Hertz Global Holdings, Inc 8-K, filed Oct 20, 2026
Hertz Global Holdings, Inc (HTZ)
About this 8-K
Hertz Global Holdings, Inc filed this 8-K on October 20, 2026, reporting on events of October 16, 2026.
Hertz formed an Oro Mobility joint venture, selling investors 50% voting units and approximately 15.86% common units for approximately $80.89 million, and repurchased approximately $51.1 million of 8.000% notes due 2029 for approximately $20.86 million. AI summary
Items reported
- Item 1.01: Entered into a material agreement
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) |
(Commission File Number) | (I.R.S. Employer Identification No.) |
(Address, including Zip Code, and
telephone number, including area code,
of registrant’s principal executive offices)
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former fiscal year, if changed since last report.)
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:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on which Registered | ||||
| Hertz Global Holdings, Inc. | ||||||
| Hertz Global Holdings, Inc. | ||||||
| The Hertz Corporation | None | None | None |
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. |
Transaction Overview
On October 16, 2026, The Hertz Corporation (“Hertz”), a Delaware corporation, and certain investors, including Cohen Private Ventures and certain funds or accounts affiliated with each of Certares Opportunities LLC (“Certares”) and/or Knighthead Capital Management, LLC or an affiliate (“Knighthead”) (all such investors, collectively, the “JV Investors”), entered into a joint venture arrangement (the “Joint Venture”) pursuant to which the JV Investors agreed to purchase Class A Common Units of Oro Mobility Holdings LLC (f/k/a Hertz Mobility Holdings LLC), a Delaware limited liability company (“Oro” or the “JV Entity”) from Hertz, representing 50% of the voting units of the JV Entity and approximately 15.86% of the common units of the JV Entity, for aggregate cash consideration of approximately $80.89 million (the “JV Investor Purchase”). Concurrently, Hertz agreed to repurchase approximately $51.1 million aggregate principal amount of its 8.000% Exchangeable Senior Second-Lien Secured Paid-in-Kind Notes due 2029 (the “2L Notes”) from certain funds or accounts affiliated with Certares and/or Knighthead for approximately $20.86 million, representing a 60% discount to par. In connection with the formation of the Joint Venture, but prior to the JV Investor Purchase, Hertz transferred to Oro certain assets relating to Hertz’s Oro Mobility business (the “Oro Business”) not already owned by Oro, together with approximately $60.03 million in cash. Each of the transactions described herein, including the issuance and sale of up to $100 million of equity units of the JV Entity, was approved by the independent Audit Committee and other disinterested directors of Hertz Global Holdings, Inc.
Contribution Agreement, Purchase Agreement and LLC Agreement
On October 16, 2026, Oro, Hertz and Hertz Transporting, Inc. (“HTI”) entered into a Contribution Agreement (the “Contribution Agreement”) and certain related agreements pursuant to which Oro became the owner of, or acquired the right to use, certain assets related to the Oro Business, and Hertz assigned a 5% interest in Oro to HTI.
On October 16, 2026, Hertz, the JV Entity and the JV Investors entered into a Purchase Agreement (the “Purchase Agreement”) pursuant to which the JV Investors agreed to acquire Class A Common Units from a Hertz entity representing 50% of the voting rights of the JV Entity and approximately 15.86% of the economic rights of the JV Entity (before giving effect to any dilution from the management incentive plan of the JV Entity), for aggregate cash consideration of approximately $80.89 million. The JV Investors paid the consideration for and acquired their Class A Common Units on October 19, 2026.
On October 16, 2026, Hertz, HTI and the JV Investors entered into the Amended and Restated Limited Liability Company Agreement of the JV Entity effective as of October 19, 2026 (the “LLC Agreement”). Pursuant to the terms of the LLC Agreement, the JV Entity will be governed by a six-person board, with each of Hertz and the JV Investors entitled to designate three members.
The foregoing summaries and descriptions of the Contribution Agreement, the Purchase Agreement and the LLC Agreement do not purport to be complete and are subject to, and qualified in their entirety by, the full text of such agreements, copies of which are filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference.
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Services Agreement
On October 19, 2026, in connection with the formation of the Joint Venture, Hertz, the JV Entity and certain of their respective affiliates entered into a Services Agreement (the “Services Agreement”), pursuant to which Hertz agreed to provide certain corporate, operational, fleet, technology and other services to the JV Entity and its subsidiaries. Certain services under the Services Agreement are expected to be provided on an ongoing basis and certain services are expected to be provided on a short-term transitional basis in order to facilitate the independent operation of the Oro Mobility business through the JV Entity, and information technology, corporate security and systems support services are expected to be transitioned to the JV Entity within 12 months.
The Services Agreement also includes a transitional trademark license pursuant to which Hertz grants the JV Entity a limited, sublicensable, non-transferable, royalty-free, non-exclusive license to use the Hertz names and marks in connection with the Oro Business for an initial period ending on the later of the date (i) that is 12 months after the effective date and (ii) on which the JV Entity obtains all required governmental licenses, authorizations, permits, consents and approvals. In addition, the Services Agreement includes a transitional trademark license pursuant to which Hertz grants the JV Entity a limited, sublicensable, non-transferable, royalty-bearing, non-exclusive license to use the Hertz names and marks in connection with certain Oro composite marks including Hertz names and marks, for an initial period of 24 months and subject to extension in accordance with the Services Agreement. With respect to the royalty-bearing license, the JV Entity is required to pay Hertz a royalty equal to 0.5% of new rental customer revenue, determined in accordance with the Services Agreement.
The foregoing summary and description of the Services Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Services Agreement, a copy of which is filed as an exhibit to this Current Report on Form 8-K and incorporated by reference herein.
Fleet Lease Agreement
On October 16, 2026, the JV Entity and certain of its subsidiaries entered into the Master Motor Vehicle Lease Agreement (Operating Lease) and Master Motor Vehicle Operating Sublease Agreement with Hertz (collectively, the “Fleet Lease Agreements”), pursuant to which Hertz agreed to lease or sublease to the JV Entity certain vehicles comprising the fleet used in the Oro Mobility business. The Fleet Lease Agreements include lease and sublease arrangements that permit vehicles subject to Hertz’s existing HVF III fleet financing facility to be subleased to the JV Entity and, upon Hertz’s acquisition of such vehicles from HVF III, transitioned to direct leases with the JV Entity. The Fleet Lease Agreements provide for such vehicles to be leased or subleased, including lease payments of approximately $13.7 million per month, an average term of approximately 4.5 years, and other customary economic terms. Hertz’s existing asset-backed securitization financing facility relating to the fleet may continue to be utilized in the ordinary course, and the JV Entity may over time also enter into alternative financing arrangements, including establishing its own separate asset-backed securitization facility.
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The foregoing summary and description of the Fleet Lease Agreements does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Fleet Lease Agreements, copies of which are expected to be filed as an exhibit to this Current Report on Form 8-K and incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
Press Release
On October 20, 2026, Hertz issued a press release announcing, among other things, certain of the transactions described above, a copy of which is attached as Exhibit 99.1 to this Form 8-K and incorporated by reference herein.
The information furnished in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits*. |
(d) Exhibits.
| * | Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Hertz hereby agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE HERTZ CORPORATION | |||
| Date: October 20, 2026 | |||
| By: | /s/ W. Gil West | ||
| Name: | W. Gil West | ||
| Title: | Chief Executive Officer & Director | ||
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Exhibit 10.1
Execution Version
CONTRIBUTION
AGREEMENT
dated as of
October 16, 2026
among
THE HERTZ CORPORATION,
HERTZ
TRANSPORTING, INC.,
and
ORO MOBILITY HOLDINGS, LLC
TABLE OF CONTENTS
Page
| ARTICLE 1 DEFINITIONS | 1 | |
| Section 1.01. | Definitions | 1 |
| Section 1.02. | Other Definitional and Interpretative Provisions | 9 |
| ARTICLE 2 CONTRIBUTIONS; CASH CONSIDERATION; ISSUANCES OF EQUITY INTERESTS | 10 | |
| Section 2.01. | Oro Contributed Assets | 10 |
| Section 2.02. | Excluded Hertz Assets | 11 |
| Section 2.03. | Oro Assumed Liabilities | 13 |
| Section 2.04. | Excluded Hertz Liabilities | 13 |
| Section 2.05. | Cash Contribution | 14 |
| Section 2.06. | Issuance of Equity Interests | 14 |
| Section 2.07. | Assignment of Contracts and Rights; Shared Contracts | 14 |
| Section 2.08. | Closing | 15 |
| Section 2.09. | Wrong Pockets | 16 |
| Section 2.10. | Delivery of Oro Books and Records | 16 |
| ARTICLE 3 REPRESENTATIONS AND WARRANTIES RELATED TO THE HERTZ PARTIES | 16 | |
| Section 3.01. | Corporate Existence and Power | 16 |
| Section 3.02. | Corporate Authorization | 17 |
| Section 3.03. | Governmental Authorization | 17 |
| Section 3.04. | Noncontravention | 17 |
| Section 3.05. | Required Consents | 17 |
| Section 3.06. | Business Intercompany Contracts | 17 |
| Section 3.07. | Credit Support | 18 |
| ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY | 18 | |
| Section 4.01. | Corporate Existence and Power | 18 |
| Section 4.02. | Corporate Authorization | 18 |
| Section 4.03. | Governmental Authorization | 18 |
| Section 4.04. | Noncontravention | 18 |
| ARTICLE 5 COVENANTS OF THE PARTIES | 19 | |
| Section 5.01. | Best Efforts; Further Assurance | 19 |
| Section 5.02. | Certain Filings | 19 |
| Section 5.03. | Public Announcements | 19 |
| Section 5.04. | Notices of Certain Events | 20 |
| Section 5.05. | Insurance Coverage | 20 |
| Section 5.06. | Credit Support | 20 |
| Section 5.07. | Access; Confidentiality | 21 |
| Section 5.08. | Oro Business Employee Accrued Bonuses | 21 |
| ARTICLE 6 TAX MATTERS | 21 | |
| Section 6.01. | Tax Cooperation; Allocation of Taxes; Certain Refunds | 21 |
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| Section 6.02. | Tax Treatment of the Transactions | 23 |
| Section 6.03. | Tax Contests. | 23 |
| ARTICLE 7 SURVIVAL; INDEMNIFICATION | 23 | |
| Section 7.01. | Survival | 23 |
| Section 7.02. | Indemnification | 24 |
| Section 7.03. | Third Party Claim Procedures | 24 |
| Section 7.04. | Direct Claim Procedures | 25 |
| Section 7.05. | Calculation of Damages | 25 |
| Section 7.06. | Assignment of Claims | 26 |
| Section 7.07. | Exclusivity | 26 |
| Section 7.08. | Treatment of Indemnification Payments | 27 |
| ARTICLE 8 MISCELLANEOUS | 27 | |
| Section 8.01. | Notices | 27 |
| Section 8.02. | Amendments and Waivers | 27 |
| Section 8.03. | Expenses | 28 |
| Section 8.04. | Successors and Assigns | 28 |
| Section 8.05. | Governing Law | 28 |
| Section 8.06. | Jurisdiction | 28 |
| Section 8.07. | WAIVER OF JURY TRIAL | 28 |
| Section 8.08. | Counterparts; Effectiveness; Third Party Beneficiaries | 28 |
| Section 8.09. | Entire Agreement | 29 |
| Section 8.10. | Bulk Sales Laws | 29 |
| Section 8.11. | Severability | 29 |
| Section 8.12. | Disclosure Schedules | 29 |
| Section 8.13. | Specific Performance | 30 |
Exhibits
| Exhibit A | Form of Services Agreement |
| Exhibit B | Form of Assignment and Assumption
Agreement |
| Exhibit C | Form of Fleet Lease Agreements |
| Exhibit D | Form of Real Property Lease Agreements |
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this “Agreement”), dated as of October 16, 2026, among The Hertz Corporation, a Delaware corporation (“THC”), Hertz Transporting, Inc., a Delaware corporation (“HTI” and together with THC each, a “Hertz Member” and collectively, the “Hertz Members”) and Oro Mobility Holdings, LLC (formerly known as Hertz Mobility Holdings, LLC), a Delaware limited liability company (the “Company”).
W I T N E S S E T H :
WHEREAS, the Hertz Members conduct, directly and indirectly through their Subsidiaries (including the Company), the Oro Business;
WHEREAS, the Hertz Members, directly or indirectly, own all of the issued and outstanding Equity Interests of the Company;
WHEREAS, the parties desire that, (i) THC shall contribute the Oro Contributed Assets and the Cash Contribution Amount to the Company (such contributions, collectively, the “THC Contribution”) in exchange for certain Equity Interests in the Company and the Company’s assumption of the Oro Assumed Liabilities and (ii) immediately thereafter THC shall contribute, assign, transfer and convey to HTI, Equity Interests in the Company representing 5.0% of the total outstanding Equity Interests of the Company (such contributions and transfers by THC and HTI in clauses (i) and (ii) collectively, the “Hertz Contributions”); and
WHEREAS, it is intended for the transactions contemplated by this Agreement to be treated for U.S. federal income tax purposes as described in Section 6.02.
NOW, THEREFORE, for other good and valuable consideration, each of the parties hereto, intending to be legally bound, agrees as follows:
Article
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Definitions
Section 1.01. Definitions. As used herein, the following terms have the following meanings:
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such other Person. For purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have correlative meanings. For purposes of this Agreement, (a) neither any Hertz Member nor any of their respective Affiliates shall be deemed to be an Affiliate of the Company and (b) no Person (or any of its Affiliates) holding a direct or indirect minority investment in the Company shall be deemed to be an Affiliate of the Company solely by virtue of such minority investment.
“Ancillary Agreements” means the Services Agreement, the Assignment and Assumption Agreement, the Fleet Lease Agreements and the Real Property Lease Agreements.
“Applicable Law” or “Law” means any applicable transnational, domestic or foreign federal, state, provincial or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority of competent jurisdiction, as amended.
“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
“Cash Contribution Amount” means $60,033,832.00.
“Closing Date” means the date of the Closing.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Group” means the Company, each Subsidiary of the Company and any other Person that is controlled directly or indirectly by the Company.
“Confidential Information” means, with respect to any Person, (a) any proprietary information that is competitively sensitive, material or otherwise of value to such Person and not generally known to the public, including business plan or product planning information, strategies, financial information, information regarding operations, consumer and/or customer relationships, consumer and/or customer profiles, sales estimates, internal performance results relating to the past, present or future business activities of such Person and the consumers, customers, clients and suppliers of such Person, and information relating to filings, plans, correspondence or relationships with regulators, (b) any proprietary scientific or technical information, design, invention, process, procedure, formula, or improvement that is commercially valuable and secret in the sense that its confidentiality affords such Person a competitive advantage over its competitors, and (c) all confidential or proprietary concepts, documentation, reports, data, specifications, computer software, source code, object code, flow charts, databases, inventions, information, and trade secrets, in the case of each of clauses (a), (b), and (c) of this definition, that are related to or used in the business of such Person.
“Contract” means any commitment, contract, subcontract, agreement, lease, sublease, license, sublicense, understanding, sales order, purchase order, instrument, indenture, note or any other legally binding commitment or undertaking, whether oral or written.
“Credit Support” means any letter of credit, guaranty, financial assurance, surety bond, performance bond, or other contractual obligations or credit support.
“Damages” means any and all out of pocket damages, losses, Taxes, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding whether involving a third party claim or a claim solely between the parties hereto), excluding (except to the extent paid to a third party in connection with a Third Party Claim) any damages based on a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization) or any other financial metric (whether trailing, forward or otherwise), punitive, diminution in value, lost profits, speculative, remote, exemplary, special, incidental, indirect or consequential (or similar) damages, losses, liabilities or
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expenses except to the extent recoverable under applicable principles of Delaware contract law because they were the natural, probable and reasonably foreseeable consequence of the relevant breach or action and were not occasioned by the special circumstances relating to the applicable indemnified party hereunder.
“Environmental Laws” means any Applicable Law relating to public or worker health or safety (to the extent relating to exposure to Hazardous Substances), pollution or protection of the environment or the handling, storage, generation, use, disposal, release or threatened release of Hazardous Substances, including pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise Hazardous Substances, wastes or materials.
“Equity Interest” means any (a) shares or units of capital stock or voting or other equity securities, (b) membership interests or units, (c) other interest or participation (including phantom shares, units or interests or equity appreciation rights or equity-based performance units or contracts) that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (d) subscriptions, calls, warrants, options, restricted shares, contingent value rights, rights of first refusal, preemptive or similar rights, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire, any of the interests described in the foregoing clauses (a) through (c), or (e) securities convertible into or exercisable or exchangeable for any of the interests described in the foregoing clauses (a) through (d) or any other equity securities.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended and the rules and regulations promulgated thereunder.
“Fleet Lease Agreement” means the Fleet Lease Agreements between the Company and THC to be entered into at the Closing, substantially in the form attached hereto as Exhibit C.
“GAAP” means generally accepted accounting principles in the United States.
“Governmental Authority” means any transnational, domestic or foreign federal, state, provincial, territorial or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof or arbitral tribunal (public or private).
“Hazardous Substance” means any substance, waste or material listed, defined or classified as a pollutant, contaminant, hazardous substance, toxic substance, hazardous waste or words of similar import or regulatory effect, or for which liability or standards of conduct may be imposed, under any law pertaining to the environment, including petroleum, polychlorinated biphenyls and asbestos.
“Hertz Covered Tax” means any (a) Tax for a Pre-Closing Tax Period (including any Tax allocable to a Pre-Closing Tax Period under Section 6.01(b)) to the extent arising out of the Oro Business or the Oro Contributed Assets but excluding any Tax incurred in connection with the transactions contemplated by this Agreement, (b) Tax arising out of any Excluded Hertz Asset, (c) any Income Taxes of the Hertz Members or any of their respective Affiliates and (d) any Tax of another Person imposed on the Company Group by reason of a pre-acquisition consolidated, combined, unitary, contractual, successor or transferee relationship.
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“Hertz Employee Plan” means any (a) “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA), (b) pension, retirement, profit-sharing, savings, health, disability, life insurance, welfare, bonus, incentive, commission, stock option or other equity or equity-based, deferred compensation, severance, retention, employment, change of control plan or (c) other compensation or benefit plan, policy, program, arrangement, contract or agreement, in each case that is maintained, sponsored, or contributed to or required to be contributed to by the Hertz Members or any of their respective Affiliates for the benefit of any Oro Business Employee.
“Hertz Parties” means each Hertz Member and each Subsidiary of such Hertz Member that has any right, title or interest in the Oro Contributed Assets pursuant to this Agreement, each of which is set forth on Schedule 1.01(a) of the Hertz Disclosure Schedule. For the avoidance of doubt, the Company is not a Hertz Party.
“Income Taxes” means all Taxes based upon, measured by, or calculated with respect to net income or profits (including any gross or net receipts, transfer taxes or other similar Taxes), including any such Taxes that are imposed through withholding.
“Intellectual Property Rights” means any and all intellectual property or similar proprietary rights throughout the world, including (a) patents and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations thereof) issued, registered or applied for in the United States and all other nations throughout the world, and all improvements to the inventions disclosed in each such patent or patent application (collectively, “Patents”), (b) trademarks, service marks, trade dress, logos, domain names, social media accounts and handles, trade names, corporate names and all other designations of commercial source or origin (whether or not registered) in the United States and all other nations throughout the world, including all registrations and applications for registration of the foregoing and all goodwill associated therewith (collectively, “Trademarks”), (c) works of authorship, copyrights (whether or not registered) and registrations and applications for registration thereof in the United States and all other nations throughout the world, including all derivative works, moral rights, renewals, extensions, reversions or restorations associated with such copyrights, now or hereafter provided by law, regardless of the medium of fixation or means of expression, (d) computer program, software, firmware, middleware, applications and other code (including source code, object code, libraries, APIs, tools, compilers, scripts, files, algorithms, models, operating systems and all documentation therefor including specifications) (collectively, “Software”), (e) trade secrets, confidential information, inventions (whether patentable or unpatentable and whether or not reduced to practice), manufacturing and production processes and techniques, specifications, designs, formulas, and, whether or not confidential, business information (including pricing and cost information, business and marketing plans and customer and supplier lists) research and development information and know-how, (f) rights in data, databases and data collections, (g) rights of publicity, privacy and endorsement, (h) industrial designs and registrations and applications for registration thereof throughout the world and (i) all rights to collect royalties, fees and otherwise exploit and to sue or recover and retain damages and costs and attorneys’ fees for past, present and future infringement or misappropriation of any of the foregoing.
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“Investors” means the Lead Investors and the other “Investors” who are party to the Purchase Agreement.
“IT Assets” means computers, Software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, and all other information technology assets or other equipment storing or processing information, including all associated documentation related to any of the foregoing.
“Lead Investors” means CPV Oro, LLC.
“Lien” means, with respect to any property or asset, any mortgage, deed of trust, lien, pledge, charge, statutory or deemed trust, preferential right to purchase, third party consent to transfer, security interest or encumbrance in respect of such property or asset, right of first offer, option, right of first refusal, easement, claim, indenture, rights of way, restrictions on the use of real property, encroachments, licenses to third parties, leases to third parties, security agreements, or other adverse claim of any kind in respect of such property or asset, including, in the case of any shares of capital stock, any limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such shares).
“Material Adverse Effect” means any change, effect, event, state of facts, circumstance or occurrence that (x) is or would reasonably be expected to be, materially adverse to the condition, business or results of operations of the Company Group or the Oro Business, taken as a whole, or (y) would reasonably be expected to materially delay or prevent the consummation of the transactions contemplated hereby excluding, in the case of clause (x), any effect resulting from (a) changes in GAAP or changes in the regulatory accounting standards, principles or requirements (or in the enforcement, implementation or authoritative interpretations thereof) applicable to any industry in which the Oro Business operates, (b) changes in the general economic, regulatory or political conditions generally and any anti-dumping actions, tariffs, sanctions, trade policies or disputes or any “trade war” or similar actions in the United States or any other country or region in the world, (c) changes in the financial or securities markets, including in interest rates or currency exchange rates, (d) changes (including changes of Applicable Law) or conditions generally affecting the industry in which the Oro Business operates or the industries in which suppliers, customers or collaboration partners of the Oro Business operate, (e) acts of war, sabotage or terrorism, cyber-attacks or natural disasters (including earthquakes, floods, hurricanes, tornadoes, natural disasters or other “acts of God”) or any escalation or worsening thereof, (f) the negotiation of this Agreement, (g) the announcement or pendency or of the transactions contemplated hereby, (h) any failure to meet any internal, analyst or industry estimates, forecasts or projections for any period (it being understood that the underlying facts giving rise or contributing to such failure may be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect, unless it is otherwise excluded from the definition thereof pursuant to any other clause) or (i) any action taken by any Hertz Member or the Company that is required, expressly contemplated or permitted pursuant to this Agreement, except in the case of clauses (a), (b), (c), (d) and (e) to the extent that such adverse changes, effects, events, states of facts, circumstances or occurrences have a disproportionately adverse impact on the Oro Business as compared to other participants in the industry in which the Oro Business operates (in which case, only the incremental disproportionate effect or effects may be taken into account in determining whether there has been a Material Adverse Effect).
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“Oro Assets” means any Oro Contributed Asset and any asset of the Company or its Subsidiaries.
“Oro Balance Sheet” means the balance sheet of the Oro Business as of the Oro Balance Sheet Date.
“Oro Balance Sheet Date” means August 31, 2026.
“Oro Business” means the business, operations, and activities conducted by Oro Mobility Holdings and each of its Subsidiaries as it exists as of the date hereof related to (i) the operation and management of Oro employee-operated vehicle fleets on mobility, transportation, delivery, and app-based Transportation Network Company (“TNC”) platforms (e.g., Uber and Lyft) within the United States; (ii) the rental, leasing, subscription, provision or management of vehicles provided to independent drivers, couriers, gig-economy workers, or other individual service providers solely for the purpose of operating on TNC platforms within the United States; and (iii) the provision of fleet management, fleet operations, and fleet support services for autonomous vehicles operated on TNC platforms in the United States and internationally (excluding China).
“Oro Business Employee” means (a) any employee of the Company Group and (b) any individual employed by the Hertz Members or any of their respective Affiliates (other than a member of the Company Group) who devotes substantially all of his or her working time to performing services on behalf of the Oro Business.
“Oro Business Intercompany Contracts” means Contracts between a Hertz Member or its Affiliates (other than the Company Group), on the one hand, and a member of the Company Group, on the other hand.
“Permit” means any license, permit, approval, consent, certification, franchise, registration, grant, or authorization that has been issued by or obtained from any Governmental Authority.
“Permitted Liens” means (a) mechanics, materialmen’s and similar Liens for labor provided in the ordinary course of business with respect to any amounts not yet due and payable as of the Closing Date, (b) Liens for Taxes not yet due and payable as of the Closing Date or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with applicable accounting principles, (c) Liens securing rental payments under capital lease agreements, (d) Liens on real property that (i) are matters of public record and (ii) do not materially detract from the value of, or otherwise impair or interfere with, the present uses or occupancy of such real property, (e) to the extent fully terminated in connection with the Closing, Liens securing payment, or any other obligations, or the Hertz Contributions, as applicable, (f) Liens constituting a lease, sublease or occupancy agreement that gives any third party any right to occupy any real property; provided that such agreements do not contain any rights of first refusal, rights of first offer or purchase options, (g) Liens constituting non-exclusive licenses of Intellectual Property Rights granted to customers, vendors or service providers in the ordinary course of business, (h) Liens referred to in the Oro Balance Sheet and set forth on the Hertz Disclosure Schedule, (i) Liens described in Section 1.01(b) of the Hertz Disclosure Schedule
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and (j) other Liens, if any, that would not individually or in the aggregate be material to the Oro Business, taken as a whole.
“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.
“Pre-Closing Tax Period” means (a) any Tax period ending on or before the Closing Date and (b) with respect to a Straddle Period, the portion of such Straddle Period up to and including the Closing Date.
“Purchase Agreement” means that certain Purchase Agreement dated October 16, 2026 by and between the Investors and THC, pursuant to which the Investors agreed to purchase interests in the Company, on and pursuant to the terms thereof.
“Real Property Lease Agreements” means the Real Property Lease Agreements between the Company and THC to be entered into at the Closing, substantially in the form attached hereto as Exhibit D.
“Retained Business” means any business now, previously or hereafter conducted by THC and its Subsidiaries, other than the Oro Business.
“Services Agreement” means a Services Agreement between the Company and THC to be entered into at the Closing, substantially in the form attached hereto as Exhibit A.
“Shared Contracts” means the Contracts entered between (a) THC and/or its Affiliates, (b) the Company or one of its Subsidiaries and (c) one or more third parties that directly benefit both (i) the Oro Business and (ii) the Retained Business, each of which is set forth on Section 1.01(c) of the Hertz Disclosure Schedule.
“Specified Rental Contracts” means each Contract set forth on Section 1.01(d) of the Hertz Disclosure Schedule.
“Straddle Period” means any Tax period beginning on or before and ending after the Closing Date.
“Subsidiary” means, with respect to any Person, another Person, an amount of the voting securities or other voting ownership interests of which is sufficient, together with any contractual rights, to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.
“Tax” means (a) any federal, state, local, foreign or other tax, levy, impost, duty, fee, assessment or other governmental charge of any kind whatsoever (including income, profits, premium, disability, alternative minimum, add-on minimum, stamp, value added, goods and services, estimated, excise, sales, use, occupancy, gross receipts, franchise, capital stock, net worth, ad valorem, severance, capital levy, production, transfer, documentary, registration, recording, real property transfer and gains, license, environmental, windfall profits, customs, employment, social security (or similar), employer health, unemployment compensation, payroll-
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related and real and personal property taxes), import duties, levy, impost, duty, governmental fee or assessment or other governmental assessment or charge of any kind whatsoever (including withholding on amounts paid to or by any Person), together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority (a “Taxing Authority”) responsible for the imposition, administration or collection of any of the foregoing.
“Tax Return” means any federal, state, local, foreign or other applicable return, report, claim for refund, information return or statement or other document (including any related or supporting schedules, statements or information) with respect to any Tax filed or required to be filed with the U.S. Internal Revenue Service, or any other Taxing Authority in connection with the determination, assessment, payment or collection of any Tax of any Person or the administration of any laws, regulations or administrative requirements relating to any Tax.
“Transaction Expenses” means, without duplication, all liabilities (except for any Taxes) incurred by any party hereto and their Affiliates (which in the case of the Hertz Members shall include the Company for all periods prior to the Closing) for fees, expenses, costs or charges as a result of the contemplation, negotiation, efforts to consummate or consummation of the transactions contemplated by this Agreement, including any fees and expenses of investment bankers, attorneys, accountants or other advisors, and any fees payable by such parties to Governmental Authorities or other third parties, in each case, in connection with the consummation of the transactions contemplated by this Agreement.
“Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code.
Each of the following terms is defined in the Section set forth opposite such term:
| Term | Section |
| Agreement | Preamble |
| Assignment and Assumption Agreement | 2.08(a) |
| Closing | 2.08 |
| Company | Preamble |
| Company Disclosure Schedule | 8.12 |
| Company Indemnified Parties | 7.02(a)(ii) |
| 8.01 | |
| Excluded Hertz Assets | 2.02 |
| Excluded Hertz Liabilities | 2.04 |
| Hertz Affiliate Assignment | 2.08(a) |
| Hertz Contributions | Recitals |
| Hertz Credit Support | 3.07(a) |
| Hertz Disclosure Schedule | 8.12 |
| Hertz Indemnified Parties | Section 7.02(a) |
| Hertz Member(s) | Preamble |
| Hertz Required Consents | 3.05 |
| Hertz Retained Policies | 5.05 |
| HTI | Preamble |
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| Indemnified Party | Section 7.03 |
| Indemnifying Party | Section 7.03 |
| Intended Tax Treatment | 6.02(a) |
| Leases | 2.01(a) |
| Oro Assumed Liabilities | 2.03 |
| Oro Books and Records | 2.01(g) |
| Oro Contributed Assets | 2.01 |
| Oro Contributed Contracts | 2.01(e) |
| Oro Data | 2.01(h) |
| Oro Transferred IP | 2.01(c) |
| Policy Claims | 5.05 |
| Potential Contributor | Section 7.06 |
| Recovery Costs | 5.05 |
| Rental Facilities | 2.01(a) |
| Tax Benefit | Section 7.05 |
| Taxing Authority | 1.01 |
| THC | Preamble |
| THC Contribution | Recitals |
| Third Party Claims | Section 7.03 |
| TNC | Section 1.01 |
Section 1.02. Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “or”, “either” and “any” shall not be construed as exclusive. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to “dollars” or “$” means United States dollars. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” shall be deemed also to include any and all
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Applicable Law. Wherever from the context it appears appropriate, pronouns stated in the masculine, feminine or neuter shall include the masculine, feminine and neuter. The provisions of this Agreement shall apply to successive events and transactions. If any time period for giving notice or taking action hereunder expires on a day that is not a Business Day, the time period for such notice or action shall automatically be extended to the next Business Day following such day.
Article
2
Contributions; Cash Consideration; Issuances of Equity Interests
Section 2.01. Oro Contributed Assets. Except as otherwise provided herein, upon the terms and subject to the conditions of this Agreement, at the Closing, the Hertz Members agree to contribute, convey, transfer, assign and deliver, or to cause to be contributed, conveyed, transferred, assigned and delivered, to the Company, and the Company agrees to accept, free and clear of all Liens, other than Permitted Liens, all of the Hertz Parties’ right, title and interest in, to and under any assets, properties or rights primarily related to or primarily used or practiced or held for use or practice in the conduct of the Oro Business, of whatever sort, nature or description, whether intangible or tangible, real, personal or mixed, wherever located, other than the Excluded Hertz Assets (collectively, the “Oro Contributed Assets”). Without limiting the generality of the foregoing, the Oro Contributed Assets shall include:
(a) all interests in all leases, subleases, licenses and occupancy agreements to real property listed in Section 2.01(a) of the Hertz Disclosure Schedule, (collectively, the “Leases”) and, to the extent covered by such Leases, any and all buildings, structures, improvements and fixtures located thereon (collectively, the “Rental Facilities”);
(b) all interests in personal property, fixtures, machinery, furniture, office equipment, special and general tools, and other tangible personal property (other than any Intellectual Property Rights or landlord-owned fixtures and improvements) used or held for use in the Oro Business;
(c) all Intellectual Property Rights (i) owned by any Hertz Party as of the Closing and (ii) primarily related to or primarily used or practiced or held for use or practice by the Oro Business (collectively, the “Oro Transferred IP”);
(d) all IT Assets (i) owned by any Hertz Party as of the Closing Date and (ii) primarily related to or primarily used or held for use in the Oro Business, including the IT Assets listed in Section 2.01(d) of the Hertz Disclosure Schedule;
(e) (i) all Contracts (excluding Contracts relating to Intellectual Property Rights or IT Assets) and any rights thereunder, in each case to the extent primarily related to or primarily used or held for use in the Oro Business, and (ii) all Contracts relating to Intellectual Property Rights and IT Assets used or practiced or held for use or practice by the Oro Business, including the Contracts listed in Section 2.01(e) of the Hertz Disclosure Schedule (collectively, the “Oro Contributed Contracts”);
(f) all Permits primarily related to or primarily used or held for use by the Oro Business, including the Permits listed in Section 2.01(f) of the Hertz Disclosure Schedule;
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(g) all accounting and other legal, financial, Tax and business books, records, correspondence, minute books, corporate documents, ledgers and files and all personnel records, in each case, whether printed, electronic, contained on storage media or written, or in any other form relating to the Oro Business, and all tangible embodiments of the Oro Transferred IP set forth in Section 2.01(c) of this Agreement and tangible IT Assets set forth in Section 2.01(d) of this Agreement, (the “Oro Books and Records”); provided that, to the extent any of the Oro Books and Records do not exclusively relate to or are not held exclusively for use in connection with the Oro Business, THC will transfer such Oro Books and Records as promptly as reasonably practicable post-Closing and until such time will provide access to such Oro Books and Records under the Services Agreement; provided further that the Oro Contributed Assets shall not include (1) any Tax records of either Hertz Member or any of their respective Affiliates related to Income Taxes, including any consolidated, combined, affiliated or unitary Tax Return that includes any Hertz Member or any of their respective Affiliates, or (2) any Tax records that are not specifically related to the Oro Assets, as determined by THC in its sole discretion;
(h) (i) all Confidential Information, (ii) all cost information, sales and pricing data, supplier records, supplier lists, vendor data, customer data, correspondence and lists, and (iii) all product and services data and literature, brochures, marketing and sales literature, advertising catalogues, photographs, display materials, media materials, packaging materials, artwork, designs, formulations and specifications, quality records and reports, in each case, used or held for use in connection with the Oro Business (the “Oro Data”); provided that, to the extent any of the Oro Data does not exclusively relate to or is not held exclusively for use in connection with the Oro Business, Hertz will transfer such Oro Data as promptly as reasonably practicable post-Closing and until such time will provide access to such Oro Data under the Services Agreement;
(i) any assets, rights or properties included in the Oro Balance Sheet;
(j) all causes of action against third parties to the extent relating to the Oro Contributed Assets or Oro Assumed Liabilities; and
(k) all accounting goodwill associated with the Oro Business or the Oro Contributed Assets included in the Oro Balance Sheet.
Section 2.02. Excluded Hertz Assets. The Company expressly understands and agrees that all assets of the Hertz Parties that are not Oro Contributed Assets shall be excluded from the THC Contribution (collectively, the “Excluded Hertz Assets”). Without limiting the generality of the foregoing, the Excluded Hertz Assets shall include the following assets and properties of the Hertz Members or their respective Affiliates (or any of their predecessors):
(a) all of the Hertz Parties’ cash and cash equivalents on hand and in banks other than cash and cash equivalents included in the Oro Balance Sheet;
(b) all current assets, including accounts, notes and other receivables, of the Hertz Members or any of their respective Affiliates other than all accounts receivable in respect of the TNC business included in the Oro Balance Sheet;
(c) other than the Oro Contributed Contracts, all Contracts of the Hertz Parties or any of their Affiliates;
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(d) all insurance policies of the Hertz Parties or any of their Affiliates and all claims, credits, causes of action or rights thereunder (other than, in the case of claims, credits, causes of action or rights thereunder, to the extent primarily related to the Oro Contributed Assets or Oro Business or otherwise contemplated by Section 5.05);
(e) all Intellectual Property Rights owned by or licensed to the Hertz Parties or any of their Affiliates, other than the Oro Transferred IP or Oro Contributed Contracts;
(f) all books, records, files and papers, whether in hard copy or computer format, prepared in connection with this Agreement or the transactions contemplated hereby and all minute books and corporate records of the Hertz Parties and their Affiliates that are not used in the Oro Business;
(g) all causes of action against third parties to the extent relating to the Excluded Hertz Assets or the Excluded Hertz Liabilities;
(h) all rights of the Hertz Members arising under this Agreement or the transactions contemplated hereby;
(i) all claims for Tax refunds, and all other Tax assets, in each case, associated with the Hertz Covered Taxes (or otherwise attributable to Taxes economically borne by the Hertz Members or their respective Affiliates);
(j) all Tax Returns of the Hertz Parties and their Affiliates and all other Tax-related documents of the Hertz Parties and their Affiliates, including any consolidated, combined, affiliated or unitary Tax Return that includes the Hertz Members or any of their respective Affiliates;
(k) the personnel records (including all human resources and other records) of the Hertz Members and their respective Affiliates relating to employees of the Hertz Members and their respective Affiliates, other than the Oro Business Employees;
(l) all assets related to the Hertz Employee Plans and any other benefit or compensation plan, program, agreement, contract, policy or arrangement at any time maintained, sponsored or contributed or required to be contributed to by the Hertz Members or any of their respective Affiliates or with respect to which the Hertz Members or any of their respective Affiliates has any current or contingent liability or obligation;
(m) any Oro Contributed Assets sold or otherwise disposed of in the ordinary course of business prior to the date hereof; and
(n) fee title to all real property owned by THC or its Affiliates, including the sites to be leased to the Company at the Closing and any buildings, fixtures and improvements owned by the landlord, whether or not listed on Section 2.01(a) of the Hertz Disclosure Schedule, and any other real property or facility currently or formerly owned, leased, operated, occupied or used by the Hertz Members or their respective Affiliates (or any of their predecessors) (including with respect to the Oro Business), or at which the Hertz Members or their respective Affiliates (or
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any of their predecessors) formerly provided any services (including with respect to the Oro Business), that is not listed on Section 2.01(a) of the Hertz Disclosure Schedule.
Section 2.03. Oro Assumed Liabilities. Upon the terms and subject to the conditions of this Agreement, the Company agrees, at the Closing, to assume all debts, obligations and liabilities of the Hertz Parties (or any predecessor of the Hertz Parties or any prior owner of all or part of their businesses and assets) of any kind, character or description (whether known or unknown, accrued, absolute, contingent or otherwise and whether arising before, on or after the Closing) to the extent relating to, arising out of or in connection with or resulting from (x) the Oro Contributed Assets or (y) the conduct of the Oro Business, in each case in accordance with their terms, regardless of when or where such debts, obligations or liabilities arose, whether the facts on which they are based occurred prior to or subsequent to the Closing, where or against whom such liabilities are asserted or determined or whether asserted or determined prior to the date hereof, and in each case except for the Excluded Hertz Liabilities (the “Oro Assumed Liabilities”). Without limiting the generality of the foregoing, the Oro Assumed Liabilities shall include:
(a) all liabilities set forth on the Oro Balance Sheet to the extent not satisfied prior to the Closing Date;
(b) all liabilities and obligations of the Hertz Parties or any of their Affiliates arising under the Oro Contributed Contracts;
(c) all liabilities and obligations arising out of any action, suit, investigation or proceeding to the extent relating to or arising out of the Oro Contributed Assets or the conduct of Oro Business to the extent relating to the Oro Contributed Assets before any arbitrator or any Governmental Authority; and
(d) all liabilities and obligations with respect to each Oro Business Employee, other than any such liabilities and obligations that are Excluded Hertz Liabilities pursuant to Section 2.04(b).
For the avoidance of doubt this Section 2.03 in no way limits the liabilities and obligations of THC under the Ancillary Agreements.
Section 2.04. Excluded Hertz Liabilities. Notwithstanding any provision in this Agreement or any other writing to the contrary, the Company is assuming from the Hertz Parties only the Oro Assumed Liabilities and is not assuming any other debt, liability or obligation of the Hertz Parties of whatever nature, whether presently in existence or arising hereafter. All such other liabilities and obligations shall be retained by and remain obligations and liabilities of the Hertz Parties, in each case in accordance with their terms, regardless of when or where such debts, obligations or liabilities arose, whether the facts on which they are based occurred prior to or subsequent to the Closing, where or against whom such liabilities are asserted or determined or whether asserted or determined prior to the date hereof (all such liabilities and obligations not being assumed being herein referred to as the “Excluded Hertz Liabilities”). Without limiting the generality of the foregoing, and notwithstanding any provision in this Agreement or any other writing to the contrary, Excluded Hertz Liabilities (which shall not be assumed by the Company) include:
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(a) any liability or obligation for Hertz Covered Taxes;
(b) (i) all liabilities and obligations related to the Hertz Employee Plans and any other benefit or compensation plan, program, agreement, contract, policy or arrangement at any time maintained, sponsored or contributed or required to be contributed to by the Hertz Members or any of their respective Affiliates or with respect to which any Hertz Member or any of their respective Affiliates has any current or contingent liability or obligation and (ii) all liabilities with respect to Oro Business Employees incurred, accrued or owed to such employees prior to the Closing;
(c) any liability or obligation relating to or arising out of the Excluded Hertz Assets;
(d) Transaction Expenses of the Hertz Members and their respective Affiliates (including the Company prior to the Closing); and
(e) all accounts payable and other current liabilities existing as of the Closing Date.
Section 2.05. Cash Contribution. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Hertz Members agree to contribute, convey, transfer, assign and deliver, or to cause to be contributed, conveyed, transferred, assigned and delivered, to the Company, and the Company shall accept, the Cash Contribution Amount.
Section 2.06. Issuance of Equity Interests. In exchange for the THC Contribution on the Closing Date, the Company shall issue the Equity Interests as provided in Section 2.08 to the applicable Hertz Members.
Section 2.07. Assignment of Contracts and Rights; Shared Contracts.
(a) Notwithstanding the foregoing or anything else in this Agreement to the contrary, this Agreement shall not constitute an agreement to assign any Oro Contributed Asset or any right thereunder if an attempted assignment, without the consent of, or other action by, any third party (including any Governmental Authority), would constitute a breach thereunder or in any way materially and adversely affect the rights or obligations of the Hertz Members or the Company or any of their respective Affiliates thereunder or violate any Applicable Law. If such consent is not obtained, the Hertz Members and the Company, will (and will cause their applicable Subsidiaries to) cooperate in a mutually agreeable arrangement under which the Company would obtain the benefits and assume the obligations thereunder in accordance with this Agreement with no additional cost to the Company. With respect to any Specified Rental Contract and subject to applicable sublicensing requirements, (x) such arrangement shall provide the Company the rights and obligations under such Specified Rental Contract to the same extent as if such Specified Rental Contract were assigned to and held by the Company, (y) any proceeds received by the Hertz Members or their respective Affiliates pursuant to or in connection with such Specified Rental Contract, net of any reasonable, documented out-of-pocket costs or expenses incurred by the Hertz Members or their respective Affiliates in connection with collecting, receiving, holding and transferring such amounts shall be deemed to be owned by the Company, promptly transferred by a Hertz Member or such Affiliate to the Company upon receipt and, prior to any such transfer in
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accordance with this clause (y), be held by such Hertz Member or such Affiliate in trust for the use and benefit of the Company.
(b) The Hertz Members and the Company shall use their respective commercially reasonable efforts to cause each Shared Contract to be appropriately amended or modified (or to cause a new replacement Contract to be entered into) so that the Company shall be entitled to the economic rights and benefits, and shall be responsible for any related economic burden, relating to the Oro Business thereunder, and the Hertz Parties shall be entitled to the economic rights and benefits, and shall be responsible for any related economic burden, relating to the balance of the subject matter of such Shared Contract. If any such Shared Contract cannot be so amended (and a new Contract cannot be entered into), or if either of the foregoing would impair the benefits that the Hertz Parties or the Company would expect to derive from such materially amended Shared Contract, then the Hertz Members and the Company shall cooperate in good faith to enter into any lawful and commercially reasonable arrangements mutually agreed by the Hertz Parties and the Company under which the Company shall be entitled to the economic rights and benefits, and shall be responsible for any related economic burden, relating to the Oro Business thereunder, and the Hertz Parties shall be entitled to the economic rights and benefits, and shall be responsible for any related economic burden, relating to the balance of the subject matter of such Shared Contract (without breaching such Shared Contract, infringing upon the legal rights of any third party or violating any Applicable Law).
Section 2.08. Closing. The closing (the “Closing”) of the Hertz Contributions shall take place at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York or remotely by exchange of documents and signatures (or their electronic counterparts), simultaneously with the execution and delivery of this Agreement, and shall be deemed to have occurred effective as of the date hereof. At the Closing, the Hertz Contributions shall occur in the order set forth below, notwithstanding that the instruments effecting such transactions may be executed and delivered concurrently, each shall be deemed to have occurred in such order:
(a) simultaneously with the transactions contemplated by Section 2.08(b), in connection with the Hertz Contributions, (x) THC shall contribute the Oro Contributed Assets to the Company and shall deliver the Cash Contribution Amount in immediately available funds by wire transfer to an account designated by the Company and (y) THC shall, and shall cause the Company to, enter into an assignment and assumption agreement substantially in the form attached hereto as Exhibit B (the “Assignment and Assumption Agreement”), and, subject to the provisions hereof, THC shall cause all Persons involved with the Hertz Contributions to deliver such deeds, bills of sale, endorsements, consents, assignments and other good and sufficient instruments of conveyance and assignment as the parties, the Lead Investors and their respective counsel shall deem reasonably necessary to ultimately vest in the Company (or its applicable Subsidiary) all right, title and interest in, to and under the Oro Contributed Assets;
(b) simultaneously with the transactions contemplated by Section 2.08(a), in connection with the THC Contribution, the Company shall issue and deliver to THC Equity Interests in the Company having a value equal to the Oro Contributed Assets, plus the Cash Contribution Amount, net of the Oro Assumed Liabilities; and
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(c) immediately after the consummation of the transactions contemplated by Section 2.08(a) and Section 2.08(b), THC shall contribute, assign, transfer and convey to HTI Equity Interests in the Company representing 5.0% of the total outstanding Equity Interests of the Company, free and clear of all Liens (the “Hertz Affiliate Assignment”). THC and HTI shall execute and deliver such consents, assignments and other good and sufficient instruments of conveyance and assignment as may be reasonably necessary to effect the Hertz Affiliate Assignment.
Section 2.09. Wrong Pockets. If the Hertz Members, the Company or any Investors, on behalf of the Investors, become aware that (a) any of the Oro Contributed Assets has not been transferred to the Company, (b) any of the Excluded Hertz Assets has been transferred to the Company, (c) any of the Oro Assumed Liabilities has not been assumed by the Company or (d) any of the Excluded Hertz Liabilities has been assumed by the Company, the Company or the applicable Hertz Member, as applicable, in reasonable consultation with the Lead Investors (on behalf of the Investors), shall promptly notify the other such parties and shall, as soon as reasonably practicable, ensure that such property or liability is transferred or assumed, as applicable, with any necessary prior consent or approval of a Governmental Authority or other third party, to or by (x) the Company, in the case of any Oro Contributed Asset which was not transferred to the Company at the Closing or any Oro Assumed Liability which was not assumed by the Company at the Closing; or (y) the applicable Hertz Party, in the case of any Excluded Hertz Asset which was transferred to the Company at the Closing or any Excluded Hertz Liability which was assumed by the Company at the Closing. Pending any such transfer or assumption, (i) the party holding (or whose Affiliate is holding) a misallocated asset shall hold such asset for the use and benefit of the party entitled to it hereunder, and (ii) the party that has assumed or retained a misallocated liability shall be responsible for such liability for the benefit of the party properly responsible for it hereunder, in each case at the cost and for the account of the party properly entitled to such asset or properly responsible for such liability, as applicable.
Section 2.10. Delivery of Oro Books and Records(a). Subject to Section 2.01(g), at the Closing, the Hertz Members will deliver to the Company the Oro Books and Records to the extent not already in the possession of the Company (or another member of the Company Group).
Article
3
Representations and Warranties related to the Hertz parties
Except as set forth in the Hertz Disclosure Schedule, each Hertz Member represents and warrants to the Company that:
Section 3.01. Corporate Existence and Power. THC is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted. Each of the other Hertz Parties is a Person duly formed, validly existing and in good standing under the laws of its jurisdiction of formation and has all corporate or other organizational powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted.
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Section 3.02. Corporate Authorization. The execution, delivery and performance by each of the Hertz Parties of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby are within such Hertz Party’s organizational powers and have been duly authorized by all necessary action on the part of such Hertz Party. This Agreement constitutes a valid and binding agreement of the Hertz Members and the Ancillary Agreements to which any Hertz Party is a party, when executed, will constitute a valid and binding agreement of such Hertz Party, in each case enforceable against such Hertz Party in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).
Section 3.03. Governmental Authorization. The execution, delivery and performance by each of the Hertz Parties of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority other than (a) compliance with any applicable requirements of the securities laws and (b) any action or filing as to which the failure to make or obtain would not reasonably be expected to have a material adverse effect.
Section 3.04. Noncontravention. Execution, delivery and performance by a Hertz Party of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate the organizational documents of the Company, (b) assuming compliance with the matters referred to in Section 3.03, violate any Applicable Law, (c) assuming the obtaining of all Hertz Required Consents, require any consent or other action by any Person under, result in a breach of, constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation or to a loss of any benefit relating to the Oro Business or (d) result in the creation or imposition of any Lien on any Oro Asset, except for Permitted Liens, with such exceptions, in the case of each of clauses (c) and (d), as would not have, individually or in the aggregate, a material impact on the Company or the Oro Business.
Section 3.05. Required Consents. Section 3.05 of the Hertz Disclosure Schedule sets forth each agreement or other instrument binding upon the Hertz Parties or the Company requiring a consent or other action by any Person as a result of the execution, delivery and performance of this Agreement, except such agreements or instruments which are not, individually or in the aggregate, material to the Oro Business taken as a whole (the “Hertz Required Consents”).
Section 3.06. Business Intercompany Contracts.
(a) Section 3.06(a) of the Hertz Disclosure Schedule sets forth each Shared Contract that is an Oro Contributed Asset.
(b) Section 3.06(b) of the Hertz Disclosure Schedule sets forth each Shared Contract that is an Excluded Hertz Asset.
(c) Other than Shared Contracts that are Oro Contributed Assets, the Company and its Subsidiaries do not own any properties or assets used by the Retained Business.
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(d) Section 3.06(d) of the Hertz Disclosure Schedule sets forth all Oro Business Intercompany Contracts.
Section 3.07. Credit Support.
(a) Section 3.07(a) of the Hertz Disclosure Schedule sets forth all Credit Support provided by the Hertz Members or their Affiliates with respect to the Oro Business (“Hertz Credit Support”).
(b) Section 3.07(b) of the Hertz Disclosure Schedule sets forth all Credit Support provided by the Company Group with respect to the Oro Business.
Article
4
Representations and Warranties of the Company
Except as set forth in the Company Disclosure Schedule, the Company represents and warrants to the Hertz Members that:
Section 4.01. Corporate Existence and Power. The Company and each of its Subsidiaries is a legal entity, duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization and has all organizational powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which would not have a Material Adverse Effect.
Section 4.02. Corporate Authorization. The execution, delivery and performance by the Company of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby are within the Company’s organizational powers and have been duly authorized by all necessary limited liability company action on the part of the Company. This Agreement constitutes a valid and binding agreement of the Company and the Ancillary Agreements to which it is a party, when executed, will constitute a valid and binding agreement of the Company, in each case enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).
Section 4.03. Governmental Authorization. The execution, delivery and performance by such Hertz Member and the Company of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority other than (a) compliance with any applicable requirements of the securities laws and (b) any action or filing as to which the failure to make or obtain would not have a Material Adverse Effect.
Section 4.04. Noncontravention. The execution, delivery and performance by such Hertz Member and the Company of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate the certificate of incorporation, bylaws, or operating agremeent of such Hertz Member or the Company, respectively, (b) assuming compliance with the matters referred to in Section 3.03,
18
violate any Applicable Law, (c) assuming the obtaining of all Hertz Required Consents, constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation or to a loss of any benefit relating to the Oro Business or (d) result in the creation or imposition of any Lien on any Oro Asset, except for Permitted Liens, with such exceptions, in the case of each of clauses (c) and (d), as would not have, individually or in the aggregate, a Material Adverse Effect.
Article
5
Covenants of the Parties
The parties hereto agree that:
Section 5.01. Best Efforts; Further Assurance. Subject to the terms and conditions of this Agreement, and from the execution and delivery of this Agreement and from time to time after the Closing: (a) the parties hereto shall use their respective best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under Applicable Law to consummate the transactions contemplated by this Agreement and the Ancillary Agreements as soon as practicable, and (b) the parties hereto agree to use their reasonable best efforts to execute and deliver, at no cost to the other party, such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement and the Ancillary Agreements.
Section 5.02. Certain Filings. Subject to the terms and conditions of this Agreement, from the execution and delivery of this Agreement and from time to time after the Closing, the parties hereto shall cooperate with one another in determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers. The Hertz Members shall each have responsibility for their respective filing fees associated with any other required filings.
Section 5.03. Public Announcements. The parties agree to consult with each other and the Lead Investors, on behalf of the Investors, before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except for any press releases and public statements the making of which may be required by Applicable Law or any listing agreement with any national securities exchange, will not issue any such press release or make any such public statement without such other Persons’ consent (not to be unreasonably withheld, conditioned or delayed).
19
Section 5.04. Notices of Certain Events. Each party hereto shall promptly notify the other parties hereto and the Lead Investors of:
(a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; and
(b) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement.
Section 5.05. Insurance Coverage. From and after the Closing, subject to any applicable provisions of the Services Agreement, the Oro Business shall continue to be insured by the Hertz Parties’ insurance policies or by any of their self-insurance programs and the Hertz Parties shall retain all rights to control such insurance policies and self-insurance programs, including the right to exhaust, settle, release, commute, buy back or otherwise resolve disputes with respect to any of its insurance policies and self-insurance programs. The parties acknowledge that the Oro Business shall be entitled to the benefit of coverage under the insurance policies made available through the Hertz Parties (the “Hertz Retained Policies”) with respect to acts, facts, circumstances or omissions occurring prior to or after the Closing, and the Hertz Members agree to make such applicable claims on the Company Group’s behalf (“Policy Claims”). With respect to any Policy Claims made pursuant to the preceding sentence, whether reported to the applicable insurance provider by a Hertz Party or by a member of the Company Group, each party shall, and shall cause its respective Affiliates to, use commercially reasonable efforts to obtain the benefit of the applicable insurance coverage and pay such benefit, if any, to the Company Group (net of any Recovery Costs incurred by the Hertz Members as a result of the same); provided that (x) without modifying the allocation of assets and liabilities set forth in Article 2, the Company shall be fully liable for all uninsured or self-insured amounts in respect of any Policy Claims and (y) the Company agrees to reimburse the Hertz Members promptly upon request for all reasonable out-of-pocket costs or expenses incurred by the Hertz Members or any of their respective Affiliates in connection with making or pursuing any claim pursuant to this Section 5.05, including the costs of filing a claim and any deductibles, premium increases to the extent such increase is solely related to such Policy Claim or other amounts that are or become payable by the Hertz Members or any of their respective Affiliates under the applicable insurance policies or self-insurance programs directly as a result of claims made pursuant to this Section 5.05 (such costs and expenses referred to in this clause (y), “Recovery Costs”).
Section 5.06. Credit Support.
(a) Following the Closing, the Company and the Hertz Members shall use their commercially reasonable efforts to cause the replacement, effective as of the Closing, of the Hertz Credit Support listed in Section 5.06 of the Hertz Disclosure Schedule; provided, that if any such Hertz Credit Support is not replaced effective as of the Closing, the Company shall indemnify the Hertz Members and their respective Affiliates against, and hold each of them harmless from, any and all Damages incurred or suffered by any Hertz Member or any of their respective Affiliates, related to or arising out of the same.
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(b) Until such time as THC or its Affiliates (other than the Company Group) no longer provides any Credit Support to the Company Group, the Company shall pay to THC an amount equal to $16,476.62, which shall be payable monthly in advance within 30 days following receipt of an invoice from THC to the Company. Such amount shall be proportionally reduced to the extent any such Credit Support listed in Section 5.06 of the Hertz Disclosure Schedule is no longer provided.
Section 5.07. Access; Confidentiality.
(a) On and after the Closing Date, each party hereto will afford promptly to the other parties hereto and their respective agents reasonable access to its properties, books, records, employees and auditors to the extent necessary to permit the other parties hereto, at such other parties’ costs, to determine any matter relating to their respective rights and obligations hereunder or to any period ending on or before the Closing Date; provided that any such access shall not unreasonably interfere with the conduct of the business of the party affording such access. Each party hereto will hold, and will use its best efforts to cause its respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of Applicable Law, all confidential documents and information concerning the other parties hereto provided to it pursuant to this Section 5.07.
(b) Without limiting the generality of the foregoing, on and after the Closing Date, each Hertz Member will afford promptly to the Company and its respective agents reasonable access to its books of account, financial and other records (including accountant’s work papers), information, employees and auditors to the extent necessary or useful for the Company in connection with any audit, investigation, dispute or litigation or any other reasonable business purpose relating to the Oro Business; provided that any such access by the Company shall not unreasonably interfere with the conduct of the business of such Hertz Member. The Company shall bear all of the reasonable, documented out-of-pocket costs and expenses (including attorneys’ fees, but excluding reimbursement for general overhead, salaries and employee benefits) reasonably incurred in connection with the foregoing.
Section
5.08. Oro Business Employee Accrued Bonuses. No
later than March 31, 2027, THC will fund an amount to the Company in cash equal to the accrued bonus liability for all Oro Business
Employees for the period January 1, 2026, through the Closing Date.Article
6
Tax Matters
Section 6.01. Tax Cooperation; Allocation of Taxes; Certain Refunds.
(a) The Company and the Hertz Members agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance relating to the Oro Business and the Oro Assets (including access to books and records) as is reasonably necessary for the filing of all Tax Returns, the making of any election relating to Taxes, the preparation for and conduct of any audit by any Taxing Authority, and the prosecution or defense of any claim, suit or proceeding relating to any Tax; provided, that notwithstanding anything to the contrary in this Agreement, in no event shall any party or any of its respective Affiliates be entitled to any information relating to, or a copy of, any consolidated, combined,
21
affiliated or unitary Tax Return that includes any Hertz Member or any of their respective Affiliates; provided, further, that, notwithstanding the foregoing proviso, the Hertz Members shall furnish or cause to be furnished to the Company, upon reasonable request and as promptly as practicable, pro forma or extracted portions of any such consolidated, combined, affiliated or unitary Tax Return, together with any related work papers, schedules and supporting information, solely to the extent relating to the Oro Business, the Oro Contributed Assets or the Oro Assumed Liabilities and reasonably necessary to the matters referenced above (it being understood that the Hertz Members may redact any information that does not so relate), and any such information shall be held in confidence by the Company in accordance with Section 5.07. The Company and the Hertz Members shall retain all books and records with respect to Taxes pertaining to the Oro Assets until at least 60 days following the expiration of the applicable statute of limitations (taking into account any extensions thereof). The Company and the Hertz Members shall cooperate with each other in the conduct of any audit or other proceeding relating to Taxes involving the Oro Assets or the Oro Business.
