as collateral to secure any loan facility of such Stockholder in existence as of the date of this Agreement, if, as and when required pursuant to the terms of any such loan facility, as such terms exist as of the date of this Agreement; provided,
that, prior to and as a condition to the effectiveness of such Transfer contemplated by the foregoing clauses (A) through (C), each Person to whom any of such Covered Shares or any interest in any of such Covered Shares is or may be transferred
shall have executed and delivered to Buyer and the Company a counterpart of this Agreement in a form reasonably acceptable to Buyer and the Company pursuant to which such transferee shall be bound by all of the terms and provisions hereof in
which case such transferee shall be deemed a Stockholder hereunder, and the transferor shall remain liable for all of its obligations hereunder. From the date hereof until the Termination Date, subject to the immediately preceding sentence, the
Stockholders shall retain all of the Owned Shares. At all times from the date of this Agreement until the Termination Date, each Stockholder hereby authorizes the Company or its counsel to impose stop orders to prevent the Transfer of any
Covered Shares in violation of this Agreement; provided that the Company shall promptly cause any such stop orders to be removed upon the valid termination of this Agreement in accordance with Section 2.
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3.2. Regulatory Matters.
(a) Subject to Section 3.2(c), each Stockholder shall, and shall cause its Affiliates to, use their respective reasonable best efforts, to (i) take such actions (and refrain
from taking such actions) and agree or commit to take such actions (and agree or commit to refrain from taking such actions) as are necessary or appropriate to enable Buyer to comply with its obligations pursuant to Section 5.03 of the
Merger Agreement and Section 5.03 of the Buyer Disclosure Letter and (ii) consistent with the time frames set forth in Section 5.03 of the Merger Agreement, supply and provide information that, to such Stockholder’s knowledge, is
complete and accurate in all material respects to any Governmental Authority requesting such information in connection with filings or notifications under, or relating to, applicable Laws (collectively, the “Regulatory Filings”) that are
required or advisable as a result of, or pursuant to, the Merger Agreement and the related financings and transactions, including information required or requested to be provided to any antitrust, regulatory, financial, national security or
other Governmental Authorities in connection with any approvals reasonably sought in connection with the Transactions (collectively, the “Regulatory Disclosures”). Notwithstanding anything to the contrary herein, the Stockholders may
designate any Regulatory Disclosures that contain sensitive, legally privileged, or confidential information in respect of the Stockholders or any of their Affiliates as exclusive to the Stockholders and the Stockholders may provide that any
such sensitive, legally privileged, or confidential information may only be provided on a counsel-only basis or directly to the applicable Governmental Authority requesting such information. No Stockholder shall make any filings or
notifications in connection with the Merger pursuant to any Antitrust Laws without the Company’s and Buyer’s prior written consent (not to be unreasonably withheld, delayed or conditioned). Neither Buyer nor the Company will file any Regulatory
Filings that contain information with respect to a Stockholder or its Affiliates without first providing such Stockholder and its counsel a reasonable opportunity to review and comment thereon, and will give good faith consideration to all
reasonable additions, deletions or changes suggested by such Stockholder and its counsel.
(b) Each Stockholder represents, warrants and covenants to Buyer and the Company that: (i) none of the information supplied in writing by such Stockholder specifically for inclusion or
incorporation by reference in the Regulatory Disclosures will contain a material misstatement of fact or a material omission of fact necessary to make the information provided not misleading; and (ii) such Stockholder does not and will not
permit any entity under the “control” (defined in Section 721 of the Defense Production Act, as amended, including all implementing regulations thereof) of a People’s Republic of China national, or any entity under the “control” of a Russian
Federation national, to obtain through any Affiliate, control with respect to the Company.
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(c) Each Stockholder shall (i) promptly keep Buyer and the Company informed of any material communication received by or on behalf of such Stockholder from a Governmental Authority in
connection with the Transactions and permit Buyer and the Company to review and discuss in advance (and to consider in good faith any comments made by Buyer or the Company, as applicable, in relation to) any proposed draft notifications, formal
notifications, filing (provided, however, that filings made under the HSR Act need not be shared), submission or other written substantive communication made in connection with the Transactions to a Governmental Authority, and
(ii) to the extent permitted by the applicable Governmental Authority, promptly give Buyer and the Company reasonable prior notice of such meeting and the opportunity to attend and participate in any meeting (whether in person, by telephone or
videoconference) with or before any Governmental Authority in respect of the Transactions. However, the Stockholders may designate any non-public information provided to any Governmental Authority as restricted to “outside counsel” only and any
such information shall not be shared with employees, officers or directors or their equivalents of the other party without approval of the party providing the non-public information; provided, however, that the Stockholders may
redact any valuation and related information, or information that is protected by legal privilege, before sharing any information provided to any Governmental Authority with the other parties on an “outside counsel” only basis.
(d) Each Stockholder shall, and shall cause its Affiliates to, use their respective reasonable best efforts to consummate and make effective the Transactions and to cause the
conditions to the Closing set forth in the Merger Agreement to be satisfied as promptly as reasonably practicable, and in any event, prior to the Outside Date. Notwithstanding anything to the contrary in this Section 3.2, the
obligations of each Stockholder and its Affiliates under this Section 3.2 shall be subject in all respects to the limitations set forth in Section 5.03(d) of the Merger Agreement applicable to Investor Group Members and their
respective Affiliates.
3.3. Additional Covenants. Each Stockholder shall permit Buyer and the Company to publish and disclose in all documents and schedules filed with the SEC, and any press release or
other disclosure document Buyer or the Company determines to be desirable or required by applicable Law in connection with the Merger and any other Transactions, such Stockholder’s identity and ownership of Covered Shares and the nature of such
Stockholder’s commitments, arrangements and understandings under this Agreement.
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4. Proxy Statement; Schedule 13E-3 and Schedules 13D.
(a) As promptly as reasonably practicable (but in any event within 30 Business Days) after the execution of the Merger Agreement, the Company will prepare (with Buyer’s reasonable
cooperation) and file with the SEC a preliminary proxy statement to be sent to the stockholders in connection with the Company Stockholders Meeting (the proxy statement, including any amendments or supplements thereto, the “Proxy Statement”).
The Company, Buyer and the Stockholders shall cooperate to, concurrently with the preparation and filing of the Proxy Statement, jointly prepare and file with the SEC a Rule 13e-3 Transaction Statement on Schedule 13E-3 (such transaction
statement, including any amendment or supplement thereto, the “Schedule 13E-3”) relating to the Merger and the other transactions contemplated by the Merger Agreement. The Stockholders shall promptly provide information reasonably
requested by the Company or Buyer in connection with the preparation of the Proxy Statement and the Schedule 13E-3. The information supplied by such Stockholder for inclusion or incorporation by reference in the Proxy Statement or the Schedule
13E-3 or any other Required Regulatory Approvals will not, at the time that such information is provided, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they are made, not misleading. The Company and Buyer shall (i) provide the Stockholders and their counsel a reasonable opportunity to review drafts of the Proxy
Statement and the Schedule 13E-3 prior to filing the Proxy Statement and the Schedule 13E-3 with the SEC and (ii) consider in good faith all comments thereto reasonably proposed by the Stockholders, their counsel and their other
Representatives. Each Stockholder and its applicable Affiliates shall (i) provide the Company and its counsel a reasonable opportunity to review drafts of all required disclosure statements on Schedule 13D or any amendments or supplements
thereto, as applicable (such disclosure statements, including any amendments or supplements thereto, the “Schedule 13D Filings”), relating to the Company, the Merger Agreement, this Agreement and the transactions contemplated hereby and
thereby (including the Merger) prior to filing such materials with the SEC and (ii) consider in good faith all comments thereto reasonably proposed by the Company, its counsel and their respective Representatives.
(b) Assistance. The Company, Buyer and the Stockholders will use their respective reasonable best efforts to furnish all information concerning such party and its controlled
Affiliates to the other parties that is reasonably necessary for the preparation and filing of the Proxy Statement, the Schedule 13E-3 and all Schedule 13D Filings and will otherwise reasonably assist and cooperate with the other parties in the
preparation, filing and distribution of the Proxy Statement, the Schedule 13E-3 and all Schedule 13D Filings and the resolution of any comments thereto received from the SEC.