(b) The Company shall promptly pay to the Hertz Members an amount equal to any refund of Taxes (including any interest paid with respect thereto), or any credit against or offset of Taxes in lieu of such a refund, in each case that constitutes an Excluded Hertz Asset, when and to the extent that (i) in the case of a refund, such refund is actually received in cash by the Company Group, or (ii) in the case of a credit or offset, such credit or offset actually reduces the amount of cash Taxes that the Company Group would otherwise have been required to pay (determined on a with-and-without basis), in each case net of any Taxes and reasonable out-of-pocket costs incurred by the Company Group in obtaining or receiving such refund, credit or offset. If any such refund, credit or offset is subsequently disallowed or reduced, the Hertz Members shall promptly repay to the Company the amount so disallowed or reduced (together with any interest and penalties imposed thereon). The Company shall, if requested by a Hertz Member and at such Hertz Member’s expense, file (or cause the relevant entity to file) for, and take such other actions as may be necessary to obtain, any refund or credit which would give rise to a payment under this Section 6.01(b).
(c) In the case of any Taxes that are payable with respect to a Straddle Period, for purposes of determining whether and to what extent a liability for Taxes is allocable to a Pre-Closing Tax Period (i) Taxes that are based upon or related to income and any gross receipts, payroll Taxes, employment Taxes, withholding Taxes and sales or use Taxes shall be allocated between the Pre-Closing Tax Period and the portion of such Straddle Period beginning after the Closing Date based on an interim closing of the books as of the end of the day on the Closing Date and (ii) Taxes not described in clause (i) above shall be allocated between the Pre-Closing Tax Period and the portion of such Straddle Period beginning after the Closing Date by prorating each such Tax based on the number of days in the Pre-Closing Tax Period, on the one hand, and the number of days in such Straddle Period that occur after the Closing Date, on the other hand.
Section 6.02. Tax Treatment of the Transactions.
(a) Notwithstanding anything to the contrary herein, the parties intend, for U.S. federal income tax purposes, that (i) the THC Contribution shall be treated as a disregarded transaction, (ii) the Hertz Affiliate Assignment shall be treated as (A) a contribution by THC to HTI of 5.0% of the undivided interests in the Oro Contributed Assets and cash in an amount equal
22
to 5.0% of the Cash Contribution Amount in a transaction described in Section 351(a) of the Code, followed by (B) contributions by THC and HTI of their respective interests in the Oro Contributed Assets and the Cash Contribution Amount to the Company in a transaction described in Section 721(a) of the Code, in each case, to the extent permitted by Applicable Law (the “Intended Tax Treatment”).
(b) The parties shall report the transactions described in Section 6.02(a) in a manner that is consistent with the Intended Tax Treatment and shall not take any position that is inconsistent with the Intended Tax Treatment in connection with any audit or other proceeding.
Section 6.03. Tax Contests.
With respect to the settlement, compromise or other resolution of any audit or other tax contest (or portion thereof) of any Hertz Member or any Affiliate thereof that would reasonably be expected to give rise to a materially adverse Tax implication to the Company or its direct or indirect members, the Hertz Member or its Affiliate thereof, as applicable, shall act in good faith and not in a manner that would reasonably be expected to unfairly increase the Tax liabilities of the Company or its direct or indirect members, as determined by such Hertz Member or its Affiliate thereof, as applicable, in its reasonable discretion.
Article
7
Survival; Indemnification
Section 7.01. Survival. None of the representations and warranties of the parties hereto contained in this Agreement shall survive the Closing. The covenants and agreements of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing until the first anniversary of the Closing Date, except for those covenants and agreements that are by their terms to be performed in whole or in part at or after the Closing, which covenants and agreements shall survive by their terms.
Section 7.02. Indemnification.
(a) Effective at and after the Closing, the Company hereby indemnifies, for an indefinite period following the Closing Date, the Hertz Members, their respective Affiliates, and their respective successors and assigns and its and their respective directors, officers and employees (“Hertz Indemnified Parties”) against and agrees to hold each of them harmless from any and all Damages incurred or suffered by any Hertz Indemnified Party arising out of:
(i) the Oro Contributed Assets or Oro Assumed Liabilities; or
(ii) any breach of covenant or agreement made or to be performed by the Company following the Closing pursuant to this Agreement.
(b) Effective at and after the Closing, the Hertz Members hereby indemnify, for an indefinite period following the Closing Date, the Company, their respective Affiliates, and their respective successors and assigns and its and their respective equityholders, directors, officers and employees (“Company Indemnified Parties”) against and agrees to hold each of them harmless from any and all Damages incurred or suffered by any Company Indemnified Party arising out of:
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(i) the Excluded Hertz Assets, Excluded Hertz Liabilities or Retained Business; or
(ii) any breach of covenant or agreement made or to be performed by a Hertz Party following the Closing pursuant to this Agreement.
Section 7.03. Third Party Claim Procedures. The party seeking indemnification under Section 7.02 (the “Indemnified Party”) agrees to give prompt notice in writing to the party against whom indemnity is to be sought (the “Indemnifying Party”) of the assertion of any claim or the commencement of any suit, action or proceeding by any third party (“Third Party Claim”) in respect of which indemnity may be sought under such Section. Such notice shall set forth in reasonable detail such Third Party Claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have adversely prejudiced the Indemnifying Party.
(a) The Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim and, subject to the limitations set forth in this Section, shall be entitled to control and appoint lead counsel for such defense, in each case at its own expense. The Indemnifying Party shall be liable for the reasonable fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party has not assumed the defense thereof (other than during any period in which the Indemnified Party shall have not yet given notice of the Third Party Claim as provided above).
(b) If the Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section 7.03, (i) the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld) before entering into any settlement of such Third Party Claim, if the settlement (A) does not expressly unconditionally release the Indemnified Party and its Affiliates from all liabilities and obligations with respect to such Third Party Claim, (B) imposes injunctive or other equitable relief against the Indemnified Party or any of its Affiliates or (C) includes a statement or admission of fault, culpability or failure to act by or on behalf of the Indemnified Party or any of its Affiliates and (ii) the Indemnified Party shall be entitled to participate in the defense of any Third Party Claim and to employ separate counsel of its choice for such purpose. The fees and expenses of such separate counsel shall be paid by the Indemnified Party; provided, however, that if the Indemnified Party determines in good faith that the representation of the Indemnified Party and the Indemnifying Party by the same counsel creates an actual or potential conflict of interest for such counsel, the reasonable fees and expenses of such separate counsel (limited to one counsel employed by the Indemnified Party) with respect to such matter shall be considered indemnifiable Damages hereunder.
(c) Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such 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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Section 7.04. Direct Claim Procedures. In the event an Indemnified Party has a claim for indemnity under Section 7.02 against an Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party agrees to give prompt notice in writing of such claim to the Indemnifying Party. Such notice shall set forth in reasonable detail such claim and the basis for indemnification (taking into account the information then available to the Indemnified Party) and the amount of such Damages incurred or that such Indemnified Party reasonably estimates in good faith based on the facts then-known is likely to be incurred in connection with such claim. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have materially and adversely prejudiced the Indemnifying Party. If the Indemnifying Party does not notify the Indemnified Party within 15 days following the receipt of a notice with respect to any such claim that the Indemnifying Party disputes its indemnity obligation to the Indemnified Party for any Damages with respect to such claim, such Damages shall be conclusively deemed a liability of the Indemnifying Party and the Indemnifying Party shall promptly pay to the Indemnified Party any and all Damages arising out of such claim. If the Indemnifying Party has timely disputed its indemnity obligation for any Damages with respect to such claim, the parties shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in an appropriate court of jurisdiction determined pursuant to Section 8.06.
Section 7.05. Calculation of Damages. The amount of any Damages payable under this Article 7 by the Indemnifying Party shall be net of any amounts recovered by the Indemnified Party under applicable insurance policies, or from any other Person alleged to be responsible therefor, and the net Tax benefit actually realized by the Indemnified Party and its Affiliates as a result of the incurrence or payment of such Damages by the Indemnified Party, determined on a “with-and-without basis” (any such net tax benefit, a “Tax Benefit”). In the case of Damages payable under this Article 7 by the Hertz Members to any Company Indemnified Party, the Company shall be considered for all purposes of this Section 7.05 to actually realize a net Tax benefit equal to the aggregate reduction in the amount of cash Taxes paid or payable by the members of the Company (or any direct or indirect owner of any such member) as a result of the incurrence or payment of such Damages by the applicable Company Indemnified Party. If the Indemnified Party or any of its Affiliates receive any Tax Benefits subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly pay to the Indemnifying Party the amount of such Tax Benefits. If the Indemnified Party receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Damages, subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount received by the Indemnified Party, net of any expenses incurred by such Indemnified Party in collecting such amount. The Indemnified Party shall diligently prosecute any claims for recovery under applicable insurance policies, and from any other Person alleged to be responsible for any Damages, and shall diligently pursue any and all claims for Tax credits or refunds to the extent such Tax credits or refunds would give rise to a Tax Benefit.
(a) Each Indemnified Party shall use commercially reasonable efforts to mitigate in accordance with Applicable Law any loss for which such Indemnified Party seeks
25
indemnification under this Agreement. If such Indemnified Party mitigates its loss after the Indemnifying Party has paid the Indemnified Party under any indemnification provision of this Agreement in respect of that loss, the Indemnified Party must notify the Indemnifying Party and pay to the Indemnifying Party the extent of the value of the benefit to the Indemnified Party of that mitigation (less the Indemnified Party’s reasonable costs of mitigation) within two Business Days after the benefit is received.
(b) Each Indemnified Party shall use reasonable efforts to collect any amounts available under insurance coverage, or from any other Person alleged to be responsible, for any Damages payable under Section 7.02.
Section 7.06. Assignment of Claims. If the Indemnified Party receives any payment from an Indemnifying Party in respect of any Damages pursuant to Section 7.02 and the Indemnified Party could have recovered all or a part of such Damages from a third party (a “Potential Contributor”) based on the underlying claim asserted against the Indemnifying Party, the Indemnified Party shall assign such of its rights to proceed against the Potential Contributor as are necessary to permit the Indemnifying Party to recover from the Potential Contributor the amount of such payment; provided that the Indemnified Party shall not be required to assign any right to proceed against a Potential Contributor if the Indemnified Party determines in its reasonable discretion that such assignment would be materially detrimental to its reputation or future business prospects.
Section 7.07. Exclusivity. Except as specifically set forth in this Agreement, effective as of the Closing the Company waives any rights and claims such party may have against the Hertz Members or their respective Affiliates, whether in law or in equity, relating to the Oro Business or the transactions contemplated hereby. The rights and claims waived by each party include claims arising under or relating to Environmental Laws (whether now or hereinafter in effect), claims for breach of contract, breach of representation or warranty, negligent misrepresentation and all other claims for breach of duty. After the Closing, except for claims arising out of fraud or willful misconduct, Sections 7.02 and 8.13 will provide the exclusive remedy for any misrepresentation, breach of warranty, covenant or other agreement or other claim arising out of this Agreement or the transactions contemplated hereby.
Section 7.08. Treatment of Indemnification Payments. Unless otherwise required by a final determination by the appropriate Taxing Authority, the parties agree to treat for all Tax purposes any amounts paid by an Indemnifying Party in respect of Damages described in Section 7.02 as, in the case of payments from a Hertz Member to the Company, adjustments to the amount contributed to the Company by such Hertz Member or, in the case of payments from the Company to any Hertz Member, amounts distributed from the Company to such Hertz Member in respect of its equity interest in the Company.
Article
8
Miscellaneous
Section 8.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile transmission and electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given,
26
if to the Company, THC or HTI, to:
The Hertz Corporation
8501 Williams Road
Estero, Florida 33928
Attention: Adrian S. Nasr
E-mail: [***]
with a copy to:
Davis Polk & Wardwell
LLP
450 Lexington Avenue
New York, New York 10017
Attention: Michael Davis
E-mail: michael.davis@davispolk.com
if to the Lead Investors:
to the contacts set forth in the Purchase Agreement, as such contacts may be updated from time to time in accordance therewith,
or such other address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.
Section 8.02. Amendments and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective; provided that any amendment or waiver of this Agreement by the Company shall also require the prior written consent of the Lead Investors, on behalf of the Investors.
(a) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 8.03. Expenses. Except as otherwise provided herein, all Transaction Expenses shall be paid by the Hertz Party incurring such Transaction Expenses (and the Company shall have no obligation with respect to any Transaction Expenses).
Section 8.04. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns;
27
provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto and the Lead Investors.
Section 8.05. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of laws that would make the laws of another state applicable.
Section 8.06. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby shall be brought in the courts of the State of Delaware, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Delaware, and each party hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.01 shall be deemed effective service of process on such party.
Section 8.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.08. Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). Except as set forth in Section 2.08 (Closing), Section 5.04 (Notices of Certain Events), Section 2.09 (Wrong Pockets), Section 5.03 (Public Announcements), Section 8.02 (Amendments and Waivers), Section 8.04 (Successors and Assigns) and this Section 8.08, which the Investors will be entitled to enforce and to each of which the Investors will be an express third party beneficiary, no provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the parties hereto, the Company Indemnified Parties and the Hertz Indemnified Parties, and their respective successors and assigns.
Section 8.09. Entire Agreement. This Agreement and the Ancillary Agreements constitute the entire agreement between the parties with respect to the subject matter of this
28
Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.
Section 8.10. Bulk Sales Laws. The parties hereto each hereby waive compliance by each other party with the provisions of the “bulk sales,” “bulk transfer” or similar laws of any state.
Section 8.11. Severability. If any term, provision, covenant or restriction of this Agreement or any Ancillary Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement or the Ancillary Agreement, as applicable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement or the Ancillary Agreement, as applicable, so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby or by the Ancillary Agreement, as applicable, be consummated as originally contemplated to the fullest extent possible.
Section 8.12. Disclosure Schedules. The parties have each set forth information on their respective disclosure schedules (with respect to the Hertz Members, the “Hertz Disclosure Schedule” and with respect to the Company, the “Company Disclosure Schedule”) in a section thereof that corresponds to the section of this Agreement to which it relates. A matter set forth in one section of a disclosure schedule need not be set forth in any other section so long as its relevance to such other section of the disclosure schedule or section of the Agreement is reasonably apparent on the face of the information disclosed therein to the Person to which such disclosure is being made. The parties acknowledge and agree that the disclosure schedules to this Agreement may include certain items and information solely for informational purposes for the convenience of the parties and the disclosure by a party of any matter in the applicable disclosure schedules shall not be deemed to constitute an acknowledgment by such party that the matter is required to be disclosed by the terms of this Agreement or that the matter is material.
Section 8.13. Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in the courts specified by Section 8.05, and appropriate injunctive relief may be applied for and granted in connection therewith, without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity. Each party agrees to waive any requirement for the securing or posting of any bond in connection with such remedy. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary to law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy or that a remedy at law would be adequate.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| THE HERTZ CORPORATION | ||
| By: | /s/ W. Gil West | |
| Name: W. Gil West | ||
| Title: Chief Executive Officer | ||
| HERTZ TRANSPORTING, INC. | ||
| By: | /s/ Christopher G. Berg | |
| Name: Christopher G. Berg | ||
| Title: President | ||
| ORO MOBILITY HOLDINGS, LLC | ||
| By: | /s/ Doria Holbrook | |
| Name: Doria Holbrook | ||
| Title: Chief Executive Officer | ||
[Signature Page to Contribution Agreement]
Exhibit 10.2
PURCHASE
AGREEMENT
dated as of
October 16, 2026
among
THE HERTZ CORPORATION
and
THE INVESTORS (AS DEFINED HEREIN)
TABLE OF CONTENTS
Page
| Article 1 Definitions | 1 | |
| Section 1.01. | Definitions | 1 |
| Section 1.02. | Other Definitional and Interpretative Provisions | 11 |
| Article 2 Purchase and Sale of Equity Interests | 11 | |
| Section 2.01. | Investor Equity Acquisition | 11 |
| Section 2.02. | Closing | 11 |
| Section 2.03. | Withholding | 13 |
| Article 3 Representations and Warranties of Seller | 13 | |
| Section 3.01. | Corporate Existence and Power | 13 |
| Section 3.02. | Corporate Authorization | 13 |
| Section 3.03. | Company Group | 14 |
| Section 3.04. | Governmental Authorization | 15 |
| Section 3.05. | Noncontravention | 15 |
| Section 3.06. | Required Consents | 15 |
| Section 3.07. | Financial Statements | 15 |
| Section 3.08. | Undisclosed Liabilities | 16 |
| Section 3.09. | Absence of Certain Changes | 16 |
| Section 3.10. | Material Contracts | 18 |
| Section 3.11. | Litigation | 20 |
| Section 3.12. | Licenses and Permits | 20 |
| Section 3.13. | Compliance with Laws and Court Orders | 21 |
| Section 3.14. | Properties; Sufficiency of Assets | 21 |
| Section 3.15. | Intellectual Property | 22 |
| Section 3.16. | Employees and Employee Plans | 24 |
| Section 3.17. | Environmental Compliance | 26 |
| Section 3.18. | Tax Matters | 26 |
| Section 3.19. | Finders’ Fees | 28 |
| Section 3.20. | Insurance. | 28 |
| Section 3.21. | Affiliate Transactions | 29 |
| Section 3.22. | Bank Accounts | 29 |
| Section 3.23. | OFAC Compliance; Anti-Corruption; Sanctions; Anti-Money Laundering | 29 |
| Article 4 Representations and Warranties of Investor | 29 | |
| Section 4.01. | Corporate Existence and Power | 29 |
| Section 4.02. | Corporate Authorization | 29 |
| Section 4.03. | Governmental Authorization | 30 |
| Section 4.04. | Noncontravention | 30 |
| Section 4.05. | Litigation | 30 |
| Section 4.06. | ERISA | 30 |
| Section 4.07. | Financing | 30 |
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| Section 4.08. | Finders’ Fees | 31 |
| Section 4.09. | Inspections; No Other Representations | 31 |
| Article 5 Covenants of the Parties | 31 | |
| Section 5.01. | Efforts; Further Assurance | 31 |
| Section 5.02. | Certain Filings | 32 |
| Section 5.03. | Public Announcements | 32 |
| Section 5.04. | Notices of Certain Events | 32 |
| Section 5.05. | Access; Confidentiality | 33 |
| Section 5.06. | Equity Plan | 33 |
| Article 6 Tax Matters | 33 | |
| Section 6.01. | Transfer Taxes; Certain Tax Matters | 33 |
| Section 6.02. | Tax Treatment | 34 |
| Article 7 Survival; Indemnification | 35 | |
| Section 7.01. | Survival | 35 |
| Section 7.02. | Indemnification | 35 |
| Section 7.03. | Third Party Claim Procedures | 37 |
| Section 7.04. | Direct Claim Procedures | 38 |
| Section 7.05. | Calculation of Damages | 38 |
| Section 7.06. | Assignment of Claims | 39 |
| Section 7.07. | Exclusivity | 39 |
| Section 7.08. | Tax Treatment of Indemnification Payments | 40 |
| Section 7.09. | Set-Of Against Distributions | 40 |
| Article 8 Miscellaneous | 40 | |
| Section 8.01. | Notices | 40 |
| Section 8.02. | Amendments and Waivers | 41 |
| Section 8.03. | Expenses | 41 |
| Section 8.04. | Successors and Assigns | 41 |
| Section 8.05. | Investors’ Obligations | 41 |
| Section 8.06. | Governing Law | 43 |
| Section 8.07. | Jurisdiction | 43 |
| Section 8.08. | WAIVER OF JURY TRIAL | 43 |
| Section 8.09. | Counterparts; Effectiveness; Third Party Beneficiaries | 43 |
| Section 8.10. | Entire Agreement | 44 |
| Section 8.11. | Intentionally omitted. | 44 |
| Section 8.12. | Severability | 44 |
| Section 8.13. | Disclosure Schedules | 44 |
| Section 8.14. | Specific Performance | 44 |
| Section 8.15. | No Recourse | 45 |
| Schedules | |
| Schedule I | Investors |
ii
| Exhibits | |
| Exhibit A | Form of Post-Closing LLC Agreement |
| Exhibit B | Form of Hertz Services Agreement |
| Exhibit C | Form of Equity Plan |
| Exhibit D | Form of Assignment Instrument |
iii
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this “Agreement”), dated as of October 16, 2026, by and among the investors listed in Schedule I hereto (the “Investors”) and The Hertz Corporation, a Delaware corporation (“THC” and “Seller”).
W I T N E S S E T H:
WHEREAS, Oro Mobility Holdings, LLC (formerly known as Hertz Mobility Holdings, LLC), a Delaware limited liability company (the “Company”) conducts, directly and indirectly through its Subsidiaries, the Oro Business;
WHEREAS, Seller, directly or indirectly, owns all of the issued and outstanding Equity Interests of the Company;
WHEREAS, pursuant to that certain Contribution Agreement dated October 16, 2026 (the “Contribution Agreement”) by and among THC, Hertz Transporting, Inc. (“HTI”) and the Company, (i) THC contributed certain assets to the Company and the Company assumed certain liabilities related to the Oro Business and (ii) THC assigned certain Equity Interests in the Company to HTI, in each case, upon the terms and subject to the conditions set forth therein;
WHEREAS, the Investors desire to acquire, and Seller desires to sell, certain Equity Interests of the Company upon the terms and subject to the conditions set forth herein, such that after giving effect to the transactions contemplated hereby, the Investors will, collectively, own a number of Class A Common Units representing approximately 15.86% of the outstanding Common Units and 50% of the outstanding voting capital interests in the Company; Seller and HTI will, together, own a number of Class B Common Units and Class C Common Units representing approximately 84.14% of the outstanding Common Units and 50% of the outstanding voting capital interests in the Company, in each case, before accounting for the Management Incentive Pool (as defined in the Post-Closing LLC Agreement) as further set forth in (and subject to) the Post-Closing LLC Agreement, and that the Company shall be governed by the Post-Closing LLC Agreement as of and following the Closing; and
WHEREAS, it is intended for the transactions contemplated by this Agreement to be treated for U.S. federal income tax purposes as described in Section 6.02.
NOW, THEREFORE, for other good and valuable consideration, each of the parties hereto, intending to be legally bound, agrees as follows:
Article
1
Definitions
Section 1.01. Definitions. As used herein, the following terms have the following meanings:
“Affiliate” means, with respect to any specified Person, any other Person that, at the time of determination, through one or more intermediaries, Controls, is Controlled by or is under common Control with such specified Person; provided, that (a) neither Seller nor any of its
respective Affiliates nor the Investors nor any of their Affiliates shall be deemed to be an Affiliate of the other or of the Company, (b) no Person (or any of its Affiliates) holding a direct or indirect minority investment in the Company shall be deemed to be an Affiliate of the Company or the Investors or any of their respective Affiliates solely by virtue of such minority investment and (c) when used with respect to an Investor, “Affiliate” shall include Certares Management Holdings LLC (in the case of CK), Knighthead Capital Management LLC (in the case of Knighthead or CK), Cohen Private Ventures, LLC (in the case of CPV) and GCM Investments GP, LLC (in the case of GCM), as applicable; provided, however, that, other than for the purposes of the definitions of “Investor Indemnified Parties” and “Hertz Indemnified Parties”, Section 5.03, Article 7 and Section 8.15, it shall not include (i) any former, current or future equityholders, co-investment vehicles, limited partners, directors, officers, general partners, members, managers or employees of (A) such Investor or (B) any investment fund advised, managed or jointly advised or jointly managed by such Investor, or any of their respective Affiliates or (ii) any portfolio company of such Investor or of any investment fund advised, managed or jointly advised or jointly managed by the Affiliates of such Investor. For greater certainty, none of CK, Knighthead, CPV or GCM shall be deemed to be Affiliates of THC or its Affiliates. The terms “Affiliated” and “Affiliation” shall have correlative meanings.
“AML Laws” means all Applicable Laws of any jurisdiction applicable to any Person from time to time concerning or relating to anti-money laundering and countering the financing of terrorism.
“Ancillary Agreements” means the Contribution Agreement, the Post-Closing LLC Agreement, the Hertz Services Agreement, and the Fleet Lease Agreement.
“Anti-Corruption Laws” means the anti-bribery provisions of the Foreign Corrupt Practices Act of 1977, as amended, and all other applicable anti-corruption and bribery Laws (including the U.K. Bribery Act 2010, the Corruption of Foreign Public Officials Act (Canada), and any rules or regulations promulgated thereunder or other Laws of other countries implementing the OECD Convention on Combating Bribery of Foreign Officials).
“Applicable Law” or “Law” means any applicable transnational, domestic or foreign federal, state, provincial or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority of competent jurisdiction, as amended.
“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by Applicable Law to close.
“CK” means CK Oro, LLC.
“Class A Common Units” has the meaning set forth in the Post-Closing LLC Agreement.
“Class B Common Units” has the meaning set forth in the Post-Closing LLC Agreement.
“Class C Common Units” has the meaning set forth in the Post-Closing LLC Agreement.
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“Closing Date” means the date of the Closing.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Group” means the Company, each Subsidiary of the Company and any other Person that is controlled directly or indirectly by the Company.
“Common Units” has the meaning set forth in the Post-Closing LLC Agreement.
“Contract” means any commitment, contract, subcontract, agreement, lease, sublease, license, sublicense, understanding, sales order, purchase order, instrument, indenture, note or any other legally binding commitment or undertaking, whether oral or written.
“Control” means, as to any Person, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The terms “Controlled by”, “Controlled”, “under common Control with” and “Controlling” shall have correlative meanings.
“CPV” means CPV Oro, LLC.
“Debt” means, with respect to any Person, (a) all debt of such Person for borrowed money or for the deferred purchase price of property or services, or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money, (b) all obligations of such Person which are evidenced by notes, bonds, debentures or similar instruments, (c) all obligations of such Person that have been, or should be, in accordance with GAAP, recorded as capital leases, (d) all obligations of such Person that have been, or should be, in accordance with GAAP, recorded as a sale-leaseback transaction or leveraged lease, (e) all obligations of such Person in respect of letters of credit or similar instruments, bankers’ acceptances, surety, performance bonds or other bonds, (f) all reimbursement obligations of such Person relating to bankers’ acceptances, surety, performance or other bonds or similar instruments, in each case to the extent called, drawn or otherwise payable, (g) all obligations of such Person secured by a Lien on any of its assets or properties, whether or not the obligation secured thereby has been assumed, (h) all obligations of such Person in respect of customer deposits or commitments to repay deposits or other amounts advanced by and owing to third parties, (i) all obligations of such Person under any interest rate, currency or other hedging agreement, (j) all obligations of such Person in connection with any factoring of receivables or securitization programs, and (k) with respect to any obligation of a type described in clauses (a) through (j) above, all accrued and unpaid interest, premiums, penalties, breakage costs, unwind costs, fees, termination costs, redemption costs, expenses and other charges with respect thereto and (l) all direct or indirect guarantees (including “keep well” arrangements, support agreements and similar agreements) with respect to Debt of any other Person referred to in clauses (a) through (k) above.
“Environmental Laws” means any Applicable Law relating to public or worker health or safety (to the extent relating to exposure to Hazardous Substances), pollution or protection of the environment or the handling, storage, generation, use, disposal, release or threatened release of Hazardous Substances, including pollutants, contaminants, wastes or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise Hazardous Substances, wastes or materials.
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“Equity Interest” means any (a) shares or units of capital stock or voting or other equity securities, (b) membership interests or units, (c) other interest or participation (including phantom shares, units or interests or equity appreciation rights or equity-based performance units or contracts) that confers on a Person the right to receive a share of the profits and losses of, or distribution of assets of, the issuing entity, (d) subscriptions, calls, warrants, options, restricted shares, contingent value rights, rights of first refusal, preemptive or similar rights, or commitments of any kind or character relating to, or entitling any Person or entity to purchase or otherwise acquire, any of the interests described in the foregoing clauses (a) through (c), or (e) securities convertible into or exercisable or exchangeable for any of the interests described in the foregoing clauses (a) through (d) or any other equity securities.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended and the rules and regulations promulgated thereunder.
“Fleet Lease Agreement” means a Fleet Lease Agreement, dated as of October 16, 2026, by and between the Company and THC.
“GAAP” means generally accepted accounting principles in the United States.
“GCM” means GCM Grosvenor Strategic Credit, L.P.
“Governmental Authority” means any transnational, domestic or foreign federal, state, provincial, territorial or local governmental, regulatory or administrative authority, department, court, agency or official, including any political subdivision thereof or arbitral tribunal (public or private).
“Guarantee and Lien Release” means the letter agreement, dated as of October 16, 2026, from Barclays Bank PLC, as administrative agent and collateral agent under Hertz’s existing credit agreement with Barclays Bank PLC and the other parties thereto, to THC, pursuant to which Barclays Bank PLC, in such capacities, confirms the release of the subsidiary guaranty and its security interest, and authorizes the filing of the related UCC-3 termination statements.
“Hazardous Substance” means any substance, waste or material listed, defined or classified as a pollutant, contaminant, hazardous substance, toxic substance, hazardous waste or words of similar import or regulatory effect, or for which liability or standards of conduct may be imposed, under any law pertaining to the environment, including petroleum, polychlorinated biphenyls, per- or polyfluoroalkyl substances and asbestos.
“Hertz Basket” means $808,919.75.
“Hertz Cap” means $8,089,197.51.
“Hertz Employee Plan” means any (i) “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA), (ii) pension, retirement, profit-sharing, savings, health, disability, life insurance, welfare, bonus, incentive, commission, stock option or other equity or equity-based, deferred compensation, severance, retention, employment, change of control or (iii) other compensation or benefit plan, policy, program, arrangement, contract or agreement, in each case that is maintained, sponsored, or contributed to or required to be
4
contributed to by Seller or any of their respective Affiliates for the benefit of any Oro Business Employee.
“Hertz Fundamental Reps” means the representations and warranties contained in Sections 3.01, 3.02, 3.03 and 3.19.
“Hertz Indemnified Parties” means Seller, their respective Affiliates, and their respective successors and assigns and its and their respective directors, officers and employees.
“Hertz Material Adverse Effect” means any change, effect, event, state of facts, circumstance or occurrence that (x) is or would reasonably be expected to be, materially adverse to the condition, business or results of operations of the Company Group or the Oro Business, taken as a whole, or (y) would reasonably be expected to materially delay or prevent the consummation of the transactions contemplated hereby excluding, in the case of clause (x), any effect resulting from (a) changes in GAAP or changes in the regulatory accounting standards, principles or requirements (or in the enforcement, implementation or authoritative interpretations thereof) applicable to any industry in which the Oro Business operates, (b) changes in the general economic, regulatory or political conditions generally and any anti-dumping actions, tariffs, sanctions, trade policies or disputes or any “trade war” or similar actions in the United States or any other country or region in the world, (c) changes in the financial or securities markets, including in interest rates or currency exchange rates, (d) changes (including changes of Applicable Law) or conditions generally affecting the industry in which the Oro Business operates or the industries in which suppliers, customers or collaboration partners of the Oro Business operate, (e) acts of war, sabotage or terrorism, cyber-attacks or natural disasters (including earthquakes, floods, hurricanes, tornadoes, natural disasters or other “acts of God”) or any escalation or worsening thereof, (f) the negotiation of this Agreement, (g) the announcement or pendency of the transactions contemplated hereby or the identity of the Investors or any other facts or circumstances relating to the Investors, (h) any failure to meet any internal, analyst or industry estimates, forecasts or projections for any period (it being understood that the underlying facts giving rise or contributing to such failure may be taken into account in determining whether there has been, or would reasonably be expected to be, a Hertz Material Adverse Effect, unless it is otherwise excluded from the definition thereof pursuant to any other clause), or (i) any action taken by Seller that is required, expressly contemplated or permitted pursuant to this Agreement, except in the case of clauses (a), (b), (c), (d) and (e) to the extent that such adverse changes, effects, events, states of facts, circumstances or occurrences have a disproportionately adverse impact on the Oro Business as compared to other participants in the industry in which the Oro Business operates (in which case, only the incremental disproportionate effect or effects may be taken into account in determining whether there has been a Hertz Material Adverse Effect).
“Hertz Services Agreement” means the Hertz Services Agreement to be entered into at Closing substantially in the form attached as Exhibit B.
“Intellectual Property Rights” means any and all intellectual property or similar proprietary rights throughout the world, including (a) patents and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations thereof) issued, registered or applied for in the United States and all other nations throughout the world, and all improvements to the inventions disclosed in each such patent or patent application
5
(collectively, “Patents”), (b) trademarks, service marks, trade dress, logos, domain names, social media accounts and handles, trade names, corporate names and all other designations of commercial source or origin (whether or not registered) in the United States and all other nations throughout the world, including all registrations and applications for registration of the foregoing and all goodwill associated therewith (collectively, “Trademarks”), (c) works of authorship, copyrights (whether or not registered) and registrations and applications for registration thereof in the United States and all other nations throughout the world, including all derivative works, moral rights, renewals, extensions, reversions or restorations associated with such copyrights, now or hereafter provided by law, regardless of the medium of fixation or means of expression, (d) computer programs, software, firmware, middleware, applications and other code (including source code, object code, libraries, APIs, tools, compilers, scripts, files, algorithms, models, operating systems and all documentation therefor including specifications) (collectively, “Software”), (e) trade secrets, confidential information, inventions (whether patentable or unpatentable and whether or not reduced to practice), manufacturing and production processes and techniques, specifications, designs, formulas, and, whether or not confidential, business information (including pricing and cost information, business and marketing plans and customer and supplier lists) research and development information and know-how (collectively, “Know-How”), (f) rights in data, databases and data collections, (g) rights of publicity, privacy and endorsement, (h) industrial designs and registrations and applications for registration thereof throughout the world and (i) all rights to collect royalties, fees and otherwise exploit and to sue or recover and retain damages and costs and attorneys’ fees for past, present and future infringement or misappropriation of any of the foregoing.
“Investor Basket” means $808,919.75.
“Investor Cap” means $8,089,197.51.
“Investor Cash Payment Amount” means an amount equal to $80,891,975.10.
“Investor Fundamental Reps” means the representations and warranties contained in Sections 4.01, 4.02 and Section 4.08.
“Investor Material Adverse Effect” means any change, effect, event, state of facts, circumstance or occurrence that materially impairs or delays, or would reasonably be expected to materially impair or delay, the transactions contemplated by this Agreement or any of the Ancillary Agreements or the Investors’ ability to perform or comply with their respective obligations hereunder or thereunder.
“IT Systems” means computers, software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications lines, and all other information technology assets or other equipment storing or processing information, including all associated documentation related to any of the foregoing.
“Knighthead” means, collectively, KHMO Oro, LLC, Knighthead (NY Fund), L.P., KH Bluestem KMF, LLC, KHAL Bridger, Inc., Knighthead Annuity & Life Assurance Company, and KDOF Oro, LLC.
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“knowledge of Hertz,” “Hertz’s knowledge” or any other similar knowledge qualification in this Agreement means to the actual knowledge of Doria Holbrook or Andrea Feinstein after reasonable inquiry.
“knowledge of the Investors,” “Investors’ knowledge” or any other similar knowledge qualification in this Agreement means to the actual knowledge of the undersigned signatory of such Investor after reasonable inquiry.
“Lead Investor” means CPV.
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, statutory or deemed trust, preferential right to purchase, third party consent to transfer, security interest or encumbrance in respect of such property or asset, right of first offer, option, right of first refusal, easement, claim, indenture, rights of way, restrictions on the use of real property, encroachments, licenses, leases to third parties, security agreements, or other adverse claim of any kind in respect of such property or asset, including, in the case of any shares of capital stock, units, or membership interests, any limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such shares, units or membership interests).
“OFAC” means Office of Foreign Assets Control of the U.S. Department of the Treasury.
“Organizational Documents” means, with respect to any Person, the articles or certificate of incorporation, formation or organization or other similar documents evidencing the formation of such Person and the by-laws, the limited partnership agreement, the partnership agreement or the limited liability company agreement, operating agreement or other similar organizational documents of such Person.
“Oro Asset” has the meaning set forth in the Contribution Agreement.
“Oro Balance Sheet” means the balance sheet of the Oro Business as of the Oro Balance Sheet Date.
“Oro Balance Sheet Date” means August 31, 2026.
“Oro Business” has the meaning set forth in the Contribution Agreement.
“Oro Business Employee” means any employee of the Company Group (determined as of the Closing Date).
“Oro IP” means any and all Intellectual Property Rights owned by, or purported to be owned by, the Company or its Subsidiaries including, for clarity, any and all Intellectual Property Rights included in the Oro Assets.
“Oro Registered IP” means any Oro IP that is registered, issued or applied-for including any and all (a) issued Patents and patent applications (including provisional applications); (b) registered Trademarks and applications for Trademark registration; (c) registered copyrights and applications for copyright registration; and (d) Internet domain name registrations and social media accounts, in each case of (a) to (d), to the extent included in the Oro IP.
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“Percentage Interest” means, with respect to an Investor, the percentage set forth next to such Investor’s name in Schedule I.
“Permit” means any license, permit, approval, consent, certification, franchise, registration, grant, or authorization that has been issued by or obtained from any Governmental Authority.
“Permitted Liens” means (a) mechanics, materialmen’s and similar Liens for labor provided in the ordinary course of business with respect to any amounts not yet due and payable as of the Closing Date, (b) Liens for Taxes not yet due and payable as of the Closing Date or which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with applicable accounting principles, (c) Liens securing rental payments under capital lease agreements, (d) Liens on real property that (i) are matters of public record and (ii) do not materially detract from the value of, or otherwise impair or interfere with, the present uses or occupancy of such real property, (e) Liens constituting a lease, sublease or occupancy agreement that gives any third party any right to occupy any real property; provided that such agreements do not contain any rights of first refusal, rights of first offer or purchase options, (f) Liens constituting non-exclusive licenses of Intellectual Property Rights granted to customers, vendors or service providers in the ordinary course of business, (g) Liens referred to in the Oro Balance Sheet and set forth on the Hertz Disclosure Schedule and (h) Liens described in Section 1.01(a) of the Hertz Disclosure Schedule.
“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Authority.
“Post-Closing LLC Agreement” means an amended and restated limited liability company agreement of the Company substantially in the form attached as Exhibit A.
“Pre-Closing Tax Period” means (a) any taxable period ending on or before the Closing Date and (b) with respect to any Straddle Period, the portion of such Straddle Period beginning on the first day of such Straddle Period and ending on and including the Closing Date.
“Retained Business” means any business now, previously or hereafter conducted by THC and its Subsidiaries, other than the Oro Business.
“Sanctioned Country” means any country or region that is, or has been at any time since April 24, 2019, the subject or target of a comprehensive embargo under Sanctions or Export Control Laws (including, as of the date of this Agreement, Cuba, Iran, North Korea, the Crimea, the so-called “Donetsk People’s Republic,” and the so-called “Luhansk People’s Republic,” and non-government controlled areas of the Zaporizhzhia and Kherson regions of Ukraine).
“Sanctioned Person” means any Person that is the subject or target of Sanctions or restrictions under Sanctions, including: (a) any person or entity listed on any applicable Sanctions-related restricted party list, including OFAC’s Specially Designated Nationals and Blocked Persons List; (b) a Governmental Authority of, located in, resident in, or organized under the Applicable Laws of a country or territory that is the subject of comprehensive Sanctions (at present, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, North Korea), or a Governmental Authority of a Sanctioned
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Country or Venezuela; or (c) any person or entity that is, in the aggregate, 50% or greater owned, directly or indirectly, or otherwise controlled by any of the foregoing.
“Sanctions” means any applicable economic, financial sanctions laws, regulations, embargoes or other restrictive measures enacted, administered, implemented and/or enforced from time to time by any Sanctions Authority or an agency thereof.
“Sanctions Authority” means any competent authorities of: (a) the United States of America, (b) the European Union, or (c) the United Nations Security Council, or any other Governmental Authority with jurisdiction over a Person, in each case in charge of the enactment, administration, implementation, and enforcement of Sanctions.
“Straddle Period” means any taxable period beginning on or before and ending after the Closing Date.
“Subsidiary” means, with respect to any Person, another Person, an amount of the voting securities or other voting ownership interests of which is sufficient, together with any contractual rights, to elect at least a majority of its board of directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.
“Tax” means any federal, state, local, foreign or other tax, levy, impost, duty, fee, assessment or other governmental charge of any kind whatsoever (including income, profits, premium, disability, alternative minimum, add-on minimum, stamp, value added, goods and services, estimated, excise, sales, use, occupancy, gross receipts, franchise, capital stock, net worth, ad valorem, severance, capital levy, production, transfer, documentary, registration, recording, real property transfer and gains, license, environmental, windfall profits, customs, employment, social security (or similar), employer health, unemployment compensation, payroll-related and real and personal property taxes), import duties, levy, impost, duty, governmental fee or assessment or other governmental assessment or charge of any kind whatsoever (including withholding on amounts paid to or by any Person) together with any interest, penalty, addition to tax or additional amount imposed by any Governmental Authority (a “Taxing Authority”) responsible for the imposition, administration or collection of any of the foregoing.
“Tax Return” means any federal, state, local, foreign or other applicable return, report, claim for refund, information return or statement or other document (including any related or supporting schedules, statements or information) with respect to any Tax filed or required to be filed with the U.S. Internal Revenue Service, or any other Taxing Authority in connection with the determination, assessment, payment or collection of any Tax of any Person or the administration of any laws, regulations or administrative requirements relating to any Tax.
“Transaction Expenses” means, without duplication, all liabilities (except for any Taxes) incurred by any party hereto and their Affiliates (which in the case of Seller shall include the Company and its Subsidiaries for all periods prior to the Closing) for fees, expenses, costs or charges as a result of the contemplation, negotiation, efforts to consummate or consummation of the transactions contemplated by this Agreement, including any fees and expenses of investment bankers, attorneys, accountants or other advisors, and any fees payable by such parties to
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Governmental Authorities or other third parties, in each case, in connection with the consummation of the transactions contemplated by this Agreement.
“Treasury Regulations” means the regulations promulgated by the United States Department of the Treasury pursuant to and in respect of provisions of the Code.
“WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988 and any similar Applicable Law.
Each of the following terms is defined in the Section set forth opposite such term:
| Term | Section |
| Accounting Referee | 6.02(c) |
| Agreement | Preamble |
| Closing | 2.02 |
| Company | Recitals |
| Company Securities | 3.03 |
| Contracting Party | 8.15 |
| Contribution Agreement | Recitals |
| Contribution Transfer Taxes | 6.01(a) |
| Damages | 7.02(a) |
| 8.01 | |
| Equity Plan | 5.06 |
| Hertz Disclosure Schedule | 8.13 |
| Hertz Insurance Policies | 3.20(a) |
| Hertz Required Consents | 3.06 |
| Hertz Warranty Breach | 7.02(a) |
| HTI | Recitals |
| Indemnified Party | 7.03(a) |
| Indemnifying Party | 7.03(a) |
| Investor | Preamble |
| Investor Equity Acquisition | Recitals |
| Investor Indemnified Parties | 7.02(a) |
| Investor Warranty Breach | 7.02(b)(i) |
| Investors’ Representative | 8.05(a) |
| Non-Recourse Party | 8.15 |
| Oro Business Data | 3.15(f) |
| Oro Contracts | 3.10(a) |
| Oro Facilities | 3.14(b) |
| Oro IT Systems | 3.15(f) |
| Patents | 1.01 |
| Permits | 3.12 |
| Potential Contributor | 7.06 |
| Related Party | 3.10(a)(viii) |
| Seller | Preamble |
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| Software | 1.01 |
| Tax Benefit | 7.05(a) |
| Taxing Authority | 1.01 |
| THC | Preamble |
| Third Party Claim | 7.03(a) |
| Trademarks | 1.01 |
| Transfer Taxes | 6.01(a) |
| Valuation Statement | 6.02(c) |
Section 1.02. Other Definitional and Interpretative Provisions. The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “or”, “either” and “any” shall not be construed as exclusive. The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to “dollars” or “$” means United States dollars. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” shall be deemed also to include any and all Applicable Law. Wherever from the context it appears appropriate, pronouns stated in the masculine, feminine or neuter shall include the masculine, feminine and neuter. The provisions of this Agreement shall apply to successive events and transactions. If any time period for giving notice or taking action hereunder expires on a day that is not a Business Day, the time period for such notice or action shall automatically be extended to the next Business Day following such day.
Article
2
Purchase and Sale of Equity Interests
Section 2.01. Investor Equity Acquisition. At the Closing, the Investors shall acquire, in the aggregate, 15,854,778 Class A Common Units from THC for an aggregate amount equal to the Investor Cash Payment Amount, which shall be paid in cash as provided in Section 2.02 and shall be paid by each Investor in the amount set forth next to such Investor’s name in Schedule I.
Section 2.02. Closing. The closing (the “Closing”) shall take place at the offices of Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, New York or remotely by exchange
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of documents and signatures (or their electronic counterparts) at 9 a.m. on October 19, 2026, or such other date and time the parties hereto may agree in writing. At the Closing:
(a) the Investors shall deliver their respective portions of the Investor Cash Payment Amount in the amounts set forth next to each Investor’s name in Schedule I, in immediately available funds by wire transfer to the accounts designated by Seller at least three Business Days prior to the Closing by notice to the Lead Investor;
(b) Seller shall transfer a number of Equity Interests to each Investor indicated in Schedule I, such that immediately following the Closing, the Post-Closing LLC Agreement shall be in effect and (x) the Investors will own, in the aggregate, 15,854,778 Class A Common Units and (y) Seller and HTI shall own, in the aggregate, 15,854,778 Class B Common Units and 68,290,444 Class C Common Units;
(c) Seller shall have delivered the Guarantee and Lien Release, duly executed by Barclays Bank PLC, together with evidence that the UCC-3 termination statements referred to therein have been filed;
(d) the transactions contemplated by that certain Note Purchase Agreement, dated as of the date hereof, by and among Seller and the noteholders named therein shall have been consummated;
(e) Seller shall deliver to the Company and each Investor a properly completed and duly executed Internal Revenue Service Form W-9 certifying that Seller is a United States person within the meaning of Section 7701(a)(30) of the Code and is exempt from backup withholding;
(f) each Investor shall deliver to each of the Company and Seller a properly completed and duly executed Internal Revenue Service Form W-9 certifying that it is exempt from backup withholding;
(g) Seller shall deliver to the Company and the Investors a duly executed counterpart of each Ancillary Agreement to which Seller is a party;
(h) each Investor shall deliver to the Company and Seller a duly executed counterpart of each Ancillary Agreement to which such Investor is a party;
(i) Seller shall deliver to the Investors a duly executed counterpart of each Ancillary Agreement to which the Company is a party;
(j) Seller shall pay or cause to be paid the legal fees and expenses provided for in Section 8.03, in immediately available funds by wire transfer to the accounts designated by White & Case LLP at least three Business Days prior to the Closing by notice to the Investors;
(k) Seller shall deliver to the Investors a certificate, dated as of the Closing Date and signed by an authorized officer of Seller, certifying that (i) the Hertz Fundamental Reps are true and correct in all respects as of the Closing Date as though made on and as of such date (except to the extent any such representation and warranty is made as of a specified date, in which case it
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shall be true and correct as of such date), (ii) all other representations and warranties of Seller contained in this Agreement are true and correct in all material respects as of the Closing Date as though made on and as of such date (except to the extent any such representation and warranty is made as of a specified date, in which case it shall be true and correct as of such date), (iii) that it has performed and complied with its covenants in the last sentence of Section 5.01 in all respects as of the Closing Date, and (iv) the transactions contemplated under the Contribution Agreement have been completed in accordance with the Contribution Agreement; and
(l) Seller shall deliver to the Investors an assignment instrument substantially in the form attached as Exhibit D.
Section 2.03. Withholding. Each Investor, the Company and any other applicable withholding agent shall be entitled to deduct and withhold from any amount otherwise payable pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under the Code or any provision of state, local or foreign Tax law. To the extent that amounts are so deducted and withheld and paid over to the appropriate Taxing Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made. Any Person that expects to so deduct or withhold any such amounts (other than any deduction or withholding resulting from the failure of Seller to deliver the Internal Revenue Service Form W-9 described in Section 2.02(e)) will use commercially reasonable efforts to provide timely notice of the expected deduction or withholding prior to such deduction or withholding to the Person with respect to which the deduction or withholding is to be made (which notice will include the legal authority and the calculation method for the expected deduction or withholding), and the parties hereto will use reasonable efforts to cooperate to reduce or eliminate the amount of such deduction or withholding. Notwithstanding anything to the contrary contained in this Agreement, the parties hereby agree and acknowledge that, in the event Seller delivers to Investors and the Company a properly completed and executed Internal Revenue Service Form W-9, no withholding of any amounts otherwise payable to Seller under this Agreement shall be made.
Article
3
Representations and Warranties of Seller
Except as set forth in the Hertz Disclosure Schedule, the Seller represents and warrants to the Investors as of the date hereof and the Closing Date that:
Section 3.01. Corporate Existence and Power. THC is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which would not have a Hertz Material Adverse Effect.
Section 3.02. Corporate Authorization. The execution, delivery and performance by the Seller, any of its Affiliates and the Company Group of this Agreement and the Ancillary Agreements to which they are a party and the consummation of the transactions contemplated hereby and thereby are within the Seller’s, any of its Affiliates’ and the Company Group’s
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corporate powers and have been duly authorized by all necessary corporate action on the part of the Seller, any of its Affiliates and the Company Group. This Agreement constitutes a valid and binding agreement of the Seller, any of its Affiliates and the Company Group and the Ancillary Agreements to which they are a party, when executed, will constitute a valid and binding agreement of the Seller, any of its Affiliates and the Company Group in each case enforceable against the Seller, any of its Affiliates and the Company Group in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).
Section 3.03. Company Group.
(a) All of the issued and outstanding Equity Interests of the Company are owned by the Seller or direct or indirect wholly owned Subsidiaries of the Seller. There are no outstanding (i) Equity Interests of the Company or any of its Subsidiaries, (ii) securities, notes or other obligations of the Company or any of its Subsidiaries convertible into or exchangeable for Equity Interests of the Company or any of its Subsidiaries, or (iii) options, warrants, calls, subscriptions or other rights (including preemptive rights) to acquire from the Company or any of its Subsidiaries, or other obligation of the Company or any of its Subsidiaries to issue, any Equity Interests of the Company or securities convertible into or exchangeable for Equity Interests of the Company or any of its Subsidiaries (the items in the foregoing clauses (i) through (iii) being referred to collectively as the “Company Securities”). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities, and there are no outstanding or authorized stock appreciation, phantom equity, profit participation or similar rights with respect to the Equity Interests of, or other equity or voting interest in, the Company or any of its Subsidiaries. There are no irrevocable proxies and no voting agreements with respect to the Equity Interests of the Company or any of its Subsidiaries, and there are no declared but unpaid dividends or distributions with respect to the Equity Interests of the Company or any of its Subsidiaries. All outstanding Equity Interests of the Company and its Subsidiaries have been duly authorized and validly issued, were acquired in compliance with all Applicable Law and preemptive or similar rights, and are held free and clear of all Liens other than Permitted Liens. Seller has made available to the Investors true and complete copies of the Organizational Documents of each member of the Company Group and such Organizational Documents are in full force and effect.
(b) The Company and each of its Subsidiaries is a legal entity, duly incorporated or organized, validly existing and, to the extent legally applicable, in good standing under the laws of its jurisdiction of incorporation or organization and has all requisite corporate or other similar organizational powers required to own, lease and operate its properties and assets and to carry on its business, including the Oro Business, as it is now being conducted. Each of the Company and its Subsidiaries is duly qualified to do business and in good standing in each jurisdiction where the ownership, leasing or operation of its properties or assets or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not reasonably be expected to have a Hertz Material Adverse Effect. All of the issued and outstanding Equity Interests of each Subsidiary of the Company are owned, directly or indirectly, by the Company, free and clear of any Lien other than Permitted Liens. There are no outstanding (x) Equity Interests of the Company or its Subsidiaries or (y) Contracts or other commitments or arrangements of any kind to which the Seller or any of the Company or its
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Subsidiaries is subject or bound (other than this Agreement and the organizational documents of the Company or its Subsidiaries) restricting or requiring the issuance, transfer, granting, delivery or sale, after the date hereof of any Equity Interests of any of the Company or its Subsidiaries. Since the date of its formation, no member of the Company Group has engaged in any business activities or conducted any operations other than the operations of the Oro Business (or any part thereof) and activities in connection with the transactions contemplated by this Agreement and the Contribution Agreement. None of the Company or its Subsidiaries owns, directly or indirectly, any Equity Interest in any other Person.
(c) All parties to the Contribution Agreement have performed and complied with their obligations thereunder in full, in each case, subject to the terms and conditions set forth therein.
Section 3.04. Governmental Authorization. The execution, delivery and performance by the Seller, any of its Affiliates and the Company Group of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority other than (i) compliance with any applicable requirements of the securities laws, and (ii) any action or filing as to which the failure to make or obtain would not have a material impact on the Company Group or the Oro Business.
Section 3.05. Noncontravention. The execution, delivery and performance by the Seller, any of its Affiliates and the Company Group of this Agreement and the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate the Organizational Documents of the Seller, Affiliate or the Company Group, respectively, (b) assuming compliance with the matters referred to in Section 3.04, violate any Applicable Law, (c) assuming the obtaining of all Hertz Required Consents, require any consent or other action by any Person under, result in a material breach of, constitute a default or an event that, with or without notice or lapse of time or both, constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation or to a loss of any benefit relating to the Oro Business or (d) result in the creation or imposition of any Lien on any Oro Asset, except for Permitted Liens, with such exceptions, in the case of each of clauses (c) and (d), as would not have, individually or in the aggregate, a material impact on the Company Group or the Oro Business.
Section 3.06. Required Consents. Section 3.06 of the Hertz Disclosure Schedule sets forth each agreement or other instrument binding upon the Seller, any of its Affiliates or the Company Group requiring a consent or other action by any Person as a result of the execution, delivery and performance of this Agreement or the Ancillary Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby, except such agreements or instruments which are not, individually or in the aggregate, material to the Oro Business taken as a whole (the “Hertz Required Consents”).
Section 3.07. Financial Statements. The unaudited balance sheet as of August 31, 2026, for the Oro Business, has been delivered to the Investors and is set forth as Section 3.07 of the Hertz Disclosure Schedule and, subject to the notes therein, fairly presents, in all material respects
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the financial position of the Oro Business as of the date thereof and its results of operations for the period then ended.
Section 3.08. Undisclosed Liabilities. There is no liability, debt or obligation of or claim against the Oro Business of a type required to be reflected or reserved for on a balance sheet prepared in accordance with GAAP, except for liabilities and obligations (a) expressly reflected or reserved for on the Oro Balance Sheet set forth in Section 3.07 of the Hertz Disclosure Schedule, including the notes thereto, (b) that have arisen since the Oro Balance Sheet Date in the ordinary course of the operation of the Oro Business consistent with past practices (none of which is a liability for a material breach of Contract, a material breach of warranty, tort, infringement, misappropriation or violation of law), (c) incurred in connection with the transactions contemplated by this Agreement, (d) that are obligations to perform pursuant to the terms of any of the Oro Contracts or (e) which do not exceed $500,000 individually or $2,500,000 in the aggregate.
Section 3.09. Absence of Certain Changes. Except as contemplated by this Agreement or any Ancillary Agreement:
(a) since the Oro Balance Sheet Date, the Oro Business has been conducted in the ordinary course consistent with past practices and there has not been any event, occurrence, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Hertz Material Adverse Effect.
(b) since the Oro Balance Sheet Date, except as expressly contemplated by this Agreement or the Ancillary Agreements, neither Seller, its Affiliates nor any member of the Company Group has:
(i) solely with respect to the Company Group, amended its Organizational Documents;
(ii) (A) split, combined or reclassified any Equity Interests of any member of the Company Group or made any other change in the capital structure of any member of the Company Group or (B) declared, set aside or paid any dividend or other distribution, other than cash dividends or other cash distributions by a member of the Company Group to any other member of the Company Group;
(iii) issued, granted or sold (or committed to issue, grant or sell) (A) any Equity Interests of any member of the Company Group to any Person (other than to any other member of the Company Group, Seller, or as otherwise contemplated by the Contribution Agreement and this Agreement) or (B) any securities, notes or other obligations convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any such Equity Interests;
(iv) incurred any capital expenditures in respect of the Oro Business, except for capital expenditures not to individually exceed $500,000 or in the aggregate to exceed $2,000,000;
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(v) suffered any damage, destruction or other casualty loss, in each case not covered (and continuing to be covered) by insurance, material to the Oro Business taken as a whole;
(vi) acquired (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, interests or businesses that are Oro Assets or otherwise intended for the conduct of the Oro Business, other than in the ordinary course of business consistent with past practice;
(vii) sold, leased, transferred, licensed or otherwise disposed of or incurred any Liens with respect to any material Oro Assets (excluding Oro IP or Oro IT Systems) except (A) Liens pursuant to existing commercial Contracts or commitments in the ordinary course consistent with past practice or (B) Permitted Liens;
(viii) entered into, amended or modified in any material respect or terminated any Contract required to be disclosed by Section 3.10 other than in the ordinary course of business consistent with past practice;
(ix) (A) sold, assigned, leased, transferred, licensed, sublicensed, covenanted not to assert, abandoned, canceled, failed to maintain, allowed to lapse, terminated, or otherwise disposed of or incurred any Liens with respect to any material Oro IP except (1) the expiration of Intellectual Property Rights at the end of the applicable statutory life or (2) Permitted Liens; or (B) disclosed any material confidential Know-How of the Oro Business to any Person other than pursuant to a written agreement or other obligation restricting the use and disclosure thereof by such Person in a manner that is consistent with such agreements or obligations entered into in the ordinary course of business for the protection thereof;
(x) created or allowed the Oro Business to create, incur, assume or guarantee any Debt in an amount greater than $2,500,000;
(xi) except as set forth on Section 3.09(b)(xi) of the Hertz Disclosure Schedule, other than as required by the terms of any Hertz Employee Plan or Applicable Law, (A) increased the compensation of any Oro Business Employee, (B) increased the benefits of any Oro Business Employee, or (C) established, adopted or materially amended any collective bargaining agreement, except, in each case (x) in line with annual compensation increases of less than 5% in the ordinary course of business consistent with past practice, and (y) with respect to any Hertz Employee Plan, any adoption of or amendment thereto that is generally applicable to the Seller’s employees;
(xii) (A) hired or offered to hire any new Oro Business Employee earning a salary of more than $250,000 (or local currency equivalent), except as may be necessary to fill vacant positions (with no greater base salary or other compensation than the employee he or she was replacing), (B) terminated the employ of any Oro Business Employee other than for cause, (C) instituted any general layoffs of Oro Business Employees, reduction in force or implement any early retirement or severance plan or announce the planning of such actions;
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(xiii) changed the Oro Business’s methods of accounting, except as required by changes in GAAP or other Applicable Law;
(xiv) solely with respect to the Company Group (A) made, changed, or revoked any material Tax election, (B) changed any Tax accounting period, adopted or changed any material method of Tax accounting, (C) filed any amended material Tax Return, (D) settled or compromised any claim, notice, audit or assessment in respect of any material Tax liability, (E) entered into any Tax allocation, indemnity or sharing agreement or similar Contract (other than customary commercial Contracts entered into in the ordinary course of business the principal subject matter of which is not Taxes) or (F) surrendered, settled, or compromised any right to claim a refund for material Taxes, or consented to an extension of the statute of limitations applicable to any material Tax claim or assessment; except, in each case, in the ordinary course of business consistent with past practice or required by applicable law, in each case as determined by the Seller in its sole reasonable discretion exercised in good faith; provided that, this clause (xiv) shall not apply or refer to any action or inaction taken or not taken or otherwise relating or with respect to any affiliated, consolidated, combined, unitary or similar Tax group that includes the Seller or any of its Affiliates that is not a member of the Company Group;
(xv) settled, or resolved, any claim or action relating to the Oro Business (other than actions relating to Taxes) involving more than $1,000,000 individually or $3,000,000 in the aggregate, except where such settlement or compromise provided solely for monetary damages to be paid in full by Seller;
(xvi) proposed or adopted a plan of complete or partial liquidation, dissolution, restructuring, recapitalization, or other reorganization with respect to the Company Group or otherwise relating to the Oro Business;
(xvii) failed to maintain any material license, authorization, permission, registration, consent, approval or waiver required to operate the Oro Business or agreed to any material amendment or condition to any such license, authorization, permission, registration, consent approval or waiver; or
(xviii) agreed, resolved or committed to do any of the foregoing.
Section 3.10. Material Contracts.
(a) Other than as set forth on Section 3.10(a) of the Hertz Disclosure Schedule no member of the Company Group is a party to or bound by, and none of the Oro Assets are bound by (collectively, the “Oro Contracts”):
(i) any lease (whether of real or personal property) (A) providing for annual rentals of $1,000,000 or more by any member of the Company Group of any material penalty or (B) under which it is a lessor of or permits any third party to hold or operate any property owned by it;
(ii) any agreement for the purchase of materials, supplies, goods, services, equipment or other assets providing for either (A) annual payments by the
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Company Group of $1,000,000 or more or (B) aggregate payments by the Company Group of $3,000,000 or more;
(iii) any Contract, including any sales, distribution or other similar agreement providing for the sale by the Oro Business of materials, supplies, goods, services, equipment or other assets, that provides for (A) payments to the Oro Business of $1,000,000 or more, or (B) a duration of more than 12 months;
(iv) any partnership, joint venture or other similar agreement or arrangement;
(v) any agreement relating to the acquisition or disposition of any business (whether by merger, sale of stock, sale of assets or otherwise);
(vi) any agreement relating to Debt (whether incurred, assumed, guaranteed or secured by any asset), except any such agreement where the maximum liabilities that may be owed by the Company Group does not exceed $1,000,000;
(vii) any agreement that limits the freedom of the Oro Business to compete in any line of business or with any Person or in any area;
(viii) any agreement with or for the benefit of the Seller or any Affiliates, officers, directors, managers, partners, members, or employees of the Seller or the Company (each, a “Related Party”);
(ix) any Shared Contract (as defined in the Contribution Agreement);
(x) any collective bargaining agreement or other Contract to or with any labor union or other employee representative of a group of employees;
(xi) any settlement, conciliation or similar agreement with any Governmental Authority or any other Person involving any actual or threatened litigation, arbitration, claim or other dispute, or that will require the Oro Business to pay consideration after the date hereof in excess of $1,000,000;
(xii) any Contract relating to the licensing, covenant not to assert, or other grant of rights or immunity of, for or to (A) any Oro IP by the Company or the Seller or any of its respective Subsidiaries or Affiliates to any Person, or (B) any Intellectual Property Rights by any Person to the Seller or any of its respective Subsidiaries or Affiliates that is material to and related to, or used or held for use in the Oro Business (in each case of the foregoing clauses (A) and (B), other than (1) “shrink wrap” or other standard Contracts granting nonexclusive rights, covenants, immunities, or licenses to use uncustomized Software or hosted services on generally available non-negotiated commercial terms with one-time or annual fees of $500,000 or less, (2) non-exclusive licenses, rights, immunities, or covenants that are incidental or ancillary to the primary purpose of such Contract and granted in the ordinary course of business);
(xiii) any Contract with any Governmental Authority;
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(xiv) any Contract for the employment or engagement of any officer, individual employee, or other person or entity on a full-time, part-time, consulting or other basis involving compensation in excess of $200,000 or agreement providing severance or other termination payments or benefits in excess of three (3) months of compensation or relating to loans to officers, directors, employees, the Company or Affiliates; or
(xv) any Contract that is otherwise material to the Oro Business, taken as a whole.
(b) Following the consummation of the transactions contemplated by the Contribution Agreement, none of Seller or its Affiliates are a party to any Contract that primarily relates to or is primarily held for use with respect to the Oro Assets or the Oro Business, other than any Shared Contract (as defined in the Contribution Agreement) as contemplated by Section 2.07 of the Contribution Agreement.
(c) The Seller has made available to the Investors true and complete copies of the Oro Contracts, in each case as amended or otherwise modified and in effect as of the date hereof. Each Oro Contract is in full force and effect, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity and represents the valid and binding obligations of the Seller or one of its Affiliates (including, for this purpose, the Company Group) party thereto and, to the knowledge of Hertz, represents the valid and binding obligations of the other parties thereto. Neither the Seller nor any of its Affiliates (including, for this purpose, the Company Group) has received written notice of cancellation of any Oro Contract, the cancellation of which would be, individually or in the aggregate, material to the Oro Business. Except, in each case, where the occurrence of such breach or default would not reasonably be expected to be, individually or in the aggregate, material to the Oro Business taken as a whole, (x) neither the Seller, any of its Affiliates (including, for this purpose, the Company Group) nor, to the knowledge of Hertz, any other party thereto is in material breach of or default under any such Oro Contract and (y) as of the date of this Agreement, neither the Seller nor any of its Affiliates (including, for this purpose, the Company Group) has received any written claim or written notice of material breach of or material default under any such Oro Contract.
Section 3.11. Litigation. There is no action, suit, investigation or proceeding before any arbitrator or any Governmental Authority pending, or to the knowledge of Hertz, threatened against, affecting or involving the Company Group, Oro Assets or Oro Business which is reasonably likely to be material to the Oro Business taken as a whole or which in any manner challenges or seeks to prevent, enjoin, alter or materially delay the transactions contemplated by this Agreement or any of the Ancillary Agreements.
Section 3.12. Licenses and Permits. Section 3.12 of the Hertz Disclosure Schedule sets forth each license, franchise, permit, certificate, approval or other similar authorization affecting, or relating in any way to, the Oro Business (the “Permits”), together with the name of the Governmental Authority issuing such Permit. The Permits necessary to conduct the Oro Business are valid and in full force and effect, there is no default under, and no condition exists that with notice or lapse of time or both would constitute a default under, such Permits, and no such Permits will be terminated or impaired or become terminable, in whole or in part, as a result of the
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transactions contemplated by this Agreement, except, in each case, as would not reasonably be expected to be, individually or in the aggregate, material to the Oro Business taken as a whole.
Section 3.13. Compliance with Laws and Court Orders. Neither Seller nor any member of the Company Group is, and for the past two years none of them have been, in violation of any Applicable Law relating to the Oro Assets or the conduct of the Oro Business, except for violations that are not and would not reasonably be expected to be, individually or in the aggregate, material to the Oro Business taken as a whole. Neither Seller, its Affiliates nor any member of the Company Group has received any written notice from any Governmental Authority of a material violation of any Applicable Law with respect to the Oro Business at any time during the past two years that would reasonably be expected to be, individually or in the aggregate, material to the Oro Business taken as a whole.
Section 3.14. Properties; Sufficiency of Assets.
(a) Except as set forth on Section 3.14(a) of the Hertz Disclosure Schedules, the Company and its Subsidiaries have good title to all of the Oro Assets. None of the Oro Assets is subject to any Lien, except for Permitted Liens.
(b) Section 3.14(b) of the Hertz Disclosure Schedule sets forth, as of the date of this Agreement, the leases, licenses and occupancy agreements relating to the real property that any of the Company or its Subsidiaries owns in fee simple and leases of, and other interests in, real property, in each case, together with all land, buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto (the “Oro Facilities”). Except as set forth in Section 3.14(b) of the Hertz Disclosure Schedule, the Company Group has a valid leasehold interest or license in such Oro Facilities free and clear of all Liens other than Permitted Liens.
(c) Section 3.14(c) of the Hertz Disclosure Schedule sets forth, as of the date of this Agreement any agreement pursuant to which any member of the Company Group has subleased or otherwise granted any Person the right to cross, use or occupy (or similar right) any Oro Facility, or any material portion thereof. Except as set forth in Section 3.14(c) of the Hertz Disclosure Schedule, no member of the Company Group has granted any outstanding options, rights of first refusals, rights of first offer or other rights to sell, assign or dispose any interest in any Oro Facility. All leases of such real property and personal property are in good standing and are valid, binding and enforceable in accordance with their respective terms and there does not exist under any such lease any default or any event which with notice or lapse of time or both would constitute a default, except for such default that would not reasonably be expected to be, individually or in the aggregate, material to the Oro Business.
(d) Except as would not be material to the Oro Business taken as a whole, the property and assets currently owned, licensed or leased by the Company Group or to be contributed pursuant to the Contribution Agreement, or which they otherwise have the valid right use, constitute all of the property and assets primarily used or held for use in connection with the Oro Business and are adequate to conduct the Oro Business as currently conducted, have been maintained in accordance with normal industry practice, are in good operating condition (subject to normal wear and tear) and are suitable for the purposes for which they are currently used.
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(e) Except as set forth on Section 3.14(e) of the Hertz Disclosure Schedule, no portion of any real property owned or leased by any member of the Company Group (or to be owned or leased by them after completion of the transactions contemplated pursuant to the Contribution Agreement) is leased or subleased by any member of the Company Group to any third party.
(f) There is no condemnation proceeding pending, or to the knowledge of Hertz, threatened with respect to any real property, or portion thereof, owned or leased by any member of the Company Group (or to be owned or leased by them after completion of the transactions contemplated pursuant to the Contribution Agreement) except for any such proceeding that would not reasonably be expected to be, individually or in the aggregate, material to the Oro Business.
(g) Immediately following the Closing, and after giving effect to the transactions contemplated by this Agreement, taking into account the assets and services provided under the Ancillary Agreements, Section 2.07, Section 2.09 and Section 5.01 of the Contribution Agreement, except as would not be material to the Oro Business taken as a whole, the assets, properties and rights owned, leased or licensed by the Company Group, together with the rights of the Company Group under the Ancillary Agreements, will be sufficient to conduct the Oro Business immediately following the Closing in substantially the same manner as the Oro Business has been conducted in the preceding 12 months.
(h) All material real property Taxes and assessments due and payable with respect to the Oro Facilities have been timely paid (except for those being contested in good faith by appropriate proceedings and for which adequate reserves have been established). The Company Group holds or has been assigned adequate rights to use (under the Ancillary Agreements or otherwise) all material Permits required under applicable zoning, building, and land use laws for the current use and operation of each Oro Facility in the conduct of the Oro Business, and, to the knowledge of Hertz, the current use and operation of each Oro Facility does not violate any such Permits or laws in any material respect.
Section 3.15. Intellectual Property.
(a) There is no Oro Registered IP.
(b) A member of the Company Group is the sole and exclusive owner of, and solely possesses, all Oro IP, free and clear of any Lien other than Permitted Liens and the Company Group possesses valid licenses or otherwise has the valid continuing right to use all other Intellectual Property Rights and IT Systems used or practiced (or held for use or practice) in the conduct or operation of the Oro Business and none of the foregoing will be adversely impacted by (nor will require the payment or grant of additional amounts or consideration as a result of) the execution, delivery or performance by any party thereto of either of this Agreement or any of the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby. There exist no material restrictions on the ownership, disclosure, use, license transfer or other exploitation of the Oro IP, none of the Oro IP has been adjudged invalid or unenforceable, and all Oro IP is valid and enforceable. The Oro IP and the rights provided to the Company under the Hertz Services Agreement constitute all of the Intellectual Property Rights necessary and sufficient
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to operate and conduct the Oro Business immediately following the Closing in substantially the same manner as the Oro Business has been conducted in the preceding 12 months. On and from Closing, the Seller and its Affiliates will not retain any Intellectual Property Rights or IT Systems used or practiced in (or held for use or practice in) or necessary for the conduct or operation of the Oro Business other than Intellectual Property Rights or IT Systems licensed to Company pursuant to the Hertz Services Agreement. Neither the execution, delivery or performance by Seller (or, if applicable, the relevant Affiliate) of this Agreement and the Ancillary Agreements nor the consummation of the transactions contemplated hereby or thereby by Seller (or, if applicable, the relevant Affiliate) will, with or without notice or lapse of time, result in, or give any other Person the right or option to cause or declare, (i) a loss of, or Lien (other than a Permitted Lien) on, any Oro IP; (ii) a breach of or default under any Oro Contract; or (iii) the grant, assignment or transfer to any other Person of any license, immunity, covenant not to assert or compete, or other right, title, or interest in, to or under any Oro IP.
(c) No member of the Company Group, the operation nor conduct of the Oro Business nor any Oro Asset is infringing, misappropriating, or otherwise violating, and has not in the last two (2) years infringed, misappropriated, or otherwise violated, any Intellectual Property Right of any third party in any material respect. There are no adverse third party actions, claims, orders, judgments or decrees pending or, to the knowledge of Hertz, threatened against Seller or any of its respective Subsidiaries (including the Company Group) by any third party or by or before any Governmental Authority, in any such case alleging that the operation or conduct of the Oro Business is infringing, misappropriation, or otherwise violating the Intellectual Property Rights of such third party.
(d) To the knowledge of Hertz, no third party is infringing, misappropriating, or otherwise violating, and in the last two (2) years, no third party has infringed, misappropriated, or otherwise violated, any Oro IP. There are no actions, claims, orders, judgments or decrees pending or threatened by Seller, any of its Affiliates or any member of the Company Group against any third party with respect to, nor has Seller, any of its Affiliates or any member of the Company Group in the last two (2) years sent any written notice to any third party alleging any infringement, misappropriation, or other unauthorized use of, any Oro IP.
(e) The Seller, its Affiliates and each member of Company Group have taken commercially reasonable steps to protect their respective rights in any confidential Know-How owned by them included in the Oro IP. Except as would not have a material effect, each current and former employee, consultant, and contractor who has contributed to the creation, conception, or development of any Oro IP has executed and delivered to a member of the Company Group a written agreement (i) containing an assignment to a member of the Company Group of all Oro IP arising out of such individual’s employment by, engagement by, or agreement with a member of the Company Group, and (ii) providing for the non-disclosure by such individual of any confidential Know-How of the Company Group. To the knowledge of Hertz, each current and former employee, consultant, and contractor is in material compliance with such agreement.
(f) The information technology systems (including software) that are owned, leased, outsourced, or licensed by the Company Group (the “Oro IT Systems”) operate and perform in all material respects in accordance with their documentation and functional specifications and otherwise in a manner that permits the Company Group to conduct the Oro
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Business as currently conducted, and the Company Group has implemented, and required that their third party vendors implement, adequate policies and commercially reasonable security (a) regarding the collection, use, disclosure, retention, processing, transfer, confidentiality, integrity and availability of personally identifiable information and business proprietary or sensitive information used in connection with the Oro Business (together, the “Oro Business Data”), in their possession, custody or control, or held or processed on their behalf, and (b) to protect the confidentiality, integrity and security of the Oro IT Systems (and all information and transactions stored or contained therein or transmitted thereby) against any unauthorized use, access, interruption, modification or corruption. To the Knowledge of Hertz, the Oro IT Systems do not contain any “time bombs,” “trojan horses,” “back doors,” “trap doors,” worms, viruses, spyware, keylogger software or other vulnerability, faults or malicious code or damaging devices designed or reasonably expected to adversely impact the functionality of or permit unauthorized access or to disable or otherwise harm any Oro IT System. The Company Group has not experienced any information security incident that has compromised the integrity or availability of the Oro IT Systems and there has been no loss, damage or unauthorized access, disclosure, use or breach of security of any Oro Business Data. The Company Group operates the Oro Business in compliance in all material respects with all Applicable Laws, internal and external policies applicable to the Oro Business, and Contracts relating to (i) the privacy of users of the products, services and websites of the Oro Business (ii) the collection, use, storage, processing disclosure, confidentiality, integrity or availability of Oro Business Data; and (iii) data privacy, data security, artificial intelligence or cybersecurity. No claims, actions, inquiries, or investigations have been asserted or initiated, nor, to the knowledge of Hertz, threatened against Seller or the Company Group alleging a violation of any such Applicable Law or Contract relating to data privacy, data security or cybersecurity. Neither the Seller nor the Company Group has been notified in writing, or been required by Applicable Law or Contract to notify in writing, any Person of any personally identifiable information or information security-related incident. The consummation of the transactions contemplated by this Agreement will not result in any violation of any Applicable Law relating to data privacy or cybersecurity.
Section 3.16. Employees and Employee Plans.
(a) Section 3.16(a) of the Hertz Disclosure Schedule sets forth an accurate and complete list of each material Hertz Employee Plan. With respect to each material Hertz Employee Plan, the Seller has made available to Investors, to the extent applicable, true, correct and complete copies of the material Hertz Employee Plan document, including any amendments thereto, and all related trust documents, insurance contracts or other funding vehicles.
(b) Except as set forth on Section 3.16(b) of the Hertz Disclosure Schedule, (i) every individual employed by Seller or its Affiliates, including the Company Group, who primarily devotes his or her working time to performing services on behalf of the Oro Business is employed by the Company or a member of the Company Group and (ii) no individual employed by Seller or its Affiliates, including the Company Group, who primarily devotes his or her working time to performing services on behalf of the Oro Business is employed by Seller or one of its Affiliates (other than the Company or a member of the Company Group), in each case after giving effect to the Closing.
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(c) Seller has provided to the Investors a schedule that sets forth, to the extent permitted by Applicable Law, each Oro Business Employee’s (i) name, (ii) title, (iii) hire date, (iv) location, and (v) base salary or wage rate and bonus opportunity as of the date of this Agreement. In the past six (6) years, neither Seller nor any of its Affiliates has any current or contingent liability or obligation under or with respect to a “multiemployer plan” (as defined in Section 3(37) of ERISA) or a plan that is or was subject to Title IV of ERISA or Section 412 of the Code, in each case that has not had, and would not reasonably be expected to have, a material liability on the Company Group taken as a whole.
(d) Each Hertz Employee Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the Internal Revenue Service (a copy of which has been provided to the Investors) or has applied to the Internal Revenue Service for such a letter within the applicable remedial amendment period or such period has not expired, and to Hertz’s knowledge, no act or omission has occurred which would reasonably be expected to adversely affect such plan’s qualification. Each Hertz Employee Plan (including any related trusts), has been, established, operated and administered in compliance with its terms and applicable Laws, including, without limitation, ERISA and the Code, except as has not had, and would not reasonably be expected to have, a material liability on the Company Group taken as a whole.
(e) Neither the execution and delivery of this Agreement, shareholder or other approval of this Agreement nor the consummation of the transactions contemplated by this Agreement could, either alone or in combination with another event, (i) entitle any Oro Business Employee to severance pay or any material increase in severance pay and (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation due to any such employee, director, officer or independent contractor.
(f) With respect to the Oro Business, the Seller and the Company Group has complied in all material respects with all employment-related contracts and policies to which it is a party or by which it is bound, except for instances of non-compliance that would not, individually or in the aggregate, be material to the Oro Business taken as a whole. The Seller and the Company Group are in material compliance with Applicable Law respecting employment and employment practices (including those relating to labor management relations, employment standards, labor relations, wages, hours, overtime, discrimination, sexual harassment, civil rights, affirmative action, human rights, work authorization, immigration, occupational health and safety, privacy, workers’ compensation, employment insurance, employer health tax, pay equity and continuation coverage under group health plans) and to the knowledge of Hertz, there are no pending or threatened proceedings before any Governmental Authority with respect to any of the foregoing. The Oro Business has no material liability or obligation under any Applicable Law arising out of the misclassification of any employee working as an employee, consultant, independent contractor or temporary employee, as applicable.
(g) Neither the Seller, the Company nor any of their respective Affiliates is a party to or subject to or required to negotiate any collective bargaining agreement or employee association agreement or bargaining relationship that covers any Oro Business Employee. To the knowledge of Hertz, no union organizing or decertification activities are underway or threatened with respect to the Oro Business and no such activities have occurred in the past three years. There
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is no labor strike, slowdown, walkout, lockout, work stoppage or other labor dispute pending or, to Hertz’s knowledge, threatened against or affecting the Oro Business, and no such dispute has occurred in the past three years.
(h) With respect to the Oro Business, neither Seller nor any member of the Company Group has any outstanding material liability under the WARN Act concerning employee layoffs implemented in the last two years. To the knowledge of Hertz, no employee layoff, facility closures, or similar reduction in force is currently contemplated, planned or announced that could affect Oro Business Employees.
Section 3.17. Environmental Compliance. Except as to matters that would not reasonably be expected to be material to the Oro Business taken as a whole:
(a) (i) No written notice, order, request for information, complaint or penalty has been received by Seller, and (ii) there are no judicial, administrative or other actions, suits or proceedings pending or threatened, in the case of each of (i) and (ii), which allege a violation of, or liability under, any Environmental Law and relate to the Oro Assets or Oro Facilities.
(b) Seller or the Company Group (i) has obtained or caused to be obtained all Permits necessary for the operation of the Oro Assets and the Oro Facilities to comply with all applicable Environmental Laws (as in effect on or prior to the dates this representation is made) and Seller or the Company Group is in compliance with the terms of such Permits and, with respect to the operation of the Oro Assets and the Oro Facilities, with all other applicable Environmental Laws (as in effect on or prior to the dates this representation is made); and (ii) with respect to the Oro Assets and the Oro Facilities, has not assumed or become subject to any liability of any other Person pursuant to Environmental Laws.
(c) With respect to the Oro Assets or the Oro Facilities, there has been no release, treatment, storage, disposal, handling, transportation or arrangement for the disposal or transportation of, or exposure of any Person to, any Hazardous Substances on, at, under or from the Oro Facilities, or from or in connection with the operations of the Oro Business, in a manner that could give rise to any liabilities (including any remedial or corrective action obligations) pursuant to Environmental Laws.
(d) To the knowledge of Hertz, Seller or the Company Group, solely with respect to the Oro Business, has not designed, manufactured, sold, marketed, installed, repaired or distributed products or other items containing asbestos or other Hazardous Substances so as to give rise to any liabilities under Environmental Laws.
Section 3.18. Tax Matters.
(a) Each member of the Company Group has timely filed, or caused to be timely filed, all material Tax Returns required to be filed by or with respect to such member, and all such Tax Returns are true, correct and complete in all material respects.
(b) Each member of the Company Group has timely paid all material Taxes required to be paid by such member (whether or not shown as due on any Tax Return).
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(c) There is not in force any extension (i) of the statute of limitations in respect of the collection or assessment of any material Taxes or (ii) of time within which to file any material Tax Return, in each case of, or with respect to, any member of the Company Group.
(d) There are no pending, active or, to the knowledge of Hertz, threatened (in writing) audits, assessments or reassessments or legal proceedings involving or relating to any material Taxes or material Tax Returns, of, or with respect to, any member of the Company Group or the Oro Assets (in the case of the Oro Assets, for any period (or portion thereof) prior to the contribution thereof to the Company).
(e) No claim has been made in the past three years by a Taxing Authority in a jurisdiction where a member of the Company Group does not file Tax Returns that such member is or may be subject to taxation in that jurisdiction, or by a Taxing Authority in a jurisdiction where Tax Returns are not filed with respect to the Oro Contributed Assets (as defined in the Contribution Agreement) that Seller or any of its Affiliates is or may be subject to taxation in that jurisdiction in respect of the Oro Assets (including for any period (or portion thereof) prior to the contribution thereof to the Company).
(f) Other than any Permitted Liens, there are no Liens for material Taxes on any of the Oro Assets.
(g) The Company is, and at all times since its formation has been, classified as a partnership or an entity disregarded as separate from its owner for U.S. federal and applicable state and local income Tax purposes, and no election has been made to treat the Company as an association taxable as a corporation. The Company is not, and has never been, a “publicly traded partnership” within the meaning of Section 7704 of the Code.
(h) No election under Section 6221(b) of the Code has been made (or has been required to be made) with respect to the Company, no administrative adjustment request under Section 6227 of the Code has been filed by or with respect to the Company, and there is no pending or, to the knowledge of Hertz, threatened audit or other proceeding with respect to Taxes at the level of the Company.
(i) The Company has in effect, or will have in effect for its taxable year that includes the Closing Date, a valid election under Section 754 of the Code.
(j) Each member of the Company Group has withheld and timely paid over to the appropriate Taxing Authority all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, member, partner or other Person by such member and complied in all material respects with all related information reporting requirements.
(k) No member of the Company Group is a party to or bound by any Tax sharing, Tax allocation, Tax indemnification or similar Contract, other than (i) any such Contract solely among members of the Company Group, and (ii) customary commercial Contracts entered into in the ordinary course of business the principal subject matter of which is not Taxes. No member of the Company Group 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
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provision of state, local or non-U.S. Applicable Law), as a transferee or successor, by Contract (other than a Contract described in the foregoing clauses (i) through (ii)) or otherwise.
(l) No member of the Company Group will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) beginning after the Closing Date as a result of any of the following occurring or existing on or prior to the Closing Date: (i) a “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Applicable Law) executed on or prior to the Closing Date; (ii) an installment sale or open transaction disposition made on or prior to the Closing Date; (iii) any prepaid amount or advance payment received on or prior to the Closing Date, including any advance payment the inclusion of which is deferred under Section 451(c) of the Code or Treasury Regulations Section 1.451-8 (or any similar provision of state, local or non-U.S. Applicable Law); (iv) any change in, or use of an improper, method of accounting for a taxable period (or portion thereof) ending on or prior to the Closing Date, including pursuant to Section 481 of the Code (or any similar provision of state, local or non-U.S. Applicable Law); or (v) any “intercompany transaction” or “excess loss account” described in Treasury Regulations Section 1.1502-13 or 1.1502-19, respectively (or any similar provision of state, local or non-U.S. Applicable Law).
(m) No member of the Company Group has any material liability under any abandoned or unclaimed property, escheat or similar applicable law and there is no abandoned or unclaimed property or escheat obligation with respect to any property or other assets held or owned by any member of the Company Group.
Section 3.19. Finders’ Fees . Except for PJT Partners LP, whose fees and expenses will be paid by Seller, there is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Seller who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.
Section 3.20. Insurance.
(a) Section 3.20(a) of the Hertz Disclosure Schedule sets forth a description of the insurance policies under which the Oro Assets are covered as of the date of this Agreement (the “Hertz Insurance Policies”). Each Hertz Insurance Policy is in full force and effect and all premiums with respect thereto have been paid to the extent due and payable. No written notice of cancellation or termination has been received by Seller or any member of the Company Group with respect to any such Hertz Insurance Policy that has not been replaced on substantially similar terms prior to the date of such cancellation or termination.
(b) Section 3.20(b) of the Hertz Disclosure Schedule sets forth a list of all pending claims that have been made under any Hertz Insurance Policy since January 1, 2026 with respect to the Oro Assets.
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Section 3.21. Affiliate Transactions.
(a) Neither Seller, the Company nor any of their respective Related Parties have, or during the last three years have had, any direct material interest in, or is or during the last three years was, a director, manager, officer, or employee of, any Person that is a client, customer, supplier, vendor, lessor, lessee, debtor, creditor, or competitor of the Oro Business.
(b) Section 3.21(b) the Hertz Disclosure Schedule sets forth all intercompany balances between the Oro business, on the one hand, and the Retained Business, on the other hand.
Section 3.22. Bank Accounts. Section 3.22 of the Hertz Disclosure Schedule contains a complete and correct list of the names and locations of all banks or other financial institutions in which any member of the Company Group has an account or safe deposit box relating to the Oro Business, the identity of each such account or safe deposit box by account number at such financial institutions, and the names of all Persons authorized to draw thereon or to have access thereto and all authorized signatories on such accounts or safe deposit boxes.
Section 3.23. OFAC Compliance; Anti-Corruption; Sanctions; Anti-Money Laundering. Seller, each member of the Company Group and each of their respective Affiliates and, to the knowledge of Seller, the employees and agents of such Persons, solely in their capacity as such, in connection with the Oro Business and the activities of the Company Group, are in compliance with applicable Anti-Corruption Laws, Sanctions, and AML Laws (if any). None of Seller, any member of the Company Group or their respective Affiliates is a Sanctioned Person.
Article
4
Representations and Warranties of Investor
Each Investor represents and warrants, severally and solely as to itself and not jointly, to Seller and the Company as of the date hereof and the Closing Date that:
Section 4.01. Corporate Existence and Power. Such Investor is a legal entity, duly incorporated, validly existing and, to the extent legally applicable, in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all governmental licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, except for those licenses, authorizations, permits, consents and approvals the absence of which would not have, individually or in the aggregate, an Investor Material Adverse Effect.
Section 4.02. Corporate Authorization. The execution, delivery and performance by such Investor or any of its Affiliates of this Agreement and the Ancillary Agreements to which such Investor or any of its Affiliates is a party and the consummation of the transactions contemplated hereby and thereby are within such Investor’s and such Affiliate’s corporate or other similar organizational powers and have been, or will be prior to their execution, delivery and performance, duly authorized by all necessary corporate or other similar organizational action on the part of such Investor and any such Affiliates. This Agreement constitutes a valid and binding agreement of such Investor and the Ancillary Agreements to which it is a party, when executed, will constitute a valid and binding agreement of such Investor, in each case enforceable against such Investor in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general
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principles of equity). Each other Ancillary Agreement to which any Affiliate of such Investor is a party constitutes or, upon the execution and delivery thereof by such Affiliate, will constitute, a valid and binding agreement of such Affiliate, in each case enforceable against such Affiliate in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other laws affecting creditors’ rights generally and general principles of equity).
Section 4.03. Governmental Authorization. The execution, delivery and performance by such Investor or any of its Affiliates of this Agreement and the Ancillary Agreements to which such Investor or any of its Affiliates is a party and the consummation of the transactions contemplated hereby and thereby require no action by or in respect of, or filing with, any Governmental Authority other than (a) compliance with any applicable requirements of securities laws and (b) any action or filing as to which the failure to make or obtain would not have, individually or in the aggregate, an Investor Material Adverse Effect.
Section 4.04. Noncontravention. The execution, delivery and performance by such Investor and its Affiliates of this Agreement and the Ancillary Agreements to which such Investor or any of its Affiliates is a party, and the consummation of the transactions contemplated hereby and thereby do not and will not (a) violate the organizational or governing documents of such Investor or such Affiliates, (b) assuming compliance with the matters referred to in Section 4.03, violate any Applicable Law, (c) require any consent or other action by any Person under, constitute a default under or give rise to any right of termination, cancellation or acceleration of any right or obligation or to a loss of any benefit relating to the Investor or such Affiliates or (d) result in the creation or imposition of any Lien on any asset of such Investor or such Affiliates, with such exceptions, in the case of each of clauses (c) and (d), as would not have, individually or in the aggregate, an Investor Material Adverse Effect.
Section 4.05. Litigation. There is no action, suit, investigation or proceeding pending, or to the knowledge of such Investor, threatened against or affecting, the Investor or its Affiliates which in any manner challenges or seeks or is reasonably likely to prevent, enjoin or alter the transactions contemplated by this Agreement or any of the Ancillary Agreements or such Investors’ ability to perform or comply with its obligations hereunder or thereunder or would have, individually or in the aggregate, an Investor Material Adverse Effect.
Section 4.06. ERISA. Except for GCM, each Investor is not (a) an employee benefit plan subject to Title I of ERISA, (b) a plan or account subject to Section 4975 of the Code or (c) an entity deemed to hold “plan assets” of any such plan or account under Section 3(42) of ERISA, 29 C.F.R. 2510.3-101, or otherwise. With respect to GCM, the purchase, holding and disposition of the Equity Interests and the transactions contemplated pursuant to this Agreement and the Ancillary Agreements will not result in a non-exempt prohibited transaction or other violation of Section 406 of ERISA or Section 4975 of the Code.
Section 4.07. Financing. The Investor has sufficient cash, available lines of credit or other sources of immediately available funds to enable it to make full payment of the Investor Cash Payment Amount and any other amounts to be paid by it under this Agreement or any of the Ancillary Agreements and such Investor acknowledges and agrees that the availability of funds
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shall not be a condition to the obligation of such Investor to consummate the transactions contemplated hereby or thereby.
Section 4.08. Finders’ Fees. There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of such Investor who might be entitled to any fee or commission in connection with the transactions contemplated by this Agreement.
Section 4.09. Inspections; No Other Representations. Investor is an informed and sophisticated entity, and has engaged expert advisors, experienced in the evaluation of property and assets such as the Equity Interests in the Company and the Oro Assets as contemplated hereunder. Investor has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement and each Ancillary Agreement to which it is a party. Except as expressly set forth in this Agreement, Investor acknowledges and agrees that Investor is acquiring an interest in the Oro Assets “as is”, and Investor agrees to accept the Oro Assets and the Oro Business, in the condition they are in on the Closing Date based on its own inspection, examination and determination with respect to all matters. Without limiting the generality of the foregoing, except as expressly set forth in this Agreement, Investor acknowledges that neither of Seller makes any representation or warranty with respect to any projections, estimates or budgets delivered to or made available to Investor of future revenues, future results of operations (or any component thereof), future cash flows or future financial condition (or any component thereof) of the Oro Business or the future business and operations of the Oro Business or any other information or documents made available to Investor or its counsel, accountants or advisors with respect to the Oro Business.
Article
5
Covenants of the Parties
The parties hereto agree that:
Section 5.01. Efforts; Further Assurance. Subject to the terms and conditions of this Agreement, the parties hereto shall use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary or desirable under Applicable Law to consummate the transactions contemplated by this Agreement and the Ancillary Agreements as soon as practicable. The parties hereto agree to use their reasonable best efforts to execute and deliver, at no cost to the other party, such other documents, certificates, agreements and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the transactions contemplated by this Agreement and the Ancillary Agreements. Except as expressly contemplated or required by this Agreement or any Ancillary Agreement, as required by Applicable Law, or as the Investors otherwise consent to in advance in writing, from the date hereof until the Closing, the Company and Seller shall, and shall cause the other members of the Company Group to, (i) conduct the Oro Business in the ordinary course of business consistent with past practice and not take any of the actions specified in Section 3.09; (ii) not take any action, or knowingly omit to take any action, that would reasonably be expected to impede, delay or inhibit the consummation of the transactions contemplated by this Agreement and (iii) not take any action, or agree to take any action, that would require the consent
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of the Board (as defined in the Post-Closing LLC Agreement) pursuant to Section 5.02 of the Post-Closing LLC Agreement or otherwise require the consent of the Board, an Investor Member (as defined in the Post-Closing LLC Agreement) or an Investor Member Designated Director (as defined in the Post-Closing LLC Agreement) (as defined in the Post-Closing LLC Agreement).
Section 5.02. Certain Filings. The parties hereto shall cooperate with one another in determining whether any action by or in respect of, or filing with, any Governmental Authority is required, or any actions, consents, approvals or waivers are required to be obtained from parties to any material contracts, in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and in taking such actions or making any such filings, furnishing information required in connection therewith and seeking timely to obtain any such actions, consents, approvals or waivers. Seller, on the one hand, and the Investors, on the other hand, shall each have responsibility for their respective filing fees associated with any other required filings.
Section 5.03. Public Announcements . The parties agree to consult with each other before issuing any press release or making any public statement with respect to this Agreement or the transactions contemplated hereby and, except for any press releases and public statements the making of which may be required by Applicable Law or any listing agreement with any national securities exchange, will not issue any such press release or make any such public statement without the other parties’ consent (not to be unreasonably withheld, conditioned or delayed); provided, that nothing in this Section 5.03 shall restrict any Investor from disclosing any information regarding the transactions contemplated by this Agreement or the Ancillary Agreements (a) to any of its direct and indirect equityholders, prospective or existing investors, Affiliates and its and their respective officers, directors, employees, agents, advisors or other representatives, financing sources, or insurance underwriters, in each case on a confidential basis and solely to the extent such persons need to know such information, (b) for purposes of compliance with its or its Affiliates’ or direct or indirect equityholders’ respective financial reporting obligations or (c) in connection with its or its Affiliates’ or direct or indirect equityholders’ fundraising or marketing activities, in each case of clauses (a), (b) and (c) so long as the recipients of such information are bound by customary confidentiality obligations.
Section 5.04. Notices of Certain Events. Each party hereto shall promptly notify the other parties hereto of:
(a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and
(c) prior to the Closing, any change, effect, event, state of facts, circumstance or occurrence that has, or would reasonably be expected to cause the representations and warranties made by such party to be untrue or inaccurate in any material respect.
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Section 5.05. Access; Confidentiality.
(a) On and after the Closing Date, Seller hereto will afford promptly to the other parties hereto and their respective agents reasonable access to its properties, books, records, employees and auditors to the extent necessary to permit the other parties hereto to determine any matter relating to their respective rights and obligations hereunder or to any period ending on or before the Closing Date; provided that any such access shall not unreasonably interfere with the conduct of the business of Seller. Each party hereto will hold, and will use its best efforts to cause its respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of Applicable Law, all confidential documents and information concerning the other parties hereto provided to it pursuant to this Section 5.05.
(b) Without limiting the generality of the foregoing, on and after the Closing Date, Seller will afford promptly to the Company, the Investors and their respective agents reasonable access to its books of account, financial and other records (including accountant’s work papers), information, employees and auditors to the extent necessary or useful for the Company or the Investors, as applicable, in connection with any audit, investigation, dispute or litigation or any other reasonable business purpose relating to the Oro Business; provided that any such access by the Company or the Investors shall not unreasonably interfere with the conduct of the business of Seller. The Company or such Investor(s) making such request for access, as applicable, shall bear all of the out-of-pocket costs and expenses (including attorneys’ fees, but excluding reimbursement for general overhead, salaries and employee benefits) reasonably incurred in connection with the foregoing.
Section 5.06. Equity Plan.
Prior to the Closing, Seller shall take all actions necessary so that the Company adopts an equity compensation plan (the “Equity Plan”) to grant “compensatory options” (as defined under the Post-Closing LLC Agreement) (with respect to Class D Common Units) (as defined under Post-Closing LLC Agreement) with an option pool equal to 10% of the total number of Units (as defined under the Post-Closing LLC Agreement) of the Company outstanding immediately after the Closing (calculated on a fully diluted basis giving effect to all Common Units), which Units shall be reserved for issuance by the Company to eligible employees pursuant to the Equity Plan, subject to and in accordance with the terms and conditions of the Post-Closing LLC Agreement and the Equity Plan. A draft of the Equity Plan is attached hereto as Exhibit C.
Article
6
Tax Matters
Section 6.01. Transfer Taxes; Certain Tax Matters.
(a) All excise, sales, use, value added, registration stamp, recording, documentary, conveyancing, franchise, real property gains, real or personal property, transfer and similar Taxes, levies, charges and fees (collectively, “Transfer Taxes”) incurred in connection with the transactions contemplated by this Agreement shall be borne 50% by Seller and 50% by the Investors (subject to the reimbursement provided pursuant to this Section 6.01(a) and any Transfer Taxes incurred in connection with the Hertz Contributions (as defined in the Contribution
33
Agreement) or otherwise arising under the Contribution Agreement shall be borne 100% by Seller (“Contribution Transfer Taxes”). Each of the Company, the Investors and Seller shall cooperate in providing each other with any appropriate resale exemption certifications and other similar documentation. Transfer Taxes shall be timely paid, and all applicable filings, reports and Tax Returns shall be timely filed, as provided by Applicable Law. In the event Seller, the Investors or the Company pay any Transfer Taxes incurred in connection with the transactions contemplated by this Agreement, the parties shall make such payments to each other as necessary to achieve the allocation of liability described above in this Section 6.01; provided that in no event shall the Company or any other member of the Company Group reimburse, bear or otherwise be liable for any Contribution Transfer Taxes.
(b) The parties agree that the Company shall file an election under Section 754 of the Code for its first taxable year in existence and shall cause a Section 754 election to be maintained and in effect for the each taxable year Company.
(c) The parties agree that, for U.S. federal and applicable state and local income Tax purposes, the Company shall determine the distributive shares of the Company’s items of income, gain, loss, deduction and credit for its taxable year that includes the Closing Date with respect to the Equity Interests transferred pursuant to Section 2.01 using the “interim closing of the books” method under Section 706(d) of the Code and Treasury Regulations Section 1.706-4 (and any similar provision of state or local Tax law), treating the Company’s books as closed as of the end of the day on the Closing Date.
Section 6.02. Tax Treatment.
(a) Notwithstanding anything to the contrary herein, the parties intend, for U.S. federal income tax purposes, that the transaction described in Section 2.01 shall be treated as a sale of a partnership interest in the Company governed by Sections 741 and 751(a) of the Code to the extent permitted by Applicable Law (the “Intended Tax Treatment”).
(b) The parties shall report the transactions described in Section 6.02(a) in a manner that is consistent with the Intended Tax Treatment and shall not take any position that is inconsistent with the Intended Tax Treatment in connection with any audit or other proceeding.
(c) As soon as practicable (and in any event within 120 days) after the Closing Date, Seller shall deliver a statement (the “Valuation Statement”) to the Investors setting forth the fair market value and adjusted tax basis (as of immediately after the Closing) of each of the assets of the Company Group (including each of the Oro Assets) in a manner that is consistent with the principles of Sections 704(c), 707, 743, 751, 752, 755 and 1060 of the Code to the extent necessary (and in sufficient detail) to comply with such Code provisions and the Treasury Regulations promulgated thereunder. If within 20 days after the delivery of the Valuation Statement, the Investors’ Representative notifies Seller in writing that it objects to the Valuation Statement, the Investors’ Representative and Seller shall use commercially reasonable efforts to resolve such dispute within 20 days of such notice. In the event that the Investors’ Representative and Seller are unable to resolve such dispute within such 20-day period, the Investors’ Representative and Seller shall jointly retain an independent nationally recognized accounting firm mutually acceptable to the Investors’ Representative and Seller (the “Accounting Referee”) to
34
resolve the disputed items, which resolution shall be final and binding on the parties. Upon resolution of the disputed items, the Valuation Statement shall be adjusted to reflect such resolution. The costs, fees and expenses of the Accounting Referee shall be borne equally by the Investors, on the one hand, and the Seller, on the other hand.
(d) Seller and the Investors each agree to be bound by the Valuation Statement as finally determined pursuant to Section 6.02(c) and shall (and shall cause the Company Group and their respective Affiliates to) act in accordance with the Valuation Statement in the preparation, filing and audit of any Tax Return (including Internal Revenue Service Form 8308 and any statement required under Treasury Regulations Section 1.743-1(k)), and shall not take any position inconsistent therewith in any Tax Return, audit or other proceeding, unless otherwise required by a final determination within the meaning of Section 1313(a) of the Code.
Article
7
Survival; Indemnification
Section 7.01. Survival. (a) The representations and warranties of the parties hereto contained in this Agreement shall survive the Closing until the first anniversary of the Closing Date; provided, that the representations and warranties contained in Section 3.18 shall survive the Closing until the date that is sixty (60) days after the expiration of the applicable statute of limitations; provided, further, that the Hertz Fundamental Reps and the Investor Fundamental Reps shall survive indefinitely or until the latest date permitted by Applicable Law. The covenants and agreements of the parties hereto contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith shall survive the Closing until the first anniversary of the Closing Date, except for those covenants and agreements that are by their terms to be performed in whole or in part at or after the Closing, which covenants and agreements shall survive by their terms. Notwithstanding the preceding sentences, any breach of covenant, agreement, representation or warranty in respect of which indemnity may be sought or any other indemnification right set forth in Section 7.02 that contemplates a defined indemnification period under this Agreement shall survive the time at which it would otherwise terminate pursuant to the preceding sentences or shall survive following the indicated period in Section 7.02, if notice of the inaccuracy thereof giving rise to such right of indemnity or a claim for indemnity shall have been given to the party against whom such indemnity may be sought prior to such time.
Section 7.02. Indemnification. Effective at and after the Closing, Seller hereby indemnifies:
(a) each of the Investors, any direct or indirect members of the Investors, and their respective successors and assigns and its and their respective Affiliates, directors, officers and employees (collectively, the “Investor Indemnified Parties”), against, and agrees to hold each of them harmless from, any and all out of pocket damages, losses, Taxes, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding whether involving a third party claim or a claim solely between the parties hereto), excluding (except to the extent paid to a third party in connection with a Third Party Claim) any damages based on a multiple of EBITDA (earnings before interest, taxes, depreciation and amortization) or any other financial metric (whether trailing, forward or otherwise), punitive, diminution in value, lost profits, speculative, remote,
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exemplary, special, incidental, indirect or consequential (or similar) damages, losses, liabilities or expenses except in each case to the extent recoverable under applicable principles of Delaware contract law because they were the natural, probable and reasonably foreseeable consequence of the relevant breach or action and were not occasioned by the special circumstances relating to the applicable indemnified party hereunder (“Damages”), incurred or suffered by any Investor Indemnified Party arising out of any breach or inaccuracy of the representations or warranties by Seller or the Company in this Agreement (a “Hertz Warranty Breach”) or any breach of covenant or agreement made or to be performed by Seller or the Company pursuant to this Agreement or, prior to the Closing, by the Company;
provided that (i) Seller shall not be liable for any Hertz Warranty Breach (other than with respect to fraud or breaches of Hertz Fundamental Reps or the representations and warranties contained in Section 3.18) unless such Hertz Warranty Breach involves Damages in excess of $25,000, and no such Damage in an amount below $25,000 shall be counted towards the Hertz Basket, (ii) Seller shall not be liable for any Hertz Warranty Breach (other than breaches of Hertz Fundamental Reps or the representations and warranties contained in Section 3.18) unless the aggregate amount of Damages with respect to all such Hertz Warranty Breaches exceeds the Hertz Basket and then only to the extent of such excess, (iii) Seller maximum liability for any and all Hertz Warranty Breaches (other than with respect to fraud or breaches of Hertz Fundamental Reps) shall not exceed the Hertz Cap and (iv) Seller shall not be liable under this Section 7.02 for any Taxes imposed with respect to any taxable period that is not a Pre-Closing Tax Period, except that this clause (iv) shall not limit Seller’s liability for (A) any Damages arising out of or resulting from any Hertz Warranty Breach of the representations and warranties contained in Section 3.18(k) or Section 3.18(l), or (B) any Transfer Taxes borne by Seller pursuant to Section 6.01(a). Notwithstanding anything in this Agreement to the contrary, the indemnification obligations of Seller under this Section 7.02 (other than with respect to fraud or breaches of Hertz Fundamental Reps) shall be limited in the aggregate to an amount equal to $80,891,975.10.
(b) Effective at and after the Closing, each of the Investors hereby (severally and not jointly) indemnifies:
(i) Seller against and agree to hold each of them harmless from any and all Damages incurred or suffered by Seller (including as a result of their direct or indirect ownership of equity interests of the Company, including with respect to Damages incurred or suffered by the Company) arising out of (A) any breach or inaccuracy of the representations or warranties by such Investor in this Agreement (an “Investor Warranty Breach”) or (B) any breach of covenant or agreement made or to be performed by such Investor pursuant to this Agreement;
provided, that (x) no Investor shall be liable for any Investor Warranty Breach (other than in the event of fraud or breaches of Investor Fundamental Reps) unless such Investor Warranty Breach involves Damages in excess of $25,000, and no such Damage in an amount below $25,000 shall be counted towards the Investor Basket, (y) the Investors shall not be liable for any Investor Warranty Breach (other than breaches of Investor Fundamental Reps) unless the aggregate amount of Damages with respect to all such Investor Warranty Breaches exceeds such Investor’s Percentage Interest of the Investor Basket and then only to the extent of such excess and (z) such Investor’s maximum liability for any Investor Warranty Breaches (other than in the event of fraud
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or breaches of Investor Fundamental Reps) shall not exceed such Investor’s Percentage Interest of the Investor Cap. Notwithstanding anything in this Agreement to the contrary, the indemnification obligations of Investor under this Section 7.02(b) (other than with respect to fraud or breaches of Investor Fundamental Reps) shall be limited in the aggregate to an amount equal to such Investor’s Percentage Interest of $80,891,975.10.
(c) Solely for purposes of this Article 7 (including for determining whether or not any Hertz Warranty Breach or Investor Warranty Breach has occurred and the calculation of Damages) each representation and warranty contained in this Agreement (other than the representations and warranties contained in Section 3.09(a) and 3.10(a)) shall be read without regard to any materiality, Hertz Material Adverse Effect or Investor Material Adverse Effect qualifier or exception contained therein.
Section 7.03. Third Party Claim Procedures.
(a) The party seeking indemnification under Section 7.02 (the “Indemnified Party”) agrees to give prompt notice in writing to the party against whom indemnity is to be sought (the “Indemnifying Party”) of the assertion of any claim or the commencement of any suit, action or proceeding by any third party (“Third Party Claim”) in respect of which indemnity may be sought under such Section. Such notice shall set forth in reasonable detail such Third Party Claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have materially and adversely prejudiced the Indemnifying Party.
(b) The Indemnifying Party shall be entitled to participate in the defense of any Third Party Claim and, subject to the limitations set forth in this Section 7.03, shall be entitled to control and appoint lead counsel for such defense, in each case at its own expense. The Indemnifying Party shall be liable for the reasonable fees and expenses of counsel employed by the Indemnified Party for any period during which the Indemnifying Party has not assumed the defense thereof (other than during any period in which the Indemnified Party shall have not yet given notice of the Third Party Claim as provided above).
(c) If the Indemnifying Party shall assume the control of the defense of any Third Party Claim in accordance with the provisions of this Section 7.03, (i) the Indemnifying Party shall obtain the prior written consent of the Indemnified Party (which shall not be unreasonably withheld) before entering into any settlement of such Third Party Claim, if the settlement (A) does not expressly completely and unconditionally release the Indemnified Party and its Affiliates from all liabilities and obligations with respect to such Third Party Claim, (B) imposes injunctive or other equitable relief against the Indemnified Party or any of its Affiliates or (C) includes a statement or admission of fault, culpability or failure to act by or on behalf of the Indemnified Party or any of its Affiliates and (ii) the Indemnified Party shall be entitled to participate in the defense of any Third Party Claim and to employ separate counsel of its choice for such purpose. The fees and expenses of such separate counsel shall be paid by the Indemnified Party; provided, however, that, the Indemnifying Party shall not be entitled to assume control of such defense, and the reasonable fees and expenses of counsel retained by the Indemnified Party shall constitute Damages hereunder, if (1) such Third Party Claim for indemnification relates to or
37
arises in connection with any criminal proceeding, action, indictment, allegation or investigation; (2) such Third Party Claim seeks an injunction or equitable relief against the Indemnified Party provided that the Indemnifying Party shall not be entitled to assume control of such defense solely to the extent related to such injunctive or equitable relief is sought; (3) the Indemnified Party has been advised in writing by counsel that the representation of the Indemnified Party and the Indemnifying Party by the same counsel creates an actual or potential conflict of interest for such counsel or (4) the Indemnified Party gives written notice to the Indemnifying Party in the notice of claim that it wishes to retain control of the defense of such Third Party Claim and agrees to bear the costs of defense of such Third Party Claim and any losses arising out of such Third Party Claim.
(d) Each party shall cooperate, and cause their respective Affiliates to cooperate, in the defense or prosecution of any Third Party Claim and shall furnish or cause to be furnished such records, information and testimony, and attend such conferences, discovery proceedings, hearings, trials or appeals, as may be reasonably requested in connection therewith.
Section 7.04. Direct Claim Procedures. In the event an Indemnified Party has a claim for indemnity under Section 7.02 against an Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party agrees to give prompt notice in writing of such claim to the Indemnifying Party. Such notice shall set forth in reasonable detail such claim and the basis for indemnification (taking into account the information then available to the Indemnified Party). The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except to the extent such failure shall have materially and adversely prejudiced the Indemnifying Party. If the Indemnifying Party does not notify the Indemnified Party within 15 days following the receipt of a notice with respect to any such claim that the Indemnifying Party disputes its indemnity obligation to the Indemnified Party for any Damages with respect to such claim, such Damages shall be conclusively deemed a liability of the Indemnifying Party and the Indemnifying Party shall promptly pay to the Indemnified Party any and all Damages arising out of such claim. If the Indemnifying Party has timely disputed its indemnity obligation for any Damages with respect to such claim, the parties shall proceed in good faith to negotiate a resolution of such dispute and, if not resolved through negotiations, such dispute shall be resolved by litigation in an appropriate court of jurisdiction determined pursuant to Section 8.07.
Section 7.05. Calculation of Damages.
(a) The amount of any Damages payable under this Article 7 by the Indemnifying Party shall be net of (i) any amounts actually recovered by the Indemnified Party under applicable insurance policies (net of costs), or from any other Person alleged to be responsible therefor and (ii) the net Tax benefit actually realized by the Indemnified Party and its Affiliates as a result of the incurrence or payment of such Damages by the Indemnified Party, determined (x) on a “with-and-without basis” and (y) with respect to any net tax benefit that is allocated to a partner of the Company, such net tax benefit shall be treated as realized only when and to the extent that it results in an actual reduction in the amount of cash Taxes paid or payable by such partner (or any direct or indirect owner of such partner) (a “Tax Benefit”). If the Indemnified Party or any of its Affiliates receive any Tax Benefits subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly
38
pay to the Indemnifying Party the amount of such Tax Benefits. If the Indemnified Party actually receives any amounts under applicable insurance policies, or from any other Person alleged to be responsible for any Damages, subsequent to an indemnification payment by the Indemnifying Party, then such Indemnified Party shall promptly reimburse the Indemnifying Party for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification payment up to the amount received by the Indemnified Party, net of any expenses incurred by such Indemnified Party in collecting such amount. The Indemnified Party shall use commercially reasonable efforts to submit any claims for recovery under applicable insurance policies, and shall use commercially reasonable efforts to seek any and all Tax credits or refunds to the extent such Tax credits or refunds would give rise to a Tax Benefit; provided, that in no event shall the Indemnified Party be required to (A) initiate, threaten or pursue any action, suit, proceeding or claim against any third party (other than the submission of insurance claims under applicable insurance policies and claims for Tax credits or refunds as expressly provided above), (B) make any payment to, or offer or grant any accommodation (financial or otherwise) to, any third party, or (C) take any action that the Indemnified Party determines in its reasonable discretion would be materially detrimental to its reputation, its relationship with any insurer or any other third party, or its future business prospects.
(b) Subject to the proviso of Section 7.05(a), each Indemnified Party shall use commercially reasonable efforts to mitigate in accordance with Applicable Law any loss for which such Indemnified Party seeks indemnification under this Agreement. If such Indemnified Party mitigates its loss after the Indemnifying Party has paid the Indemnified Party under any indemnification provision of this Agreement in respect of that loss, the Indemnified Party must notify the Indemnifying Party and pay to the Indemnifying Party the extent of the value of the benefit to the Indemnified Party of that mitigation (less the Indemnified Party’s reasonable costs of mitigation) within two Business Days after the benefit is received.
Section 7.06. Assignment of Claims. If the Indemnified Party receives any payment from an Indemnifying Party in respect of any Damages pursuant to Section 7.02 and the Indemnified Party could have recovered all or a part of such Damages from a third party (a “Potential Contributor”) based on the underlying claim asserted against the Indemnifying Party, the Indemnified Party shall assign such of its rights to proceed against the Potential Contributor as are necessary to permit the Indemnifying Party to recover from the Potential Contributor the amount of such payment; provided that the Indemnified Party shall not be required to assign any right to proceed against a Potential Contributor if the Indemnified Party determines in its reasonable discretion that such assignment would be materially detrimental to its reputation or future business prospects.
Section 7.07. Exclusivity. Except as specifically set forth in this Agreement (including this Article 7), the Contribution Agreement and the Ancillary Agreements or in the event of fraud, effective as of the Closing, each of the parties waives any rights and claims such party may have against the other parties, whether in law or in equity, relating to the transactions contemplated hereby. The rights and claims waived by each party include claims arising under or relating to Environmental Laws (whether now or hereinafter in effect), claims for breach of contract, breach of representation or warranty, negligent misrepresentation and all other claims for breach of duty. After the Closing, except for claims arising out of fraud or willful misconduct, Sections 7.02 and 8.14 will provide the exclusive remedy for any misrepresentation, breach of warranty, covenant or
39
other agreement or other claim arising out of this Agreement or the transactions contemplated hereby. For the avoidance of doubt, nothing in this Section 7.07 shall limit the rights or remedies of the Investors under the Ancillary Agreements.
Section 7.08. Tax Treatment of Indemnification Payments. Unless otherwise required by a final determination by the appropriate Taxing Authority, the parties agree to treat for all Tax purposes any amounts paid by an Indemnifying Party in respect of Damages described in Section 7.02 as an adjustment to the Investor Cash Payment Amount that was paid pursuant to Section 2.01.
Section 7.09. Set-Off Against Distributions. The parties agree that any amounts finally determined by a court of competent jurisdiction or agreed in writing by the Indemnifying Party to be payable by it under Section 7.02 may be set-off against amounts otherwise distributable to such Indemnifying Party under the Post-Closing LLC Agreement, solely to the extent permitted by that agreement and after written notice specifying the basis and amount of the set-off. No disputed amount may be set off pending its final determination.
Article
8
Miscellaneous
Section 8.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including electronic mail (“e-mail”) transmission, so long as a receipt of such e-mail is requested and received) and shall be given,
if to the Company or THC, to:
The Hertz Corporation
8501 Williams Road
Estero, Florida 33928
Attention: Adrian S. Nasr
E-mail: [***]
with a copy to:
Davis Polk & Wardwell
LLP
450 Lexington Avenue
New York, New York 10017
Attention: Michael Davis
E-mail: michael.davis@davispolk.com
if to an Investor, the contact set forth on the signature page of such Investor
with a copy to:
White
& Case LLP
1221 Avenue of the Americas
New York, New York 10020
Attention: Oliver Brahmst, Adam Cieply and Morgan Hollins
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E-mail: oliver.brahmst@whitecase.com, adam.cieply@whitecase.com and morgan.hollins@whitecase.com
or such other address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business Day in the place of receipt. Otherwise, any such notice, request or communication shall be deemed not to have been received until the next succeeding Business Day in the place of receipt.
Section 8.02. Amendments and Waivers.
(a) Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, the rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 8.03. Expenses. Except as otherwise provided herein, all Transaction Expenses shall be paid by the party incurring such Transaction Expenses (and the Company shall have no obligation with respect to any Transaction Expenses); provided that, at (and conditioned upon) the Closing, the Company will reimburse the Investors for the documented legal fees and expenses owed to White & Case LLP in connection with the transactions contemplated by this Agreement up to $1,400,000.
Section 8.04. Successors and Assigns . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided that no party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the consent of each other party hereto, and any attempted or purported assignment, delegation or transfer in violation of this Section 8.04 shall be null and void ab initio.
Section 8.05. Investors’ Obligations.
(a) All of the Investors’ rights and obligations hereunder are several, and except as otherwise specifically provided in this Agreement, any amounts payable by or to the Investors pursuant to this Agreement shall be paid in proportion to each Investor’s investment. In no event shall any Investor be liable for any obligation of any other Investor hereunder, including any failure by any other Investor to fund its portion of the Investor Cash Payment Amount at Closing or to satisfy its indemnification obligations under Section 7.02(b).