5. Representations and Warranties of the Stockholders. Each Stockholder hereby represents and warrants to Buyer and the Company as follows:
5.1. Due Authority. Such Stockholder, if not a natural Person, is a legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its
jurisdiction of formation. Such Stockholder (x) if a natural Person, has the legal capacity to, and (y) if not a natural Person, has all requisite corporate or other similar power and authority and has taken all corporate or other similar
action necessary (including approval by the board of directors or applicable corporate bodies) to execute, deliver, comply with and perform its obligations under this Agreement in accordance with the terms hereof and to consummate the
transactions contemplated hereby, and no other action on the part of or, if such Stockholder is not a natural Person, vote of holders of any equity securities of such Stockholder is necessary to authorize the execution and delivery of,
compliance with and performance by such Stockholder of this Agreement. This Agreement has been duly executed and delivered by such Stockholder and, assuming the due execution and delivery of this Agreement by all of the other parties hereto,
constitutes a legal, valid and binding agreement of such Stockholder enforceable against such Stockholder in accordance with its terms, subject to the Enforceability Exception.
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5.2. No Conflict. The execution and delivery of, compliance with and performance of this Agreement by such Stockholder do not and will not (i) if an entity, conflict with or
result in any violation or breach of any provision of the certificate of incorporation, bylaws, certificate of formation or operating agreement or similar organizational documents of such Stockholder, (ii) conflict with or result in a violation
or breach of any applicable Law, (iii) require any consent by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination,
cancellation or acceleration of any right or obligation or the loss of any benefit to which such Stockholder is entitled, under any Contract binding upon such Stockholder, or to which any of its properties, rights or other assets are subject or
(iv) result in the creation of an Encumbrance (other than Permitted Encumbrances) on any of the properties or assets (including intangible assets) of such Stockholder, except in the case of clauses (i), (ii), (iii) and (iv) above, any such
violation, breach, conflict, default, termination, acceleration, cancellation, loss or Encumbrance that would not, individually or in the aggregate, reasonably be expected to restrict in any material respect, prohibit or impair in any material
respect the consummation of the Merger or the performance by such Stockholder of its obligations under this Agreement.
5.3. Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority or any other Person is required by or with respect to
such Stockholder in connection with the execution and delivery of this Agreement or the performance by such Stockholder of its obligations hereunder, except (a) as required by the rules and regulations promulgated under the Exchange Act,
the Securities Act, or state securities, takeover, and “blue sky” Laws, (b) compliance with any applicable requirements of the HSR Act and any other Antitrust Laws or FDI Laws set forth on Section 3.05 of the Company Disclosure Letter, (c)
the applicable rules and regulations of the SEC or any applicable stock exchange, or (d) as would not, individually or in the aggregate, reasonably be expected to prohibit or, in any material respect, restrict, impair or delay the
consummation of the Transactions or the performance by such Stockholder of its obligations under this Agreement.
5.4. Ownership of the Owned Shares. Such Stockholder is, as of the date hereof, the record holder and beneficial owner of the Owned Shares, all of which are free
and clear of any and all Encumbrances, other than those (i) created by this Agreement, (ii) arising under applicable securities Laws, or (iii) set forth on Schedule 5.4. Other than any Equity-Based Awards owned of record or beneficially
by such Stockholder, such Stockholder does not own, of record or beneficially, any shares of capital stock of the Company, or other rights to acquire shares of capital stock of the Company, in each case other than the Owned Shares and any
rights or obligations arising under the Merger Agreement or any Equity Commitment Letter to acquire shares of Buyer or the Surviving Corporation in connection with the transactions contemplated thereby. Such Stockholder has the sole right to
dispose of the Owned Shares, and none of the Owned Shares is subject to any pledge, disposition, transfer or other agreement, arrangement or restriction, except as set forth on Schedule 5.4 or otherwise contemplated by this Agreement.
Except as set forth on Schedule 5.4, as of the date hereof, such Stockholder has not entered into any agreement to Transfer any Owned Shares, and no Person has a right to acquire any of the Owned Shares held by such Stockholder.
Notwithstanding anything to the contrary in this Agreement, the Merger Agreement or any other Ancillary Document, nothing set forth on Schedule 5.4 would, individually or in the aggregate, reasonably be expected to prohibit or, in any
material respect, restrict, impair or delay the consummation of the Merger or the performance by such Stockholder of its obligations under this Agreement.
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5.5. Absence of Litigation. As of the date hereof, there is no Action pending against or, to the knowledge of such Stockholder, threatened against or affecting such Stockholder or
any of its Affiliates (other than the Company and its Subsidiaries) that would reasonably be expected to prevent, materially delay or materially impair the ability of such Stockholder to perform its obligations under this Agreement.
5.6. Finder’s Fee. Except as set forth in Section 4.09 of the Buyer Disclosure Letter, no broker, investment bank, financial advisor or other Person is entitled to any broker’s,
finder’s, financial adviser’s or similar fee or commission payable by the Company or its Subsidiaries on or prior to the Closing in connection with the transactions contemplated hereby based upon arrangements made by or on behalf of such
Stockholder.
6. Representations and Warranties of the Company. The Company hereby represents and warrants to the Stockholders and Buyer as follows:
6.1. Due Authority. The Company is a legal entity duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. The Company has all
requisite corporate power and authority and has taken all corporate action necessary (including approval by the Company Board (acting on the recommendation of the Special Committee) and the Special Committee) to execute, deliver, comply with
and perform its obligations under this Agreement in accordance with the terms hereof and to consummate the transactions contemplated hereby, and no other corporate action by the Company or vote of holders of any class of the capital stock of
the Company is necessary to approve and adopt this Agreement. This Agreement has been duly executed and delivered by the Company and, assuming the due execution and delivery of this Agreement by all of the other parties hereto, constitutes a
legal, valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws
affecting or relating to creditors’ rights generally.
6.2. No Conflict. The execution and delivery of, compliance with and performance by the Company of this Agreement do not and will not, other than as provided in the Merger
Agreement with respect to the Merger and the other transactions contemplated thereby, (i) conflict with or result in any violation or breach of any provision of the certificate of incorporation, bylaws, certificate of formation or operating
agreement of the Company or the similar organizational documents of any of its Subsidiaries, (ii) conflict with or result in a violation or breach of any applicable Law, (iii) require any consent by any Person under, constitute a default, or an
event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which the Company and any
of its Subsidiaries are entitled, under any Contract binding upon the Company or any of its Subsidiaries, or to which any of their respective properties, rights or other assets are subject or (iv) result in the creation of any Encumbrance
(other than Permitted Encumbrances) on any of the properties or assets (including intangible assets) of the Company or any of its Subsidiaries, except in the case of clauses (ii), (iii) and (iv) above, any such violation, breach, conflict,
default, termination, acceleration, cancellation, loss, or Encumbrance that would not reasonably be expected to restrict, prohibit or impair the performance by the Company of its obligations under this Agreement.
8
6.3. Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority, is required by or with respect to the
Company in connection with the execution and delivery of this Agreement or the consummation by the Company of the transactions contemplated hereby, except (a) as required by the rules and regulations promulgated under the Exchange Act, the
Securities Act, or state securities, takeover, and “blue sky” Laws, (b) Transaction Regulatory Filings, (c) the applicable rules and regulations of the SEC or any applicable stock exchange, or (d) as would not, individually or in the aggregate,
reasonably be expected to prohibit or, in any material respect, restrict, impair or delay the consummation of the Transactions or the performance by the Company of its obligations under this Agreement.
6.4. Absence of Litigation. As of the date hereof, there is no Action pending against or, to the knowledge of the Company, threatened against or affecting the Company that would
reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement.
7. Representations and Warranties of Buyer. Buyer hereby represents and warrants to the Stockholders and the Company as follows:
7.1. Due Authority. Buyer is a legal entity duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. Buyer has all requisite
corporate power and authority and has taken all corporate action necessary (including approval by the board of directors or applicable corporate bodies) to execute, deliver, comply with and perform its obligations under this Agreement in
accordance with the terms hereof and to consummate the transactions contemplated hereby, and no other corporate action by Buyer or vote of holders of any class of the capital stock of Buyer is necessary to approve and adopt this Agreement. This
Agreement has been duly executed and delivered by Buyer and, assuming the due execution and delivery of this Agreement by all of the other parties hereto, constitutes a legal, valid and binding agreement of Buyer enforceable against Buyer in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally.
7.2. No Conflict. The execution and delivery of, compliance with and performance by Buyer of this Agreement do not and will not, other than as provided in the Merger Agreement
with respect to the Transactions, (i) conflict with or result in any violation or breach of any provision of the certificate of incorporation, bylaws, certificate of formation or operating agreement of Buyer or the similar organizational
documents of any of its Subsidiaries, (ii) conflict with or result in a violation or breach of any applicable Law, (iii) require any consent by any Person under, constitute a default, or an event that, with or without notice or lapse of time or
both, would constitute a default under, or cause or permit the termination, cancellation or acceleration of any right or obligation or the loss of any benefit to which Buyer and any of its Subsidiaries are entitled, under any Contract binding
upon Buyer or any of its Subsidiaries, or to which any of their respective properties, rights or other assets are subject or (iv) result in the creation of any Encumbrance (other than Permitted Encumbrances) on any of the properties or assets
(including intangible assets) of Buyer or any of its Subsidiaries, except in the case of clauses (ii), (iii) and (iv) above, any such violation, breach, conflict, default, termination, acceleration, cancellation, loss, or Encumbrance that would
not reasonably be expected to restrict, prohibit or impair the performance by Buyer of its obligations under this Agreement.