(b) Each Investor hereby irrevocably appoints the Lead Investor as its representative, agent and attorney-in-fact (the “Investors’ Representative”) for all purposes under
41
this Agreement, including for purposes of (i) giving and receiving all notices, consents, waivers and other communications required or permitted to be given or received hereunder on behalf of any or all Investors, (ii) taking any action or exercising any right, power, privilege, remedy or discretion under this Agreement on behalf of any or all Investors (including determining whether to bring, settle, compromise or waive any claim under this Agreement, or agreeing to any amendment, modification or waiver of this Agreement), (iii) receiving service of process in connection with any claims under this Agreement, and (iv) engaging and paying for the services of attorneys, accountants and other advisors as the Investors’ Representative deems necessary or advisable in connection with the foregoing; provided, however, that, notwithstanding the foregoing, the Investors’ Representative shall not, without the prior written consent of each affected Investor, (A) agree to any amendment, modification or waiver of this Agreement that would (1) disproportionately and adversely affect such Investor relative to the other Investors, (2) increase such Investor’s funding, indemnification or other monetary obligations hereunder, or (3) modify such Investor’s Percentage Interest or its allocation of Equity Interests under Section 2.02, or (B) settle, compromise or waive any claim under this Agreement to the extent such settlement, compromise or waiver would (1) impose on such Investor any payment or other obligation other than a pro rata monetary payment within the limits of the Investor Basket and Investor Cap, (2) include any admission of liability or wrongdoing by such Investor, or (3) impose any injunctive or other equitable relief on such Investor. Notwithstanding anything to the contrary in this Section 8.05, each Investor shall retain the right to independently (x) assert, defend, settle or compromise any claim for indemnification under Section 7.02 that solely relates to a breach of such Investor’s own representations, warranties or covenants or that solely affects such Investor, and (y) receive, concurrently with the Investors’ Representative, copies of all notices, certificates, claim notices and other communications delivered to or by the Investors’ Representative under this Agreement. The Investors’ Representative shall act in good faith in exercising its authority under this Section 8.05 and shall promptly provide each other Investor with copies of all material communications, claim notices, settlement proposals and other material information received or sent by the Investors’ Representative in such capacity. Each Investor agrees that such appointment is coupled with an interest and is irrevocable (subject to Section 8.05(e)), and that any action taken by the Investors’ Representative in accordance with the terms of this Agreement shall be binding upon each Investor as fully as if such Investor had taken such action directly.
(c) Seller and the Company shall be entitled to rely, without further inquiry, upon any action taken by the Investors’ Representative, to the extent such action is within the scope of the Investors’ Representative’s authority as set forth in Section 8.05(b) as being duly authorized and binding upon each Investor, and neither Seller nor the Company shall have any obligation to inquire into the authority of the Investors’ Representative to act on behalf of any Investor.
(d) The Investors’ Representative shall not have any liability to any Investor for any action taken or omitted to be taken by it under this Agreement, except in the case of the Investors’ Representative’s gross negligence, bad faith, willful misconduct, fraud or any action taken outside the scope of its authority as set forth in Section 8.05(b). Each Investor shall, severally and not jointly, in accordance with its pro rata share of the investment, indemnify and hold harmless the Investors’ Representative against any loss, liability or expense incurred by the Investors’ Representative in connection with acting in such capacity, other than losses, liabilities or expenses resulting from the Investors’ Representative’s gross negligence, bad faith, willful
42
misconduct, fraud or any action taken outside the scope of its authority as set forth in Section 8.05(b); provided that each Investor’s aggregate liability under this Section 8.05(d) shall not exceed such Investor’s Percentage Interest of $500,000.
(e) The Investors’ Representative may be removed and replaced, at any time and from time to time, upon the written consent of Investors holding a majority of the aggregate Percentage Interests held by all Investors (excluding, for purposes of this calculation, the Percentage Interests held by any Investor then serving as, or affiliated with, the Investors’ Representative), by written notice to Seller, the Company and the then-serving Investors’ Representative, which notice shall designate one or more replacement Investors to act as the successor Investors’ Representative. Any such removal and replacement shall be effective upon the later of (x) delivery of such notice and (y) the effective date specified in such notice. Until Seller and the Company have received written notice of such removal and replacement, Seller and the Company shall be entitled to continue to rely on the acts of the then-serving Investors’ Representative as provided in Section 8.05(c).
Section 8.06. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of laws that would make the laws of another state applicable.
Section 8.07. Jurisdiction. The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby shall be brought in the courts of the State of Delaware, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any cause of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Delaware, and each party hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8.01 shall be deemed effective service of process on such party.
Section 8.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 8.09. Counterparts; Effectiveness; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or
43
obligation hereunder (whether by virtue of any other oral or written agreement or other communication). No provision of this Agreement is intended to confer any rights, benefits, remedies, obligations, or liabilities hereunder upon any Person other than the parties hereto, the Investor Indemnified Parties and the Hertz Indemnified Parties, and their respective successors and assigns.
Section 8.10. Entire Agreement. This Agreement and the Ancillary Agreements constitute the entire agreement between the parties with respect to the subject matter of this Agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this Agreement.
Section 8.11. Intentionally omitted.
Section 8.12. Severability. If any term, provision, covenant or restriction of this Agreement or any Ancillary Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement or the Ancillary Agreement, as applicable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement or the Ancillary Agreement, as applicable, so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby or by the Ancillary Agreement, as applicable, be consummated as originally contemplated to the fullest extent possible.
Section 8.13. Disclosure Schedule. Seller has set forth information on its disclosure schedules (the “Hertz Disclosure Schedule”) in a section thereof that corresponds to the section of this Agreement to which it relates. A matter set forth in one section of a disclosure schedule need not be set forth in any other section so long as its relevance to such other section of the disclosure schedule or section of the Agreement is reasonably apparent on the face of the information disclosed therein to the Person to which such disclosure is being made. The parties acknowledge and agree that the disclosure schedules to this Agreement may include certain items and information solely for informational purposes for the convenience of the parties and the disclosure by a party of any matter in the applicable disclosure schedules shall not be deemed to constitute an acknowledgment by such party that the matter is required to be disclosed by the terms of this Agreement or that the matter is material.
Section 8.14. Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof, in the courts specified by Section 8.07, and appropriate injunctive relief may be applied for and granted in connection therewith, without proof of actual damages or otherwise, in addition to any other remedy to which they are entitled at law or in equity. Each party agrees to waive any requirement for the securing or posting of any bond in connection with such remedy. The parties further agree not to assert that a remedy of specific enforcement is unenforceable, invalid, contrary
44
to law or inequitable for any reason, nor to assert that a remedy of monetary damages would provide an adequate remedy or that a remedy at law would be adequate.
Section 8.15. No Recourse. Without limiting any party’s right to specifically enforce the terms and provisions of this Agreement, all causes of action or proceedings (whether in contract or in tort, in equity or at Applicable Law, or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, preparation, execution, delivery, performance or breach of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be brought only against (and are those solely of) the Persons that are expressly identified as parties to this Agreement in the preamble of this Agreement (each, a “Contracting Party”). No Person who is not a Contracting Party, including any past, present or future direct or indirect equityholder, Related Party, Affiliate, officer, director, employee, agent, advisor or other representative of such Contracting Party or any Affiliate, officer, director, employee, agent, advisor or other representative of any of the foregoing (each, a “Non-Recourse Party”), shall have any liability or other obligation (whether in contract or in tort, in equity or at Applicable Law, or granted by statute) for any cause of action or proceeding arising under, out of, in connection with, or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, preparation, execution, delivery, performance, or breach; and, to the maximum extent permitted by Applicable Law, each Contracting Party hereby waives and releases all such causes of action and proceedings against any such Non-Recourse Party. Without limiting the generality of the foregoing, to the maximum extent permitted by Applicable Law, each Contracting Party hereby (a) waives and releases any and all causes of action or proceedings that may otherwise be brought in equity or at Applicable Law, or granted by statute, to avoid or disregard the entity form of a Contracting Party or otherwise impose liability or other obligation of any Contracting Party on any Non-Recourse Party, whether granted by statute or based on theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or otherwise; and (b) disclaims any reliance upon any Non-Recourse Party with respect to the performance of this Agreement or any representation or warranty made in, in connection with, or as an inducement to this Agreement. Notwithstanding the foregoing, nothing in this Section 8.15 shall (i) limit, impair or otherwise affect any right, claim or remedy of any Investor Indemnified Party or Hertz Indemnified Party under Article 7, (ii) limit any claim for fraud, (iii) preclude any party to any Ancillary Agreement from making any claim thereunder, to the extent permitted therein and pursuant to the terms thereof (and subject to the applicable limitations set forth therein), (iv) limit any party’s rights to specifically enforce the terms and provisions of this Agreement in accordance with Section 8.14 against the other parties hereto, or (v) limit, release, waive, impair or otherwise affect any right, claim, remedy, defense or interest that any Investor or any of its Affiliates has or may have against THC, Seller, the Company, any of their respective Affiliates or any other Person in any capacity other than as a party to this Agreement, including as a holder of any Equity Interests, debt securities, indebtedness or other securities of THC, Seller, the Company or any of their respective Affiliates, or as a counterparty under any other Contract (including any Ancillary Agreement) with any such Person.
[Signature Pages Follow]
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
| THE HERTZ CORPORATION | |||
| By: | /s/ W. Gil West | ||
| Name: | W. Gil West | ||
| Title: | Chief Executive Officer | ||
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| CK ORO, LLC | |||
| By: CK Opportunities GP, LLC, its general partner | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
| By: | /s/ Tom LaMacchia | ||
| Name: | Tom LaMacchia | ||
| Title: | Authorized Signatory | ||
Notice to be provided to:
Contact: Adam Zirkin and Laura Torrado Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***]
Contact: Michael Friedberg Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***]
Contact: Tom LaMacchia Address: c/o Certares Management LLC, 350 Madison Avenue, 8th Floor, New York, NY 10017 Email: [***] |
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| KDOF ORO, LLC | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
Notice to be provided to:
Contact: Adam Zirkin and Laura Torrado Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***]
Contact: Michael Friedberg Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***] |
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| KHAL BRIDGER, INC. | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
Notice to be provided to:
Contact: Adam Zirkin and Laura Torrado Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***]
Contact: Michael Friedberg Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***] |
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| KH BLUESTEM KMF, LLC | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
Notice to be provided to: Contact: Adam Zirkin and Laura Torrado Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***]
Contact: Michael Friedberg Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***] |
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| KNIGHTHEAD (NY) FUND, L.P. | |||
| By: Knighthead Capital Management, LLC, its investment advisor | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | General Counsel | ||
Notice to be provided to:
Contact: Adam Zirkin and Laura Torrado Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***]
Contact: Michael Friedberg Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***] |
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| KHMO ORO, LLC | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
Notice to be provided to:
Contact: Adam Zirkin and Laura Torrado Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***]
Contact: Michael Friedberg Address: c/o Knighthead Capital Management, LLC, 320 Park Avenue, 28th Floor, New York, NY 10022 Email: [***] |
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| GCM GROSVENOR STRATEGIC CREDIT, L.P. | |||
| By: GCM Investments GP, LLC, its Managing Member | |||
| By: | /s/ Nicole McIlree | ||
| Name: | Nicole McIlree | ||
| Title: | Authorized Signatory | ||
Notice to be provided to: Contact: SIG Operations & GCM Legal Address: 900 North Michigan Avenue, Suite 1100, Chicago, IL 60611 Email: [***] |
[Signature Page to Purchase Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| CPV ORO, LLC | |||
| By: CPV Holdings II, LLC, its managing member | |||
| By: | /s/ Jason Colombo | ||
| Name: | Jason Colombo | ||
| Title: | Authorized Signatory | ||
Notice to be provided to: Contact: Andrew B. Cohen; Nancy Hung Address: c/o Cohen Private Ventures, LLC 55 Hudson Yards 24th Floor New York, New York 10001 Email: [***] |
[Signature Page to Purchase Agreement]
EXHIBIT A
FORM OF POST-CLOSING
LLC AGREEMENT
[Omitted]
EXHIBIT B
FORM OF HERTZ
SERVICES AGREEMENT
[Omitted]
EXHIBIT C
FORM OF EQUITY PLAN
[Omitted]
EXHIBIT D
FORM OF ASSIGNMENT INSTRUMENT
[Omitted]
Exhibit 10.3
Execution Version
THE LIMITED LIABILITY COMPANY INTERESTS EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE WITH APPLICABLE FEDERAL, STATE OR FOREIGN SECURITIES LAWS. IN ADDITION, TRANSFER OR OTHER DISPOSITION OF THE INTERESTS IS RESTRICTED AS PROVIDED IN THIS AGREEMENT.
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ORO MOBILITY HOLDINGS, LLC
DATED AS OF OCTOBER 19, 2026
TABLE OF CONTENTS
Page
| Article 1 Definitions | |
| Section 1.01 Defined Terms | 2 |
| Section 1.02 Other Definitional and Interpretative Provisions | 20 |
| Article 2 Organizational Matters and General Provisions | |
| Section 2.01 Formation | 21 |
| Section 2.02 Name | 24 |
| Section 2.03 Principal Place of Business | 24 |
| Section 2.04 Registered Agent | 24 |
| Section 2.05 Purpose and Powers of the Company | 24 |
| Section 2.06 Term | 25 |
| Section 2.07 Filings; Qualification in Other Jurisdictions | 25 |
| Section 2.08 Company Property | 25 |
| Section 2.09 Transactions with Members and Directors | 25 |
| Section 2.10 Uncertificated Units | 25 |
| Article 3 Capital Contributions and Preemptive Rights | |
| Section 3.01 Initial Capital Contributions | 25 |
| Section 3.02 Additional Capital Contributions | 26 |
| Section 3.03 Issuance of Membership Interests | 26 |
| Section 3.04 Withdrawal of Capital | 27 |
| Section 3.05 Maintenance of Capital Accounts | 27 |
| Section 3.06 No Interest | 27 |
| Section 3.07 Preemptive Rights | 27 |
| Section 3.08 Repurchase Rights. | 29 |
| Article 4 Certain Rights and Obligations of Members | |
| Section 4.01 Members | 31 |
| Section 4.02 No Action on Behalf of the Company | 32 |
| Section 4.03 No Right to Withdraw | 32 |
| Section 4.04 Member Meetings | 32 |
| Section 4.05 Notice of Meetings | 32 |
| Section 4.06 Quorum; Telephonic or Electronic Meetings | 32 |
| Section 4.07 Voting | 33 |
| Section 4.08 Action Without a Meeting | 33 |
| Section 4.09 Record Date | 34 |
| Section 4.10 Member Approval Rights | 34 |
| Section 4.11 Partition | 34 |
| Section 4.12 Liability | 34 |
i
| Article 5 Board and Officers | |
| Section 5.01 Board | 34 |
| Section 5.02 Required Board Actions | 36 |
| Section 5.03 Removal and Resignation | 40 |
| Section 5.04 Meetings of the Board | 40 |
| Section 5.05 Action Without a Meeting | 42 |
| Section 5.06 Chairman of the Board | 42 |
| Section 5.07 Committees of the Board | 42 |
| Section 5.08 Officers; Designation and Election of Officers; Duties | 42 |
| Section 5.09 Management Equity Matters. | 44 |
| Section 5.10 Affiliate Transactions. | 45 |
| Article 6 Exculpation and Indemnification | |
| Section 6.01 Exculpation and Indemnification | 45 |
| Section 6.02 Other Activities; Business Opportunities | 49 |
| Article 7 Accounting, Tax, Fiscal and Legal Matters | |
| Section 7.01 Fiscal Year | 54 |
| Section 7.02 Bank Accounts | 54 |
| Section 7.03 Books of Account and Other Information | 54 |
| Section 7.04 Auditors | 54 |
| Section 7.05 Certain Tax Matters | 54 |
| Section 7.06 Compliance | 58 |
| Section 7.07 Separateness | 59 |
| Article 8 Allocations and Distributions | |
| Section 8.01 Allocations | 60 |
| Section 8.02 Compensatory Options | 64 |
| Section 8.03 Distributions. | 64 |
| Article 9 Transfers, Redemption/Purchase Rights and Additional Members | |
| Section 9.01 Restrictions on Transfers | 66 |
| Section 9.02 Right of First Offer | 68 |
| Section 9.03 Tag-Along Right | 70 |
| Section 9.04 Drag-Along Right | 72 |
| Section 9.05 Additional Conditions to Tag-Along Sales and Drag-Along Sales | 76 |
| Section 9.06 Management Member Permitted Transfers | 76 |
| Section 9.07 Additional Members | 76 |
| Section 9.08 Termination of Member Status | 77 |
| Section 9.09 Void Transfers | 77 |
| Section 9.10 Blocker Corporations. | 78 |
ii
| Article 10 Covenants | |
| Section 10.01 Confidentiality | 79 |
| Section 10.02 Structuring of an IPO | 82 |
| Section 10.03 Actions in Connection with an IPO | 84 |
| Section 10.04 Registration Rights | 84 |
| Section 10.05 Budget | 93 |
| Section 10.06 No Promotion | 93 |
| Section 10.07 [Reserved] | 94 |
| Section 10.08 Matters Pertaining to the Shared Collection Account and the Company Group Collections. | 94 |
| Section 10.09 Non-Solicit. | 97 |
| Article 11 Reporting | |
| Section 11.01 Financial Information | 99 |
| Section 11.02 Certain Other Provisions Regarding Financial Reporting | 100 |
| Section 11.03 Access to Audit Personnel, Working Papers, Management Personnel and Information | 100 |
| Section 11.04 Regulatory Proceedings | 101 |
| Section 11.05 Liability | 101 |
| Section 11.06 Other Agreements Providing for Exchange of Information | 101 |
| Article 12 Dissolution, Liquidation and Termination | |
| Section 12.01 No Dissolution | 102 |
| Section 12.02 Events Causing Dissolution | 102 |
| Section 12.03 Bankruptcy of a Member | 102 |
| Section 12.04 Winding Up | 102 |
| Section 12.05 Distribution of Assets | 103 |
| Section 12.06 Distributions in Cash or in Kind | 104 |
| Section 12.07 Claims of the Members | 104 |
| Article 13 Miscellaneous | |
| Section 13.01 Further Assurances | 104 |
| Section 13.02 Amendment or Modification | 104 |
| Section 13.03 Waiver; Cumulative Remedies | 105 |
| Section 13.04 Entire Agreement | 105 |
| Section 13.05 Third Party Beneficiaries | 105 |
| Section 13.06 Non-Assignability; Binding Effect | 105 |
| Section 13.07 Severability | 105 |
| Section 13.08 Injunctive Relief | 106 |
| Section 13.09 Governing Law | 106 |
| Section 13.10 Submission to Jurisdiction | 106 |
| Section 13.11 Waiver of Jury Trial | 106 |
| Section 13.12 Notices | 107 |
iii
| Section 13.13 Counterparts | 108 |
| Section 13.14 No Recourse | 108 |
| EXHIBITS | ||
| Exhibit A | Member Information | |
| SCHEDULES | ||
| Schedule 3.01 | Initial Capital Contributions | |
| Schedule 5.01(d) | Initial Directors | |
| Schedule 5.02(a)(v) | Equity Grants | |
| Schedule 5.02(a)(xxi) | Affiliated Transactions | |
| Schedule 10.05 | Initial Approved Budget |
iv
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of Oro Mobility Holdings, LLC (formerly known as Hertz Mobility Holdings, LLC), a Delaware limited liability company (the “Company”), is made as of October 19, 2026, by and among The Hertz Corporation, a Delaware corporation (“THC”), Hertz Transporting, Inc. a Delaware corporation (“HTI” and together with THC collectively, the “Initial Hertz Members”), the other Persons identified as Members on the signatory pages hereto (each, an “Initial Investor Member”), and each other Person who at any time becomes a Member in accordance with the terms of this Agreement and the Act.
RECITALS
WHEREAS, the Company was formed on March 2, 2023, by the filing of a Certificate of Formation (as amended or otherwise modified from time to time, the “Certificate of Formation”) with the Secretary of State of the State of Delaware and the adoption of that certain Limited Liability Company Agreement of the Company dated as of March 2, 2023, by THC (the “Original LLC Agreement”);
WHEREAS, pursuant to that certain Contribution Agreement, dated as of October 16, 2026 (as amended or otherwise modified from time to time, the “Contribution Agreement”), by and among the Company and the Initial Hertz Members, THC contributed (or caused to be contributed) cash and certain assets and liabilities to the Company in exchange for interests in the Company and HTI was assigned certain interests in the Company by THC;
WHEREAS, pursuant to that certain Purchase Agreement, dated as of October 16, 2026 (as amended or otherwise modified from time to time, the “Purchase Agreement” and, together with the Contribution Agreement, the “Transaction Agreements”), by and between the THC and the Initial Investor Members, on the date hereof, the Initial Investor Members acquired from THC, a portion of THC’s interests in the Company; and
WHEREAS, this Agreement is being executed and delivered concurrently with the Closing (as defined in the Purchase Agreement); and
WHEREAS, the Members desire to enter into this Agreement to (a) amend, restate and supersede in its entirety the Original LLC Agreement, (b) recapitalize the Interests in the Company and (c) set forth, among other things, the admission of the Initial Investor Members as Members, the manner by which the business and affairs of the Company will be managed and certain rights and obligations in respect of the ownership of Units, including restrictions on the Transfer thereof, preemptive rights and governance rights and obligations.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby amend and restate the Original LLC Agreement and hereby agree as follows:
Article
1
Definitions
Section 1.01 Defined Terms. In this Agreement, except where the context otherwise requires:
“Act” means the Delaware Limited Liability Company Act, 6 Del. C. § 18-101, et seq., as amended from time to time.
“Adjusted Capital Account” means, with respect to any Member, such Member’s Capital Account balance (a) reduced for any items described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6), and (b) increased for any amount such Person is obligated to contribute or is treated as being obligated to contribute to the Company pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (relating to Member liabilities to the Company) and the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(l) and 1.704-2(i)(5) (relating to Minimum Gain or Member Nonrecourse Debt Minimum Gain), as of the end of the Company’s Tax Year, after taking into account thereunder any changes during such year in Minimum Gain or Member Nonrecourse Debt Minimum Gain. The foregoing definition of “Adjusted Capital Account” is intended to comply with the provisions of Treasury Regulation Sections 1.704-1(b)(2)(ii)(d) and 1.704-2 and shall be interpreted consistently therewith.
“Adjusted Capital Account Deficit” means with respect to any Member as of the end of any Tax Year, the amount by which the balance in such Member’s Adjusted Capital Account is less than zero.
“Affiliate” means, with respect to any specified Person, any other Person that, at the time of determination, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with such specified Person; provided, that the term Affiliate (a) when used with respect to the Hertz Members, the Investor Members or any of their respective Affiliates, shall not include the Company or any of its Subsidiaries, and (b) when used with respect to the Company or any of its Subsidiaries, shall not include the Hertz Members, the Investor Members or any of their respective Affiliates (other than the Company and its Subsidiaries), and (c) when used with respect to an Investor Member, “Affiliate” shall include Certares Management Holdings LLC (in the case of CK), Knighthead Capital Management LLC (in the case of Knighthead or CK), Cohen Private Ventures, LLC (in the case of CPV) and GCM Investments GP, LLC (in the case of GCM) but shall not include (i) any former, current or future equityholders, co-investment vehicles, limited partners, general partners, members, managers directors, officers or employees of (A) such Investor Member or (B) any investment fund or co-invest vehicle advised, managed or jointly advised or jointly managed by such Investor Member, or any of their respective Affiliates, in each case in clauses (A) and (B), except for purposes of the definitions of “Covered Person” and “Permitted Transferee”, Section 3.07, Article 6, Section 10.01, Section 10.04, Section 13.05 and Section 13.14 or (ii) any portfolio company of any investment fund advised, managed or jointly advised or jointly managed by the Affiliates of such Investor Member. For greater certainty, none of CK, Knighthead, CPV or GCM shall be deemed to be Affiliates of any Hertz Member. The terms “Affiliated” and “Affiliation” shall have correlative meanings.
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“Agreement” means this Amended and Restated Limited Liability Company Agreement, as it may be amended or otherwise modified from time to time in accordance with Section 13.02.
“AML Laws” means the Laws of any jurisdiction applicable to any Person from time to time concerning or relating to anti-money laundering and countering the financing of terrorism.
“Ancillary Agreements” has the meaning set forth in the Purchase Agreement.
“Anti-Corruption Laws” means the Laws (a) governing the activities of the Members, the members of the Company Group and this Agreement which prohibit bribery and corruption, as well as, where applicable, the principles described in the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, signed in Paris on December 17, 1997, which entered into force on February 15, 1999, and such Convention’s Commentaries and (b) prohibiting bribery and corruption in the jurisdiction in which each Member or member of the Company Group is incorporated or registered, carries out its business activities, or its securities are listed on a stock market, or in the jurisdiction in which the ultimate parent company of such Person is incorporated or registered carries out its business activities, or its securities are listed on a stock market.
“Applicable Tax Rate” means the highest stated combined federal, state and local income tax rate as determined by the Tax Matters Member in good faith equal to the sum of the highest stated combined marginal federal, state and local income tax rate applicable to an individual (including taxes imposed under Section 1411 of the Code) or a corporation that is resident in New York, NY or San Francisco, CA (whichever is higher) (giving effect to the deductibility of state and local income taxes for federal income tax purposes) as of the date of determination.
“Base Rate” means, on any date, a variable rate per annum equal to the rate of interest most recently published by The Wall Street Journal as the “prime rate” at large United States money center banks.
“Blocker Corporation” means a special purpose Person that (a) is classified as a corporation for U.S. federal income tax purposes, (b) is organized or used by any Investor Member or any of its Affiliates solely for the purpose of directly or indirectly owning Units and (c) owns no material assets other than such Units, assets incidental or relating to the Units, and cash and cash equivalents.
“Board” means the board of directors of the Company.
“Book Value” means, with respect to any of the Company’s property, the Company’s adjusted basis for federal income tax purposes, except that:
(a) the initial Book Value of any asset contributed by a Member to the Company shall be the gross Fair Market Value as set forth on the Valuation Statement (as defined in the Purchase Agreement);
(b) if the Board determines, in its reasonable discretion, that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members, the Book Value of all assets of the Company shall be adjusted to equal their respective gross fair market values, as
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reasonably determined by the Board, upon the occurrence of an event specified in Treasury Regulations Section 1.704-1(b)(2)(iv)(f)(5); provided, that if any noncompensatory options are outstanding upon the occurrence of any such adjustment, the Company shall adjust the Book Values of its properties in accordance with Treasury Regulations Sections 1.704-1(b)(2)(iv)(f)(1) and 1.704-1(b)(2)(iv)(h)(2);
(c) as of the date on which any Company asset is distributed to a Member in kind, the Book Value of such asset shall be adjusted to equal the gross fair market value of such asset on such date, as determined by the Board in its reasonable discretion;
(d) the Book Value of the Company’s assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) of the Code or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Account balances pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m); provided, that the Book Value shall not be adjusted pursuant to this clause (d) if the Board reasonably determines that an adjustment pursuant to clause (b) of this definition of “Book Value” is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this clause (d); and
(e) the Book Value of an asset shall be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Net Profits and Net Losses, rather than by the depreciation, amortization or other cost recovery allowable with respect to such asset for U.S. federal income tax purposes.
“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.
“Capital Contributions” means Initial Capital Contributions and Additional Capital Contributions.
“Capital Expenditures” means, with respect to the Company and its Subsidiaries, any expenditure that is required to be capitalized for purposes of the Company’s financial statements in accordance with GAAP.
“Capital Units” means the Class A Common Units, the Class B Common Units and the Class C Common Units.
“Cause” has the meaning set forth in the Equity Plan.
“Change of Control” means, with respect to any Member, the occurrence of any event, whether voluntary or involuntary or by operation of law and whether in a single transaction or a series of related transactions, that causes such Member to cease to be Controlled by the Person that was its Ultimate Parent immediately prior to such event, it being understood that, for the avoidance of doubt, any direct or indirect sale, transfer, assignment or other disposition of any publicly traded Equity Securities in the Ultimate Parent of any Hertz Member (or any direct or indirect equityholder of such Ultimate Parent) shall not, in each case, constitute a “Change of Control” with respect to such Hertz Member so long as such Hertz Member remains Controlled by its Ultimate Parent. Notwithstanding the foregoing, for any determination of Change of Control under
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this Agreement with respect to a Member following any Transfer by such Member of Units to one or more of its Affiliates to the extent permitted hereunder, any reference in this definition to “Member” shall be deemed to include such Member and such Affiliate(s) of such Member. Any series of related transactions shall be treated as a single transaction for purposes of this definition.
“CK” means CK Oro, LLC.
“Class A Common Unit” means a limited liability company interest in the Company designated as a “Class A Common Unit” and having the rights and obligations specified with respect thereto in this Agreement.
“Class B Common Unit” means a limited liability company interest in the Company designated as a “Class B Common Unit” and having the rights and obligations specified with respect thereto in this Agreement.
“Class C Common Unit” means a limited liability company interest in the Company designated as a “Class C Common Unit” and having the rights and obligations specified with respect thereto in this Agreement.
“Class D Common Unit” means a limited liability company interest in the Company designated as a “Class D Common Unit” and having the rights and obligations specified with respect thereto in this Agreement.
“Closing” has the meaning ascribed to the term “Closing” in the Purchase Agreement.
“Closing Date” means the date hereof.
“Code” means the United States Internal Revenue Code of 1986.
“Commission” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act or the Exchange Act.
“Common Units” means the Class A Common Units, the Class B Common Units, the Class C Common Units and the Class D Common Units.
“Company Auditors” means the independent certified public accountants of the Company, as may be engaged by the Company from time to time.
“Company Collection Account” means an account specified in writing by the Company into which the Company Group Collections will be deposited as and when provided for in Section 10.08.
“Company Entity” means each of the Company, its Subsidiaries and Person that is controlled directly or indirectly by the Company.
“Company Group” means all of the Company Entities, collectively.
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“Company Group Collections” means all payments, deposits, cash and other amounts that constitute proceeds of, or are otherwise attributable to, the Oro Contracts, including all accounts receivable, fees, reimbursements, damages, termination payments and other amounts payable under or with respect to the Oro Contracts, in each case, that are collected by a Hertz Member or any of its Affiliates.
“Company Group Payables” means all amounts payable by the Company Group to a Hertz Member or any of its Affiliates under (a) the Fleet Lease Agreement, (b) the Hertz Services Agreement, including Hertz Services Agreement service charges, system charges and third-party vendor pass-through charges, (c) under any real estate lease or real estate sublease between THC or its Affiliates (other than the Company Group) as landlord or sublandlord, on the one hand, and the Company Group as tenant or subtenant, on the other hand and (d) such other agreements as a Hertz Member or any of its Affiliates and the Company may agree from time to time.
“Company Securities” means any securities (including debt securities) issued by the Company or any of its Subsidiaries.
“Compensatory Option” means any option, warrant or other right to acquire Class D Common Units granted by the Company to any employee, officer, director, manager, consultant or other service provider of the Company Group in connection with the performance of services, whether pursuant to the Equity Plan or otherwise.
“Competing Business” means any business or operation that is competitive with the Oro Business.
“Control” means, as to any Person, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. The terms “Controlled by”, “Controlled”, “under common Control with” and “Controlling” shall have correlative meanings.
“Covered Person” means (a) each current and former Member and each of its Affiliates, and each of its and their respective officers, directors, managers, shareholders, partners, members, Affiliates, employees, agents and Representatives, (b) each current and former Partnership Representative and “designated individual” (as such term is used in Treasury Regulations Section 301.6223-1) and (c) each Person not identified who is a current or former manager, director or officer of any member of the Company Group or who served in such a capacity for any other entity or enterprise at the request of the Company, in each case with respect to clauses (a) through (c), in such capacity and whether or not such Person continues to have the applicable status.
“CPV” means CPV Oro, LLC.
“Debt” means, with respect to any Person, (a) all debt of such Person for borrowed money or for the deferred purchase price of property or services, or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money, (b) all obligations of such Person which are evidenced by notes, bonds, debentures or similar instruments, (c) all obligations of such Person that have been, or should be, in accordance with GAAP, recorded as capital leases, (d) all obligations of such Person that have been, or should be, in accordance with GAAP, recorded as a sale-leaseback transaction or leveraged lease, (e) all obligations of such Person in respect of letters
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of credit or similar instruments, bankers’ acceptances, surety, performance bonds or other bonds, (f) all obligations of such Person secured by a lien on any of its assets or properties, whether or not the obligation secured thereby has been assumed, (g) all obligations of such Person under any interest rate, currency or other hedging agreement, (h) all obligations of such Person in connection with any factoring of receivables or securitization programs, and (i) with respect to any obligation of a type described in clauses (a) through (i) above, all accrued and unpaid interest, premiums, penalties, breakage costs, unwind costs, fees, termination costs, redemption costs, expenses and other charges with respect thereto (j) all direct or indirect guarantees (including “keep well” arrangements, support agreements and similar agreements) with respect to Debt of any other Person referred to in clauses (a) through (i) above.
“Deemed Liquidation Event” means (a) a merger or consolidation of the Company with any third party that is not an Affiliate of any Member, (b) a sale, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company to a third party that is not an Affiliate of any Member, (c) an IPO or (d) any other transaction in which 50% or more of all Capital Units will be directly transferred to a third party that is not an Affiliate of a Member (other than pursuant to a Permitted Transfer).
“Direct Collection Date” means the first day of the first calendar month commencing after the date on which the Company delivers written notice to the Hertz Members and the Lead Investor in accordance with Section 10.08(c) certifying that (a) the internal systems of the Company Group have been upgraded to enable Company Group Collections to be collected directly from obligors under Oro Contracts and paid directly into the Company Collection Account separate from any Hertz Collections and (b) payment instructions directing payment of Company Group Collections to the Company Collection Account have been delivered to the counterparties to the Oro Contracts.
“Eligible Employee” means any individual who is an employee, officer, consultant, advisor or other service provider of the Company or any of its Subsidiaries, in each case as approved by the Board.
“Employee Permitted Transferees” means, with respect to a Member that is an employee of the Company or its Subsidiaries, (a) an investment vehicle wholly-owned and controlled by the transferor and/or his or her family members (in accordance with the following clause (b)) or (b) family members (within the meaning of Rule 701 of the Securities Act) through gifts or domestic relations orders, as permitted by Rule 701 of the Securities Act; provided, that such transferee is an accredited investor and the transferor remains liable for all obligations under this Agreement related to the transferred Common Units and the transferor retains rights of notice with respect to such transferred Common Units. If a transferee meeting the qualifications in clauses (a) or (b) ceases to meet such qualifications at any time, then such Person shall be required to transfer such Person’s Common Units back to the original transferor.
“Employer” has the meaning set forth in the Equity Plan.
“Equity Plan” means the plan adopted by the Company on the date hereof in respect of Options and referred to in Section 5.09.
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“Equity Securities” means (a) any capital stock, partnership interests, limited liability company interests, units or any other type of equity interest, or other indicia of equity ownership (including profits interests) (collectively, “Interests”), (b) any security that is or may be convertible into or exercisable or exchangeable for, with or without consideration, any Interests (including any option to purchase such convertible security), (c) any security, warrant or other right (contingent or otherwise) to subscribe to, receive or purchase any security described in clause (a) or clause (b), or (c) any interest, right or participation in the share of the profits or revenue with respect to any Interest of such Person.
“Estimated Tax Period” means a calendar period commencing on January 1 of each year, and ending on March 31, May 31, August 31, and December 31 of such year.
“Exchange Act” mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Excluded Registration” means any registration (a) pursuant to a Demand Request, (b) in connection with registrations on Form S-4 or S-8 promulgated by the Commission or any successor or similar forms, (c) relating to an offering of debt securities, or (d) relating to an exchange offer.
“Fair Market Value” of a Common Unit means the price that a willing buyer not Affiliated with the seller and under no compulsion to buy would pay in an arm’s-length transaction to a willing seller not Affiliated with the buyer and under no compulsion to sell, as of the relevant time and as determined by the Board in the exercise of its reasonable discretion; provided, that the Company shall deliver to each holder of Capital Units the Board’s determination of Fair Market Value at least 15 Business Days prior to the applicable event, and if within 15 Business Days thereafter any Member holding greater than 10% of the Company’s Common Units objects in good faith in writing to such determination (which shall provide reasonable detail describing the basis of such objection), the Company shall retain a nationally recognized appraiser with experience in valuing companies similar to the Company, who has not received any material fees from the Company in the past five years (an “Independent Appraiser”), and who is reasonably acceptable to the objecting Member, to determine such fair market value, and the expense of such appraiser shall be borne by the Company (unless such appraiser’s determination of value is not more than 10% higher than the original determination, in which case the expense of the Independent Appraiser will be borne by the Member or Members requesting such appraisal); provided, further, that if the Board is unable to reach a determination of Fair Market Value within 20 Business Days after the date on which such determination is first required or requested (whether due to a deadlock, a failure to achieve the requisite vote, the absence of a quorum or otherwise) (a “Board Valuation Deadlock”), then (i) the Company shall, within five Business Days after the expiration of such 20 Business Day period, retain an Independent Appraiser, and who is reasonably acceptable to the majority of the Board, to determine such fair market value, and (ii) the expense of the Independent Appraiser shall be borne by the Company; provided, further, that the determination of the Independent Appraiser shall not discount the value of Membership Interests either because (a) they are subject to restrictions set forth in this Agreement, (b) they are illiquid, (c) they constitute only a minority interest in the Company or (d) any similar discounts regarding illiquidity or minority status; provided, further, that no Member may provide its own proposed Fair Market Value to the Independent Appraiser or otherwise seek to influence the Independent Appraiser’s decision.
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“Fleet Management Services” means the provision of depot management, charging, fueling, maintenance, cleaning, inspections, repairs, registration, accident management, and related operational services, in each case, to autonomous vehicles.
“GAAP” means generally accepted accounting principles in the United States of America.
“GCM” means GCM Grosvenor Strategic Credit, L.P.
“Governmental Approval” means any authorization, consent, waiver, order and approval of any Governmental Authority, including any applicable waiting periods associated therewith.
“Governmental Authority” means any domestic or foreign federal, state or local government, political subdivision, governmental, regulatory or administrative authority, instrumentality, agency, body or commission, self-regulatory organization or any court, tribunal, or judicial or arbitral body.
“Hertz Collections” means any amounts other than the Company Group Collections.
“Hertz Members” means (a) the Initial Hertz Members and (b) any Permitted Transferee of a Hertz Member that becomes a Member after the date hereof in accordance with this Agreement, in each case with respect to clauses (a) and (b), for as long as such Person remains a Member.
“Initial Capital Contribution” means, with respect to a Member, the amount set forth as an Initial Capital Contribution of such Member on Schedule 3.01 hereto.
“Initial Units” means (a) with respect to the Hertz Members, the number of Units held by the Hertz Members as of the Closing Date (subject to equitable adjustment for any split, dividend, combination or other recapitalization or reclassification) and (b) with respect to the Investor Members, the number of Units held by the Investor Members as of the Closing Date.
“Investor Members” means (a) the Initial Investor Members, (b) any Permitted Transferee of an Investor Member admitted as an “Investor Member” after the date hereof or that holds Class A Common Units and (c) any Affiliate of the Persons set forth in clause (a) or (b) that becomes a Member holding Class A Common Units after the date hereof in accordance with this Agreement, in each case with respect to clauses (a), (b) and (c), for as long as such Person remains a Member.
“IPO” means (a) the first Public Offering of common Equity Securities of the Company, or of a newly formed entity that controls the Company, that results in such common Equity Securities of the Company, or such newly formed entity, being registered under the Exchange Act and publicly traded on a national securities exchange or automated quotation system, or (b) the acquisition of the Company (or any successor entity) via a merger, the sale of all or substantially all of the Company’s assets, equity exchange or other business combination with a publicly traded special purpose acquisition company that is traded on a national securities exchange or automated quotation system (a “SPAC”) or the acquisition of 100% of the Membership Interests by a SPAC, in each case, that results in the Members receiving common stock of the SPAC or Equity Securities exchangeable or convertible into common stock of the SPAC (as applicable, “SPAC Securities”) or a combination of cash and SPAC Securities (any such transaction described in this clause (b), a “SPAC IPO”).
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“IRR” means with respect to each Investor Member in connection with a Drag-Along Sale, the internal rate of return achieved by such Investor Member on its Class A Common Units on a cumulative, aggregate basis, calculated as the discount rate at which the net present value of (a) all Capital Contributions made by such Investor Member in respect of its Class A Common Units (treated as negative cash flows, from the date each such Capital Contribution was made), and (b) the sum of (i) all distributions (whether in cash or in kind) theretofore actually received by such Investor Member in respect of its Common Units (treated as positive cash flows, from the date each such distribution was received) and (ii) the aggregate consideration (whether in cash or in kind) actually received by such holder in such Drag-Along Sale (treated as a positive cash flow, from the date of such Drag-Along Sale), equals zero, calculated on a daily basis using a 365-day year. For purposes of this definition, (x) any property distributed in kind and actually received will be valued at its fair market value as determined by the Board in good faith and (y) if any Class A Common Unit has been Transferred after the Closing Date, the IRR with respect to such Class A Common Unit will be calculated based on (1) the aggregate distributions and proceeds actually received in respect of such Class A Common Unit, and the dates on which such distributions were received, by any and all holders thereof and (2) the Capital Contribution of the initial holder of such Class A Common Unit, and the date on which such Capital Contribution was made, as of the Closing Date.
“Knighthead” means, collectively, KHMO Oro, LLC, Knighthead (NY Fund), L.P., KH Bluestem KMF, LLC, KHAL Bridger, Inc., Knighthead Annuity & Life Assurance Company, KDOF Oro, LLC.
“Law” means, with respect to any Person, any transnational, domestic or foreign federal, state, provincial or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise.
“Lead Investor” means CPV.
“Lead Investor Members” means Lead Investor, or a Permitted Transferee thereof.
“Majority Member” means, at any time, any Member or Members that collectively have a Membership Percentage of more than 50% of Capital Units at such time.
“Management Incentive Pool” means a number of Class D Common Units issuable on the exercise of Options equal to 10% of the total number of Units outstanding immediately after the Closing (calculated on a fully diluted basis giving effect to all Common Units), which Units shall be reserved for issuance by the Company to Eligible Employees pursuant to the Equity Plan, subject to and in accordance with the terms and conditions of Section 5.09 and the Equity Plan.
“Management Member” means a Member holding Class D Common Units issued upon the exercise of Options (or any Person who was a Member holding such Class D Common Units prior to making a transfer in accordance with Section 9.06).
“Marketable Securities” means publicly traded equity securities of a corporation, limited partnership or other entity (i) listed on a U.S. national securities exchange, (ii) issued by an entity
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with a market capitalization in excess of $2,500,000,000 immediately prior to the consummation of the Transfer or other transaction in which such securities are to be delivered, (iii) freely tradable by the recipient immediately upon receipt without volume, manner-of-sale or holding-period restrictions under applicable securities Laws (other than restrictions under Rule 144 of the Securities Act that would not restrict such recipient from selling its full allocation of such securities in a single transaction) and (iv) not subject to any contractual lock-up, holdback, standstill or other transfer restriction (whether imposed by the issuer, the underwriters or any other Person) binding on the recipient thereof. The value of any Marketable Securities for all purposes of this Agreement shall be deemed to equal of the volume weighted average closing price of such securities for the ten (10) trading days ending on the trading day preceding the date of determination.
“Member” means, at any time, for so long as he, she or it holds any Membership Interests, (a) the Hertz Members and the Investor Members, as applicable, (b) any Person holding Units in accordance with this Agreement and (c) any other Person who, after the Closing, is admitted to the Company as a member in accordance with the terms of this Agreement. No Person that is not a Member shall be deemed a “member” of the Company under the Act.
“Member Nonrecourse Debt Minimum Gain” means partner nonrecourse debt minimum gain as defined in Treasury Regulation 1.704-2(i)(2).
“Membership Interest” means the entire limited liability company interest(s) of a Member in the Company (it being acknowledged that such interest in the case of Class C Common Units held by a Member shall at all times consist solely of the respective economic interests provided therefor and shall include no voting or other rights that would otherwise be possessed by a member of a limited liability company under the Act or any other applicable Law). Except as otherwise expressly contemplated by this Agreement, a Member’s Membership Interests include such Member’s share of the Net Profits and Net Losses, its rights in its Capital Account, its right to receive distributions of Company assets, and any and all of the benefits to which such Member may be entitled as provided in this Agreement and in the Act, together with the obligations of such Member to comply with all the provisions of this Agreement and of the Act. The Membership Interests are divided into equal proportionate units of limited liability company interests (including fractional units), with the number of Membership Interests held by each Member set forth on Exhibit A, as updated from time to time.
“Membership Percentage” means, with respect to any Member as of any time, the number of Units owned by such Member at such time divided by the aggregate number of Units owned by all Members in the aggregate at such time.
“Minimum Gain” means partnership minimum gain determined pursuant to Treasury Regulation Section 1.704-2(d).
“MOIC” means, with respect to any Investor Member in connection with a Drag-Along Sale, the quotient obtained by dividing (a) the sum of (i) the aggregate amount of all distributions (whether in cash or in kind) theretofore actually received by such Investor Member in respect of its Common Units, plus (ii) the aggregate consideration (whether in cash or in kind) actually received by such holder in such Drag-Along Sale, by (b) the aggregate amount of all Capital Contributions made by such Investor Member in respect of its Class A Common Units. For
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purposes of this definition, (x) any property distributed in kind will be valued at its fair market value as determined by the Board in good faith and (y) if any Class A Common Unit has been Transferred after the Closing Date, the MOIC with respect to such Class A Common Unit will be calculated based on (1) the aggregate distributions and proceeds actually received in respect of such Class A Common Unit by any and all holders thereof and (2) the Capital Contribution of the initial holder of such Class A Common Unit as of the Closing Date.
“Net Profit” and “Net Loss” means, for each Tax Year, an amount equal to the Company’s taxable income or loss for such Tax Year, determined in accordance with Section 703(a) of the Code (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), but with the following adjustments:
(a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Profit or Net Loss shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as expenditures described in Section 705(a)(2)(B) of the Code pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Net Profit or Net Loss shall be subtracted from such taxable income or loss;
(c) In the event Book Value of any asset of the Company is adjusted pursuant to subparagraphs (ii), (iii), or (iv) of the definition of Book Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profit or Net Loss;
(d) Items of depreciation, amortization and other cost recovery deductions with respect to the Company’s property having a Book Value that differs from its adjusted basis for tax purposes shall be computed by reference to the property’s Book Value in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g), except to the extent otherwise required by Treasury Regulation Section 1.704-3(d)(2) with respect to any property for which the remedial method is used;
(e) Income, gain, loss or deduction resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of the property disposed of (adjusted for accumulated depreciation with respect to such property as determined pursuant to clause (iv) of this definition), notwithstanding that the adjusted tax basis of such property differs from its Book Value; and
(f) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 8.01(c) hereof shall not be taken into account in computing Net Profit or Net Loss. The amounts of items of Company income, gain, loss or deduction available to be specially allocated pursuant to Section 8.01(c) hereof shall be determined by applying rules analogous to those set forth in subparagraphs (a) through (e) above.
“Non-Violation Determination” means, with respect to any action, a good faith determination by the Hertz Members (on the advice of counsel, which may be internal counsel) that such action
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to be taken by the Hertz Members or their respective Affiliates that would result in the Hertz Members holding more than 50% of the total outstanding Voting Common Units will not, and will not reasonably be expected to, (i) cause the Company or any of its Subsidiaries to become subject to any covenant, restriction or other obligation under any credit agreement, indenture, note purchase agreement, loan agreement, guarantee or other similar agreement or instrument of any Hertz Member or any of its Affiliates (other than the Company and its Subsidiaries), in each case, that would restrict the operation of the business, or the acquisition, disposition or encumbrance of any assets, of the Company Entities or otherwise result in any Company Entity becoming a restricted subsidiary (or similar term) under THC’s credit agreements and (ii) contravene or cause a default under any material agreement to which any of the Company, the Hertz Members or their respective Affiliates are party (provided that any waiver by another party to such agreement must be irrevocable).
“Option” means an option to purchase Class D Common Units pursuant to the Equity Plan.
“Oro Business” means the following business, operations, and activities conducted by Oro Mobility Holdings and each of its Subsidiaries: (a) the ownership, operation, and management of vehicle fleets operated by any employees or independent contractors of the Company or its Subsidiaries on TNC Platforms within the United States; (b) the rental, leasing, subscription or provision of vehicles to independent drivers, couriers, gig-economy workers, or other individual service providers primarily for the purpose of operating on TNC Platforms within the United States; or (c) the provision of Fleet Management Services to autonomous vehicles that are (i) deployed on a TNC Platform (i.e., “for hire” on such TNC Platform), (ii) dedicated or designated primarily for use on a TNC Platform (e.g., with active software installed for operation on a TNC Platform), or (iii) temporarily not accepting rides or otherwise unavailable on a TNC Platform while being prepared, operated, managed, charged, cleaned, maintained, repaired, staged, or serviced, including through an AV depot, for continued or subsequent deployment on a TNC Platform, in each case, anywhere in the world other than China. For the avoidance of doubt, an autonomous vehicle that is used on a TNC Platform and for personal use or used for other non-TNC Platform purposes shall be included in the Oro Business while deployed on a TNC Platform or while receiving Fleet Management Services in connection with its continued or immediate subsequent deployment on a TNC Platform, but shall not be included in the Oro Business solely by reason of its prior or anticipated use on a TNC Platform during periods in which it has ceased TNC Platform operations and is being used or serviced solely for personal or other non-TNC Platform purposes.
“Oro Contracts” has the meaning set forth in the Purchase Agreement.
“Partnership Audit Rules” means Chapter 63 of the Code (and any Treasury Regulations or other guidance promulgated, or that may be promulgated in the future, relating thereto) and any similar or analogous provision of state, local, or non-U.S. tax laws.
“Partnership Representative” has the meaning assigned to the term “partnership representative” in Section 6223 of the Code and any Treasury Regulations (and any analogous or similar provision of state or local law).
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“PE Fund” means (a) a family office, private equity fund or other investment fund or separately managed account that was not formed solely to invest in the Company or any of its Subsidiaries, together with any alternative investment vehicles, parallel funds or feeder funds thereof or related thereto, the business, operations or assets of which are managed professionally for investment purposes and (b) any investment vehicle directly or indirectly controlled by any Person described in clause (a).
“Person” means any natural person, joint venture, general or limited partnership, corporation, limited liability company, trust, firm, association or organization or other legal entity.
“Prohibited Person” means any Person that is (a) the target of (or would reasonably be expected to cause any member of the Company Group or any Member to become the target of) Sanctions, (b) owned or controlled (as such terms are defined by applicable Sanctions) by a Person that is the subject or target of Sanctions; (c) located, organized or resident in any country or region that is the subject or target of comprehensive Sanctions; (d) any Person included in the Specially Designated Nationals and Blocked Persons list or any other Sanctions-related list of designated Persons maintained by a Sanctions Authority; (e) reasonably expected to cause any Company Entity or any Member to be in violation of AML Laws, Anti-Corruption Laws or Sanctions (in each case, after giving effect to an adverse determination under any ongoing civil or criminal litigation under such Laws); or (f) under public investigation by a Governmental Authority for violation of, or that has been formally charged by a Governmental Authority with violating, any AML Law, Anti-Corruption Law, or Sanctions.
“Public Offering” means an underwritten public offering of Registrable Securities pursuant to an effective registration statement under the Securities Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or any similar or successor form.
“Public Official” means an elected or appointed official, and any Person employed or used as an agent of any national, regional or local government or state or department, body or agency of any such administration or any Person in which such a government or state owns, directly or indirectly, a majority or controlling interest, an official of a political party, a candidate for public office and any official, employee or agent of any public international organization.
“Registrable Securities” means any existing Units, shares of HoldCo Stock, Up-C Entity Stock, or other securities resulting from an IPO, in each case, owned by the Members and their respective Affiliates; provided, that such securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) they shall have been disposed of in compliance with Rule 144 under the Securities Act, (iii) such securities shall have been otherwise Transferred to a Person (other than a Permitted Transferee) who is not a party to this Agreement, and, if such securities are in certificated form, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company or its transfer agent, (iv) such securities shall have become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 under the Securities Act or (v) they shall have ceased to be outstanding.
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“Registration Expenses” means all expenses incident to a registration pursuant to Section 10.04, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky Laws (including reasonable fees and disbursements of legal counsel in connection with blue sky qualifications of any Registrable Securities), expenses of printing certificates for any Registrable Securities in a form eligible for deposit with the Depository Trust Company, messenger and delivery expenses, internal expenses (including, without limitation, all salaries and expenses of the Successor Entity’s officers and employees performing legal or accounting duties), fees and disbursements of counsel for the Successor Entity, any advisors retained by the Successor Entity, and its independent certified public accountants (including the expenses of any management review, cold comfort letters or any special audits required by or incident to such performance and compliance), securities acts liability insurance (if the Successor Entity elects to obtain such insurance), and the reasonable fees and expenses of one counsel (and, if applicable, one local counsel) representing the Members whose Registrable Securities are included in such registration, selected by the Members holding a majority of the Registrable Securities so included (or, in the case of a Required Registration, by the Members holding a majority of the Registrable Securities set forth in the applicable Demand Request); but not including transfer taxes, any underwriting fees, discounts or commissions attributable to the sale of securities, or fees and expenses of any additional counsel representing such Members incurred in connection with the sale of Registrable Securities.
“Rule 144” means Rule 144 (or any successor provisions) under the Securities Act.
“Sanctions” means all export controls, trade, economic or financial sanctions or laws, regulations, embargoes or restrictive measures imposed, administered, enacted or enforced by a Sanctions Authority.
“Sanctions Authority” means U.S. government or any other Governmental Authority of any applicable jurisdiction, including the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the Security Council of the United Nations, or the Council of the European Union.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
“Shared Collections Account” means the account specified in writing by a Hertz Member or any of its Affiliates to the Company prior to the date hereof (or such other account as a Hertz Member or any of its Affiliates and the Company may agree from time to time), into which any Company Group Collections initially received by a Hertz Member or any of its Affiliates are deposited.
“Subsidiary” means, with respect to any specified Person, (a) any other Person of which such first Person owns (either directly or through one or more other Subsidiaries) a majority of the outstanding Equity Securities or securities carrying a majority of the voting power in the election of the board of directors or other governing body of such Person and with respect to which entity such first Person is not otherwise prohibited contractually or by other legally binding authority from exercising control or (b) any other Person with respect to which such first Person acts as the
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sole general partner, manager, managing member or trustee (or Persons performing similar functions).
“Tag-Along Portion” means, with respect to any Member and for any Tag-Along Sale, (a) the number of Common Units owned by such Member immediately prior to such Tag-Along Sale multiplied by (b) a fraction (i) the numerator of which is the number of Capital Units proposed to be Transferred by the Tag-Along Seller in such Tag-Along Sale and (ii) the denominator of which is the aggregate number of Capital Units held by all Members immediately prior to such Tag-Along Sale.
“Tax Allowance Amount” means, with respect to any Member, for any Estimated Tax Period (a) the product of the Applicable Tax Rate and such Member’s share of the estimated net taxable income for U.S. federal income tax purposes of the Company that is allocable to such Member in respect of such Member’s Units under Section 8.01(d) arising from its ownership of such Member’s Units in the Company for such Estimated Tax Period (determined by taking into account Section 704(c) of the Code and disregarding (i) any adjustments under Sections 743(b) and 734(b) of the Code (or any comparable provisions of state law), (ii) any allowable deduction under Section 199A of the Code, (iii) any allowable deductions under Section 164 of the Code, (iv) any net losses and deductions previously allocated to such Member, and (v) any other partner-level attributes) plus (b) any adjustments taken into account by such Member under Section 6226 of the Code minus (c) the sum of all prior distributions made pursuant to Section 8.03(a)(i) to such Member with respect to such Tax Year, all as determined by the Tax Matters Member in its good faith discretion, subject to oversight by the Board.
“Tax Year” means (a) the fiscal year of the Company determined pursuant to Section 7.01 or (b) if after the date of this Agreement, the taxable year is required by the Code or the Treasury Regulations promulgated thereunder to be a period other than the period described in clause (a), then each period that is the taxable year of the Company determined in accordance with the requirements of the Code or the Treasury Regulations promulgated thereunder; provided, that (x) in the case of a dissolution, Tax Year means the period from the day after the end of the most recently ended Tax Year until the dissolution of the Company and (y) for purposes of making allocations of Net Profit and Net Loss (or items thereof), Tax Year means any portion of a taxable year of the Company to the extent required to comply with Section 706 of the Code or the Treasury Regulations promulgated thereunder. For the avoidance of doubt, Tax Year shall include any portion of a taxable year of the Company with respect to which the allocation of Net Profit and Net Loss (or items thereof) is determined based on a “closing of the books.”
“Termination” has the meaning set forth in the Equity Plan.
“TNC Platform” means any online-enabled application or platform (including a smartphone app, including but not limited to those operated by Uber Technologies, Inc., Lyft, Inc., Waymo LLC, Zoox, Inc., Alto Experience Inc., Grab Holdings Inc., Tesla Inc., or any of their respective successors or Affiliates or any other ride-share platform) that is used to connect, match or facilitate the connection of passengers, goods (including food) or other riders with drivers or autonomous vehicles (whether owned, leased or otherwise authorized for use) to provide prearranged transportation services for compensation. For the avoidance of doubt, the term “TNC Platform” shall not include (a) any taxicab, limousine or charter-party carrier that is licensed or regulated as
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such and is not licensed or otherwise operating as a transportation network company or (b) any public transit or paratransit service to the extent operated by or on behalf of a Governmental Authority.
“Transfer” means, with respect to a Common Unit, directly or indirectly (whether by merger, operation of law or otherwise), to sell, transfer, assign or otherwise dispose of any direct or indirect economic, voting or other rights in or to such Common Unit, including by means of the Transfer of an Equity Security or other interest in a Person that directly or indirectly holds such Common Unit (which, for the avoidance of doubt, does not include direct or indirect transfers or issuances of any Equity Securities of the Ultimate Parent of any Member (or any of its direct or indirect equityholders)); provided, that a transfer of Equity Securities of any PE Fund or in any Person that holds a direct or indirect interest in such PE Fund (including any (i) co-investment transaction, (ii) secondary transfer of limited partnership or other interests in such PE Fund, (iii) continuation fund, continuation vehicle or similar fund-level restructuring transaction and (iv) sale, issuance or other transfer of Equity Securities in, or of any direct or indirect general partner, manager, management company, investment adviser or sponsor of, such PE Fund or such Person) shall not be deemed a “Transfer” hereunder. “Transferred” and “Transferring” shall have correlative meanings.
“Treasury Regulations” means the regulations promulgated under the Code as such regulations may be amended from time to time (including corresponding provisions of succeeding, temporary, proposed and final regulations).
“Ultimate Parent” means (a) with respect to the Hertz Members, THC (or any successor thereto), (b) with respect to each Initial Investor Member, the Person identified on Exhibit A, and (c) with respect to any other Member, the ultimate Person Controlling such Member, as designated on the joinder executed and delivered to the Company as a condition of such Member’s admission to the Company and accepted by the Board.
“Units” means the Common Units.
“Unreturned Capital” means, with respect to each Common Unit, as of the time of determination, the Capital Contributions made in respect of such Common Unit less the cumulative amount of all prior distributions made in respect of such Common Unit pursuant to Section 8.03(a).
“Voting Common Unit” means the Class A Common Units and the Class B Common Units.
“Whole Board” means, at any time, the total number of Directors comprising the Board at such time.
Each of the following terms is defined in the Section set forth opposite such term:
| Term | Section |
| Absent Director(s) | 5.04(c) |
| Absent Member | 4.06 |
| Additional Capital Contribution | 3.02(a) |
| Additional Member | 9.07 |
| Annual Budget and Business Plan | 10.04(a) |
| Approved Budget and Business Plan | 10.04(a) |
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| Term | Section |
| Board Valuation Deadlock | 1.01 |
| Blocker Consideration | 9.10(c) |
| Blocker Interests | 9.10(a) |
| Blocker Owner | 9.10(a) |
| Blocker Sale | 9.10(a) |
| Blocker Units | 9.10 |
| Board Approved Budget | 5.02(a)(xi) |
| Capital Account | 3.05 |
| Certificate of Formation | Recitals |
| Class B Event | 2.01(d)(i) |
| Class B Event Dispute Notice | 2.01(e)(iii) |
| Class B Event Notice | 2.01(e)(i) |
| Class C Conversion | 2.01(d)(i) |
| Collection Default Event | 10.08(k)(i) |
| Company | Preamble |
| Company-Level Tax | 7.05(b) |
| Confidential Information | 10.01(b) |
| Contribution Agreement | Preamble |
| Covered Persons | 1.01 |
| Delegation of Authority Policy | 5.08(b) |
| Demand Notice | 10.04(b) |
| Demand Request | 10.04(b) |
| Demanding Owner | 10.04(b) |
| Designating Group | 5.02(e) |
| Director | 5.01 |
| Disputing Investor | 2.01(e)(iii) |
| Drag-Along Rights | 9.04(a) |
| Drag-Along Sale | 9.04(a) |
| Drag-Along Sale Notice | 9.04(a) |
| Drag-Along Sale Notice Period | 9.04(b) |
| Drag-Along Sale Price | 9.04(a) |
| Drag-Along Seller | 9.04(a) |
| Excess Prepayment Amount | 10.08(e) |
| Hertz Transporting, Inc. | Preamble |
| Hertz Designated Director | 5.01(b)(i) |
| Hertz Services Agreement | 5.02(a)(xxi) |
| HoldCo IPO Entity | 10.02 |
| HoldCo Stock | 10.02(b) |
| HTI | Preamble |
| Impermissible Transfer | 9.01(d) |
| Independent Appraiser | 1.01 |
| Initial Approved Budget | 10.04(a) |
| Initial Hertz Members | Preamble |
| Initial Investor Member | Preamble |
| Interests | 1.01 |
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| Term | Section |
| Investor Company Information | 10.01(c) |
| Investor Member Designated Director | 5.01(b)(ii) |
| Issuance Notice | 3.07 |
| Lead Investor Designated Director | 5.01(b)(ii) |
| Liquidating Agent | 12.04 |
| Lockup Period | 9.01 |
| Member Indemnitors | 6.01(l) |
| Member Information | 10.01(c) |
| Minimum Return Obligation | 9.04(a) |
| Misapplied Collections | 10.08(g) |
| MNPI | 10.01(c) |
| Monthly Net Payment | 10.08(c) |
| Non-Compete Covenant | 6.02(d)(i) |
| Original LLC Agreement | Recitals |
| Oro Business | 6.02(d)(i) |
| Oro Collections Account | 10.08(b) |
| Permitted Transferee | 9.01 |
| Permitted Transfers | 9.01 |
| Piggyback Notice | 10.04(d) |
| Piggyback Offering | 10.04(d) |
| Preemptive Rights Exercise Notice | 3.07(a) |
| Prepayment Amount | 10.08(a) |
| Prepayment Reconciliation Statement | 10.08(e) |
| Prohibited Class B Event | 2.01(d)(i) |
| Purchase Agreement | Preamble |
| Qualified Member | 3.07 |
| Qualifying Member | 11.01 |
| Reconvened Meeting | 5.04(d) |
| Reconvened Member Meeting | 4.06 |
| Regulatory Allocations | 8.01(c)(vii) |
| Related-Party Transaction | 5.02(a)(xxi) |
| Remedial Financing | 10.08(k)(ii)(A) |
| Representatives | 10.01(b) |
| Repurchase Notice | 3.08(c) |
| Repurchase Price | 3.08(a) |
| Required Registration | 10.04(b) |
| Restrictive Covenant Breach | 3.08(b) |
| ROFO Acceptance Period | 9.02(c) |
| ROFO Blocker Units | 9.02(b) |
| ROFO Closing Period | 9.02(c) |
| ROFO Notice | 9.02 |
| ROFO Offer | 9.02(b) |
| ROFO Offer Price | 9.02(b) |
| ROFO Offered Units | 9.02 |
| ROFO Offeror | 9.02 |
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| Term | Section |
| ROFO Period | 9.02(b) |
| ROFO Selling Member | 9.02 |
| Shelf Notice | 10.04(j) |
| Shelf Registration | 10.04(j) |
| Shelf Registration Effectiveness Period | 10.04(k) |
| Shelf Registration Statement | 10.04(j) |
| Shelf Request | 10.04(j) |
| Shelf Requesting Owner | 10.04(j) |
| Shelf Underwritten Offering | 10.04(m) |
| SPAC | 1.01 |
| SPAC IPO | 1.01 |
| SPAC Securities | 1.01 |
| Specified Indemnified Persons | 6.01(l) |
| Subject Interests | 3.08(a) |
| Subordinated Note | 3.08(c) |
| Successor Entity | 10.04(a) |
| Suspension Period | 10.04(l) |
| Tag-Along Notice | 9.03(a) |
| Tag-Along Notice Period | 9.03(a) |
| Tag-Along Offer | 9.03(a) |
| Tag-Along Response Notice | 9.03(a) |
| Tag-Along Right | 9.03(a) |
| Tag-Along Sale | 9.03 |
| Tag-Along Seller | 9.03 |
| Tagging Person | 9.03(a) |
| Takedown Notice | 10.04(m) |
| Takedown Owner | 10.04(m) |
| Takedown Request | 10.04(m) |
| Tax Distributions | 8.03(a)(ii) |
| Tax Matters Member | 7.05(b) |
| THC | Preamble |
| THC Auditor | 11.03(d) |
| THC Monthly Close | 11.01 |
| Transaction Agreements | Recitals |
| Unpaid Amounts | 10.08(e) |
| UP-C Entity Stock | 10.02(c) |
| UP-C IPO | 10.02 |
| UP-C IPO Entity | 10.02 |
| Upstream Transfer | 9.01(c) |
Section 1.02 Other Definitional and Interpretative Provisions. The words “hereof”, “herein”, “hereunder” and “hereto” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “or”, “either” and “any” shall not be construed as exclusive. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The captions herein are included for convenience
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of reference only and shall be ignored in the construction or interpretation hereof. References to Articles, Sections, Exhibits and Schedules are to Articles, Sections, Exhibits and Schedules of this Agreement unless otherwise specified, and references in any Section or definition to any clause means such clause of such Section or definition. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other theory extends and such phrase shall not mean “if”. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form. References to “dollars” or “$” means United States dollars, and, unless otherwise specified in this Agreement, all references to currency and monetary values set forth herein shall mean U.S. Dollars and all payments hereunder shall be made in U.S. Dollars. References to “days” shall refer to calendar days unless Business Days are specified. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to “law”, “laws” shall be deemed also to include any and all applicable Laws. Wherever from the context it appears appropriate, pronouns stated in the masculine, feminine or neuter shall include the masculine, feminine and neuter. The provisions of this Agreement shall apply to successive events and transactions. If any time period for giving notice or taking action hereunder expires on a day that is not a Business Day, the time period for such notice or action shall automatically be extended to the next Business Day following such day.
Article
2
Organizational Matters and General Provisions
Section 2.01 Formation.
(a) The Company was formed as a Delaware limited liability company on March 2, 2023 by the filing of the Certificate of Formation in the office of the Secretary of State of the State of Delaware pursuant to the Act and the adoption of the Original LLC Agreement. The Members hereby continue the Company for the purposes and upon the terms and conditions set forth herein.
(b) The Company shall initially have four classes of interests: (i) Class A Common Units, (ii) Class B Common Units, (iii) Class C Common Units and (iv) Class D Common Units. Each Class A Common Unit, Class B Common Unit, Class C Common Unit or Class D Common Unit shall represent the same rights and preferences as each other Class A Common Unit, Class B Common Unit, Class C Common Unit or Class D Common Unit, respectively, except as otherwise expressly provided herein. A Membership Interest shall for all
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purposes be personal property. Each Membership Interest shall constitute a “security” within the meaning of, and governed by, Article 8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to time in the State of Delaware, and Article 8 of the Uniform Commercial Code of any other applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article 8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on Uniform State Laws and approved by the American Bar Association on February 14, 1995.
(c) Conversion of Class B Common Units.
(i) Each Hertz Member shall have the right, at such Hertz Member’s option, at any time and from time to time, to convert all or any portion of the Class B Common Units held by such Hertz Member into Class C Common Units by providing the Company with written notice of such conversion. In connection with any conversion of Class B Common Units pursuant to this Section 2.01(c)(i), each Class B Common Unit shall be converted into an equal number of Class C Common Units. A conversion of Class B Common Units pursuant to this Section 2.01(c)(i) shall be effective as of the close of business on the first Business Day after the Company’s receipt of the conversion notice; provided that the conversion notice may provide that the conversion be conditioned upon, and be effective as of, the occurrence of an event specified in such conversion notice.
(ii) Notwithstanding anything to the contrary in this Agreement and unless a Non-Violation Determination has been made by the Hertz Members and either (x) such Non-Violation Determination is not disputed in writing by a Lead Investor Member or Investor Members holding a majority of the then-outstanding Class A Common Units within fourteen (14) Business Days following written notice thereof, or (y) any dispute pursuant to Section 2.01(e) is resolved by mutual agreement of the applicable parties or pursuant to a final non-appealable decision of a court of competent jurisdiction that such Non-Violation Determination is valid, each Class B Common Unit held by the Hertz Members owning the most Voting Common Units that would result in the Hertz Members collectively owning in excess of 50% of all of the then-outstanding Voting Common Units (including any Class B Common Units received in connection with a Class C Conversion) shall, without any further action by any Hertz Member, be automatically converted into a number of Class C Common Units equal to the number of such Class B Common Units subject to such conversion.
(d) Conversion of Class C Common Units.
(i) Each Hertz Member shall have the right, at such Hertz Member’s option, at any time and from time to time, to convert all or any portion of the Class C Common Units held by such Hertz Member into Class B Common Units (a “Class C Conversion”) on a one-for-one basis; provided that no such conversion or other issuance of Class B Common Units to a Hertz Member or Affiliate thereof shall be permitted if it would result in the Hertz Members, together with their respective Affiliates, holding more than 50% of the total outstanding Voting
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Common Units and with respect to which a Non-Violation Determination has not been made by the Hertz Members, or that would, or would reasonably be expected to, otherwise (i) cause the Company or any of its Subsidiaries to become subject to any covenant, restriction or other obligation under any credit agreement, indenture, note purchase agreement, loan agreement, guarantee or other similar agreement or instrument of any Hertz Member or any of its Affiliates (other than the Company and its Subsidiaries), in each case, that would restrict the operation of the business, or the acquisition, disposition or encumbrance of any assets, of the Company Entities, (ii) result in any Company Entity becoming a restricted subsidiary (or similar term) under THC’s credit agreements, or (iii) contravene or cause a default under any material agreement to which the Company, the Hertz Members, the Hertz Members’ Ultimate Parent or their respective Subsidiaries or Affiliates (a conversion or issuance described in this proviso, a “Prohibited Class B Event”).
(e) Class B Event Disputes.
(i) Prior to any proposed Class C Conversion or issuance of Class B Common Units, as a result of the Hertz Member’s making of a Non-Violation Determination, the applicable Hertz Member shall deliver to the Company and to the Lead Investor Member written notice of such conversion (a “Class B Event Notice”) not less than fifteen (15) Business Days prior to the proposed effective date of such conversion or issuance. The Class B Event Notice shall specify (A) the number of Class C Common Units to be converted or Class B Common Units to be issued, (B) the proposed effective date of such conversion or issuance, and (C) a certification by such Hertz Member that such conversion does not constitute a Prohibited Class B Event, together with a reasonably detailed explanation supporting such certification.
(ii) Subject to Section 2.01(e)(iii), a conversion or issuance contemplated by a Class B Event Notice shall be effective as of the close of business on the date specified in the conversion notice, which date shall not be less than fifteen (15) Business Days from receipt of such Class B Event Notice. Upon the effectiveness of any such issuance or Class C Conversion, the Company shall promptly update Exhibit A to reflect such issuance or Class C Conversion.
(iii) If either a Lead Investor Member, or Investor Member holding a majority of the outstanding Class A Common Units (such disputing party or parties, the “Disputing Investor”), reasonably believe that a conversion or issuance contemplated by a Class B Event Notice constitutes, or is reasonably expected to constitute, a Prohibited Class B Event, the Disputing Investor may, within fourteen (14) Business Days following receipt of the applicable Class B Event Notice, deliver written notice to the applicable Hertz Member setting forth in reasonable detail the basis for such belief (a “Class B Event Dispute Notice”). Upon receipt of a Class B Event Dispute Notice, the applicable Hertz Member shall provide a reasonably detailed written explanation addressing the concerns raised therein, and such Hertz Member and the Disputing Investor shall discuss in good faith whether
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the proposed Class C Conversion or issuance of Class B Common Units would constitute a Prohibited Class B Event. The proposed Class C Conversion or issuance of Class B Common Units shall not be consummated pending the resolution of any such dispute. If such Hertz Member and the Disputing Investor are unable to resolve the dispute within twenty (20) Business Days following delivery of the Class B Event Dispute Notice, either party may escalate the matter for resolution in accordance with Section 13.10 of this Agreement.
(f) Upon the execution and delivery of this Agreement or a counterpart to this Agreement, each of the Initial Hertz Members and the Initial Investor Members on the date hereof hereby is admitted or continues, as applicable, as a member of the Company and shall hold the number of Common Units set forth on, and, representing the Membership Percentages set forth on, Exhibit A. Each Member hereby acknowledges the receipt (by initial issuance or Transfer of Membership Interests) of the number of Membership Interests indicated on Exhibit A. As a condition to his or her receipt of Class D Common Units issuable on the exercise of Options, each Management Member shall execute and deliver a joinder to this Agreement, in a form provided by the Company.
(g) This Agreement amends, restates and supersedes in its entirety the Original LLC Agreement.
Section 2.02 Name. The name of the Company as of the date hereof is “Oro Mobility Holdings, LLC” and its business shall be carried on in this name with such variations and changes or in such other trade names as the Board reasonably deems necessary or appropriate. The Board shall have the power at any time to change the name of the Company in its reasonable discretion.
Section 2.03 Principal Place of Business. The principal place of business of the Company shall be located at such location as the Board may reasonably determine from time to time. The Company may also maintain such other office or offices at such other locations as the Board may reasonably determine from time to time.
Section 2.04 Registered Agent. The Company’s registered agent and office in Delaware shall be The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New Castle, Delaware 19801.
Section 2.05 Purpose and Powers of the Company. Subject to Section 5.02(a)(iv), the Company is formed for the object and purpose of engaging in any and all lawful activities permitted under the Act.
(a) Subject to the terms and conditions of this Agreement, the Company shall have the power and authority to take any and all actions that limited liability companies may take under the Act and that are necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the purposes set forth in this Section 2.05. Without limiting the foregoing, the Company may in furtherance of its business and operations carry out its objectives and accomplish its purposes as principal or agent, directly or indirectly, alone or with associates, or as a member, stockholder, partner or participant in any firm, association, trust, corporation, partnership or other entity.
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(b) The Company shall do all things necessary to maintain its limited liability company existence separate and apart from each Member and any Affiliate of any Member, including holding regular meetings of the Board and maintaining its books and records on a current basis separate from that of any Affiliate of the Company or any other Person.
Section 2.06 Term. The term of the Company commenced on the date the Certificate of Formation was filed in the office of the Secretary of State of the State of Delaware and shall continue in full force and effect in perpetuity; provided that the Company may be dissolved in accordance with the provisions of this Agreement and the Act.
Section 2.07 Filings; Qualification in Other Jurisdictions. The Company shall prepare, following the execution and delivery of this Agreement, any documents required to be filed or, in the Board’s or an authorized executive officer’s view, appropriate for filing under the Act, and the Company shall cause each such document to be filed in accordance with the Act, and, to the extent required by Law, to be filed and recorded, and/or notice thereof to be published, in the appropriate place in each jurisdiction in which the Company may hereafter establish a place of business. The Board may cause or authorize an executive officer to cause the Company to be qualified or registered under assumed or fictitious name statutes or similar Laws in any jurisdiction in which the Company transacts business where the Company is not currently so qualified or registered. Each executive officer shall execute, deliver and file any such documents (and any amendments and/or restatements thereof) necessary for the Company to accomplish the foregoing. The Board may appoint any other authorized persons to execute, deliver and file any such documents.
Section 2.08 Company Property. All property of the Company, both tangible and intangible, shall be deemed to be owned by the Company as an entity. A Member has no interest in specific Company property.
Section 2.09 Transactions with Members and Directors. Subject to the terms and conditions of this Agreement, including Section 5.02, any Member may lend money to act as a surety, guarantor or endorser for, guarantee or assume one or more obligations of, provide collateral for, and transact other business with the Company and, subject to applicable Law and the terms and conditions of this Agreement, shall have the same rights and obligations with respect to such matter as a Person who is not a Member, and any Member and the members, shareholders, partners and Affiliates thereof shall be able to transact business or enter into agreements with the Company to the fullest extent permissible under the Act.
Section 2.10 Uncertificated Units. Membership Interests shall be uncertificated.
Article
3
Capital Contributions and Preemptive Rights
Section 3.01 Initial Capital Contributions. In connection with the transactions contemplated by the Transaction Agreements, each of the Initial Hertz Members and the Initial Investor Member has made (or caused one or more of their Affiliates to make) contributions, transfers, purchases or payments in accordance with the Structuring Transactions (as defined in the Purchase Agreement) and in respect thereof shall have an Initial Capital Contribution at the Closing as specified on Schedule 3.01.
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Section 3.02 Additional Capital Contributions. From and after the Closing, no Member shall be required or permitted to make any additional capital contributions (other than Initial Capital Contributions) to the Company except as provided in this Article 3.
(a) Subject to Sections 3.07 and 5.02, in addition to the Initial Capital Contributions, Members holding Common Units may (but shall not be required to) from time to time make capital contributions to the Company (each, an “Additional Capital Contribution”) at such times and in such amounts as the Board may reasonably determine, subject to Section 3.07.
Section 3.03 Issuance of Membership Interests.
(a) No Membership Interests or other Equity Securities shall be issued in respect of any Additional Capital Contribution until such Additional Capital Contribution is actually made. All Membership Interests in respect of the Initial Capital Contributions are hereby duly authorized and issued on the date of this Agreement and no additional Membership Interests shall be issued by the Company after the date of this Agreement in respect of any Initial Capital Contributions.
(b) Subject to Sections 3.07 and 5.02, the Board may authorize the Company to issue additional Membership Interests and/or create and issue new series, types or classes of Equity Securities in the Company with such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof as the Board may reasonably determine, and authorize obligations, evidences of indebtedness or other securities or interests of the Company convertible or exchangeable into Membership Interests or other Equity Securities in the Company and warrants, options or other rights to purchase or otherwise acquire Membership Interests or other Equity Securities in the Company, in each case to any Person in such amounts and on such terms as so approved by the Board; provided, that any such issuance will be made only in exchange for payment of Fair Market Value for such interest, unless otherwise agreed to by the Board (including at least one affirmative vote from a Hertz Designated Director and one Investor Member Designated Director). The Company may issue whole or fractional Membership Interests or other Equity Securities in the Company. In the event the Company issues any Equity Securities (other than Membership Interests that are authorized for issuance in this Agreement at such time) in accordance with the terms of this Agreement, this Agreement will be appropriately amended to reflect the terms of such other Equity Securities and the issuance thereof.
(c) Notwithstanding anything to the contrary in this Agreement, (i) no Class A Common Units shall be issued to any Hertz Member, any Management Member or any of their respective Affiliates and (ii) in connection with any issuance of Common Units by the Company after the Closing Date (including any issuance pursuant to Section 3.07 or in connection with any Additional Capital Contribution), such Common Units shall be designated as follows: (A) any Common Units issued to a Hertz Member or any of its Affiliates shall be designated as Class C Common Units; (B) any Common Units issued to a Management Member or other Eligible Employee or any Affiliate thereof (including any Common Units issued upon the exercise of Options under the Equity Plan) shall be designated as Class D Common Units; and (C) any Common Units issued to any Investor Member shall be designated as Class A Common Units.
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Common Units issued to any Person that is not a Hertz Member or an Affiliate thereof or a Management Member or other Eligible Employee or any Affiliate thereof shall be Class B Common Units or Class A Common Units, as determined by the Board.
Section 3.04 Withdrawal of Capital.
(a) No Member shall be entitled to withdraw any part of its Capital Contributions or to receive any distribution from the Company, except as expressly provided herein. Under circumstances requiring the return of any Capital Contribution, no Member shall have the right to demand or receive property other than cash. No Member shall have the right to cause the sale of any Company asset. No Member shall have any right to receive any salary or draw with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company or otherwise in its capacity as a Member.
(b) No Member shall have any liability for the return of the Capital Contributions of any other Member. Except as otherwise required by Law, no Member shall be required to make up a negative balance in its Capital Account. No Member shall have priority over any other Member either as to the return of the amount of such Member’s Capital Contributions or as to any allocation of any item of income, gain, loss, deduction or credit of the Company (except to the extent granted by Company Securities hereinafter approved by the Board pursuant to Section 3.03(b)).
Section 3.05 Maintenance of Capital Accounts.
(a) The Company shall maintain a separate capital account for each Member according to the rules of Treasury Regulation Section 1.704-l(b)(2)(iv) (a “Capital Account”). For this purpose, the Company may, upon the occurrence of any of the events specified in Treasury Regulation Section 1.704-l(b)(2)(iv)(f), increase or decrease the Capital Accounts in accordance with the rules of such regulation and Treasury Regulation Section 1.704-l(b)(2)(iv)(g) to reflect a revaluation of the Company’s property.
(b) No Member shall be required to make any payment to any other Member or the Company by reason of any deficit or negative balance which may exist from time to time in such Member’s Capital Account (including upon and after dissolution of the Company).
(c) Upon a Transfer of any Membership Interest in accordance with the terms of this Agreement, the transferee Member shall succeed to the Capital Account of the transferor which is attributable to such Membership Interest.
Section 3.06 No Interest. No interest shall be paid on Capital Contributions or on the balance in a Member’s Capital Account.
Section 3.07 Preemptive Rights(a). Other than for issuances of Company Securities specified in Section 3.07(d), prior to an IPO, if the Company proposes to issue any Company Securities to any Person, the Company shall first offer such Company Securities to all Members (other than Management Members, unless the Board, acting unanimously, determines that Management Members may participate in such proposed issuance) that are accredited investors under Regulation D of the Securities Act (each, a “Qualified Member”) by delivering a written
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notice (an “Issuance Notice”) to each Qualified Member. The Issuance Notice shall specify the proposed date of such issuance (which shall be not less than 20 Business Days or more than 60 days after the date of the Issuance Notice), the number and type of Company Securities proposed to be issued, the proposed price per Company Security and the other material terms of the proposed issuance (including the terms of the Company Securities to be issued). Subject to Section 3.07(d), each Qualified Member shall be entitled to purchase (or to cause one or more of its Affiliates to purchase), at the price per Company Security and on the terms and conditions set forth in the Issuance Notice, up to such Qualified Member’s Membership Percentage of the Company Securities proposed to be issued. If any Qualified Member desires to purchase or to have any of its Affiliates purchase any or all of its Membership Percentage of the Company Securities specified in the Issuance Notice, it shall deliver a written notice to the Company (each a “Preemptive Rights Exercise Notice”) of its election to purchase such Company Securities within 15 Business Days of receipt of the Issuance Notice. The Preemptive Rights Exercise Notice shall specify the number (or amount) of Company Securities to be purchased by such party or its Affiliates and shall constitute exercise by such party of its rights under this Section 3.07 and a binding agreement of such party or such party’s applicable Affiliates to purchase, at the price and on the terms specified in the Issuance Notice, the number (or amount) of Company Securities specified in the Preemptive Rights Exercise Notice with such purchase to be consummated as promptly as reasonably practicable. If, at the termination of such 15 Business Day period, any Qualified Member shall not have delivered a Preemptive Rights Exercise Notice to the Company, such party shall be deemed to have waived all of its rights under this Section 3.07 with respect to the purchase of such Company Securities, which waiver shall apply only to the Company Securities specified in the applicable Issuance Notice and shall not constitute a waiver of such Qualified Member’s rights under this Section 3.07 with respect to any future issuance of Company Securities.
(b) If a Qualified Member fails to exercise its preemptive rights under this Section 3.07 or elects to exercise such rights with respect to less than its Membership Percentage of the issuance and another Qualified Member has exercised its rights under this Section 3.07 with respect to its entire Membership Percentage, other Qualified Members that have exercised their entire respective preemptive rights shall be entitled to purchase from the Company the remaining portion of the issuance pro rata based on their respective Membership Percentage. If any such Qualified Member desires to purchase or to have any of its Affiliates purchase such remaining portion, it shall notify the Company in the Preemptive Rights Exercise Notice its election to purchase such unsubscribed Company Securities and specify the maximum number (or amount) of Company Securities it desires to purchase.
(c) The Company shall have 30 days from the date of the Issuance Notice to consummate the issuance of the Company Securities subject thereto pursuant to this Section 3.07; provided, that, if any Governmental Approvals are required in connection with such issuance, such 30-day period shall be extended until the expiration of five Business Days following the date on which all Governmental Approvals are obtained and any applicable waiting periods under applicable Law have expired or been terminated, but in no event will such period be extended for more than an additional 90 days. If the Company proposes to issue any such Company Securities pursuant to this Section 3.07 after such 30-day (or longer, as permitted by the preceding sentence) period, it shall again comply with the procedures set forth in this Section 3.07. To the extent any Company Securities offered pursuant to an Issuance Notice are not subscribed for by Qualified Members pursuant to this Section 3.07, the Company may issue such unsubscribed Company
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Securities to any Person during the 90 days following the date of the Issuance Notice at a price per Company Security not less than, and on the same terms and conditions as specified in the Issuance Notice. Any such Company Securities not so issued within such 90-day period shall again be subject to this Section 3.07.
(d) Notwithstanding the foregoing, if the Board reasonably determines in good faith that compliance with the time periods set forth in this Section 3.07 would not be in the best interests of the Company and its Subsidiaries because of the liquidity needs of the Company and its Subsidiaries, the Company may consummate the issuance of Company Securities to the applicable Person(s) prior to delivery of the Issuance Notice; provided that, promptly thereafter (and in no event later than 30 days after consummation of such issuance), the Company shall deliver an Issuance Notice to each Qualified Member offering to sell to such Qualified Member its Membership Percentage of such Company Securities at the same price per Company Security and on the same terms and conditions as applied to such issuance, with such Qualified Member’s Membership Percentage determined taking into account the actual number of Company Securities so issued so as to achieve the same economic effect as if the Issuance Notice had been delivered prior to such issuance. The provisions of Sections 3.07(a), (b) and (c) shall apply mutatis mutandis to any such catch-up offer; provided, further, that (i) with respect to any such Company Securities that accrue interest or paid-in-kind interest, any Qualified Member that exercises its catch-up right shall be entitled to receive all accrued and unpaid interest or paid-in-kind interest in respect of the Company Securities so purchased from the original issue date through the date of such purchase, as if such Qualified Member had been the holder of such Company Securities from the original issue date and (ii) between the consummation of the issuance of such Company Securities to the applicable Person(s) and the expiration of the response period applicable to the catch-up offer, (A) there shall be no distributions, interest payments, redemptions or other liquidity events with respect to such Company Securities and (B) no Investor Member Designated Director shall be removed, replaced or have his or her designation altered (other than at the written election of the Investor Member entitled to designate such Director), and the composition of the Board and any committee thereof as it relates to the Investor Member Designated Directors shall not otherwise be modified.
(e) Notwithstanding the foregoing and any other provision of this Section 3.07, no Member shall be entitled to purchase Company Securities as contemplated by this Section 3.07 in connection with issuances of Company Securities (i) to employees or other individual service providers of the Company or any of its Subsidiaries, or the members of the Board who are employees of THC or its Subsidiaries, in each case pursuant to employee benefit plans, incentive equity plans (including the Equity Plan) or other similar arrangements approved by the Board, in each case, in accordance with the terms of this Agreement, (ii) upon the exercise of Options, (iii) to any Person that is not a Member or an Affiliate thereof as consideration in any acquisition approved in accordance with this Agreement or (iv) in respect of any split, distribution or recapitalization of the Company, which must be offered, on a pro rata basis, to each Member.
(f) This Section 3.07 shall not apply in connection with, and shall terminate upon, an IPO.
Section 3.08 Repurchase Rights.
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(a) In the event of any Termination of a Management Member for any reason (other than a Termination by Employer for Cause or a Management Member’s resignation in circumstances where Cause exists), the Company (or its designees) shall have the option (but not the obligation) to purchase from such terminated Management Member and his or her Employee Permitted Transferees all or any portion of the Class D Common Units, if any, held by such Management Member(s) or his or her Employee Permitted Transferees (collectively, the “Subject Interests”) for consideration equal to the Class D Common Units’ fair market value (as reasonably determined by the Board in good faith) as of the date of the applicable Repurchase Notice (the “Repurchase Price”), less any then unpaid distributions pursuant to Section 8.03(a)(i) advanced to such Management Member or his or her Employee Permitted Transferees. In the event of a Termination of a Management Member by Employer for Cause or a Management Member’s resignation in circumstances where Cause exists (or in the event of a Termination of a Management Member for any reason other than for Cause but where there is a subsequent determination by the Employer or the Company that Cause existed prior to such termination and the Termination is retroactively deemed to have been for Cause) all of the Management’s Member’s Class D Common Units, whether vested or unvested, shall be automatically forfeited without any consideration. In the event of a repurchase pursuant to this Section 3.08(a) and there is either (i) a subsequent determination by the Employer or the Company that Cause existed prior to such termination and the Termination is retroactively deemed to have been for Cause or (ii) a Restrictive Covenant Breach, the Management Member must promptly repay the Repurchase Price to the Company.
(b) In the event a Management Member is in material breach of the terms of any noncompete, non-solicit, confidentiality or non-disparagement covenants included in an agreement between such Management Member, on the one hand, and the Company and/or any of its Subsidiaries, on the other hand (a “Restrictive Covenant Breach”), the Company (or its designees) all of such Management Member’s Class D Common Units, whether vested or unvested, shall be automatically forfeited without any consideration.
(c) The Company (or its designees) shall exercise the foregoing purchase options, by written notice (the “Repurchase Notice”) to the applicable Management Members and their Employee Permitted Transferees beginning on the date that is the later of (x) six months following the Termination of such Management Member and (y) six months and one day following the vesting of the Subject Interests. Each of the Members hereby agrees that the foregoing remedy is a liquidated damage, and not a penalty. The amount that is payable to any Management Member for any Subject Interest to be repurchased pursuant to this Section 3.08 may be paid, at the election of the Company by any combination of (i) delivery of a check payable to such Management Member, (ii) a wire transfer of immediately available funds on the closing date of such repurchase or (iii) delivery of a subordinated note or notes on the closing date of such repurchase, bearing interest at a per annum rate equal to the Base Rate (a “Subordinated Note”). Notwithstanding the foregoing, the Company shall be permitted to offset amounts outstanding under any bona fide debts or for damages resulting from a Restrictive Covenant Breach owed by a Management Member or any bona fide debts or such damages owed by one or more of his or her Employee Permitted Transferees, to the extent such Employee Permitted Transferee is due payment for Subject Interests being purchased, in each case, to the Company or any of its Subsidiaries. Any Subordinated Notes issued pursuant to this Section 3.08(c) shall be subject to any subordination provisions required by the Company’s and its Subsidiaries’ lenders and may be prepaid, at the
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Company’s option, only to the extent permitted by the Company’s and its Subsidiaries’ debt and equity financing agreements.
(d) The Company (or its designee) will receive customary representations and warranties from the applicable Management Member and/or his or her Employee Permitted Transferees regarding the sale of the Subject Interests, including but not limited to the representation that the applicable Management Member and/or each of his or her Employee Permitted Transferees has good and marketable title to the Subject Interests to be transferred free and clear of all liens, claims and other encumbrances on the date of closing the transfer. The Management Member hereby consents to the taking of any reasonable steps by the Company purchaser which the latter party deems are necessary or convenient to effect any legal formalities in relation to such transfer. Once the Company (or its designee) has provided a Repurchase Notice to a Management Member and actually tendered payment to the applicable Management Member and his or her Employee Permitted Transferees for the Subject Interests to be repurchased in accordance with this Section 3.08, then from and after such time, the Person from whom such Subject Interests are to be repurchased shall be deemed to Transfer all rights, title and interest in and to such Subject Interests and no longer have any rights as a holder of such Subject Interests (other than the right to receive payment of such consideration in accordance with this Section 3.08), and such Subject Interests shall be deemed purchased in accordance with the applicable provisions hereof and the Company (or its designee) shall be deemed the owner and holder of such Subject Interests.
(e) Notwithstanding anything to the contrary contained in this Agreement, all repurchases of the Subject Interests by the Company shall be subject to applicable restrictions contained in the Act and in the Company’s and any of its Subsidiaries’ debt financing agreements. If any such restrictions prohibit the repurchase of the Subject Interests hereunder which the Company is otherwise entitled to make, the time periods provided in this Section 3.08 shall be suspended, and the Company (or its designee) shall make such repurchases at the applicable purchase price therefore within 60 days following the lapse, inapplicability or satisfaction of such restrictions.
(f) Each Management Member acknowledges and agrees that none of the Company, its Subsidiaries or Affiliates shall have any duty or obligation to affirmatively disclose to the Management Member, and the Management Member shall not have any right to be advised of, any material information regarding the Company and its Subsidiaries or otherwise at any time prior to, upon, or in connection with the exercise of any repurchase of Class D Common Units pursuant to this Section 3.08.
Article
4
Certain Rights and Obligations of Members
Section 4.01 Members. The Members of the Company and their respective numbers of Membership Interests, Membership Percentages, initial Capital Account balances, share of Net Profits and Net Losses, each as applicable, and addresses and other contact information for purposes of Section 13.12, are listed on Exhibit A. The Board shall update Exhibit A from time to time promptly following any changes in any of such information in accordance with the terms of this Agreement, which update shall not be deemed an amendment. No Person may be a Member
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without the ownership of a Membership Interest. The Members shall have only such rights and powers as are granted to them pursuant to the express terms of this Agreement and, unless otherwise provided herein, the Act.
Section 4.02 No Action on Behalf of the Company. No Member (in its capacity as such) shall have any authority to take any action on behalf of or in the name of the Company, or to enter into any commitment or obligation binding upon the Company, except for actions expressly authorized by the terms of this Agreement.
Section 4.03 No Right to Withdraw. Except in connection with the Transfer of Membership Interests in accordance with the terms of this Agreement such that the Transferring Member no longer holds any Membership Interests, no Member shall have any right to voluntarily resign or otherwise withdraw from the Company without the prior written consent of the Company and each of the other Members. A resigning Member shall not be entitled to a distribution of the fair value of its Membership Interests under Section 18-604 of the Act.
Section 4.04 Member Meetings. A meeting of the Members for any purpose or purposes may be called at any time by the Board. At a meeting, no business shall be transacted and no action shall be taken other than that stated in the notice of the meeting unless all Members entitled to vote are present at such meeting and agree that other business not stated in the notice of the meeting can be transacted.
Section 4.05 Notice of Meetings. Written notice stating the place, day and hour of every meeting of the Members and the purpose or purposes for which the meeting is called shall be mailed not less than five nor more than 15 Business Days before the date of the meeting (or if sent by e-mail, not less than five Business Days before the date of the meeting), in either case to each Member entitled to vote at such meeting, at its address maintained in the records of the Company by the Company’s Secretary. Such further notice shall be given as may be required by Law, but meetings may be held without notice if all the Members entitled to vote at the meeting are present in person or represented by proxy or if notice is waived in writing by those not present, either before or after the meeting. Presence at a meeting by a Member shall constitute a waiver of any deficiency of notice, except when a Member attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not called or convened in accordance with this Agreement. In the case of extraordinary circumstances, a meeting of the Members may be called by the Board on 24 hours’ notice.
Section 4.06 Quorum; Telephonic or Electronic Meetings. Provided that notice of the meeting has been given in accordance with Section 4.05, Members holding a majority of the outstanding Voting Common Units entitled to vote with respect to the business to be transacted, who shall be present or represented by proxy at any meeting duly called, shall constitute a quorum for the transaction of business; provided that the presence of a Hertz Member and a Lead Investor Member shall be required for a quorum to be constituted. If less than a quorum shall be in attendance at the time for which a meeting shall have been called, no action may be taken and the Members present shall adjourn the meeting and the Company shall promptly give notice of when the meeting will be reconvened in accordance with Section 4.05 (the “Reconvened Member Meeting”). If the Hertz Member or the Lead Investor Member was absent from such adjourned meeting such that a quorum could not be constituted (the “Absent Member(s)”) and the Hertz
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Member or the Lead Investor Member, respectively, does not attend the Reconvened Member Meeting, then the presence of such Absent Member(s) shall not be required to constitute a quorum for the Reconvened Member Meeting (but only to the extent the business to be voted on thereat related to one or more purposes set forth in the two written notices of the meetings that such Absent Member(s) did not attend).
(a) Members may participate in meetings of the Members by means of conference telephone or similar electronic communications by means of which all Persons participating in the meeting can hear each other. Participation in a telephonic or electronic meeting pursuant to this Section 4.06(a) shall constitute presence at such meeting for purposes of Section 4.06 and shall constitute a waiver of any deficiency of notice, except when a Member attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not called or convened in accordance with this Agreement.
Section 4.07 Voting. At any meeting of the Members, each Member entitled to vote on any matter coming before the meeting shall, as to such matter, have a vote, in person, by telephone (or other electronic communication) or by proxy, equal to the number of Voting Common Units held in its name on the relevant record date established pursuant to Section 4.09. All Voting Common Units with voting rights shall constitute a single class and group of Equity Securities of the Company and the holders of Voting Common Units shall vote together as a single class and group of Members. With respect to any matters on which the holders of Class C Common Units are entitled to vote as expressly set forth herein or as a matter of non-waivable Law, each holder of Units shall, as to such matter, have a vote, in person, by telephone (or other electronic communication) or by proxy, equal to the number of Common Units held in its name on the relevant record date established pursuant to Section 4.09 and all Common Units shall vote together as a single class and group of Members. Notwithstanding anything herein to the contrary, holders of Class D Common Units issued on the exercise of Options shall not have any voting rights as holders of such Units.
(a) When a quorum is present, the affirmative vote or consent of Members holding a majority of the outstanding Voting Common Units present in person or represented by proxy at a duly called meeting and entitled to vote on the subject matter shall constitute the act of the Members. Every proxy shall be in writing, dated and signed by the Member entitled to vote or its duly authorized attorney-in-fact.
(b) Except as otherwise provided in this Agreement in respect of any class or series of interests in the Company created and issued after the date of this Agreement in accordance with the terms of this Agreement or as required by Law, no class or series of such interests, other than the Voting Common Units, shall have any voting rights whatsoever, and no Member shall have any right to vote with respect to any business or matter to be voted or acted upon by the Members by virtue of its ownership of any such interests in the Company other than the Voting Common Units.
Section 4.08 Action Without a Meeting. On any matter requiring an approval or consent of Members under this Agreement or the Act at a meeting of Members, the Members may take such action without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by a majority of the Members entitled to
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vote thereon. Approval of any such action by email confirmation shall constitute consent in writing for purposes of this Section. Notwithstanding the foregoing, no such action may be taken without at least two (2) Business Days’ prior written notice to the Investor Members and Hertz Members, which notice shall contain the proposed text of the consent in writing.
Section 4.09 Record Date. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members, or entitled to receive a payment of any kind, or in order to make a determination of Members for any other proper purpose, the Board may fix in advance a date as the record date for any such determination of Members, such date in any case to be not more than 70 days prior to the date on which the particular meeting or action, requiring such determination of such Members, is to be held or taken. If no record date is fixed for the determination of Members entitled to notice of or to vote at a meeting of Members, or Members entitled to receive payment of any kind, the date on which notices of the meeting are mailed or faxed or the date on which the resolution of the Board declaring such payment is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Section 4.09, such determination shall apply to any adjournment thereof unless the Board fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.
Section 4.10 Member Approval Rights. Except as otherwise expressly set forth in this Agreement or as required by non-waivable Law, the Members shall have no right to vote on any matter and hereby expressly waive any right to vote that can be waived. Without limiting the generality of the foregoing, in the event any matters are submitted to a vote of the Members, the Members holding Voting Common Units shall have the sole right to exercise such vote, and the Members holding Class C Common Units (in each case, in their capacity as such) shall not have any right to vote in respect of any such matter so submitted and the Membership Interests of such Members holding Class C Common Units (in each case, in their capacity as such) shall not be taken into account when calculating Membership Interests or Membership Percentages for any matters requiring a vote or approval hereunder.
Section 4.11 Partition. Each Member waives any and all rights that it may have to maintain an action for partition of the Company’s property.
Section 4.12 Liability. Except as otherwise set forth herein or in the Transaction Agreements, or as required by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Member, Director or Company officer shall be obligated personally for any such debt, obligation or liability of the Company or for any losses of the Company solely by reason of being a Member or acting as a Director or Company officer.
Article
5
Board and Officers
Section 5.01 Board. The property, affairs and business of the Company shall be managed by officers of the Company (appointed in accordance with Section 5.08 and pursuant to the Delegation of Authority Policy) under the supervision and direction of the Board, except as
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otherwise expressly provided in this Agreement. The Board shall be made up of the number of individuals (who need not be Members) (each, a “Director”) as specified in this Agreement. Each Director shall be a “manager” (as such term is defined in the Act) of the Company but, notwithstanding the foregoing, no Director shall have any rights or powers beyond the rights and powers granted to such Director in this Agreement.
(a) The Board shall be made up of six Directors.
(b) The Directors shall be appointed as follows:
(i) three Directors shall be elected by the affirmative vote or written consent of the Members holding a majority of the outstanding Class B Common Units (each, a “Hertz Designated Director”);
(ii) one Director shall be designated by the Lead Investor Members holding a majority of the Class A Common Units owned by the Lead Investor Members (the “Lead Investor Designated Director”); provided that the Lead Investor Members shall not be entitled to designate any Director pursuant to this clause (ii) if the Lead Investor Members directly or indirectly, together with their Permitted Transferees hold less than 30% of their Initial Units in the aggregate. The Lead Investor Designated Director will be an “Investor Member Designated Director” for purposes of this Agreement (unless otherwise expressly stated); and
(iii) three Directors shall be designated by Members holding a majority of the Class A Common Units (each, an “Investor Member Designated Director”); provided, that, for so long as the Lead Investor Members are entitled to appoint a Lead Investor Designated Director, the Members holding a majority of the Class A Common Units shall only be entitled to designate two directors pursuant to this clause (iii); provided, that at any time there is a Lead Investor or any Investor Member (collectively with its Affiliates) that owns a majority of the Class A Common Units, one director to be designated pursuant to this clause (iii) shall be appointed by Members holding a majority of the Class A Common Units excluding for such purpose any Lead Investor and any Investor Member (collectively with its Affiliates) that owns a majority of the Class A Common Units.
(c) If the Hertz Members lose the right to appoint one or more Hertz Designated Directors pursuant to Section 5.01(b)(i), unless otherwise designated by the Hertz Members, the most recently appointed Hertz Designated Director shall be automatically removed from the Board. If the Lead Investor Members lose the right to appoint the Lead Investor Designated Director pursuant to Section 5.01(b)(ii), the Lead Investor Designated Director shall be automatically removed from the Board. If the Investor Members lose the right to appoint one or more Investor Member Designated Directors pursuant to Section 5.01(b)(iii), unless otherwise designated by the Investor Members holding a majority of the Class A Common Units, the most recently appointed Investor Member Designated Director (other than the Lead Investor Designated Director) shall be automatically removed from the Board.
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(d) The Directors designated as of the date hereof are set forth on Schedule 5.01(d).
(e) Except as otherwise set forth in Section 5.01(a) and Section 5.01(c), each Director shall hold such position until his or her successor is appointed or elected or until his or her earlier death, disability, resignation or removal.
(f) The Board, by taking action in accordance with this Article 5, shall have the power, discretion and authority on behalf and in the name of the Company to carry out any and all of the objects and purposes of the Company contemplated by this Agreement and to perform or authorize all acts which it may reasonably deem necessary or advisable in connection therewith.
(g) Each Director will serve without compensation from the Company, other than any grants of Options approved by the Board in accordance with this Agreement, including Section 5.02. Any Member may elect to provide compensation to the Directors appointed by it, at such Member’s sole discretion and expense. Each Director shall be entitled to reimbursement for reasonable, documented and necessary out-of-pocket expenses incurred by such Director for the purposes of attending meetings of the Board.
(h) No Director (acting in his or her capacity as such) shall have any right or authority to act on behalf of or to bind the Company with respect to any matter except pursuant to a resolution authorizing such action, which resolution is duly adopted by the Board by the affirmative vote required for such matter pursuant to the terms of this Agreement.
(i) Each Director may authorize another individual (who may or may not be a Director) to act for such Director by proxy at any meeting of the Board, or to express consent to or dissent from a Company action in writing without a meeting. A writing authorizing a Person to act for such Director as proxy, which has been executed by such Director and entered into the books and records of the Company, shall be a valid means by which a Director may grant such authority.
Section 5.02 Required Board Actions.
(a) Prior to an IPO, the Company shall, and shall cause its Subsidiaries to, take no action (including any action by the Board or any committee of the Board) after the date hereof with respect to any of the following matters set forth in this Section 5.02 without the affirmative majority approval (which approval must include at least one affirmative vote from a Hertz Designated Director and one Investor Member Designated Director) of the Directors in attendance at a meeting of the Board in person or by proxy:
(i) to the fullest extent permitted by Law, any voluntary liquidation, dissolution, winding up, commencement of or consent to bankruptcy, insolvency, liquidation or similar proceedings with respect to the Company or any of its Subsidiaries; provided that any such action shall require unanimous approval by the Board;
(ii) any change to the Company’s or any of its Subsidiaries’ accounting principles or practices, other than as required to comply with GAAP or other applicable Laws;
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(iii) any appointment, approval, removal or replacement of the Company Auditors;
(iv) any entry into any new line of business or any material modification of the scope of any existing principal lines of business; provided that any such action shall require approval by at least two Investor Member Designated Directors (including the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other Investor Member, together with such Investor Member’s Affiliates and Permitted Transferees);
(v) any issuance of any Equity Securities, excluding (A) the issuance of any Equity Securities in respect of any convertible or exchangeable securities issued under any equity incentive plan approved by the Board, (B) issuances by (1) wholly owned Subsidiaries of the Company to the Company or another wholly owned Subsidiary of the Company or (2) joint ventures or non-wholly owned Subsidiaries to the extent that neither the Company nor any of its Subsidiaries has control or a veto over such issuance, (3) issuances of Options from the Management Incentive Pool that have been approved pursuant to the Equity Plan or as set forth on Section 5.02(a)(v) (other than the issuance of Options to any Directors that are employees of THC or any of its Affiliates (other than the Company and its Subsidiaries), which shall require the approval of at least one Investor Member Designated Director) and (4) until December 31, 2026, issuances of additional Class A Common Units to any Person that is not a Hertz Member or any Affiliate at the same price per Unit as such Class A Common Units were issued on the Closing Date in an amount up to $20,000,000 in the aggregate;
(vi) any repurchase or redemption of any Equity Securities of the Company or any of its Subsidiaries, declaration or payment of cash or other dividends or distributions on the Equity Securities of the Company or any of its Subsidiaries, other than (A) dividends or other distributions by a wholly owned Subsidiary of the Company to the Company or another wholly owned Subsidiary of the Company, (B) dividends or other distributions made in accordance with Section 8.03(a) or Section 12.05 (as applicable) or (C) repurchases from terminated Management Members pursuant to Section 3.08 for an aggregate amount that is less than $500,000 for such Management Member; provided that any (x) repurchase or redemption of Capital Units that is effected for consideration that is more than Fair Market Value, or (y) any repurchase or redemption of any Equity Securities of the Company or any of its Subsidiaries, declaration or payment of cash or other dividends or distributions on the Equity Securities of the Company or any of its Subsidiaries on a non-pro rata basis, shall in each case require unanimous approval by the Board;
(vii) any creation, incurrence, or assumption of Debt by the Company or any of its Subsidiaries in an aggregate amount in excess of $50,000,000;
(viii) except as otherwise previously approved in a Board Approved Budget (as defined below), any sale, lease, exchange or other disposition of any asset or property, whether in a single transaction or in a series of related transactions, having a value in excess of $30,000,000;
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(ix) except as otherwise previously approved in a Board Approved Budget (as defined below), any guarantees of any Debt of any entity other than a Subsidiary of the Company or encumbrance/pledge of any material assets of the Company, in each case, in an amount in excess of $50,000,000;
(x) except as otherwise previously approved in a Board Approved Budget (as defined below), any restructuring of any Debt of the Company or any of its Subsidiaries;
(xi) except as otherwise previously approved in an Approved Budget and Business Plan that was approved by the Board including at least two Investor Member Designated Directors (including the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other Investor Member, together with such Investor Member’s Affiliates and Permitted Transferees) (a “Board Approved Budget”) for a given year, any acquisition (whether by merger, consolidation or otherwise) of Equity Securities or other investment in any Person or business (including through an acquisition of assets, operations or business and any joint venture, partnership or similar arrangement) with a value (including any liabilities assumed in connection with such acquisition) in excess of $30,000,000; provided that any such action shall require approval by at least two Investor Member Designated Directors (including the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other Investor Member, together with such Investor Member’s Affiliates and Permitted Transferees;
(xii) except as otherwise previously approved in a Board Approved Budget for a given year or any commitment or other agreement to make or incur capital expenditures or major maintenance in excess of $30,000,000 in the aggregate during the course of such commitment, any capital expenditures or major maintenance in excess of $30,000,000 during such year; provided, that any such action shall require approval by at least two Investor Member Designated Directors (including the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other individual Investor Member);
(xiii) appointment, removal and compensation of the Chief Executive Officer, President, Chief Operating Officer, Chief Commercial Officer, and Chief Financial Officer of the Company (including grants of Options or other equity to any of them);
(xiv) the commencement or settlement of any litigation or regulatory proceedings involving potential liability in excess of $30,000,000 or that would reasonably be expected to impose material restrictions on the ongoing business or operations of the Company;
(xv) the creation of any equity or equity-linked incentive or compensation plan (including terms and conditions of the Equity Plan and grants of Options under the Equity Plan after the Closing) and any material amendments thereto or waiver of rights thereunder (other than any compensation issued pursuant to The Hertz Global Holdings, Inc. 2021 Omnibus Incentive Plan, approved on November 2, 2021), or any increase in the maximum number of securities issuable under such plan; provided that any such action shall require approval by at least two Investor Member Designated Directors (including the Lead Investor Designated Director
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for so long as the Lead Investor Members hold more Class A Common Units than any other Investor Member, together with such Investor Member’s Affiliates and Permitted Transferees);
(xvi) adoption of an Annual Budget and Business Plan and any modification to an Approved Budget and Business Plan which would cause Capital Expenditures to be in excess of ten percent (10%) more than the amounts of Capital Expenditures projected in the last Board Approved Budget;
(xvii) any consummation of a Deemed Liquidation Event other than pursuant to Section 9.04; provided, that any such action shall require approval by at least two Investor Member Designated Directors (including the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other Investor Member, together with such Investor Member’s Affiliates and Permitted Transferees);
(xviii) any entry into any joint venture, strategic alliance or similar transaction;
(xix) subject to compliance with Article 9 and except in connection with an IPO otherwise approved under this Section 5.02 or rights of a Member pursuant to Section 9.04, any merger, amalgamation or consolidation with or into any Person; provided, that any such action shall require approval by at least two Investor Member Designated Directors (including the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other Investor Member, together with such Investor Member’s Affiliates and Permitted Transferees);
(xx) any admission of Additional Members pursuant to Section 9.06, excluding in connection with transfers/issuances in accordance with this Agreement;
(xxi) any entry into or amendment or modification to any transaction, contract, agreement, arrangement, understanding, loan, advance or guarantee with or for the benefit of, any Member or any Affiliate of a Member (any of the foregoing, a “Related-Party Transaction”); provided that the Members hereby approve the entry into the agreements set forth on Schedule 5.02(a)(xxi) (such agreements the “Hertz Services Agreements”); provided, that any such Related-Party Transaction shall only be deemed approved to the extent approved by the Directors who have not been appointed by any Member (or Affiliate thereof) is party to or the beneficiary of such Related-Party Transaction; provided, further, that if such Related-Party Transaction involves the holder of a majority of the Capital Units or its Affiliates (other than the Company Group) and no Investor Member Designated Directors (including the Lead Investor Designated Director) are then serving on the Board, any such Related-Party Transaction that is not on arm’s-length terms shall require the prior written approval of Investor Members holding a majority of the then-outstanding Class A Common Units;
(xxii) any establishment or termination of any committee of the Board, or adoption or changing of its charter or mandate;
(xxiii) any change in corporate structure, constituent documents or matters affecting regulatory status, or conversion of the Company into any other type of business entity;
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(xxiv) changing the Company’s fiscal year;
(xxv) any amendment or waiver of the Certificate of Formation or this Agreement;
(xxvi) any revisions, modifications or amendments to the Delegation of Authority Policy;
(xxvii) any tax election or tax filing (including a modification to a tax classification) that is expected to materially and adversely affect any Hertz Member or Investor Member in a manner that is disproportionate vis-à-vis the other Members, as applicable and, in any event, (A) any election for the Company or any of its Subsidiaries to be treated as other than a partnership or disregarded entity for U.S. federal income tax purposes (or to be excluded from the application of subchapter K of chapter 1 of subtitle A of the Code), (B) any change in the tax classification or country of organization of the Company or any of its Subsidiaries, (C) any change to the tax structure of the Company or any of its Subsidiaries that would reasonably be expected to be materially adverse to any Hertz Member or Investor Member;
(xxviii) the initial or any subsequent designation of the Company Collection Account; or
(xxix) any entry into any agreement, resolution or commitment with respect to any of the foregoing matters.
Section 5.03 Removal and Resignation.
(a) Each Member shall at all times have the exclusive right to remove, with or without cause, any Director designated by such Member, upon the giving of written notice to such Director and the Board.
(b) Any Director may resign by written notice to the Board. Unless otherwise specified therein, a Director’s resignation shall take effect upon delivery. Vacancies created on the Board resulting from the resignation, removal, death, retirement or disability of a Director shall be filled in accordance with Section 5.01(a) such that (x) if a Non-Violation Determination has been made, then such vacancy shall be filled by the affirmative vote or consent of Members holding a majority of the outstanding Voting Common Units and (y) if a Non-Violation Determination has not been made, then such vacancy shall be filled by the Member or group of Members that designated such Director, with such appointment to become effective immediately upon delivery of written notice of such appointment to the other Members and the Company.
Section 5.04 Meetings of the Board. Regular meetings of the Board shall be held on at least a quarterly basis at such place, date and time as the Board may reasonably designate. Special meetings of the Board may be called at any time by any Director.
(a) Notice of a meeting of the Board or any committee thereof stating the place, date and hour of the meeting and the purpose or purposes for which the meeting is called shall be given to each Director by telephone or electronic mail no less than five Business Days before the date of the meeting. Notice of any meeting may be waived by any Director. Presence at the
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meeting shall constitute waiver of any deficiency of notice, except when such Director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not called or convened in accordance with this Agreement.
(b) The Hertz Member shall cause the Secretary of the Company (or another Person) to circulate to each Director an agenda for the quarterly meeting not less than five Business Days in advance of such quarterly meeting (or if sent by electronic mail, three Business Days before the date of such quarterly meeting). Such agenda shall include a discussion of the financial reports most recently delivered pursuant to Section 11.01, as the case may be, and any other matters that a Director may reasonably request be included on such agenda (subject, however, to the other provisions of this Agreement).
(c) The presence in person or by proxy of a number of Directors equal to a majority of the Whole Board shall constitute a quorum for the conduct of business at any meeting of the Board; provided, that in order to constitute a quorum, at least one Director present in person or by proxy must be a Hertz Designated Director and at least one Director present in person shall present in person or by proxy must be the Lead Investor Designated Director (or, if there is no Lead Investor Designated Director, an Investor Member Designated Director). If such quorum shall not be present at any meeting of the Board, no action may be taken and the Directors present shall adjourn the meeting and promptly give notice of when it will be reconvened in accordance with Section 5.04(a) (the “Reconvened Meeting”). If the Hertz Designated Directors or the Lead Investor Designated Director (or, if applicable, the Investor Member Designated Director) were absent from such adjourned meeting such that a quorum could not be constituted (the “Absent Director(s)”) and at least one of the Hertz Designated Directors or the Lead Investor Designated Director (or, if applicable, the Investor Member Designated Director), respectively, does not attend the Reconvened Meeting, then the presence of such Absent Director(s) shall not be required to constitute a quorum for the Reconvened Meeting (but only to the extent the business to be voted on thereat is the same as the purposes set forth in the written notices of the meetings that such Absent Director(s) did not attend).
(d) Members of the Board may participate in a meeting of the Board or any committee thereof by means of a conference telephone, video or similar electronic communications by means of which all Persons participating in the meeting can hear one another. Participation in a meeting pursuant to this Section 5.04(d) shall constitute presence in person at such meeting pursuant to Section 5.04(c) and shall constitute a waiver of any deficiency of notice, except when such Director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not called or convened in accordance with this Agreement.
(e) Each Director shall be entitled to cast one vote with respect to each matter brought before the Board (or any committee thereof of which such Director is a member) for approval; provided, that, with respect to any Member or group of Members that is entitled to designate more than one Director pursuant to Section 5.01(a) (each, a “Designating Group”), if at any meeting one or more Director positions allocated to such Designating Group is then vacant, the Director(s) designated by such Designating Group who are present at such meeting (in person or by proxy pursuant to Section 5.01(i)) shall be entitled to cast, collectively, a number of votes equal to the aggregate number of Directors that such Designating Group is then entitled to
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designate pursuant to Section 5.01(a), with such votes allocated ratably among the Directors of such Designating Group in attendance. Except as otherwise provided by this Agreement (including in Section 5.02 and Section 5.10), the affirmative vote of a majority of the voting power of the Directors in attendance at any meeting at which a quorum is present shall be required to authorize any action by the Board and shall constitute the action of the Board for all purposes.
(f) The Secretary of the Company or, if he or she is not present, any individual whom the Chairman may appoint, shall keep minutes of each meeting which shall reflect all actions taken by the Board thereat.
(g) The Board may establish other reasonable provisions and procedures relating to the governance of its meetings that are not in conflict with the terms of this Agreement.
Section 5.05 Action Without a Meeting. Notwithstanding Section 5.04, on any matter requiring an approval or consent of the Board under this Agreement or the Act, the Board or any committee thereof may take such action without a meeting, without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by all Directors on the Whole Board. Approval of any such action by email confirmation shall constitute consent in writing for purposes of this Section.
Section 5.06 Chairman of the Board(a). For so long as the Hertz Members collectively have a Membership Percentage of 50% or more, the Hertz Members shall be entitled to designate a Hertz Designated Director as Chairman. The initial Chairman shall be Gil West. The Chairman will not have a tie-breaking casting vote. The Chairman shall preside at all meetings of Members and the Board at which he or she is present and perform such other duties as from time to time may be assigned to him or her by the Board.
Section 5.07 Committees of the Board.
(a) The Board may designate one or more committees, with each committee to consist of one or more of the Directors, subject to the requirements set forth in Section 5.02(a)(xxii); provided that each committee shall at all time be required to be composed of Directors nominated by the Hertz Members and the Investor Members in the same proportion as the Board. Subject to Section 5.02, any committee, to the extent permitted by Law and provided in the resolution of the Board establishing such committee, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Company.
(b) A majority of the members of any committee may fix the time and place of its meetings, unless the Board shall otherwise provide. Notice of such meetings shall be given to each member of the committee in the manner provided for in Section 5.04(a).
Section 5.08 Officers; Designation and Election of Officers; Duties. The Board may, from time to time, employ and retain Persons as may be necessary or appropriate for the conduct of the Company’s business (subject to the supervision and control of the Board), including employees, agents and other Persons (any of whom may be a Member or Representative) who may be designated as officers of the Company, with titles including but not limited to “chief executive officer,” “chief operating officer,” “chief financial officer,” “president,” “vice president,” “treasurer,” “secretary,” “general counsel” and “director,” as and to the extent authorized by the
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Board. Any number of offices may be held by the same Person. In the Board’s reasonable discretion, the Board may choose not to fill any office for any period as it may deem advisable. Officers need not be residents of the State of Delaware or Members. Any officers so designated shall have such authority and perform such duties as the Board may, from time to time, delegate to them, subject to Section 5.02. The Board may assign titles to particular officers. Each officer shall hold office until his successor shall be duly designated or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided.