9
7.3. Consents. No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority, is required by or with respect to Buyer in
connection with the execution and delivery of this Agreement or the consummation by Buyer of the transactions contemplated hereby, except (a) as required by the rules and regulations promulgated under the Exchange Act, the Securities Act, or
state securities, takeover, and “blue sky” Laws, (b) compliance with any applicable requirements of the HSR Act and any other Antitrust Laws or FDI Laws set forth on Section 3.05 of the Company Disclosure Letter, (c) the applicable rules and
regulations of the SEC or any applicable stock exchange, or (d) as would not, individually or in the aggregate, reasonably be expected to prohibit or, in any material respect, restrict, impair or delay the consummation of the Transactions or
the performance by Buyer of its obligations under this Agreement.
7.4. Absence of Litigation. As of the date hereof, there is no Action pending against or, to the knowledge of Buyer, threatened against or affecting Buyer that would reasonably be
expected to prevent, materially delay or materially impair the ability of Buyer to perform its obligations under this Agreement.
7.5. Ownership Structure. Penske Corporation, a Delaware corporation (“PC”), and Mitsui & Co., Ltd., a Japanese corporation (“Mitsui Japan”), own beneficially
and of record all of the outstanding shares of capital stock of Buyer, free and clear of all Encumbrances other than Encumbrances arising in connection with the Financing or under the Interim Investors Agreement, dated as of the date hereof
(the “Interim Investors Agreement”), among Buyer, PC, Penske Automotive Holdings Corp., a Delaware corporation, Mitsui Japan and Mitsui & Co. (U.S.A.), Inc., a New York corporation, and transfer restrictions of general applicability
as may be provided under the Securities Act or other applicable securities Laws; provided, in each case, that such Encumbrances would not, individually or in the aggregate, reasonably be expected to prohibit or, in any material respect,
restrict, impair or delay the consummation of the Merger or the performance by such Stockholder of its obligations under this Agreement. Except as contemplated by the Equity Commitment Letters, there are no options, warrants, rights,
convertible or exchangeable securities, stock-based performance units or Contracts to which Buyer is a party or by which Buyer is bound obligating Buyer to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock of, or any security convertible or exchangeable for any shares of capital stock of, Buyer. Buyer was formed solely for the purpose of engaging in the Transactions, has no liabilities or obligations of any nature other than those
incident to its formation or pursuant to the Transactions and, prior to the Effective Time, will not engage in any other business activities other than those relating to the Transactions or those incident to its formation.
8. Stockholder Capacity. This Agreement is being entered into by each Stockholder solely in its, his or her capacity as a record and/or beneficial owner of the Owned Shares,
and nothing in this Agreement shall restrict or limit, or require any Stockholder to attempt to restrict or limit, the ability of any Stockholder or any of its, his or her Affiliates or Representatives who is a director or officer of the
Company or any of the Company’s Subsidiaries to take, or refrain from taking, any action in his or her capacity as a director or officer of the Company or any of its Affiliates, including the exercise of fiduciary duties to the Company or its
stockholders, and any such action taken in such capacity or any such inaction shall not constitute a breach of this Agreement.
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9. Non-Survival of Representations, Warranties and Covenants. Other than the covenants and agreements in Section 2, Section 10, Sections 13
through 18 and Sections 20 through 29, which shall survive the Termination Date in accordance with their terms, the representations, warranties and covenants contained herein shall not survive the Termination Date.
10. Waiver of Appraisal and Dissenter Rights and Certain Other Actions. Each Stockholder hereby irrevocably and unconditionally waives, to the fullest extent permitted by
applicable Law, and agrees to cause to be waived and not to assert any appraisal rights, any dissenter’s rights and any similar rights under Section 262 of the DGCL or otherwise with respect to such Stockholder’s Covered Shares with respect to
the Transactions. Without limiting any rights or remedies of the Stockholders, their Affiliates or Representatives under the Merger Agreement, this Agreement, the Limited Guarantees or the Equity Commitment Letters, each Stockholder agrees not
to (and agrees to cause its Affiliates and their respective Representatives not to) commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any Action against Buyer, the Company
or any of their respective successors relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the Merger, including any Action (x) challenging the validity of, or seeking to enjoin or
delay the operation of, any provision of this Agreement or the Merger Agreement or (y) alleging a breach of any fiduciary duty of the Company Board or the Special Committee in connection with this Agreement, the Merger Agreement, or the
Transactions.
11. Certain Adjustments. In the event of a stock split, stock dividend or distribution, or any change in the Company Common Stock by reason of any split-up, reverse stock split,
recapitalization, combination, reclassification, exchange of shares or the like, the terms “Company Common Stock,” “Covered Shares” and “Owned Shares” and each other economic or equity-based term or provision herein shall be (a) deemed to refer
to and include, as applicable, such shares as well as all such stock dividends and distributions and any securities into which or for which any or all of such shares may be changed or exchanged or which are received in such transaction and (b)
otherwise equitably adjusted to reflect the effect of such transaction or transactions during the term of this Agreement.
12. Further Assurances. Each Stockholder shall, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further consents, documents and
other instruments as Buyer or the Company may reasonably request to the extent necessary to perform such Stockholder's obligations under, and effect the transactions contemplated by, this Agreement.
13. Notices. All notices and other communications under this Agreement must be in writing and will be deemed to have been duly delivered and received using one or a combination
of the following methods: (i) one (1) Business Day after being sent for next Business Day delivery, fees prepaid, via a reputable nationwide overnight courier service; (ii) immediately upon delivery by hand; or (iii) on the date sent by email,
in each case, to the following recipient:
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(a) if to the Stockholders:
c/o Penske Corporation
2555 Telegraph Road
Bloomfield Hills, Michigan 48302
Attention: Lawrence N. Bluth
Email: [***]
with a copy (which shall not constitute notice) to:
Jones Day
250 Vesey Street
New York, New York 10281
Attention: Andrew M. Levine; Zachary R. Brecheisen; Justin T. Roland
Email: [***]
(b) if to Buyer:
Motown Acquisition Corp.
c/o Penske Corporation
2555 Telegraph Road
Bloomfield Hills, Michigan 48302
Attention: Lawrence N. Bluth
Email: [***]
with a copy to:
Mitsui & Co., Ltd.
2-1, Otemachi 1-chome,
Chiyoda-ku, Tokyo 100-8631, Japan
Attention: Hidenori Yamano
Email: [***]
with a copy (which shall not constitute notice) to:
Jones Day
250 Vesey Street
New York, New York 10281
Attention: Andrew M. Levine; Zachary R. Brecheisen; Justin T. Roland
Email: [***]
and
Debevoise & Plimpton LLP
66 Hudson Boulevard
New York, NY, 10001
Attention: William D. Regner; Ezra Borut
Email: [***]
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(c) if to the Company (prior to the Effective Time) to:
Penske Automotive Group, Inc.
2555 S. Telegraph Road
Bloomfield Hills, MI 48302
Attention: Shane Spradlin
Email: [***]
with a copy (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019-6064
| Attention: |
Jeffrey D. Marell
|
Lara B. Solomons
| Email: |
[***]
[***]
|
and
Freshfields US LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
| Attention: |
Damien Zoubek; Oliver Board
|
| Email: |
[***]
[***]
|
14. Interpretation. Where a reference in this Agreement is made to a section or exhibit, such reference shall be to a section of or exhibit to this Agreement unless otherwise
indicated. If a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb). Unless the context of this Agreement clearly requires otherwise, words importing
the masculine gender shall include the feminine and neutral genders and vice versa, and the definitions of terms contained in this Agreement are applicable to the singular as well as the plural forms of such terms. The words “includes” or
“including” shall mean “including without limitation,” the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this Agreement shall refer to this Agreement as a whole and not any particular section or article in which such
words appear, the terms “or” and “either” are not exclusive, the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends and such phrase shall not mean simply “if,” any reference to a Law
shall include any rules and regulations promulgated thereunder, and any reference to any Law in this Agreement shall mean such Law as from time to time amended, modified or supplemented. Each reference to a “wholly owned Subsidiary” or “wholly
owned Subsidiaries” of a Person shall be deemed to include any Subsidiary of such Person where all of the equity interests of such Subsidiary are directly or indirectly owned by such Person (other than directors qualifying shares, nominee
shares or other equity interests that are required by Law to be held by a director or nominee). For all purposes under this Agreement, the Stockholders and Buyer shall be deemed not to be Affiliates of the Company and its Subsidiaries and vice versa.