(a) Removal of Officers; Vacancies. Any officer may resign as such at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time is specified, at the time of its receipt by the Board. The acceptance by the Board of a resignation of any officer shall not be necessary to make such resignation effective, unless otherwise specified in such resignation. Any officer may be removed as such, either with or without cause, at any time by the Board or any authorized committee thereof. Vacancies may be filled by approval of the Board or any authorized committee thereof. Designation of any Person as an officer by the Board shall not in and of itself vest in such Person any contractual or employment rights with respect to the Company.
(b) Powers and Duties.
(i) The officers of the Company shall have such authority and perform such duties in the day-to-day management and operations of the Company and its business as may be reasonably prescribed by the Board and, to the extent not so prescribed, as generally pertain to their respective offices in a public company incorporated under the Delaware General Corporation Law, subject to the control of the Board or any authorized committee thereof. Notwithstanding the foregoing, the actions by the Company or any of its Subsidiaries as set forth in Section 5.02 shall require approval by the Board.
(ii) The Board hereby delegates to the officers of the Company the authority to manage the day-to-day business and affairs of the Company, subject to and in accordance with (x) any limitations expressly set forth in this Agreement (including in Section 5.02) and (y) the delegation of authority policy of the Company as in effect from time to time (as may be amended, restated, supplemented or otherwise modified from time to time in accordance with this Section 5.08(b), the “Delegation of Authority Policy”). After the date hereof, the Company will adopt its initial Delegation of Authority Policy, which will require the unanimous approval of the Board. The Board shall review the Delegation of Authority Policy annually to discuss whether any modifications or updates may be deemed necessary.
(c) Officers as Agents; Reliance by Third Parties.
(i) The officers, to the extent of their powers set forth in this Agreement or in a resolution of the Board or authorized committee thereof, are agents of the Company for the purpose of the Company’s business, and the actions of the officers taken in accordance with such powers shall bind the Company.
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(ii) Any Person dealing with the Company may rely upon a certificate signed by any officer as to:
(A) the identity of any Member, Director or officer;
(B) the existence or nonexistence of any fact or facts which constitute a condition precedent to acts by Members, the Board or officers or in any other manner germane to the affairs of the Company;
(C) the Persons who are authorized to execute and deliver any instrument or document of or on behalf of the Company;
(D) the authenticity of any copy of this Agreement and amendments hereto;
(E) any act or failure to act by the Company or as to any other matter whatsoever involving the Company or, solely with respect to the activities of the Company, any Member; and
(F) the authority of the Board, any officer, any employee or agent of the Company, or the Tax Matters Member.
Section 5.09 Management Equity Matters.
(a) On the Closing Date, the Company shall issue Options in accordance with the terms of the Equity Plan, to the individuals, and in the proportions, set forth on Exhibit A. The number of Options initially reserved for issuance under the Management Incentive Pool shall be equal to 11,111,111. From time to time, subject to Section 5.02(a)(xv), the Company may issue additional Options to employees or other service providers of the Company or any of its Subsidiaries or Affiliates as specified pursuant to the Equity Plan until such time as all Options reserved for issuance under the Equity Plan have been issued.
(b) Subject to Section 5.02(a)(xv), from time to time after the Closing Date, the Board may authorize the issuance of additional Options from the Management Incentive Pool to Eligible Employees on such terms and conditions (including vesting schedules and forfeiture provisions) as shall be approved by the Board; provided, that any such issuance, and the terms and conditions applicable thereto, shall be subject to the prior approval of the Board in accordance with Section 5.02.
(c) The aggregate number of Options available for issuance shall not exceed the number of Options initially reserved under the Management Incentive Pool (as adjusted for any forfeitures, cancellations, repurchases or returns to the Management Incentive Pool pursuant to Section 2.01(f)), unless and until the Board shall have approved an increase or other adjustment to the number of Options available under the Management Incentive Pool, which approval shall be in accordance with Section 5.02.
(d) All Options issued from the Management Incentive Pool shall be issued pursuant to, and subject to the terms and conditions of, the Equity Plan and an individual award
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agreement between the Company and the applicable Eligible Employee, in each case in such form as shall be approved by the Board.
Section 5.10 Affiliate Transactions.
(a) Notwithstanding Section 5.02, a majority of the Investor Member Designated Directors shall have the sole and exclusive right, power, and authority, on behalf of the Company (and without any notice to or approval from the Hertz Members or the Hertz Designated Directors), to investigate, audit evaluate, exercise, waive and enforce the Company’s rights arising from or relating to any Related-Party Transaction with THC or any of its Affiliates, including without limitation the right to:
(i) exercise any discretionary rights, including (x) audit and inspection rights, and (y) the right to terminate or extend any services under any Hertz Services Agreement;
(ii) initiate, prosecute, defend, intervene in, or otherwise conduct any action, litigation, arbitration, mediation, or other dispute resolution proceedings against the Member or Affiliate thereof that is a party to such Related-Party Transaction;
(iii) negotiate, approve, and execute any settlement, compromise, or release of claims arising from or relating to any Related-Party Transaction;
(iv) waive, release, or forbear from enforcing any contractual right of the Company arising from a Related-Party Transaction;
(v) retain, at the Company’s expense, independent legal counsel, financial advisors, accountants, and other professionals as the Board (other than the Hertz Designated Directors) deems necessary or advisable; and
(vi) take any and all other actions reasonably necessary or incidental to the foregoing.
(b) Binding Effect. Any decision, settlement, waiver, or release approved by a majority of the Investor Member Designated Directors in accordance with this Section 5.10 shall be final and binding upon the Company and each of the Members, and no Member, Manager, or officer of the Company shall take any action to impede, interfere with, or undermine any such decision.
Article
6
Exculpation and Indemnification
Section 6.01 Exculpation and Indemnification.
(a) To the fullest extent permitted by Law, no Covered Person shall be liable to the Company or its Subsidiaries or to any other Person that is a party hereto or is otherwise bound hereby for any act or failure to act with respect to or in connection with the Company or the Company’s business or affairs, except in the case of fraud, bad faith, willful or intentional misconduct or breach of this Agreement or criminal wrongdoing; provided, however, that the
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foregoing shall not limit or otherwise affect a Covered Person’s liability with respect to a breach of the express terms of this Agreement applicable to such Covered Person. The Company, at the determination of a majority of disinterested Directors, shall also have the power to exculpate, to the same extent set forth in this Section 6.01(a), employees of the Company or its Subsidiaries who are not Covered Persons and agents of the Company or its Subsidiaries.
(b) A Covered Person shall be fully protected in relying in good faith upon the records of the Company or its Subsidiaries and upon such information, opinions, reports or statements (including financial statements and information, opinions, reports or statements as to the value or amount of the assets, liabilities, profits or losses of the Company or any of its Subsidiaries, or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid) of the following Persons or groups: (i) a Director, (ii) any officer or employee of the Company or its Subsidiaries, (iii) any attorney, independent accountant, appraiser or other expert or professional employed or engaged by or on behalf of the Company or its Subsidiaries or (iv) any other Person selected in good faith by or on behalf of the Company or its Subsidiaries, in each case, as to matters that such relying Covered Person reasonably believes to be within such other Person’s professional or expert competence.
(c) Except in the case of fraud, bad faith, willful or intentional misconduct or criminal wrongdoing, each Person (and the heirs, executors or administrators of such Person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such Person is or was a Covered Person, in each case acting in their capacities as such, and such action, suit or proceeding relates to an act or omission of such Covered Person acting in its capacity as such, shall be indemnified and held harmless by the Company to the fullest extent permitted by the Laws of the State of Delaware (including indemnification for acts or omissions constituting negligence, gross negligence or breach of duty); provided, that the foregoing indemnification shall not be available to a Member in the case of an action, suit or proceeding brought by a Member or any other party to this Agreement against such Member. The right to indemnification conferred in this Section 6.01 shall also include the right to be paid by the Company the expenses incurred in connection with any such action, suit or proceeding in advance of its final disposition to the fullest extent authorized by the Laws of the State of Delaware; provided, that the payment of such expenses in advance of the final disposition of an action, suit or proceeding shall be made only upon delivery to the Company of an undertaking by or on behalf of the applicable Covered Person to repay all amounts so paid in advance if it shall ultimately be determined that such Covered Person is not entitled to be indemnified under this Section 6.01 or otherwise. The rights to indemnification and advancement conferred in this Section 6.01 constitute contract rights. Notwithstanding the foregoing provisions of Section 6.01, the Company shall indemnify a Covered Person in connection with a proceeding (or part thereof) initiated by such Covered Person only if such proceeding (or part thereof) was authorized by the disinterested members of the Board; provided, however, that a Covered Person shall be entitled to reimbursement of his or her reasonable counsel fees with respect to a proceeding (or part thereof) initiated by such Covered Person to enforce his or her right to indemnity or advancement of expenses under the provisions of this Section 6.01 to the extent that the Covered Person is successful on the merits in such proceeding (or part thereof). The Company shall also have the power to indemnify and hold harmless, to the same extent set forth in this Section 6.01, employees
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of the Company or its Subsidiaries who are not Covered Persons and agents of the Company or its Subsidiaries.
(d) The Company may, by action of the disinterested members of the Board, provide indemnification to such officers, employees and agents of the Company or other Persons who are or were serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise to such extent and to such effect as the disinterested members of the Board shall reasonably determine to be appropriate.
(e) The Company shall have the power to purchase and maintain insurance on behalf of any Person who is or was a Covered Person or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss incurred by such Person in any such capacity or arising out of his status as such, whether or not the Company would have the power to indemnify him against such liability under the Laws of the State of Delaware.
(f) Notwithstanding any provision of this Agreement to the contrary, the provisions of this Section 6.01 shall survive the termination, voluntary or involuntary, of the status of a Member as such, the termination, voluntary or involuntary, of the status of any Covered Person or other Person as to whom the provisions of this Section 6.01 apply as such and the termination of this Agreement or dissolution of the Company.
(g) The provisions of this Section 6.01 shall be applicable to any action, suit or proceeding commenced after the date of this Agreement against any Covered Person arising from any act or omission of such Covered Person acting in its capacity as such, whether occurring before or after the date of this Agreement. No amendment to or repeal of this Section 6.01, or, to the fullest extent permitted by Law, any amendment of Law, shall have any effect on the rights provided under this Section 6.01 with respect to any act or omission occurring prior to such amendment or repeal.
(h) The indemnification hereby provided and provided hereafter pursuant to the power hereby conferred by this Section 6.01 on the Board shall not be exclusive of any other rights to which any Person may be entitled (including under a separate indemnification agreement for each of the Directors), including any right under policies of insurance that may be purchased and maintained by the Company or others, with respect to claims, issues or matters in relation to which the Company would not have the power to indemnify such Person under the provisions of this Section 6.01. Such rights shall not prevent or restrict the power of the Company to make or provide for any further indemnity, or provisions for determining entitlement to indemnity, pursuant to one or more indemnification agreements or other arrangements (including creation of trust funds or security interests funded by letters of credit or other means) reasonably approved by the Board (whether or not any of the Members, Directors or Company officers shall be a party to or beneficiary of any such agreements or arrangements); provided, however, that any provision of such agreements or other arrangements shall not be effective if and to the extent that it is determined to be contrary to this Section 6.01 or applicable Law.
(i) Nothing contained in this Section 6.01 is intended to relieve any Member or any other Person from any liability or other obligation of such Person pursuant to the
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Transaction Agreements or any other Ancillary Agreement or to in any way impair the enforceability of any provision of such agreements against any party thereto.
(j) Any indemnity under this Section 6.01 shall be provided solely out of, and only to the extent of, the Company’s assets, and no Member or Affiliate of any Member shall be required directly to indemnify any Covered Person pursuant to this Section 6.01. None of the provisions of this Section 6.01 shall be deemed to create any rights in favor of any Person other than Covered Persons and any other Person to whom the provisions of this Section 6.01 expressly apply.
(k) Each Member acknowledges that it is not relying upon any Person in making its investment or decision to invest in the Company. Each Member agrees with respect to the other Members, that such Member, together with its controlling persons, investors, officers, directors, partners, agents, or employees or its Affiliates, shall not be liable to the other Members for any action heretofore taken or omitted to be taken by such other party in connection with any Member’s Initial Capital Contribution or Additional Capital Contribution.
(l) The Company and each of the Members hereby acknowledge that certain of the Covered Persons (collectively, the “Specified Indemnified Persons”) may have certain rights to indemnification, advancement of expenses or insurance provided by a Member or certain of its Affiliates (collectively, the “Member Indemnitors”). The Company hereby agrees, and the Members hereby acknowledge, that: (i) to the extent legally permitted and as required by the terms of this Agreement and the certificate of formation of the Company (or by the terms of any other contract between the Company and a Specified Indemnified Person), (A) the Company is the indemnitor of first resort (i.e., its obligations to each Specified Indemnified Person are primary and any obligation of the Member Indemnitors to advance expenses or to provide indemnification or insurance for the same expenses or liabilities incurred by any Specified Indemnified Person are secondary) and (B) the Company shall be required to advance the full amount of expenses incurred by a Specified Indemnified Person and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement, without regard to any rights that a Specified Indemnified Person may have against the Member Indemnitors and (ii) the Company irrevocably waives, relinquishes and releases any and all rights or claims for contribution, subrogation, indemnification or any other recovery of any kind from the Member Indemnitors in respect of any of the matters described in clause (i) of this sentence for which any Specified Indemnified Person has received indemnification or advancement from the Company. The Company further agrees that no advancement, payment or provision of insurance by the Member Indemnitors to or for the benefit of or otherwise on behalf of any Specified Indemnified Person with respect to any claim for which a Specified Indemnified Person has sought indemnification from the Company shall affect the foregoing and that the Member Indemnitors shall have a right of contribution or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Specified Indemnified Person against the Company. The Company and each Member agree that the Member Indemnitors are express third party beneficiaries of the terms of this Section 6.01(l).
(m) Whenever in this Agreement a Covered Person is permitted or required to make a decision (including a decision that is in such Covered Person’s “discretion” or under a grant of similar authority or latitude), such Covered Person shall be entitled to consider only such
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interests and factors as such Covered Person desires, including such Covered Person’s own interests (or, in the case of a Manager, the interests of the Member that appointed such Manager or such Member’s Affiliates), and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person. Whenever in this Agreement a Covered Person is permitted or required to make a decision in such Covered Person’s “good faith,” the Covered Person shall act under such express standard and shall not be subject to any other or different standard imposed by this Agreement or any other Law.
(n) NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, NO MEMBER (IN ITS CAPACITY AS A MEMBER) SHALL BE LIABLE TO THE COMPANY, TO ANY MEMBER OR TO ANY OTHER PERSON MAKING CLAIMS ON BEHALF OF THE FOREGOING FOR CONSEQUENTIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR SPECIAL DAMAGES, INCLUDING DAMAGES FOR LOSS OF PROFITS, LOSS OF USE OR REVENUE OR LOSSES BY REASON OF COST OF CAPITAL, ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE BUSINESS OF THE COMPANY OR ANY OF THE OTHER COMPANY ENTITIES, REGARDLESS OF WHETHER SUCH CLAIMS ARE BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, VIOLATION OF ANY APPLICABLE DECEPTIVE TRADE PRACTICES ACT OR SIMILAR APPLICABLE LAW OR ANY OTHER LEGAL OR EQUITABLE DUTY OR PRINCIPLE, AND THE COMPANY AND EACH MEMBER HEREBY RELEASE EACH OTHER MEMBER (IN ITS CAPACITY AS A MEMBER) AND MANAGER (IN HIS OR HER CAPACITY AS A MANAGER) FOR ANY SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE LIMITATIONS SET FORTH IN THIS SECTION 6.01(N) SHALL NOT APPLY WITH RESPECT TO DAMAGES ARISING FROM ANY (I) PAYMENT DEFAULT, (II) BREACH OF CONFIDENTIALITY OBLIGATIONS HEREUNDER, (III) FRAUD, (IV) WILLFUL OR INTENTIONAL MISCONDUCT, (V) CRIMINAL WRONGDOING OR (VI) PAYMENTS OF SUCH DAMAGES OWED TO ANY THIRD PARTY.
Section 6.02 Other Activities; Business Opportunities.
(a) Except as expressly set forth in Section 6.02(d), notwithstanding any duty otherwise existing at Law or in equity, to the fullest extent permitted by Law, no Member, Affiliate of any Member (other than any Affiliate that is a natural person), Director or Company officer who is also an employee of a Member or an Affiliate of a Member (in each case only when acting on behalf of such Member or such Member’s Affiliate in connection with such Member’s or such Member’s Affiliate’s own business and operations) shall have any obligation to refrain from, directly or indirectly, (i) engaging in the same or similar activities or lines of business as the Company or developing or marketing any products or services that compete, directly or indirectly, with those of the Company, (ii) investing or owning any interest, publicly or privately, in, developing a business relationship with, or serving as an employee, officer, director, consultant or agent of, any Person engaged in the same or similar activities or lines of business as, or otherwise in competition with, the Company or (iii) doing business with (directly or as an employee, officer, director, consultant or agent of a Person who does business with) the Company or any Person who conducts business with the Company; and neither the Company nor any Member (or Affiliate of any Member (other than any Affiliate that is a natural person)) shall have any right in or to, or to be offered any opportunity to participate or invest in, any business or venture engaged or to be
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engaged in by any other Member, Affiliate of any other Member, officer of the Company who is also an employee of any other Member (or an Affiliate of any other Member) or Director or shall have any right in or to any income or profits derived therefrom. It is understood and agreed by the Members that, except as expressly set forth in Section 6.02(d), each Person referred to in this Section 6.02 shall be permitted to undertake any and all actions of the type referred to in this Section 6.02 without limitation (in each case acting on behalf of the applicable Member or Affiliate of a Member in connection with such Member’s or such Member’s Affiliate’s own business and operations) and that, except as expressly set forth in Section 6.02(d), the taking of any such actions shall not violate any legal obligation or duty (including any fiduciary duty) to any Member or other Person under or in connection with this Agreement or the Company Entities.
(b) Notwithstanding any duty otherwise existing at Law or in equity, to the fullest extent permitted by Law, if a Member, any Director designated by a Member, any Affiliate of such Member (other than any Affiliate that is a natural person) or any officer of the Company who is also an employee of such Member (or any of such Member’s Affiliates) acquires knowledge of a potential transaction or matter which may be a business opportunity for both such Member or an Affiliate of such Member, on the one hand, and the Company or another Member or another Member’s Affiliate (other than any Affiliate that is a natural person), on the other hand, no such Member, Director, Affiliate or officer shall have a duty to communicate or offer such business opportunity to the Company or such other Member or such other Member’s Affiliate, and, except as expressly set forth in Section 6.02(d), no such Person shall be liable to the Company, the other Members and their Affiliates in respect of any such matter (including for any breach of fiduciary or other duties) by reason of the fact that such Member or any Affiliate of such Member (other than any Affiliate that is a natural person) pursues or acquires such business opportunity for itself or by reason of the fact that such Member, Director, Affiliate or officer directs such opportunity to such Member or an Affiliate of such Member (other than any Affiliate that is a natural person) or does not communicate information regarding such opportunity to the Company. Notwithstanding the foregoing, the first sentence of this Section 6.02(b) shall not apply to the extent any such knowledge or business opportunity was acquired by a Member, Director or officer in its, his or her capacity as such or otherwise as result of Confidential Information of the Company. For the avoidance of doubt, a Director shall not be considered to be an officer of the Company by virtue of holding such position, the position of Chairman of the Board or any other Board-level position.
(c) The Members acknowledge and agree that, except with respect to Management Members, nothing in this Agreement shall create (i) a fiduciary duty in any Member, its investors or any Affiliate thereof to the Company or its Members by virtue of its or their status as a member or direct or indirect investor in the Company or (ii) a fiduciary duty of any Directors with respect to the Company and its Members, and all such fiduciary duties are hereby disclaimed to the extent permissible under applicable Law. Notwithstanding anything to the contrary herein or any actions or omissions by representatives of a Member or any of its Affiliates in whatever capacity, including as a Director, it is understood that no Member, its investors nor any of its Affiliates is acting as a financial advisor, agent or underwriter to the Company or any of its Affiliates or otherwise on behalf of the Company or any of its Affiliates unless retained to provide such services pursuant to a separate written agreement which agreement shall itself govern the terms and condition on which such services are provided and all related matters.
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(d) Non-Compete.
(i) During the Exclusivity Period, (x) Hertz Members shall not, and shall cause their Affiliates (other than the Company Group) not to, directly or indirectly compete against, assist with a Person’s or business line’s activities directly or indirectly competing against, invest in a Person directly or indirectly competing against, or purchase or invest in a Person or business line directly or indirectly competing against, any portion of the Oro Business and (y) the Company Group shall not directly or indirectly compete against, assist with a Person’s activities directly or indirectly competing against, invest in a Person directly or indirectly competing against, or purchase a Person directly or indirectly competing against, the business of the Hertz Members or their respective Affiliates (other than the Company Group) as such business is operated as of the date hereof (the obligations clauses (x) and (y), the “Non-Compete Covenant”). Without limiting the parties’ obligations under the Non-Compete Covenant or recourses under Section 6.02(d)(viii) or Section 13.08, during the Exclusivity Period, with respect to any new business or activity that is not part of the Oro Business and is not conducted by the Hertz Members and their Affiliates (other than the Company Group) as of the date hereof, the parties will discuss in good faith whether such new business or activity should be conducted by the Company Group or Hertz Members and their Affiliates (other than the Company Group).
(ii) Hertz Permitted Activities. Notwithstanding Section 6.02(d)(i), the Non-Compete Covenant shall not prohibit the Hertz Members, the Company, the Investor Members, or any of their respective Affiliates from:
(A) owning, directly or indirectly, Equity Securities representing 2% or less of the outstanding Equity Securities of any Person that is publicly traded on a recognized stock exchange and engaged in a Competing Business, so long as such ownership is held as a passive investment and none of the Hertz Members or their respective Affiliates (A) has or shares the power to direct or cause the direction of the management or policies of such Person (whether through ownership of securities, by contract or otherwise) or (B) has any right to designate or nominate any director, manager or other member of the governing body of such Person other than by voting its Equity Securities;
(B) fulfilling any obligations or exercising any rights of the Hertz Members or any of their respective Subsidiaries under any Ancillary Agreement or any Hertz Services Agreement, in each case in accordance with the terms thereof;
(C) owning, operating, managing or providing any products, services or business activities that do not constitute a Competing Business;
(D) subject to Section 5.02(a)(xviii), performing any activities or providing any services to the Company or its Subsidiaries (including pursuant to the Hertz Services Agreements) on arm’s-length terms;
(E) acquiring a Person, business or business line that does not generate more than 10% of its gross sales (based on its latest annual financial statements) from a Competing Business, in each case excluding sales from a Competing Business in China; provided, that neither such Hertz Member nor any of its Affiliates shall, following such acquisition, directly
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or indirectly increase the sales of such Competing Business above the lower of such percentage and dollar amount provided, further, that such Hertz Member or its applicable Affiliate shall, as promptly as practicable after the consummation of such acquisition, divest such Competing Business in its entirety, and prior to any such divestiture shall (x) deliver to the Company written notice of the proposed divestiture, together with the material terms and conditions on which such Hertz Member or Affiliate proposes to effect such divestiture, and (y) grant the Company a right of first offer to acquire such Competing Business pursuant to Section 6.02(d)(iv), exercisable by majority of the Investor Member Designated Directors (which must include the Lead Investor Designated Director) on behalf of the Company by written notice to such Hertz Member or Affiliate within 30 days following the Company’s receipt of such divestiture notice (it being agreed that the negotiation with any Hertz Member or any of its Affiliates pursuant to this Section 6.02(d)(ii)(E) shall be the sole right and responsibility of the majority of the Investor Member Designated Directors (which must include the Lead Investor Designated Director));
(F) entering into or participating in a joint venture, partnership or other strategic business relationship with any Person engaged in a Competing Business, if such joint venture, partnership or other strategic business relationship does not engage in the Competing Business or engages in the Competing Business solely in China; and
(G) any other activities approved by all of the Investor Member Designated Directors, if any, then in office.
(iii) Oro Permitted Activities. Notwithstanding Section 6.02(d)(i), the Non-Compete Covenant shall not prohibit the Investor Members, the Company or any of their respective Affiliates from fulfilling any obligations or exercising any rights of the Company, the Investor Members or any of their respective Subsidiaries under any Ancillary Agreement or any Hertz Services Agreement, in each case in accordance with the terms thereof.
(iv) ROFO. Before any Hertz Member or its Affiliate divests a Competing Business under Section 6.02(d)(ii)(E), it shall deliver written notice to the Company describing the Competing Business and the material terms of the proposed divestiture. Within 30 days after receiving that notice, the Company may make a written, irrevocable offer to purchase all (but not less than all) of the Competing Business in cash, stating the price and other material terms of such offer. The decision to make the offer, and its terms, rest solely with a majority of the Investor Member Designated Directors (which must include the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other Investor Member, together with such Investor Member’s Affiliates and Permitted Transferees). The Hertz Member or its Affiliate shall accept or reject the offer in writing within 10 Business Days after the offer period ends, and failure to respond shall be deemed a rejection. If the Hertz Member or its Affiliate accepts such offer, the closing of the transaction shall occur as promptly as practicable and in any case within 90 days after the original notice; provided that such period may be extended for required Governmental Approvals by up to an additional 90 days. If the Company makes no offer, the offer is rejected, or an accepted sale does not close within the required period, the Hertz Member or Affiliate may, within one year thereafter, Transfer the Competing Business to an unaffiliated third party. Such Transfer must be at a price no less than 95% of the price in the Company's offer (if one was made) and on terms not materially more favorable in the aggregate to the third party than those in the offer.
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(v) This Section 6.02(d) shall cease to be applicable to any Person at such time as it is no longer an Affiliate of THC and shall not apply to any Person that purchases assets, operations or a business from a Hertz Member or any of its Affiliates if such Person is not an Affiliate of THC after such transaction is consummated. This Section 6.02(d) shall not apply with respect to any Person or its Affiliates (other than THC and its Subsidiaries) that is the acquirer of THC, its successor or any of its Subsidiaries, in a transaction that results in a Change of Control of THC or its successor (whether by virtue of a merger, acquisition, consolidation or other similar transaction).
(vi) This Section 6.02(d) shall not apply to any Person that purchases assets, operations or a business from the Company or any of its Affiliates (if such Person is not an Affiliate of the Company after such transaction is consummated). This Section 6.02(d) shall not apply with respect to any Person or its Affiliates that is the acquirer of the Company, its successor or any of its Subsidiaries, in a transaction that results in a Change of Control of the Company or its successor (whether by virtue of a merger acquisition, consolidation or other similar transaction).
(vii) Termination. The Non-Compete Covenant shall terminate and be of no further force or effect upon the earliest to occur of: (i) two years after the date on which the Hertz Members or any of their Affiliates or Permitted Transferees cease to own, in the aggregate, 25% or more of the total outstanding Capital Units of the Company and cease to have the right to appoint any Directors on the Board; (ii) an IPO; (iii) two years after the date of the consummation of a Deemed Liquidation Event and the Hertz Members cease to have the right to appoint any Directors on the Board (provided that clause (a) of the definition of “Deemed Liquidation Event” shall apply for purposes of this clause (iii) only if such merger or consolidation is with a bona fide third party and results in a Change of Control of the Company); or (iv) the dissolution of the Company pursuant to Article 12 (the period during which Non-Compete Covenant applies pursuant to the foregoing, the “Exclusivity Period”). Upon termination of the Non-Compete Covenant, the Hertz Members and their respective Subsidiaries shall have no further obligations under this Section 6.02(d) (but, for the avoidance of doubt, the provisions of Section 6.02 shall continue to apply in accordance with their terms).
(viii) Each of the Members and the Company acknowledges and agrees that the covenants contained in this Section 6.02(d) are reasonably designed to protect the Members’ substantial investment in the Company Entities and are reasonable with respect to their duration, geographical area and scope. Each of the Hertz Members and the Company further acknowledges and agrees that (a) the covenants and agreements set forth in this Section 6.02(d) are a material inducement to, and a condition precedent of, the Members to consummate the transactions contemplated by this Agreement and the Transaction Agreements, (b) the Members shall receive substantial direct and indirect benefits (including the payment of consideration) by the consummation of the transactions contemplated by this Agreement and the Transaction Agreements and (c) the Members would not obtain the benefit of the bargain set forth in this Agreement and the Transaction Agreements as specifically negotiated by the parties if any Hertz Member (or its Affiliates) or the Company breached the provisions of this Agreement.
(ix) Each of the Hertz Members and the Company acknowledges that any breach of this Section 6.02(d) will cause irreparable injury and that the remedy at law for any breach of this Section 6.02(d)by a Hertz Member or its Subsidiaries or the Company Group will
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be inadequate. Accordingly, the undersigned agrees that upon any breach or threatened breach of this Section 6.02(d), each Member shall, in addition to all other available rights and remedies (including, without limitation, any rights to damages), be entitled to injunctive or other equitable relief without having to prove the inadequacy of the remedies available at law and without being required to post bond or other security.
(x) If any covenant contained in this Section 6.02(d), or any part thereof, is hereinafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions. If any covenant contained in this Section 6.02(d), or any part thereof, is held to be unenforceable because of the scope or duration of such provision or the area covered thereby, the Members agree that the court or tribunal making such determination shall have the power to reduce the scope, duration and/or geographic area of such provision and, in its reduced form, said provision shall then be enforceable. In the event that any such court or tribunal shall hold such covenants wholly unenforceable with respect to any country or jurisdiction by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Members’ right to the enforcement of such covenants with respect to any other countries or jurisdictions within the geographical scope of such covenants as to breaches of such covenants in such other respective countries or jurisdictions, the above covenants as they relate to each country or jurisdiction being, for this purpose, severable into diverse and independent covenants.
Article
7
Accounting, Tax, Fiscal and Legal Matters
Section 7.01 Fiscal Year. The fiscal year of the Company shall end on December 31 of each year or on such other day as may be fixed from time to time by resolution of the Board.
Section 7.02 Bank Accounts. In the absence of instructions from the Board to the contrary, an authorized officer of the Company shall determine the institution or institutions at which the Company’s bank accounts will be opened and maintained, the types of accounts, and the Persons who will have authority with respect to the accounts and the funds therein.
Section 7.03 Books of Account and Other Information. The Company shall prepare and maintain, at its principal place of business, separate books of account for the Company that shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the Company’s business in accordance with GAAP consistently applied, and, to the extent inconsistent therewith, in accordance with this Agreement. All questions of accounting shall be determined by the Board or a committee or officer authorized by the Board to make such determination.
Section 7.04 Auditors. The Company Auditors shall be such firm of certified independent public accountants as shall be selected by the Board in its reasonable discretion.
Section 7.05 Certain Tax Matters. The Company shall prepare and file its tax returns (including on Internal Revenue Service Form 1065) in a timely manner (taking into account extensions) and shall cause all tax returns of the Company’s Subsidiaries to be filed in a timely manner (taking into account extensions). The Company shall make a Section 754 election on the
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first IRS Form 1065 it files after the date hereof such that a Section 754 election is in effect with respect to the taxable year that includes the Closing Date.
(a) The Company shall provide to each member (i) no later than sixty (60) days after the end of each Tax Year a draft Schedule K-1 and any comparable foreign, state and local tax forms, in each case, in an Excel worksheet or other reasonable format, and (ii) (x) no later than June 30 of each year a final federal Schedule K-1 and (y) no later than June 30 of each year any comparable foreign, state and local tax forms, in each case for the immediately preceding Tax Year. All reasonable, documented fees, costs and expenses incurred in connection with the preparation and distribution of the Company’s reports, tax returns and Schedules K-1 (or additional or similar tax-related schedules) and any other tax reports or tax-related compliance activities (including any reasonable, documented fees, costs and expenses incurred in connection with the purchase, implementation, maintenance and upgrade of computer software and hardware for use in preparing and distributing the Company’s reports, tax returns and Schedules K-1 (or additional or similar tax-related schedules)) and any other tax reports, as well as reasonable, documented fees, costs and expenses incurred in connection with providing online or electronic access to information and reporting (including any upgrades or customizations incurred in connection therewith) shall be expenses of, and payable by, the Company. In furtherance of the foregoing, if any of the foregoing costs and expenses are paid by the Tax Matters Member or designated individual, the Company shall promptly reimburse the Tax Matters Member or designated individual, as applicable, for the full amount of such costs and expenses. Without the consent of the Tax Matters Member, no Member or former Member shall take any action (including, but not limited to, the manner in which any tax item attributable to its participation in the Company on its tax return is reported) that is inconsistent with the tax treatment of such items as reported to it by the Company.
(b) Partnership Representative; Partnership Audit Procedures. THC shall be the “partnership representative” of the Company for all purposes of Section 6223 of the Code (and any similar provision of state or local Law) (the “Tax Matters Member”), and the Tax Matters Member shall designate a “designated individual” to act on behalf of the Company to the extent required under Treasury Regulations Section 301.6223-1(b)(3)(ii). The Tax Matters Member and such designated individual are authorized to take such steps as are reasonably necessary to perfect such designations, including filing any forms or documents with the Internal Revenue Service, and, upon the reasonable request of the Tax Matters Member, each other Member shall execute any forms or statements reasonably required in connection therewith. The Tax Matters Member (and any designated individual) shall act in good faith and in the best interests of the Company and the Members taken as a whole, and may exercise its authority in respect of the Company’s tax affairs only in accordance with, and subject to the limitations of, this Agreement (including Section 5.02(a)(xxvii) and this Section 7.05(b)). Neither the Tax Matters Member nor any designated individual shall, without the prior written consent of the Investor Members (not to be unreasonably withheld, conditioned or delayed), (A) file an administrative adjustment request under Section 6227 of the Code or (B) settle, compromise or concede any tax audit or proceeding under the Partnership Audit Rules, in each case, to the extent such action would reasonably be expected to materially and adversely affect any Investor Member (or their direct or indirect owners) in a manner that is disproportionate relative to the Hertz Members. The Tax Matters Member (and any designated individual) shall (1) notify the Investor Members in writing within thirty (30) days after receipt of any written notice of any tax audit, examination or proceeding of the Company
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pursuant to the Partnership Audit Rules, (2) keep the Investor Members reasonably informed of all material developments in any such audit, examination or proceeding, (3) upon request of an Investor Member, promptly provide such Investor Member with copies of all material correspondence with any taxing authority in connection with any such tax audit, examination or proceeding and (4) permit such Investor Member and its advisors, at such Investor Member’s own expense, to participate in any such tax audit, examination or proceeding (including attending any meetings or conferences with any taxing authority). If the Company becomes liable for any imputed underpayment or other tax, interest, penalty or addition to tax under the Partnership Audit Rules (a “Company-Level Tax”), the Tax Matters Member (or, if applicable, the designated individual) shall, in good faith and consistent with the Partnership Audit Rules, allocate such Company-Level Tax among the Members and former Members to whom the underlying adjustments relate (based on their respective interests in the Company for the reviewed year), taking into account the tax status of each Member (or its direct or indirect owners) and any reduction resulting from any modification procedure under Section 6225(c) of the Code undertaken by or with respect to any Member, such that, to the extent possible, each Member bears only its share of such Company-Level Tax and receives the full benefit of any such reduction attributable to it, and shall deliver to each affected Member a reasonably detailed written calculation of such allocation. Each current or former Member shall pay to the Company its share of such Company-Level Tax, as so determined, within thirty (30) days after receipt of such written calculation; provided, that, at the election of a current Member and with the consent of the Tax Matters Member (not to be unreasonably withheld, conditioned or delayed), all or any portion of such amount may instead be applied to and reduce the next distribution(s) otherwise payable to such Member under this Agreement (and any amount so applied shall be treated as having been distributed to such Member). If a former Member fails to pay the Company such former Member’s share of the assessed amounts (and any additional interest) in accordance with the preceding sentence, then the current Member who is the direct and indirect transferee of such former Member’s Membership Interest shall be liable for, and shall pay to the Company, such former Member’s share. If the Company makes an election under Section 6226 of the Code, each Member and former Member shall take into account and report its share of the adjustments reflected in the statement furnished to it in accordance with Section 6226(b) of the Code and the Treasury Regulations promulgated thereunder, and any Member or former Member that fails to do so shall indemnify the Company for any tax, interest and penalties actually imposed on the Company as a direct result of such failure. Each Member shall use commercially reasonable efforts to provide to the Tax Matters Member (and any designated individual) such information, certifications and documentation within its possession or control and take any such other action as the Tax Matters Member (and any designated individual) reasonably requests in order to reduce any Company-Level Tax (including under Section 6225(c) of the Code), to make any election contemplated by this Section 7.05(e) or for the Company to adopt any course of action under the Partnership Audit Rules; provided, that no Member shall be required to file any amended tax return, pay any tax or disclose any tax return or other confidential information of such Member or its direct or indirect owners, but any Member may elect to file amended returns or pay any tax under Section 6225(c)(2) of the Code, and the Company shall take any resulting reduction into account in allocating any Company-Level Tax. The Company shall indemnify and reimburse the Tax Matters Member (and any designated individual) for all reasonable out-of-pocket expenses (including reasonable legal and accounting fees) and all claims, liabilities, losses and damages incurred by it in its capacity as such, including in connection with any administrative or judicial proceeding with respect to the
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tax liability of the Company or the Members so long as the Tax Matters Member (or any “designated individual”) has acted in good faith and in a manner consistent with the authority granted to it under this Agreement.
(c) The Members intend that the Company shall be treated as a partnership for federal, state, and local income tax purposes to the extent such treatment is available (and neither the Company nor any Member will make an election otherwise) and agree to take such actions as may be necessary to receive and maintain such treatment and refrain from taking any actions inconsistent therewith. Notwithstanding the foregoing, the Members intend that the Company shall not be a partnership (including a limited partnership) or joint venture and that no Member or the Company shall be a partner or joint venturer of any other Member or the Company for any purposes other than federal and, if applicable, state and local income tax purposes, and this Agreement shall not be construed to the contrary, and no Member shall be liable for the debts, liabilities or obligations of the Company or any other Member.
(d) Tax Information. Each Member shall timely furnish to the Company, upon its reasonable request, any tax forms, certifications, information or documentation (including IRS Form W-9 or the applicable IRS Form W-8) that the Company reasonably determines is necessary to (i) permit the Company to make payments to such Member without, or at a reduced rate of, withholding, (ii) enable the Company to qualify for a reduced rate of withholding in any jurisdiction, or (iii) enable the Company to satisfy its reporting and other obligations under applicable Law. The Company shall provide information to each Member and its tax advisors to enable such Member (or its direct or indirect owners) to comply with any tax payment or tax filing requirement resulting from its ownership of Units and to claim any available tax refund, including, without limitation, upon request of a Member, information sufficient to enable such Member and its direct or indirect owners to determine whether such Member’s ownership of Units causes such Member or any of its direct or indirect owners to be treated as a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code.
(e) Transfer Withholding Certifications. In connection with any Transfer of Units, (i) the transferor shall deliver to the transferee and the Company a properly completed IRS Form W-9 or other certification permitted under Treasury Regulations Section 1.1446(f)-2(b) establishing an exemption from, or reduction of, withholding under Section 1446(f) of the Code, to the extent available, (ii) upon the reasonable request of a transferor or transferee, the Company shall deliver any certification described in Treasury Regulations Section 1.1446(f)-2(b)(4) that the Company is able to provide in good faith, together with any other information reasonably necessary to determine the amount of any required withholding, and (iii) upon the reasonable request of a transferor or transferee, the Company shall, to the extent it is able to do so in good faith, deliver to the transferee a statement that complies with Treasury Regulations Section 1.1445-11T(d)(2)(i) certifying that either (A) less than fifty percent (50%) of the value of the gross assets of the Company consists of U.S. real property interests or (B) less than ninety percent (90%) of the value of the gross assets of the Company consists of U.S. real property interests plus cash or cash equivalents.
(f) Compensatory Options. The Company and the Members intend that, for U.S. federal and applicable state and local income tax purposes, (i) the grant of a Compensatory Option shall not be treated as a transfer of an interest in the Company, and the holder of a
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Compensatory Option shall not be treated as a partner of the Company, in each case prior to the exercise of such Compensatory Option, (ii) the exercise of a Compensatory Option shall be governed by Section 83 of the Code, and (iii) the Company shall be entitled to any deduction available under Section 83(h) of the Code in connection therewith, which shall be allocated in accordance with Section 8.01, and the Company and the Members shall file all tax returns consistently with the foregoing unless otherwise required by a “determination” within the meaning of Section 1313(a) of the Code. As a condition to the exercise of any Compensatory Option, the holder shall pay to the Company (or, if approved by the Board, the Company may withhold from the Units otherwise issuable upon such exercise) the amount of any taxes the Company Group is required to withhold in connection with such exercise.
(g) Contribution Agreement Tax Contests. Notwithstanding anything to the contrary in this Agreement (including this Section 7.05 and Section 5.08), so long as THC is the Tax Matters Member, the Tax Matters Member (or any designated individual, as applicable) shall, in determining how to enforce the Company’s rights under Section 6.03 of the Contribution Agreement (as defined in the Purchase Agreement), act fairly and equitably to all Members, and shall not favor the interests of the Hertz Members over the other Members.
(h) The obligations of each Member and former Member under this Section 7.05 shall survive the Transfer of such Member’s Units, such Member ceasing to be a Member and the dissolution, liquidation and termination of the Company.
Section 7.06 Compliance.
(a) Members’ Conduct.
(i) With respect to the transactions or activities covered by this Agreement, each Member (A) represents that it has not made, offered or authorized, and (B) undertakes not to make, offer or authorize, any payment, gift, promise or other benefit, directly or indirectly, to any Person, for the purposes of bribery, or for the use or benefit of a Public Official, political party or any other Person when such payments, gifts, promises or benefits would be in violation of any Anti-Corruption Law or the undertakings or warranties set out in this Section 7.06(a).
(ii) In furtherance of the business of any Company Entity, no Member shall undertake on its own behalf or on behalf of another Member or any Company Entity, any action which may (A) result in recording assets, undertakings or any other transaction inaccurately or inadequately, or (B) render such Member or a Company Entity liable for violations of its obligations under the Anti-Corruption Laws.
(iii) In furtherance of the business of any Company Entity, no Member shall (A) transact business with or for the benefit of a Prohibited Person in violation of Sanctions, or (B) otherwise violate Sanctions or take any action that reasonably would result in a Company Entity or any of the Members becoming a Prohibited Person or being exposed to liability for a violation of Sanctions, or (C) violate AML Laws.
(iv) Each Member shall, as soon as possible, and to the extent legally permissible, notify the other Members of any investigation or proceedings formally instigated by
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any Governmental Authority and relating to any alleged violation of the applicable Anti-Corruption Laws, AML Laws, or Sanctions by a Company Entity, or by such Member or its Affiliates, or one of its directors, officers, employees, or by a supplier of such Member or its Affiliates, or by any other third party in relation to the Company Group or the transactions or activities covered by this Agreement. Such Member shall, to the extent legally permissible, use commercially reasonable efforts to keep the other Members informed of the progress and status of such investigation or proceedings.
(v) Each Member shall indemnify the other Members (unless such Members have also violated their undertakings or warranties) and each Company Entity, for any direct damages, losses, fines and costs (including reasonable court costs and lawyers’ fees), and for the financial commitments arising therefrom or connected to related events if (A) such Member pleads guilty to the charges brought by a Governmental Authority regarding a violation of the Anti-Corruption Laws applicable to such Member in relation to the Company Group or the transactions or activities covered by this Agreement; or (B) a final ruling establishes that such Member violated the Anti-Corruption Laws applicable to such Member in relation to the Company Group or the transactions or activities covered by this Agreement.
(b) Compliance Program; Accounting Entries; Audit Right.
(i) Compliance Program. As promptly as practicable after the date hereof, the Company shall develop and implement compliance policies and procedures. The Company shall adopt, revise, and maintain (as the case may be) policies and procedures sufficient to provide reasonable assurances that the Company and Persons acting on its behalf shall comply with this Section 7.06.
(ii) Accounting Entries. The Company shall (A) ensure that its records and conserves accounting entries which, in reasonable detail, accurately and fairly reflect all the transactions carried out by the Company or related to its activities, and (B) organize and maintain a system for internally auditing accounting entries which is reasonably sufficient to detect and prevent any payments which would not be compliant with Anti-Corruption Laws.
Section 7.07 Separateness. Except as otherwise contemplated by this Agreement, the Contribution Agreement, Purchase Agreement or the Ancillary Agreements:
(a) the Company shall, on behalf of itself and the other Company Entities:
(i) maintain its bank accounts with commercial banking institutions separate from the accounts of any Member, any of their respective Affiliates and any other Person (other than any Company Entity);
(ii) maintain its status as a legal entity separate from any other Person (other than any Company Entity);
(iii) other than as may be permitted by the Ancillary Agreements, hold all of its assets in its own name and maintain its assets separate and apart from the assets of any of its Affiliates, Members or any other Persons (other than any Company Entity);
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(iv) with respect to the Company, hold at least quarterly meetings of the Board as required pursuant to Section 5.04(a) and otherwise observe corporate governance formalities as set forth in Section 5.04;
(v) not hold out its credit as being available to satisfy the obligations of any other Persons (excluding the Company Entities);
(vi) not commingle its funds or assets with the funds or assets of any other Person (other than any Company Entity) and shall maintain all of their funds and assets in accounts or records held in the name of a Company Entity;
(vii) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business purpose, transactions and liabilities of the Company Entities, in each case, as required hereunder; provided that, for the avoidance of doubt, no Member shall be required to contribute any additional capital or fund any amounts except as required pursuant to this Agreement;
(viii) maintain its assets in such a manner that it is reasonably sufficient to permit their individual assets to be identified from those of any other Person (other than any Company Entity); and
(ix) except as contemplated or permitted by this Agreement, not pledge its assets for the benefit of any other Person or assume or guarantee any of the obligations or liabilities of any other Person (other than any Company Entity).
(b) to the fullest extent permitted by law, failure of the Company, or the Members or the Managers on behalf of the Company, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Company as a separate legal entity or the limited liability of any Member.
(c) the Members acknowledge and agree that the Company is a special purpose, non-guarantor, unrestricted subsidiary of the Members and their respective Affiliates, and shall be operated in a manner intended to be bankruptcy remote from the Members and their respective Affiliates.
Article
8
Allocations and Distributions
Section 8.01 Allocations.
(a) Membership Percentages of the Members. Exhibit A shall reflect the Membership Percentages, and shall be amended from time to time for changes in the Membership Percentages. For the avoidance of doubt, the Membership Percentage shall be as calculated in accordance with the definition of such term in Article 1.
(b) Allocation of Profit and Loss. Except as otherwise provided in this Section 8.01, or required pursuant to Treasury Regulations Section 1.704-1(b)(1)(i), items of Net Profit and Net Loss of the Company for each Tax Year of the Company shall be allocated among the
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Members in a manner such that the Capital Account of each Member, immediately after making such allocations, as nearly as possible, equals the excess of (a) the distribution that would be made to such Member pursuant to Section 12.05(a) if (i) the Company were to sell the assets of the Company for an amount equal to their Book Value, (ii) liabilities of the Company were satisfied in full according to their terms (limited, with respect to each nonrecourse liability of the Company, to the Book Value of the assets securing such liability if such Book Value is less than such nonrecourse liability) and (iii) the Company were to distribute the proceeds of such sale (and any other cash on hand) pursuant to Section 12.05(a) to the Members, over (b) such Member’s share of Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the deemed sale of the Company’s assets. Notwithstanding the foregoing, the Board may make appropriate amendments or adjustments to the allocation of items pursuant to this Section 8.01(b) if necessary or desirable in order to more closely reflect the purpose and intent of this Agreement, so long as such allocations are consistent with Section 704 of the Code and applicable Treasury Regulations; provided, that the Board shall not make any such amendment or adjustment that would reasonably be expected to materially and adversely affect any Investor Member (or its direct or indirect owners) without the prior written consent of such Investor Member, unless such amendment or adjustment is required under applicable Law.
(c) Special Allocations.
(i) Member Nonrecourse Debt Minimum Gain Chargeback. Net Losses attributable to partner nonrecourse debt (as defined in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner required by Treasury Regulation Section 1.704-2(i). If there is a net decrease during a Tax Year in Member Nonrecourse Debt Minimum Gain, Net Profit for such Tax Year (and, if necessary, for subsequent Tax Years) shall be allocated to the Members in the amounts and of such character as determined according to Treasury Regulation Section 1.704-2(i)(4). This Section 8.01(c)(i) is intended to be a minimum gain chargeback provision that complies with the requirements of Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted in a manner consistent therewith.
(ii) Minimum Gain Chargeback. Except as otherwise provided in Section 8.01(c)(i), if there is a net decrease in the Minimum Gain during any Tax Year, each Member shall be allocated Net Profit for such Tax Year (and, if necessary, for subsequent Tax Years) in the amounts and of such character as determined according to Treasury Regulation Section 1.704-2(f). This Section 8.01(c)(ii) is intended to be a minimum gain chargeback provision that complies with the requirements of Treasury Regulation Section 1.704-2(f), and shall be interpreted in a manner consistent therewith.
(iii) Nonrecourse Deductions. Nonrecourse deductions (as determined according to Treasury Regulation Section 1.704-2(b)(1)) for any Tax Year shall be allocated to each Member ratably among such Members based upon the manner in which Net Profit (determined without regard to such non-recourse deductions) are allocated among the Members for such Tax Year.
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(iv) Qualified Income Offset. If any Member that unexpectedly receives an adjustment, allocation or distribution described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as of the end of any Tax Year, computed as if all other allocations provided for in this Article 8 had been tentatively made (other than pursuant to this paragraph), then items of Company income and gain for such Tax Year shall be allocated to such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account Deficit of the Member as soon as possible (and, if two or more Members have such deficits, in proportion to their deficits). This Section 8.01(c)(iv) is intended to be a qualified income offset provision as described in Treasury Regulation Section 1.704-l(b)(2)(ii)(d) and shall be interpreted in a manner consistent therewith.
(v) Gross Income Allocation. If any Member has a deficit Capital Account at the end of any Tax Year which is in excess of the sum of (i) the amount such Member is obligated to restore pursuant to any other provision of this Agreement and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 8.01(c)(v) shall be made only if and to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Agreement have been made as if Section 8.01(c)(iv) and this Section 8.01(c)(v) were not in this Agreement.
(vi) Allocation of Certain Net Profits and Net Losses. Items of gain or loss described in clause (iii) of the definition of “Net Profit and Net Loss” as a result of an adjustment to the Book Value of an asset of the Company pursuant to clause (iv) of the definition of “Book Value” shall be allocated in a manner consistent with the manner that the adjustments to the Capital Accounts are required to be made pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m).
(vii) Regulatory Allocations. The allocations set forth in Section 8.01(c)(i)-(vi) (the “Regulatory Allocations”) are intended to comply with certain requirements of Sections 1.704-l(b) and 1.704-2 of the Treasury Regulations. The Regulatory Allocations may not be consistent with the manner in which the Members intend to allocate items of Net Profit and Net Loss of the Company or make the Company’s distributions. Accordingly, notwithstanding the other provisions of this Article 8, but subject to the Regulatory Allocations, items of income, gain, deduction, and loss shall be reallocated among the Members so as to eliminate the effect of the Regulatory Allocations and thereby cause the respective Capital Accounts of the Members to be in the amounts (or as close thereto as possible) they would have been if Net Profit and Net Loss (or items thereof) had been allocated without reference to the Regulatory Allocations. In general, the Members anticipate that this will be accomplished by specially allocating other items of Net Profit and Net Loss among the Members so that the net amount of the
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Regulatory Allocations and such special allocations to each such Member is zero. In addition, if in any Tax Year there is a decrease in Minimum Gain, or in Member Nonrecourse Debt Minimum Gain, and application of the Member Nonrecourse Debt Minimum Gain chargeback or Minimum Gain chargeback requirements set forth in Section 8.01(c)(i) or 8.01(c)(ii), respectively, would cause a distortion in the economic arrangement among the Members, the Board may, if it does not expect that the Company will have sufficient other income to correct such distortion, request the Internal Revenue Service to waive either or both of such Minimum Gain chargeback requirements. If such request is granted, this Agreement shall be applied in such instance as if it did not contain such Minimum Gain chargeback requirement.
(d) Tax Allocations.
(i) Allocations Generally. Subject to the other provisions of this Section 8.01(d), the items of income, gains, losses, and deductions of the Company will be allocated for federal, state and local income tax purposes among the Members in accordance with the allocation of such items of income, gains, losses, and deductions among the Members for computing their Capital Accounts; except that if any such allocation is not permitted by the Code or other applicable Law, the Company’s items of income, gains, losses and deductions will be allocated among the Members so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts, provided that the Board may adjust such allocations so long as such adjusted allocations have “substantial economic effect” or are in accordance with the “partners’ interests in the partnership,” in each case within the meaning of the Code and the Treasury Regulations.
(ii) Code Section 704(c) Allocations. Items of the Company’s taxable income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members in accordance with Code Section 704(c) so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Book Value. In addition, if the Book Value of any asset of the Company is adjusted pursuant to the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f), then subsequent allocations of items of taxable income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c). All allocations made pursuant to this Section 8.01(d)(ii) shall be made pursuant to a method described in Treasury Regulations Section 1.704-3 that is selected by the Tax Matters Member in its reasonable discretion.
(iii) Allocation of Tax Credits, Tax Credit Recapture, Etc. Allocations of tax credits, tax credit recapture, and any items related thereto shall be allocated to the Members according to their interests in such items as reasonably determined by the Board taking into account the principles of Treasury Regulation Section 1.704-1(b)(4)(ii).
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(iv) Effect of Allocations. Allocations pursuant to this Section 8.01(d) are solely for purposes of federal, state and local taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Profit or Net Loss (or items thereof) pursuant to any provision of this Agreement.
(e) Loss Limitation. Notwithstanding anything to the contrary in this Section, Net Loss (or items thereof) shall not be allocated to any Member to the extent such allocation would cause or increase an Adjusted Capital Account Deficit of such Member as of the end of the applicable Tax Year. Any Net Loss (or items thereof) that cannot be allocated to a Member by reason of the preceding sentence shall be allocated to the other Members in proportion to their positive Adjusted Capital Account balances, and any Net Loss in excess of the aggregate positive Adjusted Capital Account balances of all Members shall be allocated among the Members in accordance with their interests in the Company, as determined by the Tax Matters Member in its reasonable discretion.
(f) Varying Interests. If any Member’s Membership Percentage or other interest in the Company changes during any Tax Year for any reason, including by reason of a Transfer of any Unit, the issuance of Units (including upon the exercise of any Compensatory Option) or the vesting, forfeiture or repurchase of any Units, the allocations under this Article and the distributions to the Members shall be adjusted as necessary to reflect the varying interests of the Members during such Tax Year using an interim closing of the books method under Section 706 of the Code and the Treasury Regulations promulgated thereunder as of the date of such change, or such other permissible method as is approved by the Tax Matters Member in its reasonable discretion.
Section 8.02 Compensatory Options. Upon the exercise of any Compensatory Option, the Capital Account of the exercising holder in respect of the Units received shall be credited with the exercise price paid plus the amount, if any, included in such holder’s gross income under Section 83 of the Code in respect of such Units. If, after giving effect to the adjustment to Book Value required immediately prior to such exercise and such credit, the Capital Account of such holder in respect of such Units does not equal the amount that would be distributed in respect of such Units under Section 12.05(a) upon a hypothetical liquidation of the Company at Book Value, the Company shall allocate items of gross income, gain, loss or deduction for the Tax Year of such exercise (and, if necessary, subsequent Tax Years) so as to eliminate such difference as quickly as possible, applying principles analogous to Treasury Regulations Sections 1.704-1(b)(2)(iv)(s) and 1.704-1(b)(4)(x). Prior to its exercise, no Compensatory Option shall be treated as a Membership Interest, and no holder of a Compensatory Option shall be treated as a Member, in each case for purposes of this Article, and no items of Company income, gain, loss or deduction shall be allocated in respect of any unexercised Compensatory Option. Distributions.
(a) Distributions; Withholding.
(i) Distributions of cash shall be made to the Members by wire transfer of immediately available funds to the account designated by the relevant Member. Except as set forth Section 12.05(a)(i) (and subject to Section 8.03(a)(ii)), any distribution shall be made to the holders of Common Units pro rata in
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accordance with each holder’s Membership Percentage.
(ii) Notwithstanding the foregoing, (A) the Company shall, within 15 days following the end of each Estimated Tax Period, distribute on a pro rata basis in accordance with each Member’s Membership Percentage an amount of cash until each of the Hertz Members and the Investor Members has received an amount of cash equal to its Tax Allowance Amount for such Estimated Tax Period (such distributions, “Tax Distributions”) and (B) in the event any Member’s Tax Allowance Amount for a Tax Year, computed on the basis of a final Schedule K-1 delivered to such Member pursuant to Section 7.05(a) of this Agreement, exceeds the Tax Distributions previously made to such Member in respect of such Tax Year, the Tax Allowance Amount that would otherwise be computed for such Member for the Estimated Tax Period that includes the date on which the applicable final Schedule K-1 is so delivered shall be increased by the amount of any such excess; provided, however, that to the extent the Board reasonably determines in good faith that the Company lacks sufficient cash to make the full amount of such Tax Distributions, Tax Distributions shall be made to the Members on a pro rata basis in accordance with each Member’s Membership Percentage, and any shortfall shall be distributed as soon as reasonably practicable after sufficient cash becomes available. All Tax Distributions made to a Member shall constitute an advance of amounts that otherwise would have been distributed to such Member at a later time pursuant to Section 8.03(a)(i) or Section 12.05(a)(i), and shall reduce such later distributions dollar-for-dollar.
(iii) The Company is authorized to withhold from payments and distributions to the Members any amounts required to be withheld under Law. In addition, the Company shall have a right of setoff against all distributions in the amount of any tax (including any liability pursuant to the Partnership Audit Rules to the extent provided in Section 7.05) or other liability or obligation to which the Company may be subject as a result of any act or status of any Member, or to which the Company may become subject with respect to the interest of any Member (or that are otherwise properly allocable to such Member, as determined by the Tax Matters Member in its sole discretion). All amounts withheld (or set off) with respect to a Member shall be treated as if such amounts were distributed to such Member under this Agreement. Neither the Company nor the Tax Matters Member shall be liable for any over-withholding in respect of any Member’s Membership Interest, and, in the event of any such over-withholding, a Member’s sole recourse shall be to apply for a refund from the appropriate Governmental Authority. The Company shall cooperate with a Member in the preparation and filing of such refund claims. Each Member agrees to indemnify the Company in full for any amounts paid by the Company to a governmental entity or regulatory authority that were not withheld or offset against any concurrent distributions otherwise to be made to such Member and that are specifically allocable or attributable to such Member (as determined by the Tax Matters Member in its sole discretion, and including any interest, penalties and expenses associated with such payments). Notwithstanding any other provision hereof to the contrary, if the Company is obligated to pay any taxes (including penalties, interest and any addition to tax) to
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any governmental authority that are attributable to a Member’s transfer of an interest in the Company, including on account of Section 1446 of the Code, then (a) the Company may withhold from distributions to the transferee to cover any such taxes, and (b) to the extent such taxes are not offset against concurrent distributions to such former Member’s transferee(s), both such former Member and such former Member’s transferee(s) shall indemnify the Company in full for the entire amount paid or payable.
(b) Distributions in Kind. No Member has any right to demand or receive property other than cash. Assets of the Company distributed in kind shall be valued based on the Book Value thereof.
(c) Limitations on Distributions. Notwithstanding anything in this Agreement to the contrary:
(i) no distribution shall be made in violation of the Act or other applicable Law; and
(ii) except as otherwise provided in Section 8.03(a)(ii) and Section 12.05, all amounts distributed to Members in respect of their Membership Interests shall be distributed to them pro rata in accordance with their respective Membership Percentages.
(d) Exculpation. The Members hereby consent and agree that, except as expressly provided herein or required by applicable Law, no Member shall have an obligation to return cash or other property paid or distributed to such Member under Section 18-502(b) of the Act or otherwise.
Article
9
Transfers, Redemption/Purchase Rights and Additional Members
Section 9.01 Restrictions on Transfers. Prior to the day that is two years following the Closing Date (provided, that this period shall be indefinite with respect to Management Members) (the “Lockup Period”), no Member may Transfer or permit a Transfer of any Membership Interests held by such Member; provided, that, subject to Section 9.01(a), such prohibition shall not apply to (i) any Transfers by a Hertz Member to any Affiliate of any Hertz Member so long as such Affiliate remains an Affiliate of THC and, if such Transfer is a direct Transfer of Units, agrees in writing to be bound by the provisions of this Agreement applicable to the Hertz Members, (ii) any Transfers by an Investor Member to an Affiliate of such Investor Member so long as such Affiliate remains an Affiliate of such Investor Member and, if such Transfer is a direct Transfer of Units, agrees in writing to be bound by the provisions of this Agreement applicable to the Investor Members, (iii) any direct or indirect Transfer of Equity Securities in THC that does not result in a Change of Control of any Hertz Member, (iv) direct or indirect Transfer of Equity Securities in an Investor Member that is or is an Affiliate of a PE Fund pursuant to any syndication of indirect interests in an Investor Member or its Affiliates, so long as such syndication does not result in a Change of Control of such Investor Member, (v) any Transfers by Members that are employees of the Company or its Subsidiaries to any Employee Permitted Transferee, (vi) any direct or indirect
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Transfer by CPV or any of its Affiliates to (A) family members (within the meaning of Rule 701 of the Securities Act) of the individuals who, directly or indirectly, Control CPV, including through gifts, domestic relations orders or charitable transfers, (B) any trust, foundation or other vehicle for the primary benefit of such individual or any such family member or (C) any investment vehicle wholly-owned and Controlled by any one or more of the Persons described in clauses (A) and (B) and/or CPV, in each case for the benefit of the foregoing, (such Transfers described in clauses (i), (ii), (iii), (iv), (v), (vi), and (vii), “Permitted Transfers” and the Person to which such Transfer is made, a “Permitted Transferee”), (vi) any Transfers to the Company (or its designee) in a repurchase pursuant to Section 3.08, (vii) after the Lockup Period, pursuant to a Tag-Along Right or (ix) after the Lockup Period, pursuant to a Drag-Along Sale; provided, further that, subject to Section 5.02, an IPO may be effected pursuant to Section 9.04 of this Agreement at any time following the Closing Date.
(a) Notwithstanding anything herein to the contrary, in no event may a Member Transfer any of its Membership Interests if such Transfer would, in the reasonable judgment of the Board, (a) cause the Company to cease to be treated as a partnership for U.S. federal income tax purposes or (b) cause the assets of the Company to be treated as “plan assets” for purposes of Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended, 29 C.F.R. 2510.3-101, or otherwise. In no event shall the Company participate in the establishment of a secondary market or the substantial equivalent thereof as defined in U.S. Treasury Regulations Section 1.7704-1(c) or the inclusion of its interests on such a market or on an established securities market as defined in U.S. Treasury Regulations Section 1.7701-1(b), or recognize any Transfers made on any of the foregoing.
(b) Following the expiration of the Lockup Period, if an Investor Member desires to Transfer Units representing (x) 100% of such Investor’s Member’s Initial Units or (y) 25% or more of the Initial Units owned by all Investor Members in the aggregate in accordance with this Agreement, the Company will use commercially reasonable efforts to cooperate with such Investor Member, such Investor Member’s Representatives and potential transferees in connection with such Transfer, including by meeting (solely at the written request of such Investor Member) with one or more potential transferees and providing reasonable access to the Company’s management, employees, Affiliated services providers, books and records, financial and accounting information, necessary due diligence materials and information and other customary information, in each case, at reasonable times and upon reasonable prior notice and without imposing an undue burden on the Company’s business operations.
(c) For the avoidance of doubt, any Transfer (in a single transaction or series of related transactions), other than a Permitted Transfer, of direct or indirect Equity Securities in a Member to any Person or group of Persons (that are not Permitted Transferees of the transferor) shall be deemed an “Upstream Transfer” by such Member of its Membership Interests for all purposes of this Agreement, and each Member agrees that it shall not effect or permit any Upstream Transfer of its Membership Interests other than in compliance with this Article 9.
(d) Any attempt to Transfer (including by way of an Upstream Transfer) any Membership Interests that is not in accordance with this Agreement (each, an “Impermissible Transfer”) shall be null and void, and each of the Company and each Member agrees that it shall not cause, permit or give any effect to any such Transfer on its books and records. Each Member
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shall take all actions necessary to reverse any Impermissible Transfer by such Member. Until such time as the applicable Member reverses any Impermissible Transfer (including any Upstream Transfer) made by such Member, (i) such Member shall not be entitled to exercise any voting, consent, approval, information or Director designation rights under this Agreement in respect of the Membership Interests subject to such Impermissible Transfer and (ii) any distributions that would otherwise be made to such Member in respect of such Membership Interests shall instead be made to the other Members on a pro rata basis, and such other Members shall not be required to forfeit, transfer or otherwise distribute or repay any such distributions to the extent the applicable Impermissible Transfer is subsequently reversed.
Section 9.02 Right of First Offer.
(a) Subject to Section 9.01, if following the Lockup Period, (i) any of the Members or any of their respective Affiliates (the “ROFO Selling Member”) desires to Transfer all or part of the ROFO Selling Member’s Membership Interests in accordance with Section 9.01 (other than pursuant to a Permitted Transfer), then the ROFO Selling Member shall invite the other Members (excluding Management Members) (the “ROFO Offeror”) to offer to purchase such ROFO Selling Member’s Membership Interests to be Transferred by delivering a written offer (the “ROFO Notice”) setting forth: (A) the ROFO Selling Member’s desire to effect a Transfer, (B) the Units proposed to be Transferred in accordance with this Section 9.02 (the “ROFO Offered Units”) and (C) if the ROFO Selling Member is considering effecting the ROFO transaction through a Blocker Corporation, a good faith estimate of any income taxes that such Blocker Corporation may have to pay in connection with a Transfer and any direct or indirect assets or liabilities of the Blocker Corporation (other than the direct or indirect ownership of Units).
(b) Upon receipt of the ROFO Notice, each ROFO Offeror shall have the option, exercisable by delivery of written notice to the Company and the ROFO Selling Member during the 10 Business Days following the date that the ROFO Notice is delivered (such period, the “ROFO Period”) to make an offer to purchase in cash all (but not less than all) of the ROFO Offered Units or, if applicable, the Interests of the Blocker Corporation holding the ROFO Offered Units (the “ROFO Blocker Units”). Each offer shall be in writing and irrevocable and shall set forth the proposed price per Unit for the ROFO Offered Units or per Equity Securities for the ROFO Blocker Units and the aggregate cash price that the ROFO Offeror proposes to pay for such ROFO Offered Units or ROFO Blocker Units (each applicable proposed price, a “ROFO Offer Price”) and all other material terms and conditions with respect to the proposed purchase of the ROFO Offered Units or ROFO Blocker Units (the “ROFO Offer”). Upon giving a ROFO Offer, a ROFO Offeror shall be bound to (and, as applicable, to require its Affiliates to) purchase the ROFO Offered Units or ROFO Blocker Units (as applicable) at the applicable ROFO Offer Price and on the terms and conditions set forth in the ROFO Offer until the ROFO Acceptance Period has expired, or if the ROFO Selling Member accepts such ROFO Offer, until the ROFO Closing Period has expired.
(c) During a period of 10 Business Days following the expiration of the ROFO Period (the “ROFO Acceptance Period”), the ROFO Selling Member may elect to accept or reject any ROFO Offer by providing written notice to the applicable ROFO Offeror(s) by the end of such ROFO Acceptance Period (and failure to timely provide such notice shall be deemed rejection of such ROFO Offer). If the ROFO Selling Member accepts a ROFO Offer, the ROFO Selling
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Member and the applicable ROFO Offeror shall thereafter set a reasonable place and time for the closing for the purchase and sale of the ROFO Offered Units or ROFO Blocker Units (as applicable), which shall be not less than 45 days nor more than 90 days after the date of the ROFO Notice (such period, the “ROFO Closing Period”); provided, that, if any Governmental Approvals are required in connection with such transaction, the ROFO Closing Period shall be extended until the expiration of three Business Days following the date on which all Governmental Approvals required with respect to such proposed transaction are obtained (including the expiration or termination of any applicable waiting periods under applicable Law) but in no event will the ROFO Closing Period be extended for more than an additional 60 calendar days (it being understood that, if any such required Governmental Approvals are not obtained within such 60 calendar day period, the ROFO Offeror(s) and the ROFO Selling Member shall not be obligated to proceed with the proposed transaction and the ROFO Selling Member may include the Membership Interests which were to have been sold to the ROFO Offeror(s) in any transaction effected pursuant to Section 9.02(d), provided, however, that the ROFO Selling Member may not proceed with any transaction effected pursuant to Section 9.02(d) if the failure to obtain Governmental Approvals was due to such ROFO Selling Member’s failure to use reasonable best efforts to obtain such required Governmental Approvals). At the closing of the Transfer, the ROFO Selling Member shall sell the applicable securities free and clear of all liens and encumbrances (other than those arising under this Agreement).
(d) If (i) one or more ROFO Offerors makes a timely ROFO Offer and each such ROFO Offer is either rejected in writing by the ROFO Selling Member or expires in accordance with its terms, (ii) no ROFO Selling Member accepts a ROFO Offer within the ROFO Period or (iii) the ROFO Selling Member timely accepts a ROFO Offer and the proposed transaction contemplated by such offer is not consummated within the ROFO Closing Period and the ROFO Selling Member has used customary reasonable best efforts to receive all required Governmental Approvals, if any (ii), then, subject to Section 9.01, the ROFO Selling Member may enter into a binding agreement to Transfer or cause to be Transferred all (but not less than all) of the securities set forth in the ROFO Offer to an unaffiliated third party acquirer at a price no less than 95% of the price proposed in the ROFO Offer and on other terms and conditions that are not materially more favorable in the aggregate to the unaffiliated third party acquirer than the terms and conditions specified in any ROFO Offer; provided that, if the Transfer is structured to include the sale of the ROFO Blocker Units, the price shall be no less than 95% of the ROFO Offer Price for the ROFO Blocker Units (or, if the ROFO Offeror only submitted a ROFO Offer Price for the ROFO Offered Units, such ROFO Offer Price less any income taxes that such Blocker Corporation would have paid if it had instead sold such ROFO Offered Units for 100% of such ROFO Offer Price), at any time during the period ending 180 calendar days following (A) the last rejection or expiration of the ROFO Offers in the case of clause (i), (B) the expiration of the ROFO Period in the case of clause (ii) or (C) the expiration of the ROFO Closing Period in the case of clause (iii).
(e) If, however, the ROFO Selling Member (or, as applicable, its Affiliate) fails to complete or cause to be completed the proposed Transfer to an unaffiliated third party acquirer within the time periods set forth in Section 9.02(e), then any proposed Transfer shall again become subject to the right of first offer pursuant to this Section 9.02.
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(f) The provisions of this Section 9.02 shall terminate upon the consummation of an IPO and shall not apply to any proposed Transfer pursuant to Section 9.04 or any Permitted Transfers.
Section 9.03 Tag-Along Right. Subject to Sections 9.03(g) and 9.05, if following the Lockup Period and the application of Section 9.02, any Member or group of Members (excluding Management Members) proposes to Transfer Membership Interests that constitute 50% or more of the Common Units (excluding Class D Common Units) other than pursuant to a Permitted Transfer, the “Tag-Along Seller” and the Transfer of such Membership Interests, (the “Tag-Along Sale”), the Tag-Along Seller shall not effect, and shall not be permitted to effect, such proposed Transfer unless the Tag-Along Seller complies with the provisions of this Section 9.03, and the Tag-Along Seller shall provide each other Member (other than Management Members, unless otherwise determined by unanimous decision of the Board) written notice of the terms and conditions of such proposed Transfer (the “Tag-Along Notice”) and offer each other Member the opportunity to participate in such Transfer in accordance with this Section 9.03. The Tag-Along Notice shall identify the identity of the proposed transferee, the number and class of Membership Interests proposed to be sold by the Tag-Along Seller (the “Tag-Along Offer”), (iii) the consideration for which the Transfer is proposed to be made, and (iv) all other material terms and conditions of the Tag-Along Offer, including the form of the proposed agreement, if any.
(a) Each other Member shall have the right (a “Tag-Along Right”), exercisable by written notice (a “Tag-Along Response Notice”) given to the Tag-Along Seller within 10 Business Days after its receipt of the Tag-Along Notice (the “Tag-Along Notice Period”), to request that the Tag-Along Seller include in the proposed Transfer up to a number of Membership Interests representing such other Member’s Tag-Along Portion (each such exercising other Member, a “Tagging Person”); provided, that each Tagging Person shall be entitled to include in the Tag-Along Sale no more than its Tag-Along Portion of Membership Interests and the Tag-Along Seller shall be entitled to include the number of Membership Interests proposed to be Transferred by the Tag-Along Seller as set forth in the Tag-Along Notice (reduced, to the extent necessary, so that each Tagging Person shall be able to include its Tag-Along Portion) and such additional Membership Interests as permitted by Section 9.03(d). Each Tag-Along Response Notice shall include wire transfer or other instructions for payment of any consideration for the Membership Interests being transferred in such Tag-Along Sale. Delivery of the Tag-Along Response Notice shall constitute an irrevocable acceptance of the Tag-Along Offer by such Tagging Person, subject to the provisions of this Section 9.03 and Section 9.05. If at the termination of the Tag-Along Notice Period any other Member shall not have elected to participate in the Tag-Along Sale, such other Member shall be deemed to have waived its rights under this Section 9.03(a) with respect to the Transfer of its Membership Interests pursuant to such Tag-Along Sale.
(b) If at the end of a 120-day period after delivery of such Tag-Along Notice (which 120-day period shall be extended if any of the transactions contemplated by the Tag-Along Offer are subject to Governmental Approvals until the expiration of five Business Days after all such Governmental Approvals have been received, but in no event later than 180 days following receipt of the Tag-Along Notice by the Tag-Along Seller), the Tag-Along Seller has not completed the Transfer of all Membership Interests proposed to be sold by the Tag-Along Seller and all Tagging Persons on substantially the same terms and conditions set forth in the Tag-Along Notice,
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the Tag-Along Seller shall (i) return to each Tagging Person the limited power-of-attorney and all applicable instruments representing the Membership Interests that such Tagging Person delivered for Transfer pursuant to this Section 9.03 and any other documents in the possession of the Tag-Along Seller executed by the Tagging Persons in connection with the proposed Tag-Along Sale, and (ii) all the restrictions on Transfer contained in this Agreement or otherwise applicable at such time with respect to such Membership Interests shall continue in effect.
(c) Promptly after the consummation of the Tag-Along Sale, the Tag-Along Seller shall (i) notify the Tagging Persons thereof, (ii) if not remitted directly to the Tagging Persons, remit to the Tagging Persons the total consideration for the Membership Interests of the Tagging Persons Transferred pursuant thereto less the Tagging Persons’ pro rata share of any escrows, holdbacks or adjustments in purchase price and any transaction expenses as determined in accordance with Section 9.05, with the cash portion of the purchase price paid by wire transfer of immediately available funds in accordance with the wire transfer instructions in the applicable Tag-Along Response Notices and (iii) furnish such other evidence of the completion and the date of completion of such transfer and the terms thereof as may be reasonably requested by the Tagging Persons. The Tag-Along Seller shall promptly remit to the Tagging Persons, if not remitted directly to the Tagging Persons, any additional consideration payable upon the release of any escrows, holdbacks or adjustments in purchase price.
(d) Each Tagging Person shall effect its participation in the Tag-Along Sale by executing and delivering to the Tag-Along Seller (to hold in trust as agent for such Tagging Person), at least three (3) Business Days prior to the date scheduled for such Tag-Along Sale as set forth in the Tag-Along Response Notice, (i) such instruments of transfer in form reasonably acceptable to the Tag-Along Seller, that represent the number of Equity Securities that such Tagging Person elected to Transfer in accordance with Section 9.03(c) (but subject to the limitations set forth in this Section 9.03), (ii) a joinder or other similar agreement pursuant to which such Tagging Person shall agree to be bound by the terms and conditions set forth in the agreement included with the Tag-Along Notice and (iii) executed copies (or signature pages thereof) of such other agreements, documents or instruments as may reasonably be requested to consummate the proposed Tag-Along Sale; provided that no such Tagging Person shall be required to execute and deliver any such agreements, documents or instruments that would require such Tagging Person to agree to any terms less favorable than those to which the Tag-Along Seller has agreed (provided that no Member shall be required to execute any non-competition, customer non-solicitation or other similar restrictive covenant (but each Tagging Person shall be obligated to agree to customary confidentiality and employee non-solicit obligations to the same extent as agreed by the Tag-Along Seller (subject to customary private equity carve outs to confidentiality and employee non-solicit obligations in the case of a Member that is an Affiliate of a PE Fund)); provided, further, that no Tagging Person shall be required to make any representations or warranties in connection with such Tag-Along Sale other than, on a several and not joint and several basis; provided, further, that the aggregate amount of liability for a breach of a representations or warranties of each Tagging Person in connection with any Tag-Along Sale will be several and not joint, and will not, except in the event of actual or intentional fraud or willful misconduct of such Tagging Person, exceed the lesser of: (i) such Tagging Person’s pro rata portion of any such liability based on such Tagging Person’s share of the consideration payable to the Tag-Along Seller and all Tagging Persons in such Tag-Along Sale and (ii) the proceeds actually received by such Tagging Person in such Tag-Along Sale. Each Tagging Person shall vote, or cause to be
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voted, all of the Equity Securities over which it has voting rights in favor of such Tag-Along Sale at any applicable special or annual meeting or by written consent in lieu of a meeting in favor of such Tag-Along Sale, if such a vote is required. All costs and expenses incurred by each Tag-Along Seller and Tagging Person in connection with the proposed Tag-Along Sale, whether or not consummated, including legal fees, accounting fees, brokerage or investment banking fees, charges or commissions, shall be paid by such Tag-Along Seller or Tagging Person, respectively. All legal and other costs and expenses will be for the account of, and will be a condition to the right to Transfer of, the Tag-Along Sellers and Tagging Persons. Any costs or expenses incurred by the Company in connection with a Tag-Along Sale will be borne by the Tagging Persons and the Tag-Along Sellers pro rata based on the relative proceeds received by each such person in such Tag-Along Sale.
(e) If (i) any other Member declines to exercise its Tag-Along Rights or (ii) any Tagging Person elects to exercise its Tag-Along Rights with respect to less than such Tagging Person’s Tag-Along Portion, the Tag-Along Seller shall be entitled to Transfer, pursuant to the Tag-Along Offer, up to a number of Membership Interests held by it equal to the number of Membership Interests constituting, as the case may be, the Tag-Along Portion of such other Member or the portion of such Tagging Person’s Tag-Along Portion with respect to which Tag-Along Rights were not exercised.
(f) Notwithstanding anything contained in this Section 9.03, there shall be no liability on the part of the Tag-Along Seller to the Tagging Persons or any other Person if the Transfer of Membership Interests pursuant to this Section 9.03 is not consummated for whatever reason, except in the case of breach of this Agreement by the Tag-Along Seller. Whether to effect a Transfer of Membership Interests pursuant to this Section 9.03, by the Tag-Along Seller is in the sole and absolute discretion of the Tag-Along Seller.
(g) The provisions of this Section 9.01 shall terminate upon the consummation of an IPO and shall not apply to any proposed Transfer pursuant to Section 9.04 or any Permitted Transfers.
Section 9.04 Drag-Along Right.
(a) Subject to Section 9.05, following the third anniversary of the Closing Date, in connection with a bona fide proposed Transfer (by merger, consolidation, sale or otherwise and whether in one transaction or a series of related transactions) by any Member(s) (other than Management Members) that would result in (x) a Deemed Liquidation Event or the Hertz Members Transferring Units representing a Membership Percentage of 50% or more to a third party and (y) such transaction would result in each holder of Class A Common Units receiving proceeds in cash or Marketable Securities resulting in a 4.0x MOIC and a 35% IRR (the “Minimum Return Obligation”) in respect of its Class A Common Units (assuming the Drag-Along Sale is consummated on its proposed terms, but excluding any earnout or similar contingent consideration forming part of the consideration in such Drag-Along Sale) (a “Drag-Along Sale”), the Majority Member (the “Drag-Along Seller”) may at its option (the “Drag-Along Rights”) require each other Member to: (i) Transfer a pro rata portion of its Membership Interests in such Drag-Along Sale on the same terms and conditions applicable and for the same type of consideration payable as the Drag-Along Seller and (ii) agree to vote to approve such transaction, waive all dissenters’
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rights and otherwise take all other actions necessary or desirable to consummate the Drag-Along Sale as requested by the Drag-Along Seller. Notwithstanding anything to the contrary herein, as a condition to the consummation of any Drag-Along Sale, each Investor Member must actually receive, in cash or Marketable Securities, aggregate consideration in respect of its Class A Common Units that is sufficient to result in a 4.0x MOIC and a 35% IRR upon the consummation of such Drag-Along Sale (in each case, without regard to any earnout, escrow, holdback, purchase price adjustment, deferred payment or other contingent or unpaid consideration). If the cash and Marketable Securities consideration otherwise allocable to the Investor Members at the closing of the Drag-Along Sale (on the terms applicable to the Drag-Along Seller and the other Members on a pro rata basis) would not satisfy such MOIC and IRR thresholds, the Drag-Along Seller shall, and shall cause the other Members participating in the Drag-Along Sale (other than the Investor Members) to, at the Drag-Along Seller’s sole discretion either (A) abandon and terminate such Drag-Along Sale or (B) reallocate to the Investor Members at such a portion of the consideration otherwise payable to the Investor Members at such closing in an amount sufficient to cause each Investor Member to receive, in cash or Marketable Securities (in the same proportion) at such closing, aggregate consideration satisfying such MOIC and IRR thresholds.
(b) If the Drag-Along Seller elects to exercise its Drag-Along Rights, the Drag-Along Seller shall provide notice of such Drag-Along Sale to the other Members (a “Drag-Along Sale Notice”) not later than 15 Business Days prior to the proposed Drag-Along Sale. The Drag-Along Sale Notice shall identify the purchaser in the Drag-Along Sale, the number and class of Membership Interests subject to the Drag-Along Sale, the consideration for which a Transfer is proposed to be made (the “Drag-Along Sale Price”), the consolidated valuation of the Company and its Subsidiaries under such transaction, the basis for the Board’s determination of MOIC and IRR (setting forth in reasonable detail the Board’s calculations with respect thereto), and all other material terms and conditions of the Drag-Along Sale. Each other Member shall be required to participate in the Drag-Along Sale on the terms and conditions set forth in the Drag-Along Sale Notice and to tender a pro rata portion of its Membership Interests as set forth below. If any Investor Member wishes to dispute the determination of MOIC or IRR with respect to such Drag-Along Sale, the dispute resolution procedures in Section 2.01(e)(iii) shall apply mutatis mutandis to such Drag-Along Sale, any party may escalate the matter for resolution in accordance with Section 13.10 of this Agreement, and the proposed Drag-Along Sale shall not be consummated pending the resolution of any such dispute.
(c) Notwithstanding anything to the contrary in this Section 9.04, each other Member shall only be required to make such representations and warranties and agree to such covenants, indemnification and similar matters on the same terms as (or terms more favorable than those that) are agreed to by the Drag-Along Seller (including any escrow arrangements) in the executed agreement (or substantially final draft agreement) in connection with such Drag-Along Sale; provided, that each other Member shall only be required to make representations or warranties in connection with such Drag-Along Sale, on a several and not joint and several basis, as to the due organization of such other Member, the lack of conflict of the definitive documentation relating to the sale of such other Member’s Membership Interests and compliance of the transactions contemplated by such sale with applicable Law, the organizational documents and contractual arrangements applicable to such other Member, unencumbered title to such other Member’s Membership Interests, the power, authority and legal right to Transfer such other Members Membership Interests free and clear of all liens and other encumbrances and to execute
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and deliver any applicable documentation relating to such sale of such other Member’s Membership Interests, the lack of litigation or government action prohibiting the Transfer of such other Member’s Membership Interests and the absence (or satisfaction) of any obligation to brokers, finders or similar representatives in connection with the Transfer of such other Member’s Membership Interests. The aggregate amount of liability for breach of a representation or warranty of each other Member in connection with the Drag-Along Sale will be several and not joint, and will not, except in the event of actual and intentional fraud of such other Member, exceed the lesser of: (i) such other Member’s pro rata portion of any such liability based on such other Member’s share of the consideration payable to all Members in such Drag-Along Sale and (ii) the proceeds actually received by such other Member in such Drag-Along Sale. Each Member acknowledges that its Drag-Along Sale Price may be reduced by transaction expenses incurred in connection with such Drag-Along Sale, but only proportionately, and any expenses incurred by any Member on its own behalf related to a Drag-Along Sale shall not reduce any other Member’s Drag-Along Sale Price.
(d) If requested by the Drag-Along Seller, not later than 10 Business Days after the date of the Drag-Along Sale Notice (the “Drag-Along Sale Notice Period”), each other Member shall deliver to a representative of the Drag-Along Seller designated in the Drag-Along Sale Notice (i) the applicable instruments representing the Membership Interests of such other Member to be included in the Drag-Along Sale, together with a notarized, limited power-of-attorney authorizing the Drag-Along Seller or its representative to Transfer such Membership Interests on the terms set forth in the Drag-Along Sale Notice and wire transfer or other instructions for payment of the consideration for the Membership Interests being Transferred in such Drag-Along Sale and/or (ii) all other documents required to be executed in connection with the Drag-Along Sale; provided, that no Member shall be required to execute and deliver any non-competition, customer non-solicitation or other similar restrictive covenant other than a customary confidentiality obligation and employee non-solicit, in each case, on substantially the same terms as those agreed to by the Drag-Along Seller (subject to customary private equity carve outs to confidentiality and employee non-solicit obligations in the case of a Member that is an Affiliate of a PE Fund). If a Member should fail to deliver such applicable instruments to the Drag-Along Seller, the Company (subject to Section 9.04(e)) shall cause the books and records of the Company to show that such Membership Interests are bound by the provisions of this Section 9.04 and that such Membership Interests shall be Transferred to the transferee immediately upon surrender for Transfer by the holder thereof.
(e) The Drag-Along Seller shall have a period of 120 days from the date of delivery of the Drag-Along Sale Notice to consummate the Drag-Along Sale on the terms and conditions set forth in such Drag-Along Sale Notice; provided, that, if such Drag-Along Sale is subject to Governmental Approvals, such 120-day period shall be extended until the expiration of five Business Days after all such Governmental Approvals have been received, but in no event later than 240 days following the date of delivery of the Drag-Along Sale Notice. If the Drag-Along Sale shall not have been consummated during such period, the Drag-Along Seller shall return to each of the other Members the limited power-of-attorney and all applicable instruments representing Membership Interests that such other Members delivered for Transfer pursuant hereto, together with any other documents in the possession of the Drag-Along Seller executed by the other Members in connection with the proposed Drag-Along Sale, and all the restrictions on
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Transfer contained in this Agreement or otherwise applicable at such time with respect to such Membership Interests owned by the other Members shall again be in effect.
(f) Promptly after the consummation of the Drag-Along Sale pursuant to this Section 9.04, the Drag-Along Seller shall (i) notify the other Members thereof, (ii) if not remitted directly to the other Members, remit to each other Member the total consideration for the Membership Interests of such other Member Transferred pursuant thereto less the other Member’s pro rata share of any escrows, holdbacks or adjustments in purchase price and any transaction expenses as determined in accordance with Section 9.05, with the cash portion of the purchase price paid by wire transfer of immediately available funds in accordance with the wire transfer instructions provided by such Members and (iii) furnish such other evidence of the completion and the date of completion of such transfer and the terms thereof as may be reasonably requested by the other Members. If not remitted directly to the other Members, the Drag-Along Seller shall promptly remit to the other Members any additional consideration payable upon the release of any escrows, holdbacks or adjustments in purchase price.
(g) Notwithstanding anything contained in this Section 9.04, there shall be no liability on the part of the Drag-Along Seller to the other Members (other than the obligation to return the limited power-of-attorney and the applicable instruments representing Membership Interests received by the Drag-Along Seller) or any other Person if the Transfer of Membership Interests pursuant to this Section 9.04 is not consummated for whatever reason, regardless of whether the Drag-Along Seller has delivered a Drag-Along Sale Notice. Whether to effect a Transfer of Membership Interests pursuant to this Section 9.04 by the Drag-Along Seller is in the sole and absolute discretion of the Drag-Along Seller. For the avoidance of doubt, the Drag-Along Seller shall remain free of conflict of interest in connection with the proposed Drag-Along Sale (except in its capacity as a continuing member of management or the Board) and, without limiting the generality of the foregoing, shall not directly or indirectly, have any financial interest (other than a prospective financial interest in connection with a “rollover” or similar transaction regarding retained equity of the Company or any of its Subsidiaries following such purchase) in any potential purchaser of the Membership Interests or assets of the Company pursuant to this Section 9.04; it being understood that the foregoing is not intended to preclude or impair Hertz Member or its Affiliates from providing services to the Company or the acquirer or its Affiliates in the Drag-Along Sale.
(h) From and after the date on which the Drag-Along Seller first notifies the Board or any other Member of a potential or proposed Drag-Along Sale, and until the earlier of the consummation or abandonment of such Drag-Along Sale, the Drag-Along Seller shall, and shall cause its Affiliates, provide the Board with regular updates on the status of such Drag-Along Sale, which updates shall include, to the extent applicable, a reasonably detailed summary of the status and progress of the sale process, the identity of prospective purchasers that have been contacted or that have indicated interest, the material terms of any indications of interest, letters of intent, bids or draft definitive agreements received, the material terms of any negotiations with prospective purchasers, and the anticipated timeline to signing and closing. The Drag-Along Seller shall also respond promptly and in good faith to reasonable questions and information requests from the Board (or from any Investor Member) relating to a sale process, if any.
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(i) The provisions of this Section 9.04 shall terminate upon the consummation of an IPO.
Section 9.05 Additional Conditions to Tag-Along Sales and Drag-Along Sales. Notwithstanding anything contained in Section 9.01 or 9.04, the rights and obligations of the other Members to participate in a Tag-Along Sale under Section 9.01 or a Drag-Along Sale under Section 9.04 are subject to the following conditions:
(a) upon the consummation of such Tag-Along Sale or Drag-Along Sale, (i) all of the Members participating therein (other than Management Members, unless otherwise determined by the Board) will receive the same form of consideration, (ii) participating Members shall receive the same proportion of the aggregate consideration from such Tag-Along Sale or Drag-Along Sale, as applicable, that such holder would have received if such aggregate consideration had been distributed by the Company to the participating Members in accordance with the rights and preferences set forth in Section 12.05(a) as in effect immediately prior to the consummation of such Tag-Along Sale or Drag-Along Sale; provided, that no consideration for any additional agreements entered into in connection with such transaction, such as non-competition agreements, be included in the amount of consideration (to the extent such agreements are not entered into by all Members participating in such Tag-Along Sale or Drag-Along Sale) and (iii) if any Members are given an option as to the form and amount of consideration to be received, all Members participating therein (other than Management Members, unless otherwise determined by the Board) will be given the same option; and
(b) each other Member shall (i) benefit from all of the same provisions of the definitive agreements as the Tag-Along Seller or Drag-Along Seller, as the case may be and (ii) be required to bear their proportionate share of any escrows, holdbacks or adjustments in purchase price.
Section 9.06 Management Member Permitted Transfers. Except for transfers to Employee Permitted Transferees or pursuant to a Drag-Along Sale or repurchase pursuant to Section 3.08, no Management Member or his or her Employee Permitted Transferees shall, directly or indirectly, sell, transfer, assign or otherwise dispose of any direct or indirect economic, voting or other rights in or to such Member’s Units without the prior written consent of the Board.
Section 9.07 Additional Members. In connection with a Transfer of Membership Interests other than in connection with a Transfer pursuant to a Public Offering or pursuant to Rule 144, each such Person who receives Membership Interests in accordance with, and as permitted by, the terms of this Agreement, in each case who is not already a Member (in the case of a Transfer of Membership Interests), shall, in addition to complying with the requirements of the last sentence of Section 13.06, execute and deliver this Agreement or a counterpart of this Agreement and agree in writing to be bound by the terms and conditions of this Agreement that were applicable to the transferor (including the restrictions on Transfer contained in this Article 9), and, in the case of a transferee of Membership Interests, shall thereupon be admitted as an additional Member of the Company (an “Additional Member”).
(a) Each Person who is issued new Membership Interests in accordance with the terms of this Agreement and who is not already a Member shall execute and deliver this
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Agreement or a counterpart of this Agreement and agree in writing to be bound by the terms and conditions of this Agreement, and shall thereupon be admitted as an Additional Member.
(b) A transferee of Membership Interests who is admitted as an Additional Member accepts, ratifies and agrees to be bound by all actions duly taken pursuant to the terms and provisions of this Agreement by the Company prior to the date it was admitted as an Additional Member and, without limiting the generality of the foregoing, specifically ratifies and approves all agreements and other instruments as may have been executed and delivered on behalf of the Company prior to such date and which are in force and effect on such date.
(c) Each Additional Member shall be named as a Member on Exhibit A. Unless and until admitted as an Additional Member, a transferee of any Membership Interest, or a recipient of any newly issued Membership Interests, shall have no powers, rights or privileges of a Member of the Company.
(d) Following a Transfer of any Membership Interests in accordance with this Article 9, the transferee of such Membership Interests shall be treated as having made all of the Capital Contributions in respect of, and received all of the distributions received in respect of, such Membership Interests, and shall receive allocations and distributions in respect of such Membership Interests as if such transferee were a Member. Unless otherwise prohibited by Section 706(d) of the Code and Treasury Regulations promulgated thereunder, the “closing of the books” method (including the “calendar day” convention described in Proposed Treasury Regulations Section 1.706-4(e)(1)) shall be utilized for determining the distributive share of the Company’s income, gains, losses, deductions, credits and other items of a Member whose interest is disposed of, in whole or in part.
(e) The Company shall maintain books for the purpose of registering the transfer of interests in the Company. Upon a transfer of interests in the Company, the transferor of such interests shall notify the Company so that such transfer may be registered in the books of the Company. A transfer of interests in the Company shall be effective upon registration of the transfer in the books of the Company.
Section 9.08 Termination of Member Status. Any Member that Transfers all of its, and owns no, Membership Interests shall immediately cease to be a Member and shall no longer be a party to this Agreement (in its capacity as a Member), and Exhibit A shall be updated to eliminate such Person; provided, however, that such Member (i) shall not thereby be relieved of its liability for breach of this Agreement prior to such time or from any obligations under this Agreement not related to its capacity as a Member; (ii) shall retain any rights with respect to a breach of this Agreement by any other Person prior to such time; (iii) shall retain the right to indemnification hereunder; and (iv) shall not thereby be relieved of any of its obligations under Article 9.
Section 9.09 Void Transfers. To the greatest extent permitted by the Act and other Law, any Transfer by any Member of any Membership Interests or other interest in the Company (including, for the avoidance of doubt, any Transfer of any Person which directly or indirectly owns Membership Interests) in contravention of this Agreement shall be ineffective and null and void ab initio and shall not bind or be recognized by the Company or any other Person. In the event of any Transfer in contravention of this Agreement, to the greatest extent permitted by the
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Act and other Law, the purported transferee shall have no right to any profits, losses or distributions of the Company or any other rights of a Member.
Section 9.10 Blocker Corporations.
Notwithstanding anything to the contrary in this Agreement (including Section 9.01 through Section 9.05), the following provisions shall apply with respect to any Units held directly or indirectly by a Blocker Corporation (such Units, “Blocker Units”):
(a) Blocker Sales; Drag-Along Sales. Any Member holding Blocker Units may elect, by written notice to the Drag-Along Seller within the Drag-Along Sale Notice Period, to satisfy its obligations under Section 9.04 with respect to all or part of its Blocker Units by causing the Investor Member or Affiliate thereof that directly or indirectly holds the Equity Securities of the applicable Blocker Corporation (or of any intermediate entity through which it holds Blocker Units) (such Equity Securities, “Blocker Interests”, and such holder, a “Blocker Owner”) to Transfer all or a corresponding portion of such Blocker Interests in lieu of such Blocker Units (a “Blocker Sale”), and the Drag-Along Seller shall cause the proposed transferee to acquire such Blocker Interests, concurrently with the closing of the Drag-Along Sale, for the applicable Blocker Consideration and otherwise on the terms of this Section 9.10.
(b) Tag-Along Sales. Any Tagging Person holding Blocker Units may elect in its Tag-Along Response Notice to include all or part of its Tag-Along Portion by means of a Blocker Sale.
(c) Blocker Consideration. The consideration payable to a Blocker Owner in a Blocker Sale effected in a Drag-Along Sale under Section 9.10(a) or a Tag-Along Sale under Section 9.10(b) (the “Blocker Consideration”) shall be paid in the same form and at the same time as the consideration payable to the other participating Members and shall equal (i) the consideration that would have been payable for the applicable Blocker Units had they been Transferred directly, plus (ii) the cash and cash equivalents of the applicable Blocker Corporation at closing, minus (iii) its liabilities at closing (including accrued and unpaid income taxes for taxable periods (or portions thereof) ending on or before closing).
(d) Pre-Sale Restructuring; Permitted Transfers. Each of the following shall constitute a Permitted Transfer, notwithstanding any resulting Change of Control of the applicable Blocker Corporation or Member: (i) any Transfer of Blocker Units between a Blocker Corporation and any Affiliate of the applicable Blocker Owner (including a newly formed Blocker Corporation) made so that the Blocker Corporation to be sold holds only the Blocker Units to be Transferred in a Blocker Sale and (ii) any Transfer of Blocker Interests to an Affiliate of the applicable Blocker Owner or to any other Investor Member or any of its Affiliates.
(e) Treatment of Blocker Sales. A Blocker Sale shall be treated for all purposes of this Article 9 (for the avoidance of doubt, other than for tax purposes) as a Transfer by the applicable Member of the corresponding Blocker Units, and no Blocker Sale made in accordance with this Section 9.10 shall be void or ineffective under Section 9.09 or otherwise.
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Article
10
Covenants
Section 10.01 Confidentiality.
(a) Each Member agrees that it shall hold strictly confidential and shall use, and that it shall cause any Person to whom Confidential Information is disclosed pursuant to clause (i) below to hold strictly confidential and to use, the Confidential Information only in connection with its investment in the Company and not for any other purpose. Each Member agrees that it shall be responsible for any breach of the provisions of this Section 10.01 by any of its Representatives to whom it discloses Confidential Information. Each Member further acknowledges and agrees that it shall not disclose any Confidential Information to any Person, except that Confidential Information may be disclosed:
(i) to such Member’s Representatives in the normal course of the performance of their duties or to any financial institution providing credit to such Member;
(ii) to the extent required by applicable Law (including complying with any oral or written questions, interrogatories, requests for information or documents, subpoena, civil investigative demand, court orders or similar process to which such Member is subject; provided, that, unless otherwise prohibited by Law, such Member agrees to give the Company prompt notice of such request(s), to the extent practicable, so that the Company (at the Company’s sole cost) may seek an appropriate protective order or similar relief (and such Member shall cooperate with such efforts by the Company, and shall in any event make only the minimum disclosure required by such Law));
(iii) to any Person to whom such Member is contemplating a Transfer of its Company Securities; provided, that such Transfer (x) would not be in violation of the provisions of this Agreement, (y) the potential transferee agrees in advance of any such disclosure to be bound by a confidentiality agreement materially consistent with the provisions hereof and (z) such Member shall be responsible for breaches of such confidentiality agreement by such potential transferee;
(iv) to the current and prospective equityholders, investors, limited partners, lenders or finance providers of such Investor Member or any of its Affiliates (including any investment fund managed, advised, sponsored or Controlled by such Investor Member or any of its Affiliates), and to other Persons as part of bona fide fund raising, marketing or investor reporting activities of such Investor Member or any of its Affiliates, in each case to the extent such Confidential Information is reasonably relevant to such Person’s current or prospective investment, financing or similar arrangement with such Investor Member or any of its Affiliates, is the type of information customarily provided to such persons in connection therewith, and so long as such Person is subject to customary obligations of confidentiality with respect to such Confidential Information;
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(v) to any regulatory authority or rating agency to which such Member or any of its Affiliates is subject or with which it has regular dealings, as long as such authority or agency is advised of the confidential nature of such information and such Member uses reasonable best efforts to seek confidential treatment of such information to the extent available;
(vi) to an Investor Member’s Affiliates, direct and indirect equityholders and its and their respective Representatives, in each case, who, in the reasonable judgment of such Investor Member, need to know such Confidential Information (provided that such Investor Member shall remain liable for any breach of this Section 10.01 by any such Person);
(vii) as part of an Investor Member’s bona fide reporting or review procedures, provided that such disclosures are made in accordance with and subject to such Investor Member’s internal confidentiality policies and procedures;
(viii) to the extent required by the rules and regulations of the Commission or stock exchange rules; or
(ix) if the prior written consent of the majority of the Board, including the consent of at least one Hertz Designated Director and the Lead Investor Member, shall have been obtained.
Nothing contained herein shall prevent the use (subject, to the extent possible, to a protective order) of Confidential Information in connection with the assertion or defense of any claim by or against the Company or any Member.
(b) “Confidential Information” means any information concerning the Company or any Persons that are or become its Subsidiaries or the financial condition, business, operations or prospects of the Company or any such Subsidiaries in the possession of or furnished to any Member (including by virtue of its present or former right to designate a Director); provided, that the term “Confidential Information” does not include information that (i) is or becomes generally available to the public other than as a result of a disclosure by a Member or its directors, officers, employees, shareholders, members, partners, agents, counsel, investment advisers or other representatives, including any managed account, investment fund or other vehicle or Person who is a current or prospective passive investor in any investment funds, vehicles or accounts that are managed, sponsored or advised by the Investor Members or any of their Affiliates, (all such persons being collectively referred to as “Representatives”) in violation of this Agreement or any of the other Ancillary Agreements, (ii) was available to such Member on a non-confidential basis prior to its disclosure to such Member or its Representatives by the Company or (iii) becomes available to such Member on a non-confidential basis from a source other than the Company Group, another Member, its Affiliates or its Representatives after the disclosure of such information to such Member or its Representatives by the Company, which source is (at the time of receipt of the relevant information) not, to such Member’s actual knowledge, bound by a confidentiality agreement with (or other confidentiality obligation to) the Company or another Person; provided, that, notwithstanding anything to the contrary contained herein,
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(c) Each Member acknowledges that it may have access to and become acquainted with proprietary information and confidential information belonging or relating to another Member and its Affiliates, in any format whatsoever (including oral, written, electronic, or any other form or medium) (collectively, “Member Information”). The term “Member Information” shall also include (i) confidential information belonging or relating to one or more Company Entities concerning their respective business plans, financial statements, strategic plans, other similar business documents or other competitively sensitive information, (ii) the existence or contents of this Agreement and the documents delivered hereunder, and (iii) any terms, conditions, circumstances, facts or other matters relating to this Agreement, the documents delivered hereunder or any of the transactions contemplated hereby (with respect to clause (i), (ii) and (iii), the “Investor Company Information”). Without limiting the applicability of any other contract to which a Member is subject, such Member shall not (and shall cause its Representatives not to), directly or indirectly, use (other than in connection with the conduct of the Company’s business, monitoring its investment in the Company or for the purposes set forth for in, or in connection with the performance of, this Agreement) or disclose at any time, including use for personal, commercial, or proprietary advantage or profit, either during its association with the Company or thereafter, any Member Information which such Member is or becomes aware; provided that such use restriction shall not apply to any Investor Company Information. Each Member shall (and shall cause its Representatives to) take all appropriate steps to safeguard and keep strictly confidential at all times all Member Information in its possession and to protect such Member Information against disclosure, misuse, espionage, loss, and theft. Each Member shall (and shall cause its Representatives to) use the same degree of care (but no less than a reasonable degree of care) to protect the Member Information and prevent the unauthorized use, dissemination, or publication of the Member Information as such Member uses to protect its own confidential information of a like nature.
(d) No Member shall, nor shall any Company Entity, (i) disclose any Investor Member’s identity as an investor in the Company in any press release or other public announcement or in any document or material filed with any Governmental Authority or (ii) make any press release or other public announcement containing Investor Company Information, in each case, without the prior written consent of such Investor Member (in its sole discretion) unless such disclosure is otherwise required by Law or the rules or regulations of any recognized stock exchange, in which case (except with respect to disclosure to a Governmental Authority that is required in connection with the filing of federal, state or local tax returns) prior to making such disclosure, such Member (or such Company Entity) shall, to the extent permitted in light of such requirements, provide such Investor Member with reasonable advance notice of the announcement, filing or notification and a copy of same, and shall consider in good faith comments from such Investor Member regarding its form, contents and timing and allow such Investor Member to seek confidential treatment therefor. Notwithstanding the foregoing, the Hertz Members may disclose any information otherwise restricted by this Section 10.01(d) to the extent that the applicable Investor Member has previously consented in writing to the disclosure of such information in a manner substantially consistent with the disclosure to which such Investor Member previously consented or if such information has already been publicly disclosed or made publicly available or if such information is otherwise publicly known.
(e) Each Member acknowledges that it is aware, and that it will advise its Representatives who receive Confidential Information, that (a) the Confidential Information may
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include material non-public information concerning THC and its securities (“MNPI”), and (b) the United States federal securities laws and other applicable securities laws, including Section 10(b) of the Exchange Act, and Rule 10b-5 under the Exchange Act, restrict any person who has MNPI about an issuer. Under those laws, such a person may not purchase or sell securities of that issuer, or derivatives or other instruments relating to those securities, while in possession of the MNPI.
Section 10.02 Structuring of an IPO.
(a) Any IPO shall be structured as either (i) a publicly traded partnership that meets the gross income requirements of Section 7704(c)(2) of the Code or (ii) an “Up-C” transaction (an “UP-C IPO”) as determined by the Hertz Members. Notwithstanding the foregoing, the Hertz Members’ and the Lead Investor Members’ prior written consent (which shall not be unreasonably withheld, conditioned or delayed) shall be required in connection with any other IPO structure not contemplated by the prior sentence. In the case of an Up-C IPO, prior to an Up-C IPO, the Company shall form a corporation that will control the Company (an “UP-C IPO Entity”), the shares of which UP-C IPO Entity shall be offered in the IPO and for which shares the Membership Interests of the Company shall be exchangeable from time to time at the election of any Member holding such Membership Interests with such exchange ratios fixed at the consummation of the UP-C IPO as though the Company effected a dissolution at such time and shares of the UP-C IPO Entity were distributed pursuant to Section 12.05 pursuant to the Fair Market Value as reasonably determined by the Board in connection with such UP-C IPO. If the Hertz Members and the Lead Investor Members consent to an IPO other than an Up-C IPO or IPO described in Section 12.05(a), the Company may, as reasonably determined by the Board, (i) form a corporation into which each Member will contribute such Member’s Membership Interests (a “HoldCo IPO Entity”), or (ii) engage in any other restructuring transaction (including the conversion of the Company into a corporation) in each case, for purposes of effecting the IPO and as described below. The Members shall use commercially reasonable efforts to cooperate with the Company in implementing any restructuring of the Company undertaken in accordance with the terms of this Section 10.02.
(b) In the case of an IPO of a HoldCo IPO Entity, as a result of the contributions of the Membership Interests to the HoldCo IPO Entity, each Member and its Affiliates that are Members (in the aggregate) will receive shares of the HoldCo IPO Entity (the “HoldCo Stock”) as though the Company effected a dissolution upon the consummation of such IPO of a HoldCo IPO Entity and such HoldCo Stock were distributed pursuant to Section 12.05(a) pursuant to the Fair Market Value as reasonably determined by the Board in connection with such IPO of a HoldCo IPO Entity, as applicable. After the formation of the HoldCo IPO Entity and the contributions referred to above, (i) except where the context clearly requires otherwise, the term, “Company”, shall refer to the HoldCo IPO Entity, (ii) the terms “Membership Interests” and “Members” and similar terms that are applicable to limited liability companies and used in this Agreement shall refer to the HoldCo Stock, the HoldCo IPO Entity shareholders and similarly corresponding terms applicable to the corporate form and (iii) the parties agree to enter into, and to cause the HoldCo IPO Entity to enter into, an agreement setting forth, to the extent applicable to a corporation and permitted by applicable Law, shareholder rights and obligations substantially equivalent to those applicable to Members set forth in this Agreement. In addition, the Members shall be entitled to the registration rights with respect to Registrable Securities as set forth in Section 10.04. For the avoidance of doubt, the registration rights provided to the Members and
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their Affiliates pursuant to this Section 10.02(b) shall be with respect to the HoldCo Stock constituting Registrable Securities received in exchange for the contributions by the Members described above. The parties shall cause such contributions to qualify as a transaction described in Section 351 of the Code and shall not take any action that would be reasonably likely to prevent such contributions from qualifying as such a transaction.
(c) In the case of an UP-C IPO:
(i) the Board shall admit the UP-C IPO Entity as the managing Member of the Company, in which case, the UP-C IPO Entity shall replace the Board as the manager of the Company. Thereafter, the business and affairs of the UP-C IPO Entity and the Company shall be conducted as nearly as practicable in such manner that: (w) the UP-C IPO Entity shall have no business activities other than the management of and ownership of interests in the Company and any other entity hereafter acquired by the Company after obtaining any requisite Board and Member approvals provided herein; (x) all of the costs and expenses of the UP-C IPO Entity shall be borne or reimbursed by the Company and any funds received by the UP-C IPO Entity shall be contributed (in the case of a sale of equity or other receipt of non-borrowed funds) or loaned (in the case of incurrence of Debt) to the Company; (y) the net proceeds from any sale of shares of the UP-C IPO Entity (“UP-C Entity Stock”) shall be invested in Membership Interests of the Company and the net proceeds from the incurrence of Debt by the UP-C IPO Entity shall be invested in Debt of the Company; and (z) the UP-C IPO Entity shall otherwise have no assets or liabilities (other than temporary investments of cash pending a contribution or loan of such amounts to the UP-C IPO Entity, de minimis assets and operating payables) other than its ownership interest in the Company. In connection with the formation of the UP-C IPO Entity and its admission to the Company as managing Member, the Members shall be issued, for nominal consideration, shares of UP-C Entity Stock that carry voting rights that are equivalent to the voting rights such Member would have received in the event of an IPO of a HoldCo IPO Entity. Such shares shall carry no economic rights and shall be surrendered upon an exchange of Membership Interests for UP-C Entity Stock. In addition, the Members shall be entitled to the registration rights with respect to Registrable Securities as set forth in Section 10.04. For the avoidance of doubt, the registration rights provided to the Members and their Affiliates pursuant to this Section 10.01(b) shall be with respect to the UP-C Entity Stock constituting Registrable Securities received in exchange for the contributions by the Members described above.
(ii) The Hertz Members and the Investor Members shall be entitled to periodic payments from the UP-C IPO Entity (and any successor entity thereto) equal to 85% or such other customary percentage (provided that the same percentage shall apply with respect to the Hertz Members and the Investor Members) of the cash tax benefit, if any, to the UP-C IPO Entity (and any consolidated, combined or unitary group of which the UP-C IPO Entity is, or thereafter becomes, a member) arising from any step-up in tax basis resulting from each exchange by the Hertz Members or the Investor Members, as applicable, of Membership Interests for shares of UP-C Entity Stock (or shares of stock of any
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successor entity). Prior to, or concurrently with, the UP-C IPO, the Hertz Members, the Investor Members and the UP-C IPO Entity shall enter into a tax receivable agreement with customary terms to govern the calculation and making of such payments, it being understood that such tax savings shall be determined using a “with and without” methodology. For the avoidance of doubt, each such party will be entitled to payments related to the deductions provided by that party on their own specific exchange with the Up-C IPO Entity. Should any party provide a step-up that is non-deductible to the Up-C IPO Entity, this will not affect the entitlement to payments of the other parties.
(d) In the case of an IPO following any other restructuring transaction, the provisions of Sections 10.02(b) and Section 10.02(c), as applicable, shall apply mutatis mutandis.
(e) Notwithstanding anything to the contrary in this Section 10.02(e), in all cases with respect to an IPO (including any IPO described in Section 10.02(b), Section 10.02(c) or Section 10.02(d)), the Board shall use its reasonable best efforts to implement a structure for such IPO and any related restructuring (including the conversion, assumption or substitution of any outstanding Compensatory Options) that is as tax efficient as is reasonably practicable for the Company and the Members (or their direct or indirect owners), including a structure that permits a Member that holds its Units through a Blocker Corporation to merge or contribute such entity into or with the HoldCo IPO Entity, the UP-C IPO Entity or any equivalent entity (or any subsidiary thereof) in exchange for Equity Securities therein as long as such merger or contribution would not reasonably be expected to materially increase the tax liabilities of the Company, the HoldCo IPO Entity, the UP-C IPO Entity of any other Member.
Section 10.03 Actions in Connection with an IPO. Each Member shall do, execute and perform all such acts, deeds and documents as may be reasonably requested by the Board to facilitate an IPO. For the avoidance of doubt, all actions in connection with a consummation of an IPO shall not be subject to Section 5.02 or any other provision herein that terminates upon the consummation of an IPO.
Section 10.04 Registration Rights.
(a) In connection with an IPO, the Company shall enter into (or cause the HoldCo IPO Entity or the UP-C IPO Entity, as applicable (each of the Company, the HoldCo IPO Entity and the UP-C IPO Entity, or other form of business organization upon an IPO, a “Successor Entity”), to enter into) a registration rights agreement with respect to all Registrable Securities then held by the Members, which shall provide the Hertz Members and the Investor Members with the rights set forth in this Section 10.04, in each case beginning on the later of (i) the expiration of any underwriter lock up entered into by the Successor Entity in connection with the IPO and (ii) six months immediately after an IPO. The provisions set forth in this Section 10.04 summarize the rights and obligations to be contained within the registration rights agreement contemplated by this Section 10.04(a) and does not convey or establish any other rights of obligations.
(b) Demand Request. If the Successor Entity shall be requested in writing, which request shall specify the Registrable Securities to be sold and the intended method of disposition thereof (a “Demand Request”), by any Hertz Member or any Investor Member (each,
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a “Demanding Owner”) to effect a registration under the Securities Act of Registrable Securities held by such Demanding Owner (each, a “Required Registration”), then the Successor Entity shall deliver within five Business Days a written notice (a “Demand Notice”) to each other Member (other than the Demanding Owner) stating that the Successor Entity intends to comply with a Demand Request and informing each such other Member of its right to include Registrable Securities in such Required Registration. Within ten Business Days after receipt of a Demand Notice, each other Member shall have the right to request in writing that the Successor Entity include all or a specific portion of the Registrable Securities held by such Member in such Required Registration, and the Successor Entity shall include such Registrable Securities in such Required Registration, subject to Section 10.04(d). The Successor Entity shall file a registration statement on the appropriate form as promptly as practicable (but no later than 60 days after the date the Demand Request is delivered in the case of a Form S-1 and 30 days after the date the Demand Request is delivered in the case of a Form S-3) and use its reasonable best efforts to cause such registration statement to be declared effective by the Commission at the earliest possible date permitted under the rules and regulations of the Commission. Each of the Hertz Members, the Lead Investor Members and Investor Members representing 50% or more of the outstanding Registrable Securities held by Investor Members shall be entitled to three such Required Registrations per calendar year in accordance with Section 10.04(d).
(c) Underwritten Offering in Connection with a Demand Request. If a Demanding Owner intends to distribute the Registrable Securities in a Required Registration by means of an underwriting, it shall so advise the Successor Entity as a part of its Demand Request. In such event, the underwriters of such Required Registration shall be one or more underwriting firms of nationally recognized standing selected by such Demanding Owner (or, if there is more than one Demanding Owner with respect to such Required Registration, selected jointly by such Demanding Owners). The right of a Member to include securities in such Required Registration shall be conditioned upon such Member entering into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected pursuant hereto.
(d) Priority on Underwritten Offerings Pursuant to a Demand Request. The Successor Entity shall not include any securities other than Registrable Securities in a Required Registration, except with the written consent of the applicable Demanding Owner(s). In the case of any Required Registration that is an underwritten offering, if the managing underwriter for the Required Registration shall advise the Successor Entity in writing (a copy of which the Successor Entity shall provide to each Member (other than Management Members) requesting to include Registrable Securities therein) that, in such underwriter’s opinion, the number of securities requested to be included in such Required Registration would adversely affect the Required Registration and sale (including pricing) of such Registrable Securities (such writing to state the basis of such opinion and the approximate number of Registrable Securities that may be included in such Required Registration without such effect), the Successor Entity shall include in such Required Registration the number of Registrable Securities that the Successor Entity is so advised can be sold in such Required Registration, in the following amounts and order of priority: (i) first, all Registrable Securities requested to be sold by the Demanding Owner(s) pursuant to this Section 10.04 pro rata among such Demanding Owner(s) on the basis of the number of Registrable Securities requested to be registered by such Demanding Owner(s), (ii), second, all Registrable Securities requested to be sold by all Members pursuant to this Section 10.04 pro rata among such Members on the basis of the number of Registrable Securities requested to be registered by such
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Members;; and (iii) third, securities proposed to be sold by the Successor Entity for its own account.
(e) Piggyback Offerings. If at any time, in order to facilitate the offer and sale of Equity Securities or securities convertible into Equity Securities for itself to an underwriter on a firm commitment basis, the Successor Entity proposes to file (i) a prospectus supplement to an effective Shelf Registration Statement (defined below), or (ii) a registration statement on Form S-3 or a similar short-form registration statement, or if not available, on Form S-1 or a similar long-form registration statement (other than pursuant to an Excluded Registration) (a “Piggyback Offering”), the Successor Entity will, as soon as possible and no later than five (5) Business Days prior to the launch of the offering, provide written notice (the “Piggyback Notice”) to each Member holding Registrable Securities as of 4:30pm ET the date prior to the date of the Piggyback Notice of its intention to effect such Piggyback Offering and, subject to the terms of Section 10.04(h), will include in such Piggyback Offering all Registrable Securities with respect to which the Successor Entity has received written requests (which written request must include the maximum number of Registrable Securities such Member desires to sell in the Piggyback Offering as well as selling shareholder information required to be included in the registration statement, prospectus or prospectus supplement) for inclusion therein within three (3) Business Days after the date of the Piggyback Notice, unless another date is specified in such Piggyback Notice. Any Member participating in such Piggyback Offering may withdraw its request for inclusion at any time at least two (2) Business Days prior to the filing of the registration statement, or if none, the filing of the prospectus supplement.
(f) Right to Terminate Registration. The Successor Entity will have the right to terminate or withdraw any registration or offering initiated by it under Section 10.04(e), whether or not any Member has elected to include securities in such registration; provided, that Members may continue the registration as a Demand Request pursuant to the terms of Section 10.04(b) and/or an Underwritten Offering pursuant to the terms of Section 10.04(c).