13
15. Entire Agreement. This Agreement (along with the documents referenced herein and any other agreement entered into in connection herewith by any of the parties hereto), the
Confidentiality Agreement, the Voting Agreement, the Limited Guarantees, the Equity Commitment Letters and the other Ancillary Documents collectively constitute the entire agreement, and supersede all other prior agreements, understandings,
representations and warranties both written and oral, among the parties hereto, with respect to the subject matter hereof (but, for the avoidance of doubt, do not supersede or otherwise modify the Voting Agreement).
16. No Third-Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their respective successors and permitted assigns,
and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, except that each Non-Recourse Party referenced
in Section 20 shall be an express third-party beneficiary of, and entitled to enforce, Section 20.
17. Governing Law; Waiver of Jury Trial.
(a) This Agreement will be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed in and to be performed entirely within
that State, regardless of the laws that might otherwise govern under any applicable conflict of Laws principles.
(b) All Actions arising out of or relating to this Agreement or the Transactions will be heard and determined in the Court of Chancery of the State of Delaware (or, if the Court of
Chancery of the State of Delaware declines to accept jurisdiction over any Action, any state or federal court within the State of Delaware). The parties hereto hereby irrevocably (i) submit to the exclusive jurisdiction and venue of such
courts in any such Action, (ii) waive the defense of an inconvenient forum or lack of jurisdiction to the maintenance of any such Action, (iii) agree to not attempt to deny or defeat such jurisdiction by motion or otherwise request for leave
from any such court, and (iv) agree to not bring any Action arising out of or relating to this Agreement or the Transactions in any court other than the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of
Delaware declines to accept jurisdiction over any Action, any state or federal court within the State of Delaware), except for Actions brought to enforce the judgment of any such court. The consents to jurisdiction and venue set forth in this
Section 17 will not constitute general consents to service of process in the State of Delaware and will have no effect for any purpose except as provided in this paragraph and will not be deemed to confer rights on any Person other than
the parties hereto. Each party hereto agrees that service of process upon such party in any Action arising out of or relating to this Agreement will be effective if notice is given in accordance with Section 13 of this Agreement. The
parties hereto agree that a final judgment in any such Action will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law; provided, however, that
nothing in the foregoing will restrict any party’s rights to seek any post-judgment relief regarding, or any appeal from, a final trial court judgment.
14
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE
AGREEMENTS DELIVERED IN CONNECTION HEREWITH (INCLUDING THE DEBT FINANCING) OR THE TRANSACTIONS CONTEMPLATED THEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (1) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (2) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (3) IT MAKES SUCH WAIVER VOLUNTARILY, AND (4) IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS SECTION 17.
18. Assignment; Successors. Other than as provided herein, neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise, by any party hereto without the prior written consent of the other parties hereto, and any such assignment without such prior written consent shall be null and void. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and permitted assigns.
19. Enforcement. The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the
parties hereto do not perform the provisions of this Agreement (including any party hereto failing to take any actions that are required of it hereunder) in accordance with their specified terms or otherwise breach such provisions. The parties
hereto acknowledge and agree that (a) the parties hereto will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or
threatened breaches) of this Agreement or to enforce specifically the terms and provisions hereof and without bond or other security being required, (b) if any party hereto is seeking injunctive relief, specific performance or other equitable
relief pursuant hereto, the other parties hereto will not assert that a remedy of monetary damages would provide an adequate remedy for such breach, and (c) the right of specific enforcement is an integral part of the transactions contemplated
hereby and without that right, none of the Company, Buyer or the Stockholders would have entered into this Agreement. Notwithstanding the foregoing, nothing herein shall (i) in any way limit a party’s right to pursue a claim for monetary
damages arising out of any other party’s Fraud or Willful Breach of this Agreement, (ii) confer on any Person any right to specifically enforce the Merger Agreement, any Equity Commitment Letter, any Limited Guarantee or any obligation to fund
the Equity Financing or consummate the Closing, except in accordance with the terms, conditions and limitations of the applicable agreement, letter or guarantee, or (iii) eliminate any requirement for approval of the Special Committee in
accordance with the Merger Agreement. Notwithstanding anything to the contrary herein, any monetary damages payable by Buyer or any Stockholder, on the one hand, or the Company, on the other hand, arising under or in connection with this
Agreement shall be subject in all respects to Section 7.03 of the Merger Agreement and the maximum aggregate monetary liability applicable to such Person, as set forth therein.
15
20. Non-Recourse. Each party agrees, on behalf of itself and its Related Parties, that this Agreement may only be enforced against, and any Action based upon, arising out of, or
related in any manner to (i) this Agreement, (ii) the negotiation, execution or performance of this Agreement, and (iii) any breach or violation of this Agreement, in each case, may only be brought against the Persons that are expressly named
as parties hereto and then only with respect to the specific obligations set forth herein with respect to such party. No Related Party of any party hereto that is not itself expressly named as a party hereto (each, a “Non-Recourse Party”)
shall have any liability to any party hereto or any of its Related Parties for any obligations or liabilities of any party under this Agreement or for any Action (whether in contract or in tort, in Law or in equity or otherwise, or granted by
statute or otherwise, whether by or through attempted piercing of the corporate, limited partnership or limited liability company veil or any other theory or doctrine, including alter ego or otherwise) based on, in respect of or by reason of
the matters described in the immediately preceding clauses (i) through (iii). Each Non-Recourse Party shall be an express third party beneficiary of, and entitled to enforce, this Section 20. For the avoidance of doubt, nothing in this
Section 20 shall limit or otherwise affect any rights or remedies against any Person under any other agreement to which such Person is a party.
21. Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void
or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto.
The parties hereto further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or
unenforceable provision.
22. Counterparts. This Agreement and any amendments hereto may be executed in one or more counterparts, all of which will be considered one and the same agreement and will become
effective when one or more counterparts have been signed by each of the parties hereto and delivered to the other parties hereto, it being understood that all parties hereto need not sign the same counterpart. Any such counterpart, to the
extent delivered by electronic delivery, will be treated in all manners and respects as an original executed counterpart and will be considered to have the same binding legal effect as if it were the original signed version thereof delivered in
person. No party hereto may raise the use of an electronic delivery to deliver a signature, or the fact that any signature or agreement or instrument was transmitted or communicated through the use of an electronic delivery, as a defense to the
formation of a contract, and each party hereto forever waives any such defense, except to the extent such defense relates to lack of authenticity.
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23. Amendment; Waiver. This Agreement may be amended by the parties hereto, and the terms and conditions hereof may be waived, only by an instrument in writing signed on behalf
of each of the parties hereto or, in the case of a waiver, by an instrument signed on behalf of the party waiving compliance; provided that any amendment or waiver by the Company shall require the prior approval of the Special
Committee. No failure or delay on the part of a party in the exercise of any right or remedy hereunder shall impair such right or power or be construed to be a waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or of any other right or power.
24. No Presumption Against Drafting Party. The Company, Buyer and the Stockholders acknowledge that each party to this Agreement has been represented by counsel in connection
with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no
application and is expressly waived.
25. Special Committee Approval. Notwithstanding anything to the contrary herein, prior to the Effective Time, no (i) amendment to or waiver of any provision of this Agreement or
(ii) exercise or enforcement of the rights of the Company hereunder, solely to the extent such rights expressly relate to transactions contemplated hereby, shall be taken by or on behalf of the Company without the approval or authorization of
the Special Committee.
26. No Agreement until Executed. This Agreement shall not be effective unless and until (i) the Merger Agreement is executed by all parties thereto and (ii) this Agreement is
executed and delivered by all parties hereto.
27. Stockholder Obligations Several and Not Joint. The obligations of each Stockholder hereunder shall be several and not joint, and no Stockholder shall be liable for any breach
of the terms of this Agreement by any other Stockholder. For the avoidance of doubt, no Stockholder hereunder shall have any liability for any breach of any other Support Agreement by any party thereto.
28. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Buyer any direct or indirect ownership or incidence of ownership of or with respect to
any Covered Shares. All ownership and economic benefits of and relating to a Stockholder’s Covered Shares shall remain vested in and belong to the applicable Stockholder.
29. Expenses. Whether or not the Merger is consummated, all costs and expenses, including fees, expenses and disbursements of legal, financial, tax, accounting, advisory,
valuation or other advisors or consultants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.
[Signature pages follow]
17
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
|
STOCKHOLDERS:
|
||
|
PENSKE CORPORATION
|
||
|
By:
|
/s/ J. Patrick Conroy
|
|
|
Name:
|
J. Patrick Conroy
|
|
|
Title:
|
Executive Vice President, Chief Financial Officer
|
|
PENSKE AUTOMOTIVE HOLDINGS CORP.
|
||
|
By:
|
/s/ J. Patrick Conroy
|
|
|
Name:
|
J. Patrick Conroy
|
|
|
Title:
|
Vice President
|
|
ROGER S. PENSKE
|
||
|
By:
|
/s/ Roger S. Penske
|
|
|
ROGER S. PENSKE TRUST
|
||
|
By:
|
/s/ Roger S. Penske
|
|
|
Roger S. Penske, as trustee of the Roger S. Penske Trust, dated November 17, 1973
|
||
|
BUYER:
|
|||
|
MOTOWN ACQUISITION CORP.
|
|||
|
By:
|
/s/ J. Patrick Conroy
|
||
|
|
Name:
|
J. Patrick Conroy | |
|
|
Title:
|
Vice President | |
|
COMPANY:
|
|||
|
PENSKE AUTOMOTIVE GROUP, INC.
|
|||
|
By:
|
/s/ Michelle Hulgrave
|
||
|
|
Name:
|
Michelle Hulgrave
|
|
|
|
Title:
|
Executive Vice President and
|
|
|
|
Chief Financial Officer | ||
Exhibit A
Owned Shares
PC Support Agreement:
|
Stockholder
|
Owned Shares
|
|
Penske Corporation
|
492,185 shares of Company Common Stock
|
|
Penske Automotive Holdings Corp.
|
33,688,936 shares of Company Common Stock
|
|
Roger S. Penske
|
116,681 shares of Company Common Stock
|
|
Roger S. Penske Trust
|
35,698 shares of Company Common Stock
|
Schedule 5.4
Encumbrances and Other Arrangements
Penske Corporation
| 1. |
The Voting Agreement, dated as of January 23, 2024, by and between Penske Automotive Group, Inc. and Penske Corporation, as amended, restated, supplemented or otherwise modified from time to time.
|
| 2. |
The Interim Investors Agreement, dated as of the date of this Agreement, by and among Buyer, Penske Corporation, Penske Automotive Holdings Corp., Mitsui & Co., Ltd. and Mitsui & Co. (U.S.A.), Inc., including any
restrictions, obligations or arrangements thereunder relating to the ownership, transfer or disposition of the Owned Shares.
|
| 3. |
The Stockholders Agreement to be entered into in connection with the Transactions and contemplated by the Interim Investors Agreement (the “Penske/Mitsui Stockholders Agreement”), including any restrictions, obligations or
arrangements thereunder relating to the ownership, transfer or disposition of the Owned Shares.
|
| 4. |
The Stockholders Agreement, dated as of July 30, 2013, by and among Mitsui & Co., Ltd., Mitsui & Co. (U.S.A.), Inc., Penske Corporation and Penske Automotive Holdings Corp., as amended, restated, supplemented or otherwise
modified from time to time.
|
| 5. |
Any pledge of Covered Shares granted by Penske Corporation to lenders under any loan facility of Penske Corporation in existence as of the date of this Agreement if, as and when required pursuant to the terms of such loan facility,
as such terms exist as of the date of this Agreement.
|
Penske Automotive Holdings Corp.
| 1. |
The Interim Investors Agreement described in paragraph 2 above.
|
| 2. |
The Penske/Mitsui Stockholders Agreement described in paragraph 3 above.
|
| 3. |
The Stockholders Agreement described in paragraph 4 above.
|
| 4. |
Any pledge of Covered Shares granted by Penske Automotive Holdings Corp. to lenders under any loan facility of Penske Corporation in existence as of the date of this Agreement if, as and when required pursuant to the terms of such
loan facility, as such terms exist as of the date of this Agreement.
|
Roger S. Penske
None.
Exhibit 10.3
CERTAIN INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT
AND REPLACING IT WITH [***] BECAUSE IT IS BOTH: (I) NOT MATERIAL AND (II) THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
INDEMNIFICATION AGREEMENT
Indemnification Agreement (the “Agreement”), dated as of October __, 2026, by and
between Penske Automotive Group, Inc., a Delaware corporation (the “Company”), and the director listed on the signature page hereto (“Indemnitee”).
WHEREAS, qualified persons are reluctant to serve, or to continue to serve, corporations as directors or officers unless they are provided with
broad indemnification and insurance against claims arising out of their service to and activities on behalf of the applicable corporation; and
WHEREAS, the Company has determined that attracting and retaining such persons is in the best interests of the Company and the business enterprise
it operates, taking into account all relevant facts and circumstances and its stakeholders, and that it is reasonable, prudent and necessary for the Company to indemnify such persons to the fullest extent permitted by applicable law and to provide
reasonable assurance regarding insurance.
NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:
1. Defined Terms; Construction.
(a) Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“Corporate Status” means the status of a person who is or was a director (or a member of
any committee of a board of directors) or officer of the Company or any of its subsidiaries, or of any predecessor thereof, or is or was serving at the request of the Company as a director (or a member of any committee of a board of directors),
officer, employee or agent of another entity, or of any predecessor thereof, including service with respect to an employee benefit plan.
“DGCL” means the Delaware General Corporation Law, as amended from time to time.
“Determination” means a determination that either (x) there is a reasonable basis for
the conclusion that indemnification of Indemnitee is proper under the relevant circumstances because Indemnitee met a particular standard of conduct (a “Favorable Determination”) or (y)
there is no reasonable basis for the conclusion that indemnification of Indemnitee is proper under the relevant circumstances because Indemnitee met a particular standard of conduct (an “Adverse
Determination”).
“Expenses” means all reasonable attorneys’ fees and expenses, retainers, court,
arbitration and mediation costs, transcript costs, fees and expenses of experts, witnesses, bonds, costs of collecting and producing documents, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery
service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, appealing or otherwise
participating in a Proceeding.
“Independent Legal Counsel” means an attorney or firm of attorneys competent to render
an opinion under the applicable law, selected in accordance with the provisions of Section 6(e), who has not performed any material services (other than services similar to those contemplated to be performed by Independent Legal Counsel under this
Agreement) for the Company or any of its subsidiaries or for Indemnitee within the last three years.
“Proceeding” means a threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, including without limitation a claim, demand, discovery request, formal or informal investigation, inquiry, administrative hearing, arbitration or other form of alternative dispute
resolution, including an appeal from any of the foregoing.
(b) Construction. For purposes of this Agreement,
(i) References to the Company and any of its “subsidiaries” shall include any corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise that before or after the date of this Agreement is party
to a merger or consolidation with the Company or any such subsidiary or that is a successor to the Company as contemplated by Section 9(e) (whether or not such successor has executed and delivered the written agreement contemplated by Section
9(e)).
(ii) References to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan.
(iii) References to a “witness” in connection with a Proceeding shall include any interviewee or person called upon to produce documents in connection with such Proceeding.
2. Agreement to Serve.
Indemnitee agrees to serve, or continue to serve, as a director of the Company and/or one or more of the Company’s subsidiaries and in such other
capacities as Indemnitee may serve at the request of the Company from time to time, and by its execution of this Agreement the Company confirms its request that Indemnitee serve, or continue to serve, as a director of the Company and/or one or more
of the Company’s subsidiaries and in such other capacities. Indemnitee shall be entitled to resign or otherwise terminate service as a Director with immediate effect at any time, and neither such resignation or termination (nor the termination of
the Indemnitee’s services or dismissal of the Indemnitee, in each case by the Company and/or one or more of the Company’s subsidiaries), nor the length of such service shall affect Indemnitee’s accrued rights under this Agreement at the point of
such resignation or termination. This Agreement shall not constitute an employment agreement, supersede any employment agreement to which Indemnitee is a party or create any right of Indemnitee to continued employment or appointment.
3. Indemnification.
(a) General Indemnification. The Company shall indemnify Indemnitee, to the fullest extent permitted by applicable law in effect on the date hereof or as amended to increase the scope of
permitted indemnification, against Expenses, losses, liabilities, judgments, fines, penalties and amounts paid in settlement (including all interest, taxes, assessments and other charges in connection therewith) incurred by Indemnitee or on
Indemnitee’s behalf in connection with any Proceeding in any way connected with, resulting from or relating to Indemnitee’s current or former Corporate Status.
2
(b) Additional Indemnification Regarding Expenses. Without limiting the foregoing, to the fullest extent permitted by applicable law, in the event any Proceeding is initiated by
Indemnitee in any way connected with, resulting from or relating to Indemnitee’s current or former Corporate Status, the Company, any of its subsidiaries or any other person to enforce or interpret this Agreement or any rights of Indemnitee to
indemnification or advancement of Expenses (or related obligations of Indemnitee) under the Company’s or any such subsidiary’s organizational documents (including limited liability company agreement, limited partnership agreement, certificate of
incorporation, bylaws or other organizational documents ), any vote of members, stockholders, directors or managers of the Company or any of its subsidiaries, the DGCL, any applicable law or any liability insurance policy, the Company shall
indemnify Indemnitee against Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding if, in the case of indemnification, Indemnitee is successful on all of the underlying claims; if Indemnitee is not successful
on all of the underlying claims but is successful as to one or more of such claims, then such indemnification shall be only to the extent related to the successfully resolved claims.
(c) Partial Indemnification. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any Expenses, losses, liabilities,
judgments, fines, penalties and amounts paid in settlement incurred by Indemnitee, but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for such portion.
(d) Nonexclusivity. The indemnification provided by this Agreement shall not be deemed exclusive of any rights to which Indemnitee may be entitled under the certificate of incorporation,
bylaws, limited liability company agreement or other organizational agreement or instrument of the Company or any of its subsidiaries, any other agreement, any vote of stockholders, members, directors or managers, the DGCL, any applicable law or
any liability insurance policy, provided that to the extent that Indemnitee is entitled to be indemnified by the Company under this Agreement and by any stockholder of the Company or any affiliate of any such stockholder (other than the Company or
any of its subsidiaries) under any other agreement or instrument, or by any insurer under a policy maintained by any such stockholder or any affiliate of any such stockholder (other than the Company or any of its subsidiaries), the subsidiaries of
the Company which have indemnification obligations as a result of the Indemnitee’s Corporate Status shall be the indemnitor(s) of first resort, the Company shall be the indemnitor of second resort, and such stockholder, or any affiliate of such
stockholder (other than the Company or any of its subsidiaries) shall be the indemnitor(s) of third resort (i.e., the obligations of the Company and its subsidiaries, as applicable, hereunder shall be primary (with the priority set forth above),
and the obligations of such stockholder, any affiliate of such stockholder (other than the Company or any of its subsidiaries) or any insurer under a policy maintained by any such stockholder or any affiliate of such stockholder (other than the
Company or any of its subsidiaries) shall be secondary).
3
(e) Exceptions. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated under this Agreement to indemnify Indemnitee (i) for Expenses or liabilities
incurred in connection with Proceedings initiated or brought voluntarily by the Indemnitee and not by way of defense, counterclaim or crossclaim, except (x) as contemplated by Section 3(b), (y) in specific cases if the board of directors of the
Company has approved the initiation or bringing of such Proceeding, and (z) as may be required by applicable law, (ii) for Expenses or liabilities of any type whatsoever to the extent that Indemnitee has otherwise actually received such amounts
under any insurance policy (provided that the Indemnitee is not required to pursue such amounts under any insurance policy), or (iii) for any claim as to which a final, nonappealable judgment is made that Indemnitee’s conduct was in bad faith,
knowingly fraudulent or deliberately dishonest or constituted willful misconduct (but only to the extent of such specific determination).
(f) Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall
execute such documents and do such acts as the Company may reasonably request to secure such rights and to enable the Company effectively to bring suit to enforce such rights, provided that (i) the Company shall be subrogated only to the extent
that it has fulfilled its obligations to pay valid claims of the Indemnitee’s rights of recovery under this Agreement in full, (ii) the Company will not be subrogated to the extent of any such payments to Indemnitee that are clawed back from
Indemnitee in a bankruptcy or other insolvency proceeding and (iii) the Company shall not be entitled to contribution or indemnification from or subrogation against any stockholder of the Company, any affiliate of any such stockholder (other than
the Company or any of its subsidiaries) or any insurer under a policy maintained by any such stockholder or any affiliate of such stockholder (other than the Company or any of its subsidiaries).
4. Contribution.
(a) To the fullest
extent permitted by applicable law, in respect of any threatened, pending or completed Proceeding in which the Company or any of its subsidiaries is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall
pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have
against Indemnitee.
(b) Without
diminishing or impairing the obligations of the Company set forth in the preceding subparagraph and to the fullest extent permitted by applicable law, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any
judgment or settlement in any threatened, pending or completed Proceeding in which the Company or any of its subsidiaries is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount
of Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company or any of its subsidiaries and all officers,
directors, managers or employees of the Company and any such subsidiaries, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the
transaction or events from which such Proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of
the Company or any of its subsidiaries and all officers, directors, managers or employees of the Company or any such subsidiary other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one
hand, and Indemnitee, on the other hand, in connection with the transaction or events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which applicable law may require to be
considered. The relative fault of the Company or any of its subsidiaries and all officers, directors, managers or employees of the Company or any of its subsidiaries, other than Indemnitee, who are jointly liable with Indemnitee (or would be if
joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree
to which their liability is primary or secondary and the degree to which their conduct is active or passive.
4
(c) To the fullest
extent permitted by applicable law, the Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors, managers or employees of the Company or any of its
subsidiaries, other than Indemnitee, who may be jointly liable with Indemnitee.
(d) To the fullest
extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is
deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company or any of its subsidiaries and Indemnitee as a result of the event(s) and/or transaction(s)
giving cause to such Proceeding; and/or (ii) the relative fault of the Company or any of its subsidiaries (and its directors, officers, managers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
5. Advancement of Expenses.
To the fullest extent permitted by applicable law, the Company shall pay all Expenses incurred by Indemnitee in connection with any Proceeding in
any way connected with, resulting from or relating to Indemnitee’s current or former Corporate Status, other than a Proceeding initiated by Indemnitee for which the Company would not be obligated to indemnify Indemnitee pursuant to Section 3(e), in
advance of the final disposition of such Proceeding and without regard to whether Indemnitee will ultimately be entitled to be indemnified for such Expenses and without regard to whether an Adverse Determination has been made, except as
contemplated by the last sentence of Section 6(f). Indemnitee shall repay such amounts advanced only if and to the extent that it shall ultimately be determined in a decision by a court of competent jurisdiction from which no appeal (or further
appeal) can be taken that Indemnitee is not entitled to be indemnified by the Company for such Expenses. Such repayment obligation shall be unsecured and shall not bear interest. Except to the extent required by applicable law, the Company shall
not impose on Indemnitee additional conditions to advancement or require from Indemnitee additional undertakings regarding repayment.
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6. Indemnification Procedure.
(a) Notice of Proceeding; Cooperation. Indemnitee shall give the Company notice in writing as soon as practicable of any Proceeding for which indemnification will or could be sought under
this Agreement, provided that any failure or delay in giving such notice shall not relieve the Company of its obligations under this Agreement unless and to the extent that the Company is materially prejudiced by such failure.
(b) Settlement. The Company will not, without the prior written consent of Indemnitee, which may be provided or withheld in Indemnitee’s sole discretion, effect any settlement of any
Proceeding against Indemnitee unless such settlement requires no payment of money by Indemnitee and includes an unconditional release of Indemnitee from all liability on any matters that are the subject of such Proceeding and an acknowledgment that
Indemnitee denies all wrongdoing in connection with such matters. The Company shall not be obligated to indemnify Indemnitee against amounts paid in settlement of a Proceeding against Indemnitee if such settlement is effected by Indemnitee without
the Company’s prior written consent, which shall not be unreasonably withheld.
(c) Request for Payment; Timing of Payment. To obtain indemnification payments or advances under this Agreement, Indemnitee shall submit to the Company a written request therefor,
together with such invoices or other supporting information as may be reasonably requested by the Company and reasonably available to Indemnitee. The Company shall make advances to Indemnitee no later than 30 days after receipt of the written
request of Indemnitee and shall make indemnification payments to Indemnitee no later than the later of (i) 30 days after receipt of the written request of Indemnitee and (ii) 10 days after a Determination, if required pursuant to Section 6(d), has
been made.
(d) Determination. The Company intends that Indemnitee shall be indemnified to the fullest extent permitted by law as provided in Section 3 and that no Determination shall be required in
connection with such indemnification. In no event shall a Determination be required in connection with advancement of Expenses pursuant to Section 5 or in connection with indemnification for Expenses incurred as a witness or incurred in connection
with any Proceeding or portion thereof with respect to which Indemnitee has been successful on the merits or otherwise. Any decision that a Determination is required by law in connection with any other indemnification of Indemnitee, and any such
Determination, shall be made within 30 days after receipt of Indemnitee’s written request for indemnification; provided, however, that such 30 day period may be extended for a reasonable time, not to exceed an additional 30 days, if the person,
persons or entity making such Determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto, as follows:
(i) Unless otherwise requested by Indemnitee pursuant to Section 6(d)(ii) below, (w) by a majority vote of the directors of the Company who are not parties to such Proceeding, even though less than a quorum, with the advice of Independent
Legal Counsel, or (x) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, with the advice of Independent Legal Counsel, or (y) if there are no such directors, or if such directors so
direct, by Independent Legal Counsel in a written opinion to the Company and Indemnitee, or (z) by the stockholders of the Company.
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(ii) If requested by written notice of Indemnitee to the Company, by Independent Legal Counsel in a written opinion to the Company and Indemnitee.
The Company shall pay all Expenses incurred by Indemnitee in connection with a Determination.
(e) Independent Legal Counsel. Independent Legal Counsel shall be selected by the board of directors of the Company and approved by Indemnitee. The Company shall pay the fees and expenses
of Independent Legal Counsel and indemnify Independent Legal Counsel against any and all expenses (including reasonable attorneys’ fees), claims, liabilities and damages arising out of or relating to its engagement.
(f) Consequences of Determination; Remedies of Indemnitee. The Company shall be bound by and shall have no right to challenge a Favorable Determination. If an Adverse Determination is
made, or if for any other reason the Company does not make timely indemnification payments or advances of Expenses, Indemnitee shall have the right to commence a Proceeding before a court of competent jurisdiction to challenge such Adverse
Determination and/or to require the Company to make such payments or advances. To the fullest extent permitted by applicable law, Indemnitee shall be entitled to be indemnified for all Expenses incurred in connection with such a Proceeding in
accordance with Section 3(b) and to have such Expenses advanced by the Company in accordance with Section 5. If Indemnitee fails to timely challenge an Adverse Determination, or if Indemnitee challenges an Adverse Determination and such Adverse
Determination has been upheld by a final judgment of a court of competent jurisdiction from which no appeal can be taken, then, to the extent and only to the extent required by such Adverse Determination or final judgment, the Company shall not be
obligated to indemnify or advance Expenses to Indemnitee under this Agreement.
7. Directors and Officers Liability Insurance.
(a) Maintenance of Insurance. So long as the Company or any of its subsidiaries maintains liability insurance for any managers, directors, officers, employees or agents of any such
person, the Company shall ensure that Indemnitee is covered by such insurance in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s and its subsidiaries’ then current
directors, managers and officers.
(b) Notice to Insurers. Upon receipt of notice of a Proceeding pursuant to Section 6(a), the Company shall give or cause to be given prompt notice of such Proceeding to all insurers
providing liability insurance in accordance with the procedures set forth in all applicable or potentially applicable policies. The Company shall thereafter take all necessary action to cause such insurers to pay all amounts payable in accordance
with the terms of such policies.
8. Miscellaneous.
(a) Non-Circumvention. The Company shall not seek or agree to any order of any court or other governmental authority that would prohibit or otherwise interfere, and shall not take or fail
to take any other action if such action or failure would reasonably be expected to have the effect of prohibiting or otherwise interfering, with the performance of the Company’s indemnification, advancement or other obligations under this
Agreement.
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(b) Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and
enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (ii) such provision or provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties hereto; and (iii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
(c) Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) on the date of delivery if delivered
personally or email, or by facsimile, upon confirmation of receipt, (ii) on the first business day following the date of dispatch if delivered by a recognized next-day courier service or (iii) on the third business day following the date of mailing
if delivered by domestic registered or certified mail, properly addressed, or on the fifth business day following the date of mailing if sent by airmail from a country outside of North America, to Indemnitee or the Company at the address set forth
below, or in either case as subsequently modified by written notice.
If to Indemnitee:
at the last known address on the records of the Company or any of its subsidiaries.
If to the Company:
Penske Automotive Group, Inc.
2555 Telegraph Road
Bloomfield Hills, MI
48302-0954
Attention: Shane M. Spradlin
Email: [***]
(d) Amendment and Termination. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by all the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.
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(e) Successors and Assigns. This Agreement shall be binding upon the Company and its respective successors and assigns, including without limitation any acquiror of all or substantially
all of the Company’s assets or business and any survivor of any merger or consolidation to which the Company is party, and shall inure to the benefit of and be enforceable by Indemnitee and Indemnitee’s estate, spouses, heirs, executors, personal
or legal representatives, administrators and assigns. The Company shall require and cause any such successor, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement as if it
were named as the Company herein, and the Company shall not permit any such purchase of assets or business, acquisition of securities or merger or consolidation to occur until such written agreement has been executed and delivered. No such
assumption and agreement shall relieve the Company of any of its obligations hereunder, and this Agreement shall not otherwise be assignable by the Company.
(f) Choice of Law; Consent to Jurisdiction. This Agreement shall be governed by and its provisions construed in accordance with the laws of the State of Delaware, as applied to contracts
between Delaware residents entered into and to be performed entirely within Delaware, without regard to the conflict of law principles thereof. The Company and Indemnitee each hereby irrevocably consents to the jurisdiction of the courts of the
State of Delaware for all purposes in connection with any Proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in the state courts of the State of Delaware.
(g) Integration and Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations,
commitments, understandings and agreements relating to the subject matter hereof between the parties hereto, provided that the provisions hereof shall not supersede the provisions of the Company’s certificate of incorporation, bylaws or other
organizational agreement or instrument, any other agreement, any vote of stockholders or directors, the DGCL or other applicable law, to the extent any such provisions shall be more favorable to Indemnitee than the provisions hereof.
(h) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original. Delivery of an executed counterpart of a signature page of this
Agreement by facsimile transmission or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
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PENSKE AUTOMOTIVE GROUP, INC.
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By:
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Name:
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Shane Spradlin
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Title:
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Executive Vice President
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AGREED TO AND ACCEPTED:
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INDEMNITEE:
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Name:
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Title: Director
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[Signature Page to Director Indemnification Agreement]
Exhibit 99.1
FOR IMMEDIATE RELEASE
Penske Automotive Group Announces Agreement to be Taken Private by Penske Corporation and Mitsui & Co.
Penske Automotive Group Shareholders to Receive $212.00 Per Share in Cash
BLOOMFIELD HILLS, MI, October 15,
2026 – Penske Automotive Group, Inc. (NYSE: PAG) (the “Company” or “PAG”),
a diversified international transportation services company and one of the world’s premier automotive and commercial truck retailers, today announced that it has entered into a merger agreement to be taken private by Motown Acquisition Corp. (“Buyer”), an entity owned by Penske Corporation (“Penske”) and Mitsui
& Co., Ltd. (“Mitsui”). Under the terms of the merger agreement, holders of Penske Automotive Group common stock, other than Penske Corporation, Mitsui
and the other members of the investor group, will receive $212.00 per share in cash, valuing the Company at an enterprise value of approximately $16.3 billion. Upon completion of the transaction, the Company will become a privately held company,
with approximately 64% of the Company’s ownership to be held by Penske and 36% to be held by Mitsui.
The purchase price represents a premium of approximately 8.6% to the closing price of the Company’s common stock on July 21, 2026
and a premium of approximately 20.09% and 26.17% to the 60-day and 90-day volume weighted average prices, respectively, for the period ended July 21, 2026, the last trading day
prior to the submission of the unsolicited, preliminary and non-binding proposal from Penske and Mitsui to acquire the remaining shares of the Company’s common stock
that they and their affiliates do not currently own, and an 8.84% premium to the closing price of the Company’s
common stock on October 14, 2026, the trading date immediately preceding the date on which the definitive agreement was announced. The Company expects to continue paying
regular quarterly cash dividends through the closing of the transaction, in each case, in an amount not to exceed $0.02 per share above the per share amount of the last quarterly dividend
declared and paid by the Company in the immediately preceding quarter, as well as a pro-rated dividend for any partial quarter prior to the closing.
A special committee of independent and disinterested directors of the Board of Directors (the “Board”) of the Company (the “Special Committee”) unanimously recommended that the Board approve the
proposed transaction. The Special Committee was formed to evaluate and consider the proposal and was advised by independent legal and financial advisors. The Board approved the proposed transaction following the unanimous recommendation of the
Special Committee.
“We are pleased to have reached this agreement with Penske and Mitsui, our largest shareholders,” said David Hoogendoorn, Penske Automotive Group
Board Member and the Special Committee Chair. “The Special Committee thoroughly reviewed the proposal and considered the benefits of the transaction as compared to continuing as a public company, and determined that this transaction provided the
greatest value for the Company’s minority shareholders.”
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“I want to thank the Special Committee for its thoughtful and diligent evaluation of the transaction,” said Roger Penske, Chair and CEO of the Company.
“This transaction marks an important next chapter for PAG. Mitsui has been a shareholder for 25 years, and we have had a productive relationship over the past quarter-century. Together with Mitsui, we will build on PAG’s operational excellence and
draw on our combined capabilities and networks to drive innovation and expand PAG’s business through new opportunities and collaborative projects.”
Approvals and Timing
The transaction is expected to close in the first quarter of 2027, subject to the satisfaction or waiver of closing conditions, including receipt of
regulatory approvals and the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock that are entitled to vote on the transaction, as well as the approval by holders of a majority of the votes cast by
unaffiliated stockholders (as defined in the merger agreement). The transaction is not subject to a financing condition.
Following the closing of the transaction, the Company’s shares of common stock will no longer be traded or listed on the New York Stock Exchange.
Third Quarter 2026 Financial Results
Penske Automotive Group’s third quarter 2026 financial results will be issued on October
28, 2026, prior to market opening. In light of the announced transaction, the Company will not host an earnings conference call. The Company’s third quarter 2026 earnings press release and investor presentation will be available on its investor
relations website at www.penskeautomotive.com.
Advisors
Moelis & Company LLC is acting as exclusive financial advisor to the Special Committee and Paul, Weiss, Rifkind, Wharton & Garrison LLP is
acting as its legal counsel. The Company is being represented by Freshfields LLP. Jones Day is acting as legal counsel to Penske and BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are acting as its financial
advisors. Debevoise & Plimpton LLP is acting as legal counsel to Mitsui & Co., Ltd.
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About Penske Automotive
Penske Automotive Group, Inc. (NYSE: PAG), headquartered in Bloomfield Hills, Michigan, is a diversified international transportation services company
and one of the world’s premier automotive and commercial truck retailers. The Company operates dealerships in the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia and is one of the largest retailers of commercial trucks
in North America for Freightliner. The Company also distributes and retails commercial vehicles, diesel and gas engines, power systems, and related parts and services principally in Australia and New Zealand. The Company employs over 28,900 people
worldwide. Additionally, the Company owns 28.9% of Penske Transportation Solutions, a business that employs over 40,000 people worldwide, manages one of the largest, most comprehensive and modern trucking fleets in North America with over 373,600
trucks, tractors, and trailers under lease, rental, and/or maintenance contracts and provides innovative transportation, supply chain, and technology solutions to its customers. The Company is a member of the S&P Mid Cap 400, Fortune 500, Russell
1000, and Russell 3000 indexes. For additional information, visit the Company’s website at www.penskeautomotive.com.
Additional Information Regarding the Transaction and Where to Find It
This communication relates to the proposed transaction (the “proposed
transaction”) involving the Company and Buyer contemplated by the agreement and plan of merger (the “agreement and plan of merger”) by and between
the Company and Buyer. In connection with the proposed transaction, the Company intends to file a preliminary proxy statement on Schedule 14A (the “Proxy Statement”)
with the Securities and Exchange Commission (the “SEC”) relating to a special meeting of shareholders to approve the proposed transaction. The definitive
proxy statement (if and when available) will be mailed to the Company’s stockholders seeking their approval of the proposed transaction and other related matters. The Company, Buyer and certain of their affiliates also intend to jointly file a
transaction statement on Schedule 13E-3 (the “Schedule 13E-3”) relating to the proposed transaction. The Company may also file other relevant documents with
the SEC regarding the proposed transaction. This communication is not a substitute for the Proxy Statement, Schedule 13E-3, or any other document the Company, Buyer, Penske or Mitsui may file with the SEC in connection with the proposed transaction.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company or any other person or the solicitation of any vote or approval.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO
READ THE DEFINITIVE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO OR INCORPORATED BY REFERENCE THEREIN), THE SCHEDULE 13E-3 (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO OR INCORPORATED BY
REFERENCE THEREIN), AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE PROPOSED TRANSACTION AND RELATED
MATTERS.
Investors and security holders may obtain free copies of these documents, including the
Proxy Statement, Schedule 13E-3 and any other documents containing important information about the Company and the proposed transaction, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. In addition, shareholders of the Company may obtain free copies of such
documents by accessing the Investor Relations portion of the Company’s website at https://investors.penskeautomotive.com/financials/sec-filings.
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Participants in the Solicitation
The Company and certain of its directors, executive officers and other employees may,
under the rules of the SEC, be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of the Company is set forth in the Company’s definitive
proxy statement on Schedule 14A for the 2026 annual meeting of the stockholders of the Company, filed with the SEC on March 20, 2026 (the “Annual Meeting Proxy Statement”), under the sections “Proposal 1 – Election of Directors,”
“Executive Officers,” “Executive Compensation,” “Director Compensation” and “Security Ownership of Certain Beneficial Owners and Management,” and other documents subsequently filed
by the Company with the SEC. Transactions with related persons (as defined in Item 404 of Regulation S-K promulgated under the Securities Act of 1933, as amended) are disclosed under the heading titled “Related Party Transactions” in the
Annual Meeting Proxy Statement. To the extent holdings of securities by potential participants (or the identity of such participants) have changed since the information set forth in the Annual Meeting Proxy Statement, such information has been or
will be reflected on the Company’s Statements of Beneficial Ownership on Forms 3 and 4 filed with the SEC. Updated information regarding the identity of participants and their
direct or indirect interests, by security holdings or otherwise, in the Company will be set forth in the Proxy Statement regarding the approval of the proposed transaction and other relevant documents to be filed with the SEC, including the
Schedule 13E-3, if and when they become available. These documents will be available free of charge as described above.
Cautionary Statement Regarding Forward-Looking Statements
This communication may include statements that are not statements of historical fact, or “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, including with respect to the proposed transaction. In many cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,”
“estimates,” “predicts,” “potential,” “continue” or the negative of such terms and other comparable terminology. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are difficult to predict and are
generally outside the Company’s and Buyer’s control, that could cause actual performance or results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. Such forward-looking statements include,
but are not limited to: the ability of Buyer and the Company to complete the transactions contemplated by the agreement and plan of merger, including the parties’ ability to satisfy the conditions set forth in the agreement and plan of merger;
statements about the expected timetable for completing the transaction, Buyer’s and the Company’s beliefs and expectations and statements about the benefits sought to be achieved in Buyer’s proposed acquisition of the Company, the potential effects
of the acquisition on each of Buyer and the Company; as well as the possibility of any termination of the agreement and plan of merger. These statements are based upon the current beliefs and expectations of Buyer’s and the Company’s management and
are subject to significant risks and uncertainties. There can be no guarantees that the conditions to the closing of the proposed transaction will be satisfied on the expected timetable or at all. If underlying assumptions prove inaccurate or risks
or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Risks and uncertainties include, but are not limited to, uncertainties as to the timing of the proposed transaction; the
possibility that Buyer’s committed debt financing will not be available; uncertainties as to how many of the Company’s shareholders will vote in favor of the proposed transaction; the possibility that various conditions to the consummation of the
proposed transaction may not be satisfied or waived; the ability to obtain necessary regulatory approvals or to obtain them on acceptable terms or within expected timing; the risk that any announcements relating to the proposed transaction could have
adverse effects on the market price of the Company’s common stock, credit ratings or operating results; the effects of disruption from the transactions contemplated by the agreement and plan of merger and the impact of the announcement and pendency
of the transactions on the Company’s business, including the ability of the Company to attract, retain and hire key personnel and to maintain relationships with customers, suppliers and others with whom the Company does business, employee departures,
diversion of management’s time and attention from ordinary course business operations, or certain restrictions during the pendency of the proposed transaction that may impact the Company’s ability to pursue certain business opportunities or strategic
transactions; the risk that shareholder litigation in connection with the proposed transaction may result in significant costs of defense, indemnification and liability; the risk that there may be unexpected costs, charges or expenses resulting from
the proposed transaction; general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; and the impact of tariffs. Additional factors that could cause results to differ
materially from those described in the forward-looking statements can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2026 and
June 30, 2026, and its other filings made with the SEC. These and other filings made by the Company with the SEC are available at www.sec.gov.
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The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the
extent required by law.
Inquiries should contact:
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Shelley Hulgrave
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Anthony Pordon
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Executive Vice President and
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Executive Vice President Investor Relations
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Chief Financial Officer
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and Corporate Development
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Penske Automotive Group, Inc.
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Penske Automotive Group, Inc.
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248-648-2812
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248-648-2540
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shulgrave@penskeautomotive.com
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tpordon@penskeautomotive.com
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