(g) Selection of Underwriters and Legal Counsel for Piggyback Offerings. If any Piggyback Offering is initiated by the Successor Entity, the Successor Entity shall select the legal counsel(s) for the Successor Entity, the investment banker(s) and manager(s) for the offering. Members holding Registrable Securities included in such Piggyback Offering shall select the legal counsel(s) to the selling shareholders.
(h) Priority on Piggyback Offerings. If a Piggyback Offering is initiated by the Successor Entity, and the managing underwriters advise the Successor Entity in writing that in their opinion the number of securities requested to be included in such registration or offering exceeds the number which can be sold in such offering without adversely affecting the marketability, proposed offering price, timing or method of distribution of the offering, the Successor Entity will include in such registration (i) first, the securities the Successor Entity proposes to sell; (ii) second, the Registrable Securities requested to be included in such registration by any Members which, in the opinion of such underwriters, can be sold, without any such adverse effect, pro rata among such Members on the basis of the number of Registrable Securities held by each such Members; and (iii) third, other securities requested to be included in such registration which, in the opinion of the underwriters, can be sold without any such adverse effect.
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(i) Form S-3. The Successor Entity shall use its reasonable best efforts to qualify for registration on Form S-3 for secondary sales and shall consummate any Required Registration on Form S-3 after such qualification.
(j) Shelf Registration. Subject to Section 10.04(l), if the Successor Entity shall be requested in writing (a “Shelf Request”) by any Hertz Member or any Investor Member (each, a “Shelf Requesting Owner”) to make a Shelf Registration, to the extent such Shelf Registration is available, then the Successor Entity shall deliver, within five Business Days of receipt of such Shelf Request, a written notice (a “Shelf Notice”) to each other Member (other than the Shelf Requesting Owner) stating that the Successor Entity intends to comply with a Shelf Request and informing each such other Member of its right to include Registrable Securities in such Shelf Registration. Any Shelf Request shall be subject to the requirements applicable to a Demand Request set forth in Section10.04(b) and shall count as a Demand Request by the applicable Shelf Requesting Owner. Within five Business Days after receipt of a Shelf Notice, each other Hertz Member or Investor Member shall have the right to request in writing that the Successor Entity include all or a specific portion of the Registrable Securities held by such Member in such Shelf Registration, and the Successor Entity shall include such Registrable Securities in such Shelf Registration. Subject to the Successor Entity’s eligibility to use Form S-3 for secondary sales, the Successor Entity shall (i) file as promptly as practicable (but no later than 30 days after the date the Shelf Request is delivered) and use reasonable best efforts to cause to be declared effective by the Commission at the earliest possible date permitted under the rules and regulations of the Commission, a Form S-3, or (ii) designate an existing Form S-3 filed with the Commission, in each case providing for offers and sales to be made on a delayed or continuous basis pursuant to Rule 415 under the Securities Act with respect to the Registrable Securities held by the Shelf Requesting Owner and any other Member who elects to participate therein as provided in this Section 10.04(j) (the “Shelf Registration” and “Shelf Registration Statement”, as applicable). This right shall constitute part of the customary S-3 registration rights, including procedures with respect to “shelf takedowns”, referenced in Section 10.04(a).
(k) Subject to Section 10.04(l), the Successor Entity shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective until the date on which all Registrable Securities covered by the Shelf Registration Statement have been sold thereunder in accordance with the plan and method of distribution disclosed in the prospectus included in the Shelf Registration Statement, or otherwise (the “Shelf Registration Effectiveness Period”).
(l) Notwithstanding anything to the contrary in this Agreement, the Successor Entity may, from time to time, by providing written notice to the Members whose Registrable Securities are covered by a Shelf Registration Statement, require such Members to suspend sales of Registrable Securities under such Shelf Registration Statement (a “Suspension Period”) if, in the judgment of the Board, upon the advice of counsel, the Successor Entity determines that it is required to disclose in the Shelf Registration Statement a financing, acquisition, corporate reorganization or other similar corporate transaction or other material event or circumstance affecting the Successor Entity or its securities. Immediately upon receipt of such notice, the Members whose Registrable Securities are covered by the Shelf Registration Statement shall suspend sales of Registrable Securities under the Shelf Registration Statement until the requisite changes to the prospectus have been made as required below and the Suspension Period shall have terminated. Any Suspension Period shall terminate at such time as the public disclosure of such
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information is made, and the Successor Entity shall make such public disclosure as promptly as possible. After the expiration of any Suspension Period and without any further request from a Member, the Successor Entity shall as promptly as practicable prepare a post-effective amendment or supplement to the Shelf Registration Statement or the related prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus shall not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(m) At any time, and from time to time during the Shelf Registration Effectiveness Period (except during a Suspension Period), any Hertz Member or any Investor Member whose Registrable Securities are covered by the Shelf Registration Statement (a “Takedown Owner”) may notify the Successor Entity in writing of its intent to sell Registrable Securities covered by the Shelf Registration Statement (in whole or in part) (a “Takedown Request”). The Takedown Owner shall have the right to effect a Takedown Request in the form of an underwritten offering (a “Shelf Underwritten Offering”). A Takedown Owner shall be entitled to request up to three Shelf Underwritten Offerings in each calendar year. Such notice shall specify the aggregate number of Registrable Securities requested to be registered in such Takedown Request or Shelf Underwritten Offering, as applicable. If such Takedown Request is a Shelf Underwritten Offering, then upon receipt by the Successor Entity of such notice, the Successor Entity shall deliver, within five Business Days of receipt of such notice, a written notice (a “Takedown Notice”) to each other Member (other than the Takedown Owner) whose Registrable Securities have been included on such Shelf Registration Statement informing such other Member of its right to include Registrable Securities in such Shelf Underwritten Offering. Within five Business Days after receipt of a Takedown Notice, each such other Member shall have the right to request in writing that the Successor Entity include all or a specific portion of the Registrable Securities held by such Member in such Shelf Underwritten Offering and the Successor Entity shall include such Registrable Securities in such Shelf Underwritten Offering. The underwriters of such Shelf Underwritten Offering shall be one or more underwriting firms of nationally recognized standing selected by the Takedown Owner. The right of each other Member to include securities in such Shelf Underwritten Offering shall be subject to Section 10.04(h) and shall be conditioned upon such Member entering into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected pursuant hereto. Notwithstanding the foregoing, nothing in this Section 10.04(m) shall prevent any Member from otherwise selling Registrable Securities, subject only to any Suspension Period, any lock-up agreement or other contractual obligations.
(n) Registration Procedures. The Successor Entity shall use its reasonable best efforts to effect each Required Registration pursuant to Section 10.04(b), any Piggyback Offering pursuant to Section 10.04(e) any Shelf Registration or any Shelf Underwritten Offering pursuant to Section 10.04(j) or Section 10.04(m), and to cooperate with the sale of such Registrable Securities in accordance with the intended method of disposition thereof as quickly as possible, and the Successor Entity shall as expeditiously as possible: (i) prepare and file with the Commission the registration statement and use its reasonable best efforts to cause the registration statement to become effective; (ii) as directed by the applicable Demanding Owner, Shelf Requesting Owner or Takedown Owner, prepare and file with the Commission such pre- and post-
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effective amendments to any registration statement and any prospectus or supplement thereto used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such registration statement until the earlier of (A) the time at which all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller and (B) in the case of a Shelf Registration, the expiration of the Shelf Registration Effectiveness Period, and cause the prospectus to be supplemented by any required prospectus supplement or free writing prospectus, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; (iii) furnish, upon request, to the applicable Demanding Owner, Shelf Requesting Owner or Takedown Owner and the underwriter or underwriters, if any, without charge, at least one signed copy of the registration statement and any post-effective amendment thereto, and such number of conformed copies thereof and such number of copies of the prospectus, any amendments or supplements thereto and any documents incorporated by reference therein, as may be reasonably requested in order to facilitate the disposition of the Registrable Securities being sold; (iv) promptly notify the applicable Demanding Owner, Shelf Requesting Owner or Takedown Owner and the underwriter or underwriters, if any, of the occurrence of the events customarily requiring notice under registration rights agreements of this type, including the issuance of any stop order, the effectiveness of the registration statement, any Commission request for amendments or supplements, and any suspension of qualification under state securities or “blue sky” Laws; (v) if requested by the managing underwriter or underwriters or the applicable Demanding Owner, Shelf Requesting Owner or Takedown Owner, promptly incorporate in a prospectus supplement or post-effective amendment such information relating to such underwriting as is reasonably requested to be included therein, and make all required filings as soon as practicable thereafter; (vi) use its reasonable best efforts to register or qualify, and cooperate in connection with the registration or qualification of, the Registrable Securities for offer and sale under state securities or “blue sky” Laws of such jurisdictions as reasonably requested, and keep such registrations or qualifications effective during the period such registration statement is required to be kept effective; (vii) cooperate to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under such registration; (viii) use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such governmental agencies or authorities as may be necessary to enable the disposition of such securities; (ix) use its reasonable best efforts to obtain customary “cold comfort” and “bring-down comfort” letters from the Successor Entity’s independent registered public accounting firm and, to the extent necessary to consummate an underwritten offering of Registrable Securities, management comfort certificates from the Successor Entity’s Chief Financial Officer or equivalent; (x) use its reasonable best efforts to obtain customary legal opinions addressed to the participating Members and the underwriters; (xi) promptly notify each participating Member of the discovery of any untrue statement or omission in the prospectus and promptly prepare and file a supplement or amendment correcting it; (xii) otherwise comply with all applicable rules and regulations of the Commission; (xiii) provide and maintain a transfer agent and registrar for the Registrable Securities; (xiv) use its reasonable best efforts to cause the Registrable Securities to be listed on each securities exchange on which the Successor Entity’s securities are then listed; (xv) enter into such agreements (including underwriting agreements in customary form) and take such other actions as reasonably requested in order to expedite or facilitate the disposition of such Registrable Securities, including customary holdback and lock-up provisions; (xvi) cooperate with the Members covered by the registration statement and the
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managing underwriter or agent, if any, to facilitate the timely removal of any restrictive legends associated with any account at which such securities are held, and enable such securities to be in such denominations and registered in such names as the managing underwriter, or agent, if any, or such Members may request; (xvii) have appropriate officers of the Successor Entity, and cause representatives of the Successor Entity’s independent registered public accountants, to participate in any due diligence discussions reasonably requested by any managing underwriter and (xviii) cause its employees and personnel to use reasonable best efforts to support the marketing of the Registrable Securities, including through customary roadshows, to the extent consistent with the Successor Entity’s business needs. The Successor Entity may require each Member whose Registrable Securities are included in such registration to furnish the Successor Entity with such information regarding such Member and its Registrable Securities as the Successor Entity may reasonably request in writing and as is required by applicable Law.
(o) Preparation; Reasonable Investigation. In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act, the Successor Entity shall give, upon reasonable notice and during normal business hours, each Demanding Owner, Shelf Requesting Owner or Takedown Owner, as applicable, the underwriter, if any, and their respective counsel and accountants access to its books and records and an opportunity to discuss the business of the Successor Entity with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such Member’s or such underwriters’ counsel, to conduct a reasonable investigation within the meaning of Section 11(b)(3) of the Securities Act.
(p) Rights of Requesting Holders. Each Hertz Member and each Investor Member shall have the right to receive, within five Business Days of receipt by the Successor Entity of such request, copies of the information, notices and other documents described in this Section 10.04.
(q) Registration Expenses. The Successor Entity will pay all Registration Expenses in connection with each registration of Registrable Securities pursuant to this Section 10.04, including any such registration not effected by the Successor Entity.
(r) Indemnification; Contribution.
(i) The Successor Entity agrees to indemnify and hold harmless each Member holding Registrable Securities included in a registration pursuant to this Section 10.04, the Affiliates, directors, officers, employees, members, managers and agents of each such Member and each Person who controls any such Member within the meaning of either the Securities Act or the Exchange Act, to the fullest extent permitted by applicable Law, from and against any and all losses, claims, damages, liabilities and expenses to which they or any of them may become subject insofar as such losses, claims, damages, liabilities and expenses (or actions in respect thereof) arise out of or are based upon any violation of the Securities Act, the Exchange Act or state securities Laws, or upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement as originally filed or in any amendment thereof, or the disclosure package, or any preliminary, final or summary prospectus or free writing prospectus included in any such registration statement, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact
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required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, that the Successor Entity shall not be liable in any case to the extent that any such loss, claim, damage, liability or expense arises (i) out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Successor Entity by or on behalf of such Member specifically for inclusion therein (which shall be limited to the Member’s name, address and equity holdings), (ii) out of sales of Registrable Securities made during a Suspension Period after notice is given pursuant to Section 10.04(h), or (iii) willful misconduct, intentional breach or fraud. This indemnity agreement shall be in addition to any liability that the Successor Entity may otherwise have.
(ii) Each Member holding Registrable Securities included in a registration pursuant to this Section 10.04 severally (and not jointly) agrees to indemnify and hold harmless the Successor Entity and each of its Affiliates, directors, officers, employees, members, managers and agents and each Person who controls the Successor Entity within the meaning of either the Securities Act or the Exchange Act, to the fullest extent permitted by applicable Law, from and against any and all losses, claims, damages or liabilities to which they or any of them may become subject insofar as such losses, claims, damages or liabilities arise out of or are based upon any violation of the Securities Act, the Exchange Act or state securities Laws, upon any untrue statement or alleged untrue statement of a material fact contained in a registration statement as originally filed or in any amendment thereof, or in the disclosure package or any free writing prospectus, preliminary, final or summary prospectus included in any such registration statement, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, to the extent, but only to the extent, that any such untrue statement or alleged untrue statement or omission or alleged omission is contained in any written information relating to such Member furnished to the Successor Entity by or on behalf of such Member specifically for inclusion therein; provided, that the total amount to be indemnified by such Member pursuant to this Section 10.04(r) shall be limited to the net proceeds (after deducting underwriters’ discounts and commissions) received by such Member in the offering to which such registration statement or prospectus relates.
(iii) Promptly after receipt by an indemnified party under this Section 10.04(n) of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 10.04(r), notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party shall not relieve it from liability under clause (i) or (ii) above unless and to the extent such failure results in material prejudice to the indemnifying party. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, jointly with any other indemnifying party similarly notified, assume the defense thereof with counsel reasonably satisfactory to the indemnified party, subject to the indemnified party’s right to employ separate counsel at the indemnifying party’s expense under customary conflict, multiple-defendant and untimely-defense circumstances. No indemnifying party shall consent to entry of any judgment or enter into any settlement without the consent of each indemnified party unless such settlement includes an
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unconditional release of such indemnified party and does not include any admission of fault by or on behalf of such indemnified party.
(iv) If the indemnity provided above is unavailable or insufficient to hold harmless an indemnified party, each applicable indemnifying party agrees to contribute to the aggregate losses, claims, damages and liabilities to which such indemnified party may be subject in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations, subject to the same net-proceeds cap on each Member’s contribution as set forth in (ii) above and the same carve-out for fraudulent misrepresentation. The provisions of this Section 10.04(n) shall survive the Transfer of Registrable Securities.
(s) Holdback Agreements; Registration Rights to Others. In the event and to the extent requested by the managing underwriter of an underwritten offering, each Member agrees that it shall enter into a customary lock-up agreement with such managing underwriter pursuant to which it shall agree not to sell, make any short sale of, grant any option for the purchase of, or otherwise dispose of any Equity Securities of the Successor Entity, other than those Registrable Securities included in such registration pursuant to the terms hereof, for the 30 days prior to (i) the effectiveness of a registration statement (other than a Shelf Registration Statement) pursuant to which such Public Offering shall be made or (ii) the pricing of an underwritten offering, and ending on the earlier to occur of (x) in the case of the IPO, the date that is 180 days after the effectiveness of the registration statement relating to the IPO (or such shorter period as is sufficient and appropriate, in the opinion of the managing underwriter, to complete the sale and distribution of the securities included in such underwritten offering) or (y) in the case of any other underwritten offering, the date that is 90 days after the pricing of such underwritten offering (or such shorter period as is sufficient and appropriate, in the opinion of the managing underwriter, to complete such sale and distribution).
(t) Availability of Information. Following the IPO, the Successor Entity shall comply with the reporting requirements of Sections 13 and 15(d) of the Exchange Act and shall comply with all other public information reporting requirements of the Commission as from time to time in effect, and shall cooperate with holders of Registrable Securities so as to permit disposition of the Registrable Securities pursuant to an exemption from the Securities Act (including the current public information requirements of Rule 144(c) and Rule 144A under the Securities Act). The Successor Entity shall also cooperate with each holder of any Registrable Securities in supplying such information as may be necessary for such holder to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of an exemption from the Securities Act for the sale of any Registrable Securities.
(u) Other Registration Rights. The Company represents and warrants that it is not a party to, or otherwise subject to, any other agreement granting registration rights to any Person with respect to any Units or Equity Securities or securities convertible into Units or Equity Securities. Except as provided in this Agreement, the Successor Entity shall not grant other registration rights to any Person without the prior written consent of the Hertz Members and the Lead Investors.
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Section 10.05 Budget. The initial annual budget (covering the period from the Closing Date through and until December 31, 2026 (as it may be modified, amended or supplemented by the Board in accordance with Section 5.02, the “Initial Approved Budget”)) is the annual budget in effect as of the Closing Date, attached hereto as Schedule 10.05. No later than by December 15 of each fiscal year, the Company shall prepare and present to the Board an annual budget and business plan (an “Annual Budget and Business Plan,” and the Initial Approved Budget or an Annual Budget and Business Plan approved by the Board, an “Approved Budget and Business Plan”) for the fiscal year immediately following such fiscal year. The Annual Budget and Business Plan shall contain, among other things, (a) projected financial statements (projected profit and loss, balance sheet, and changes in financial position) for such fiscal year, (b) projected expenditures (expense and capital) for such fiscal year, (c) Capital Contributions for such fiscal year, if any, (d) projected distributions for such fiscal year, (e) a business plan for such fiscal year and (f) such other items as are set forth in the Initial Approved Budget. If, at such time that the Hertz Members collectively hold 50% or more of the then-outstanding Capital Units, the Board fails to approve an Annual Budget and Business Plan due to a deadlock, such Annual Budget and Business Plan shall be submitted to the Members for approval within 30 days of such deadlock, and shall be deemed as an Approved Budget and Business Plan upon the approval of Members holding a majority of the then-outstanding Common Units, with the Voting Common Units and Class C Common Units voting together as a single class. To the extent there is not an Approved Budget and Business Plan for any fiscal year prior to the first day of the fiscal year to be covered by such budget, the Company shall continue to operate under the most recently Approved Budget and Business Plan with increases in each line item of 10% (excluding, for the avoidance of doubt, any one-time or non-recurring line items solely approved with respect to the prior fiscal year, which shall not be rolled forward) until a new Annual Budget and Business Plan is approved; provided, that the parties hereto acknowledge and agree that the Approved Budgets and Business Plans are only projections, and the conduct of the business of the Company may deviate from such Approved Budgets and Business Plans if deemed prudent to the extent approved by the Board, including, if applicable, in accordance with Section 5.02.
Section 10.06 No Promotion. No Member (other than the Hertz Members) will, without the prior written consent of the Hertz Members, (a) use in advertising, publicity, or otherwise the name of the Hertz Members, the Hertz Members’ parent or any of their respective Affiliates, or any employee of any such Affiliates, nor any trade name, trademark, trade device, service mark, symbol, logo or any abbreviation, contraction or simulation thereof owned by a Hertz Member, the Hertz Members’ parent or any of their respective Affiliates, or (b) represent, directly or indirectly, that any product or any service provided by the Company has been approved or endorsed by the Hertz Members, the Hertz Members’ parent or any of their respective Affiliates. Notwithstanding the foregoing, each Investor Member and its Affiliates may, without the prior written consent of the Hertz Members, use the name of the Hertz Members, the Hertz Members’ parent or any of their respective Affiliates, and refer to such Investor Member’s investment in the Company, in each case (a) in communications with such Investor Member’s current and prospective equityholders, investors, limited partners, lenders or finance providers (including any investment fund managed, advised, sponsored or Controlled by such Investor Member or any of its Affiliates), (b) as part of bona fide fundraising, marketing or investor reporting activities of such Investor Member or any of its Affiliates, including customary “tombstone” announcements, pitch materials and portfolio company lists, and (c) as part of such Investor Member’s bona fide reporting or review procedures, in each case so long as (x) such use is factually accurate and limited
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to the type of information customarily disclosed to such recipients for such purposes and (y) the recipients of such information are, where applicable, subject to customary obligations of confidentiality with respect to such information.
Section 10.07 [Reserved].
Section 10.08 Matters Pertaining to the Shared Collection Account and the Company Group Collections.
(a) Prepayment. On the Closing Date, a Hertz Member (or any of its Affiliates) shall pay to the Company, by wire transfer of immediately available funds to an account designated by the Company, an amount equal to $5,000,000 (as it may be increased under Section 10.08(b), the “Prepayment Amount”). The Prepayment Amount is an advance payment against Company Group Collections.
(b) Increased Prepayment. If the Direct Collection Date has not occurred on or before the date that is four (4) months after the Closing Date, (i) the Prepayment Amount shall automatically increase to $10,000,000 and (ii) within ten (10) Business Days thereafter, a Hertz Member (or any of its Affiliates) shall pay to the Company, by wire transfer of immediately available funds to an account designated by the Company, an additional $5,000,000. Thereafter, the Prepayment Amount shall automatically increase by an additional $5,000,000 at the end of each successive four-month period if the Direct Collection Date has not occurred by the end of such four-month period (i.e., increasing to $15,000,000 if the Direct Collection Date has not occurred by the date that is eight months after the Closing Date and increasing to $20,000,000 if the Direct Collection Date has not occurred by the date that is twelve months after the Closing Date). This Section 10.08(b) does not limit, modify or offset the obligations under Section 10.08(d).
(c) Monthly Net Payments. From the Closing Date until the Direct Collection Date, on or before the tenth (10th) Business Day after the end of each calendar month, a Hertz Member (or any of its Affiliates) shall pay to the Company an amount equal to the actual Company Group Collections collected by a Hertz Member or any of its Affiliates on behalf of the Company Group during that calendar month, net of the actual Company Group Payables for that calendar month (each, a “Monthly Net Payment”).
(d) Company Collection Account. Each Hertz Member and the Company shall use commercially reasonable efforts to implement, as promptly as reasonably practicable after the Closing, and with a target completion date no later than four (4) months after the Closing, the upgrades and modifications to the Company Group’s internal billing, invoicing, treasury, cash management and accounting systems needed to enable Company Group Collections to be paid directly into the Company Collection Account rather than through the Shared Collections Account, including establishing the Company Collection Account and delivering updated payment instructions to the counterparties to the Oro Contracts. Each Hertz Member shall cause its Affiliates, and the Company shall cause the other members of the Company Group, to do the same. The Hertz Members and the Company shall keep the Board reasonably informed of their progress under this Section 10.08(d). When the upgrades are complete, the Company shall deliver to the Hertz Members and the Lead Investor the written notice contemplated by the definition of “Direct
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Collection Date.” From and after the Direct Collection Date, notwithstanding anything to the contrary in this Section 10.08:
(i) no further Monthly Net Payments shall be required, except the Monthly Net Payment for the calendar month in which the Direct Collection Date occurs (covering the part of that month before the Direct Collection Date), which shall be paid and settled under Section 10.08(c); and
(ii) any Company Group Collections that a Hertz Member or any of its Affiliates later receives (including in the Shared Collections Account) shall constitute Misapplied Collections and shall be remitted directly to the Company Collection Account within ten (10) Business Days after receipt.
(e) Reconciliation. Within thirty (30) days after the Direct Collection Date, the Company shall deliver to the Hertz Members a written statement (the “Prepayment Reconciliation Statement”). The statement shall set out, in reasonable detail: (i) the outstanding Prepayment Amount; (ii) any Monthly Net Payment shortfall under Section 10.08(c), Misapplied Collections or other amount that a Hertz Member or any of its Affiliates owes but has not paid to the Company Group under this Section 10.08 (the items in this clause (ii), collectively, the “Unpaid Amounts”); and (iii) the amount by which the Prepayment Amount exceeds the Unpaid Amounts (the “Excess Prepayment Amount”). Within ten (10) Business Days after delivering the Prepayment Reconciliation Statement, the Company shall refund the Excess Prepayment Amount, if any, to the Hertz Member (or its designated Affiliate) that a Hertz Member designates in writing. The Company may keep and apply the remaining Prepayment Amount in satisfaction of the Unpaid Amounts. If the Unpaid Amounts exceed the Prepayment Amount, the Hertz Members shall (or shall cause their applicable Affiliate to) pay the difference to the Company Collection Account within ten (10) Business Days after the Prepayment Reconciliation Statement is delivered. If any Unpaid Amount is still being determined or disputed when the Prepayment Reconciliation Statement is delivered, the Company may hold back a portion of the Prepayment Amount equal to its reasonable good faith estimate of the disputed portion of the Unpaid Amount until such amount is finally determined, and shall then promptly refund any remaining excess.
(f) The parties hereto acknowledge that a portion of the funds in the Shared Collections Account will at any time be property of the Company comprising Company Group Collections and the remaining portion of the funds in the Shared Collections Account will be property of one or more Hertz Members or their Affiliates (other than the Company Group), comprising Hertz Collections, and such portions will be identified as such and properly allocated in accordance with the terms hereof, and pending any such identification, allocation and reconciliation payments as provided herein, any Hertz Member or any of its Affiliates shall hold amounts constituting Company Group Collections in trust for the Company Group.
(g) Each Hertz Member and its Affiliates hereby acknowledge and agree that Company Group Collections are in no way property of any Hertz Member or any of its Affiliates or amounts in respect of which a Hertz Member or any of its Affiliates has any claim. Each Hertz Member and its Affiliates further agree that it shall not take any action to cause any Company Group Collections to be initially deposited into any account other than the Shared Collections Account.
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(h) Each Hertz Member and its Affiliates hereby acknowledge and agree that all amounts in Shared Collections Account that constitute Company Group Collections shall remain Company Group Collections and the sole and exclusive property of the Company Group irrespective of whether such amounts (i) have been commingled with other funds or (ii) have not yet been identified or allocated pursuant to this Agreement; and
(i) If a Hertz Member or any of its Affiliates acquires custody, control or possession of any Company Group Collections that have been incorrectly deposited, identified, allocated, retained or remitted, including any Company Group Collections deposited into an account other than the Shared Collections Account, or transferred from the Shared Collections Account to an incorrect recipient or account, such amounts shall constitute “Misapplied Collections.” Each Hertz Member and its Affiliates shall promptly return, or cause the prompt return of, any such Misapplied Collections to the Shared Collections Account for further application in accordance with clause (a); provided, that no party shall be obligated to remit Misapplied Collections in any manner contrary to a court order or other legal requirement. Until such time as the provisions of the immediately preceding sentence have been complied with, the party holding Misapplied Collections shall be deemed to be holding such Misapplied Collections in trust for the Company Group.
(j) Notwithstanding Section 5.02 or any other provision of this Agreement to the contrary, a majority of the Investor Member Designated Directors shall have the sole and exclusive right, power, and authority, on behalf of the Company (and without any notice to or approval from the Hertz Members, the Hertz Designated Directors or the Board), to investigate, enforce, waive, settle, compromise or release any claim arising from or relating to any actual or threatened breach of this Section 10.08 by any Hertz Member or any of its Affiliates, including the right to seek injunctive relief and specific performance. Any decision, settlement, waiver or release approved by a majority of the Investor Member Designated Directors pursuant to this Section 10.08(h) shall be final and binding upon the Company and each of the Members, and no Member, Manager or officer of the Company shall take any action to impede, interfere with or undermine any such decision.
(k) Collect Default; Remedial Financing.
(i) A “Collection Default Event” occurs if, for two consecutive months, or twice over a consecutive six-month period, a Hertz Member or any of its Affiliates fails to pay the Prepayment Amount (including any increase thereto under Section 10.08(b)) or any Monthly Net Payment, in each case in full when due, and such failure has not been cured in full. For the avoidance of doubt, a Collection Default Event shall not exist if the applicable payment failure has been cured in full.
(ii) If, while a Collection Default Event is continuing, a majority of the Investor Member Designated Directors reasonably determine in good faith that the Company Group requires additional capital to fund operating expenses, working capital or other bona fide liquidity needs of the Company Group that would otherwise have been funded had the Collection Default Event not occurred, then notwithstanding any other provision of this Agreement to the contrary:
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(A) a majority of the Investor Member Designated Directors shall have the sole and exclusive right, power and authority, on behalf of the Company, to authorize, approve and cause the Company Group to carry out any issuance of debt of Equity Securities (a “Remedial Financing”), including its amount, form, price, terms and counterparties, without any vote, consent or approval of any Hertz Designated Director, the Hertz Members;
(B) no Hertz Member or any of its Affiliates shall be a Qualified Member, or have any right to receive an Issuance Notice or buy any Company Securities under Section 3.07, for any Company Securities issued in a Remedial Financing; and
(C) such Remedial Financing shall result in a reduction solely of the Hertz Members’ Membership Percentage and shall not affect or reduce the other Investor Members’ Membership Percentage; it being understood that the foregoing may be effected in any manner as a majority of the Investor Member Designated Directors may reasonably determine, including by the cancellation of Units owned by the Hertz Members.
Notwithstanding the foregoing, at any time prior to the consummation of a Remedial Financing, the Hertz Members shall have the right to cure the Collection Default Event by paying in full all amounts then-due and payable under this Section 10.08, in which case, the right of the Investor Member Designated Directors to approve and consummate a Remedial Financing shall cease with respect to such Collection Default Event.
(iii) The Company shall give the Hertz Members written notice of any Remedial Financing within five (5) Business Days after it is completed. The notice shall describe the material terms in reasonable detail. Delivering this notice is not a condition to the validity or effectiveness of the Remedial Financing.
(iv) To the extent a Collection Default Event is continuing, a majority of the Investor Member Designated Directors shall have the sole and exclusive right, power and authority, on behalf of the Company, to approve the following, solely to the extent reasonably determined to be necessary to address liquidity constraints at the Company Group as a result of such Collection Default Event, to (x) take any action (including any action by the Board or any committee of the Board) with respect to any of the matters set forth in clause (vii) or (x) of Section 5.02(a), in each case so long as any transaction or debt issuance is with a third-party that is not affiliated with any Member and (y) approve deviations from or modifications to the Annual Budget and Business Plan notwithstanding Section 10.05.
Section 10.09 Non-Solicit.
(a) Each Hertz Member agrees that it shall not, and shall cause its Affiliates (other than the Company Group) not to, during the Exclusivity Period, directly or indirectly, on its own behalf or on behalf of any other Person, hire, recruit, solicit, induce or attempt to hire, recruit, solicit or induce any current or former Director, officer or employee having the title of senior vice president or higher of the Company or any of its Subsidiaries to leave such employment or retention or to accept employment with or render services to or with any other Person (otherwise than on behalf of the Company or any of its Subsidiaries); provided, however, that nothing in this Section 10.09(a) shall restrict any Person from engaging in general solicitations (provided such
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solicitations are not specifically targeted at employees of the Company or its Subsidiaries), or hiring, recruiting or soliciting any former Director, officer or employee having had the title of director or higher of the Company or any of its Subsidiaries who has not been employed by the Company or any of its Subsidiaries for at least twelve (12) months prior to initiating such hiring or recruiting or solicitation efforts.
(b) The Company agrees that it shall not, and shall cause its Subsidiaries not to, during the Exclusivity Period, directly or indirectly, on its own behalf or on behalf of any other Person, hire, recruit, solicit, induce or attempt to hire, recruit, solicit or induce any current or former Director, officer or employee having the title of senior vice president or higher of any Hertz Member or any of its Affiliates (other than the Company Group) to leave such employment or retention or to accept employment with or render services to or with any other Person (otherwise than on behalf of such Hertz Member or any of its Affiliates); provided, however, that nothing in this Section 10.09(b) shall restrict any Person from engaging in general solicitations (provided such solicitations are not specifically targeted at employees of any Hertz Member or any of its Affiliates), or recruiting, soliciting or hiring any former Director, officer or employee having had the title of director or higher of any Hertz Member or any of its Affiliates who has not been employed by any Hertz Member or any of its Affiliates for at least twelve (12) months prior to initiating such hiring or recruiting or solicitation efforts.
(c) Following the Closing, the hiring of any management employee at the vice president, senior director or director level by either party shall be governed by a bidirectional review and approval process, pursuant to a governance framework to be mutually established by the parties following the Closing, and with the approval of the Board, in the case of the Company.
(d) Each of the Members and the Company acknowledges and agrees that the covenants contained in this Section 10.09 are reasonably designed to protect the Members’ substantial investment in the Company Entities and are reasonable with respect to their duration, geographical area and scope. Each of the Hertz Members and the Company further acknowledges and agrees that (a) the covenants and agreements set forth in this Section 10.09 are a material inducement to, and a condition precedent of, the Members to consummate the transactions contemplated by this Agreement and the Transaction Agreements, (b) the Members shall receive substantial direct and indirect benefits (including the payment of consideration) by the consummation of the transactions contemplated by this Agreement and the Transaction Agreements and (c) the Members would not obtain the benefit of the bargain set forth in this Agreement and the Transaction Agreements as specifically negotiated by the parties if any Hertz Member (or its Affiliates) or the Company breached the provisions of this Agreement.
(e) Each of the Hertz Members and the Company acknowledges that any breach of this Section 10.09 will cause irreparable injury and that the remedy at law for any breach of this Section 10.09 by a Hertz Member or its Affiliates or the Company Group will be inadequate. Accordingly, the undersigned agrees that upon any breach or threatened breach of this Section 10.09, each Member shall, in addition to all other available rights and remedies (including, without limitation, any rights to damages), be entitled to injunctive or other equitable relief without having to prove the inadequacy of the remedies available at law and without being required to post bond or other security.
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(f) If any covenant contained in this Section 10.09, or any part thereof, is hereinafter construed to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants, which shall be given full effect without regard to the invalid portions. If any covenant contained in this Section 10.09, or any part thereof, is held to be unenforceable because of the scope or duration of such provision or the area covered thereby, the Members agree that the court or tribunal making such determination shall have the power to reduce the scope, duration and/or geographic area of such provision and, in its reduced form, said provision shall then be enforceable. In the event that any such court or tribunal shall hold such covenants wholly unenforceable with respect to any country or jurisdiction by reason of the breadth of such scope or otherwise, it is the intention of the parties hereto that such determination not bar or in any way affect the Members’ right to the enforcement of such covenants with respect to any other countries or jurisdictions within the geographical scope of such covenants as to breaches of such covenants in such other respective countries or jurisdictions, the above covenants as they relate to each country or jurisdiction being, for this purpose, severable into diverse and independent covenants.
(g) The restrictions set forth in this Section 10.09 may be waived or modified with respect to any specific individual or category of individuals by the prior written consent of at least one Hertz Designated Director and at least two Investor Member Designated Directors (including the Lead Investor Designated Director for so long as the Lead Investor Members hold more Class A Common Units than any other individual Investor Member) in each case taking into good faith consideration the recommendation of the Chief Executive Officer of each of the Company and THC, and any such waiver or modification shall be effective solely to the extent expressly stated in such written consent.
Article
11
Reporting
Section 11.01 Financial Information. Prior to an IPO, the Company shall provide to each Member (other than an employee of the Company or its Subsidiaries) (each, a “Qualifying Member”) (A) no later than 3 Business Days after the due date for the filing with the Commission of the “Annual Report” of the Hertz Members’ parent on Form 10-K, an income statement of the Company Entities for such year, a balance sheet of the Company Entities, a statement of members’ equity of the Company Entities as of the end of such year and a statement of cash flows of the Company Entities for such year prepared in accordance with GAAP, (B) no later than 3 Business Days after the due date for the filing with the Commission of the “Quarterly Report” of the Hertz Members’ parent on Form 10-Q, an unaudited quarterly consolidated profit or loss statement of the Company Entities prepared in accordance with GAAP, a statement of cash flows of the Company Entities for such fiscal quarter prepared in accordance with GAAP and an unaudited consolidated balance sheet of the Company Entities as of the end of such quarter prepared in accordance with GAAP and (C) no later than the date reasonably required for THC to complete its monthly financial closing process for the applicable month, as notified in writing by THC to the Company from time to time (the “THC Monthly Close”), the unaudited monthly consolidated financial statements of the Company Entities prepared in accordance with GAAP (consisting of a balance sheet and statements of operations, changes in members’ equity, and comprehensive income and such supporting schedules and other information as THC may reasonably request in connection with the THC Monthly Close); provided that the first monthly report will not be
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delivered until after the end of the first full calendar month following the month of the Closing Date.
Section 11.02 Certain Other Provisions Regarding Financial Reporting.
(a) The Company shall, and shall cause each of its consolidated Subsidiaries to, (i) make and keep books, records and accounts, which, in the good faith judgment of the Company, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company and its consolidated Subsidiaries and (ii) devise and maintain a system of internal accounting controls which, in the good faith judgment of the Company, is sufficient to provide reasonable assurances that: (A) transactions are executed in accordance with management’s general or specific authorization, (B) transactions are recorded as necessary (1) to permit preparation of financial statements in conformity with GAAP or any other standard applicable to such statements and (2) to maintain accountability for assets and (C) access to assets is permitted only in accordance with management’s general or specific authorization.
(b) SOX Controls. The Company acknowledges that, for so long as the Company Entities are consolidated in the financial statements of THC, the Company Entities are subject to THC’s internal control over financial reporting framework maintained pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder (the “THC SOX Framework”). The Company shall, and shall cause each of its Subsidiaries to, at the Hertz Members’ sole expense, (i) adopt and maintain such internal controls and procedures as THC reasonably determines are necessary for the THC SOX Framework to apply to the Company Entities and (ii) reasonably cooperate with THC, its Affiliates and the THC Auditor in the design, implementation, documentation, and testing of the design and operating effectiveness of such controls. This cooperation includes providing reasonable access to relevant personnel, systems, books and records, and promptly fixing any deficiencies identified.
(c) Segment Reporting. The Company acknowledges that THC expects to present the Company Entities as a separate reportable segment in THC’s consolidated financial statements and periodic reports filed with the Commission, beginning with the fiscal quarter ending December 31, 2026. In connection with such segment reporting, the Company shall, and shall cause the management and other relevant personnel of the Company Entities to, (i) participate in such meetings with THC, its Affiliates and the THC Auditor as THC may reasonably request, (ii) review and comment on drafts of THC’s financial statements, footnotes, management’s discussion and analysis and related disclosures, in each case solely to the extent relating to the Company Entities, within the timeframes reasonably requested by THC, and (iii) provide such segment-level financial information as THC may reasonably request.
Section 11.03 Access to Audit Personnel, Working Papers, Management Personnel and Information.
(a) The Company will cause the Company Auditors to make available to each Qualifying Members’ auditors both the personnel who performed or are performing the annual audit of the Company and, consistent with customary professional practice and courtesy of such auditors with respect to the furnishing of work papers, work papers related to the annual audit of the Company.
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(b) The Company agrees to permit any Qualifying Member or its auditors to inspect, at such Qualifying Member’s sole expense, all existing books and records of the Company and its Subsidiaries, and to provide such Qualifying Member and its auditors reasonable access to the management and other relevant personnel of the Company and its Subsidiaries, in each case, during regular business hours for any purpose reasonably related to such Qualifying Member’s status as a holder of Membership Interests.
(c) Notwithstanding anything to the contrary in this Agreement, (i) the Company agrees to provide each Hertz Member (and its applicable Affiliates, auditors and Representatives) with such financial statements, information, reporting and books and records of the Company and its Subsidiaries as may be reasonably requested by such Hertz Member from time to time to comply with such Hertz Member’s financial reporting, accounting and regulatory obligations, including the preparation of consolidated financial statements and (ii) the Company will, and will cause the Company Auditors and the management and other relevant personnel of the Company and its Subsidiaries to, reasonably cooperate with such Hertz Member (and its applicable Affiliates, auditors and Representatives) in connection with the compliance with such obligations and the preparation, audit and review of such financial statements.
(d) THC Auditor. The Company acknowledges that the Company Entities are subject to audit and review by Ernst & Young LLP, or any successor independent registered public accounting firm engaged by THC (the “THC Auditor”), in connection with the audit and review of THC’s consolidated financial statements and internal control over financial reporting. The Company shall, and shall cause each of its Subsidiaries and the Company Auditors to, reasonably cooperate with any such audit or review. This includes providing the THC Auditor with timely access to the books, records, systems, work papers and relevant personnel of the Company Entities, and delivering such representation letters, confirmations and other information as the THC Auditor may reasonably request.
Section 11.04 Regulatory Proceedings. The Company shall keep the Members informed, on a current basis, of any events, discussions, notices or changes with respect to any tax (other than ordinary course communications which could not reasonably be expected to be material to the Company), criminal or regulatory investigation or action involving the Company, and shall reasonably cooperate with Members, and their respective Affiliates in an effort to avoid or mitigate any cost or regulatory consequences to them that might arise from such investigation or action (including by reviewing written submissions in advance, attending meetings with authorities and coordinating and providing assistance in meeting with regulators).
Section 11.05 Liability. No party shall have any liability to any other party in the event that any information exchanged or provided pursuant to this Agreement which is an estimate or forecast, or which is based on an estimate or forecast, is found to be inaccurate in the absence of willful misconduct by the party providing such information.
Section 11.06 Other Agreements Providing for Exchange of Information. The rights and obligations granted under this Article 11 are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of information set forth in any other provision of this Agreement (including Article 10) or any other Ancillary Agreement.
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Article
12
Dissolution, Liquidation and Termination
Section 12.01 No Dissolution. The Company shall not be dissolved by the withdrawal of any Member (subject to Section 12.02(d)) or the admission of Additional Members in accordance with the terms of this Agreement.
Section 12.02 Events Causing Dissolution. The Company shall be dissolved and its affairs shall be wound up solely upon the first to occur of the following events:
(a) the determination of the Members, by means of an affirmative vote of the Members holding 85% the outstanding Voting Common Units, to dissolve and terminate the Company;
(b) the sale of all or substantially all of the Company’s assets (except in connection with an IPO);
(c) the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act; or
(d) at any time when there are no Members, unless the Company is continued in accordance with the Act.
Section 12.03 Bankruptcy of a Member. The bankruptcy (within the meaning of Sections 18-101 and 18-304 of the Act) of a Member shall not cause such Member to cease to be a Member, and upon the occurrence of such event, the Company shall continue without dissolution. The receivership or dissolution of a Member will not in and of itself cause the dissolution of the Company, and upon the occurrence of such event, the Company shall continue without dissolution.
Section 12.04 Winding Up. In the event of the dissolution of the Company pursuant to Section 12.02, the Company’s affairs shall be wound up by the Board or a liquidating trustee of the Company selected by the Board (in such capacity, the “Liquidating Agent”), which Liquidating Agent shall be an individual who is knowledgeable about the Company’s business and operations (to the extent possible) and has substantial experience in the purchase and sale of businesses.
(a) Upon dissolution of the Company and until the filing of a certificate of cancellation as provided in Section 18-203 of the Act, the Liquidating Agent may, in the name of, and for and on behalf of, the Company, prosecute and defend lawsuits, whether civil, criminal or administrative, settle and close the Company’s business, dispose of and convey the Company’s property or sell the Company (and its Subsidiaries) as a going concern, discharge or make reasonable provision for the Company’s liabilities, and distribute to the Members in accordance with Section 12.05 any remaining assets of the Company, all without affecting the liability of Members and without imposing any liability on any Liquidating Agent.
(b) Except as otherwise provided in this Agreement, the Members shall continue to share distributions and allocations during the period of liquidation in the same manner as before the dissolution.
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(c) A reasonable time period shall be allowed for the orderly winding up and liquidation of the assets of the Company and the discharge of liabilities to creditors so as to enable the Liquidating Agent to seek to minimize potential losses upon such liquidation. Subject to the provisions of Section 12.05, the Liquidating Agent shall have reasonable discretion to determine the time, manner and terms of any sale or sales of the Company’s property pursuant to such liquidation. The provisions of this Agreement shall remain in full force and effect during the period of winding up and until the filing of a certificate of cancellation of the Company with the Secretary of State of the State of Delaware.
(d) Upon the completion of the winding up of the Company, the Liquidating Agent or other duly designated representative shall file a certificate of cancellation of the Company with the Secretary of State of the State of Delaware as provided in Section 18-203 of the Act.
Section 12.05 Distribution of Assets.
(a) As soon as practicable upon dissolution of the Company, the assets of the Company (or liquidation proceeds) shall be distributed in the following manner and order of priority (and ratably within each level of priority):
(i) first, to creditors of the Company, including Members who are creditors, to the extent otherwise permitted by Law, in satisfaction of liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) other than liabilities for which reasonable provision has been made and distributions to Members under Article 8; and
(ii) second, to the Members as follows:
(A) first, to holders of Class A Common Units pro rata based on the Unreturned Capital of each such Class A Common Unit relative to the aggregate Unreturned Capital of all Class A Common Units until the Unreturned Capital with respect to each outstanding Class A Common Unit has been reduced to zero dollars ($0);
(B) second to the holders of Class B Common Units and Class C Common Units pro rata based on the Unreturned Capital of each such Class B Common Unit or Class C Common Unit relative to the aggregate Unreturned Capital of all Class B Common Units and Class C Common Units until the Unreturned Capital with respect to each outstanding Class B Common Unit and Class C Common Unit has been reduced to zero dollars ($0); and
(C) third, to the holders of Common Units, pro rata based on the number of Common Units held by such holders.
(b) The Liquidating Agent shall have the power to establish any reserves that, in accordance with sound business judgment, it deems reasonably necessary to pay all claims and obligations, including all contingent, conditional or unmatured claims and obligations, which reserves may be paid over to an escrow agent selected by the Liquidating Agent to be held by such agent for the purpose of paying out such reserves in payment of the aforementioned contingencies and upon the expiration of such period as the Liquidating Agent may deem advisable, making a distribution of the balance thereof to the Members in the manner provided in this Section 12.05.
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Section 12.06 Distributions in Cash or in Kind. Upon the dissolution of the Company, the Liquidating Agent shall use reasonable best efforts to liquidate all of the Company assets in an orderly manner and apply the proceeds of such liquidation as set forth in Section 12.05; provided, that if in the good faith judgment of the Liquidating Agent, a Company asset should not be liquidated, the Liquidating Agent shall distribute such asset, on the basis of its Fair Market Value (determined in good faith by the Liquidating Agent), in accordance with Section 12.05, subject to the priorities set forth in Section 12.05, and provided, further, that the Liquidating Agent shall in good faith attempt to liquidate sufficient assets of the Company to satisfy in cash (or make reasonable provision for) the debts and liabilities referred to in Section 12.05(a).
Section 12.07 Claims of the Members. The Members and former Members shall look solely to the Company’s assets for the return of their Capital Contributions, and if the assets of the Company remaining after payment of or due provision for all debts, liabilities and obligations of the Company are insufficient to return such Capital Contributions, the Members and former Members shall have no recourse against the Company, any Director, any other Member or, for the avoidance of doubt, any Affiliates of any Member. No Member shall have any obligation to make any Capital Contribution with respect to such insufficiency, and such insufficiency shall not be considered a debt owed to the Company or to any other Person.
Article
13
Miscellaneous
Section 13.01 Further Assurances. Each Member shall, upon the request from time to time of the Company or the other Members and without further consideration, do, execute and perform all such other acts, deeds and documents as may be reasonably requested by the Company or the other Members to carry out fully the purposes and intent of this Agreement.
Section 13.02 Amendment or Modification. This Agreement may be amended or modified (including as a result of or by way of a merger) only with the approval of the Board and the written consent of each of (a) the Hertz Members for so long as they collectively hold a majority of the Capital Units, and (b) the Members holding a majority of the outstanding Voting Common Units held by the Members other than, for so long as they collectively hold a majority of the Capital Units, the Hertz Members; provided that (a) any modification or amendment of this Agreement (including as a result of or by way of a merger) that by its terms materially, disproportionately and adversely affect a Member or a group of Members as compared to other Members or groups of Members shall require the prior written consent of such Member or such group (acting by a majority-in-interest), (b) any modification or amendment of this Agreement that by its terms materially, disproportionately and adversely affect the Investor Members as compared to the Hertz Members or any other Member, or any amendment to Section 3.07, Section 5.01(a), Section 5.01(b)(ii), Section 5.01(b)(iii), Section 5.02, Section 5.10, Section 6.02(d), Article 9, the Minimum Return Obligation, Section 10.08, Section 12.05 or Section 13.02 shall require the consent of the Members holding a majority of the Class A Common Units, (c) any modification or amendment of this Agreement that by its terms materially, disproportionately and adversely affects the Class A Common Units as compared to the Class B Common Units or Class C Common Units shall require the prior written consent of the holders of a majority of the Class A Common Units, shall require the prior written consent of the Investor Members (acting by a majority-in-interest), and (d) any modification or amendment of this Agreement (including as a result of or by way of a
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merger) that would affect the rights of a Member specifically granted such rights by name shall be effective only with the prior written consent of such Member. Notwithstanding the foregoing, updates to Exhibit A that are necessary to reflect any Transfer of a Membership Interest in accordance with this Agreement or change of address of a Member shall be made by the Board without the consent or execution by the Members and any such update shall not be deemed an amendment.
Section 13.03 Waiver; Cumulative Remedies. Except as otherwise specifically provided herein, any party may waive any right of such party under this Agreement by an instrument signed in writing by such party. Except as specifically provided herein, the failure or delay of any Member to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any Member thereafter to enforce each and every such provision. No waiver of any breach of or non-compliance with this Agreement shall be held to be a waiver of any other or subsequent breach or non-compliance. Except as specifically provided herein, all remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative and not alternative.
Section 13.04 Entire Agreement. This Agreement, the Transaction Agreements, and the Ancillary Agreements constitute the entire agreement between the parties hereto with respect to the subject matter hereof and thereof and supersede and cancel all prior agreements, understandings, representations and warranties, both oral and written, between the parties hereto with respect thereto, and there are no agreements, undertakings, representations or warranties of any of the parties hereto with respect to the transactions contemplated hereby and thereby other than those set forth herein or therein or made hereunder or thereunder.
Section 13.05 Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to confer, nor shall anything herein confer, on any Person other than the Company and the parties hereto, and their respective successors or permitted assigns, any rights, remedies, obligations or liabilities, except that any Person who is entitled to exculpation, indemnification or advancement pursuant to Section 6.01 of this Agreement and is not party to this Agreement shall be a third-party beneficiary of this Agreement to the extent required for purposes of such Section 6.01.
Section 13.06 Non-Assignability; Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, that neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable other than in connection with a Transfer permitted pursuant to Article 9.
Section 13.07 Severability. Every provision of this Agreement is intended to be severable. If any term or provision hereof is declared or held illegal or invalid, in whole or in part, for any reason whatsoever, such illegality or invalidity shall not affect the validity or enforceability of the remainder of the Agreement, and such provision shall be deemed amended or modified to the extent, but only to the extent, necessary to cure such illegality or invalidity. Upon such determination of illegality or invalidity, the parties hereto shall negotiate in good faith to amend this Agreement to effect the original intent of the parties. In any event, the invalidity or
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unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other competent jurisdiction.
Section 13.08 Injunctive Relief. The parties hereto hereby acknowledge and agree that a violation of any of the terms of this Agreement will cause the other parties and the Company irreparable injury for which an adequate remedy at law is not available. Accordingly, the parties hereto expressly agree that in addition to any other remedy that each of the parties and the Company may be entitled to in law or in equity, each of the parties hereto and the Company shall, except as specifically provided otherwise in this Agreement, be entitled to specific performance of the terms of this Agreement and any injunction, restraining order or other equitable relief that may be necessary to prevent any breach(es) thereof. Furthermore, the parties expressly agree that if any of the parties hereto, or the Company, institutes any action or proceeding to enforce the provisions hereof, any other party against whom such action or proceeding is brought shall be deemed to have expressly, knowingly, and voluntarily waived the claim or defense that an adequate remedy exists at law. Each party hereby waives any requirement of any posting of bond.
Section 13.09 Governing Law. This Agreement shall be governed by and construed in accordance with the provisions of the Act, and other applicable Laws of the State of Delaware, without regard to its conflicts of law principles.
Section 13.10 Submission to Jurisdiction. For the purposes of any suit, action or other proceeding arising out of or relating to this Agreement, each party to this Agreement irrevocably submits, to the fullest extent permitted by Law, to the exclusive jurisdiction of the Chancery Court of the State of Delaware (or if unavailable, any federal court sitting in the State of Delaware or, if unavailable, the Delaware Superior Court) and the appellate courts having jurisdiction of appeals in such courts. For the purposes of any suit, action or other proceeding arising out of or relating to this Agreement, each party irrevocably and unconditionally waives, to the fullest extent permitted by Law, any objection to the laying of venue in the Chancery Court of the State of Delaware (or if unavailable, any federal court sitting in the State of Delaware or, if unavailable, the Delaware Superior Court), and hereby further irrevocably and unconditionally waives, to the fullest extent permitted by Law, and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Each party irrevocably consents, to the fullest extent permitted by Law, to service of process in connection with any such suit, action or other proceeding by registered mail to such party at its address set forth in this Agreement, in accordance with the provisions of Section 13.12. The consent to jurisdiction set forth in this Section 13.10 shall not constitute a general consent to service of process in the State of Delaware and shall have no effect for any purpose except as provided in this Section 13.10. The parties hereto agree that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.
Section 13.11 Waiver of Jury Trial. EACH OF THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTERS (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
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CONNECTED WITH THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
Section 13.12 Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by e-mail or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses:
If to the Hertz Members:
The Hertz Corporation
8501 Williams Road
Estero, Florida 33928
Attention: Adrian S. Nasr
E-mail: [***]
And a copy (which copy shall not constitute notice) to:
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Attention:
Michael Davis
Email:
michael.davis@davispolk.com
If to the Investor Members:
c/o the Lead Investor Members
c/o Cohen Private Ventures, LLC
55 Hudson Yards
24th Floor
New York, New York 10001
Attn: Andrew B. Cohen; Nancy Hung
E-mail: [***]
with a copy to:
White & Case LLP
1221 Avenue of the Americas
New York, New York 10020
Attention: Oliver Brahmst, Adam Cieply and Morgan Hollins
E-mail: oliver.brahmst@whitecase.com, adam.cieply@whitecase.com and morgan.hollins@whitecase.com
If to any other Member, to such addresses reflected in the books and records of the Company.
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By written notice to the Company, any Member, any Hertz Member or Lead Investor Members may change the address to which notices shall be directed.
Section 13.13 Counterparts. This Agreement may be executed in any number of counterparts, and delivered by facsimile or otherwise, each of which shall be deemed an original of this Agreement and all of which together shall constitute one and the same instrument.
Section 13.14 No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement or any contract, document or instrument delivered contemporaneously with this Agreement, each party to this Agreement agrees and acknowledges that no Persons other than the Members and the Company shall have any obligation under this Agreement. Each party to this Agreement further acknowledges and agrees that it has no rights of recovery whether under this Agreement or under any contracts, documents or instruments delivered contemporaneously herewith, in respect of any oral representations made or alleged to be made in connection herewith or therewith. The prohibition against recovery set forth in this Section 13.14 shall have equal application to any and all claims against any former, current or future director, officer, agent, Affiliate, manager, assignee, incorporator, Controlling Person, fiduciary, representative or employee of any Member (or any of their successors or permitted assignees), against any former, current, or future general or limited partner, stockholder or member of any Member (or any of their successors or permitted assignees) or any Affiliate thereof or against any former, current or future director, officer, agent, Affiliate, manager, assignee, incorporator, Controlling Person, fiduciary, representative, employee, general or limited partner, stockholder, or member of any of the foregoing, but in each case not including the Members. The prohibition set forth in this Section 13.14 shall apply to any and all claims, whether such claims sound in tort, contract or otherwise. This prohibition shall apply whether such claims are asserted by attempting to pierce the corporate veil, or through a claim brought by or on behalf of such party against such Persons and whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, or otherwise. The parties to this Agreement further expressly agree and acknowledge that no personal liability whatsoever shall attach to or be incurred by any of the Persons referenced in this Section 13.14 for any obligations of the applicable party under this Agreement or the transactions contemplated hereby, under any documents or instruments delivered contemporaneously herewith, in respect of any oral representations made or alleged to be made in connection herewith or therewith, or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, such obligations or their creation.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| the hertz corporation | |||
| By: | /s/ W. Gil West | ||
| Name: | W. Gil West | ||
| Title: | Chief Executive Officer | ||
| HERTZ TRANSPORTING, INC. | |||
| By: | /s/ Christopher G. Berg | ||
| Name: | Christopher G. Berg | ||
| Title: | President | ||
| ORO MOBILITY HOLDINGS, LLC | |||
| By: | /s/ Doria Holbrook | ||
| Name: | Doria Holbrook | ||
| Title: | Chief Executive Officer | ||
[Signature Page to A&R LLC Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| CK ORO, LLC | |||
| By: CK Opportunities GP, LLC, its manager | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
| By: | /s/ Tom LaMacchia | ||
| Name: | Tom LaMacchia | ||
| Title: | Authorized Signatory | ||
| KDOF ORO, LLC | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
| KHAL BRIDGER, INC. | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
| KH BLUESTEM KMF, LLC | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
[Signature Page to A&R LLC Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
| KHMO ORO, LLC | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | Authorized Signatory | ||
| GCM GROSVENOR STRATEGIC CREDIT, L.P. | |||
| By: GCM Investments GP, LLC, its Managing Member | |||
| By: | /s/ Nicole McIlree | ||
| Name: | Nicole McIlree | ||
| Title: | Authorized Signatory | ||
| CPV ORO, LLC | |||
| By: CPV Holdings II, LLC, its managing member | |||
| By: | /s/ Jason Colombo | ||
| Name: | Jason Colombo | ||
| Title: | Authorized Signatory | ||
| KNIGHTHEAD (NY) FUND, L.P. | |||
| By: CPV Holdings II, LLC, its managing member | |||
| By: | /s/ Laura Torrado | ||
| Name: | Laura Torrado | ||
| Title: | General Counsel | ||
[Signature Page to A&R LLC Agreement]
EXHIBIT A
MEMBER INFORMATION
[Omitted]
Schedule 3.01
INITIAL CAPITAL CONTRIBUTIONS
[Omitted]
Schedule 5.01(d)
INITIAL DIRECTORS
[Omitted]
Schedule 5.02(a)(v)
EQUITY GRANTS
[Omitted]
Schedule 5.02(a)(xxi)
AFFILIATED TRANSACTIONS
[Omitted]
.
Schedule 10.05
INITIAL APPROVED BUDGET
[Omitted]
Exhibit 10.4
EXECUTION VERSION
SERVICES AGREEMENT
This Services Agreement (“Agreement”) is entered into as of October 19, 2026, (“Effective Date”) by and between Oro Mobility Holdings, LLC, a Delaware limited liability company (“Oro”), and The Hertz Corporation, a Delaware corporation (“THC”). Oro and THC are each referred to herein as a “Party” and collectively as the “Parties”.
WHEREAS, Oro and THC have entered into a Contribution Agreement, dated as of October 16, 2026 (as such agreement may be amended from time to time, the “Contribution Agreement”) pursuant to which, among other things, THC agreed to contribute certain Hertz Contributions (as defined in the Contribution Agreement) to Oro on the terms and subject to the conditions set forth in the Contribution Agreement; and
WHEREAS, the Contribution Agreement contemplates that, in connection with the consummation of the transactions contemplated thereby, Oro and THC shall enter into this Agreement, pursuant to which THC will provide (or cause to be provided) to Oro certain services in accordance with the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
Article
1
Definitions
Section 1.01. Definitions. Any capitalized term that is used, but not defined, herein shall have the meaning assigned to such term in the Contribution Agreement. In addition, for purposes of this Agreement, the following terms shall have the meanings set forth below:
“CPI” means the Consumer Price Index for All Urban Consumers (CPI-U), U.S. City Average, All Items (1982–84 = 100) published by the U.S. Bureau of Labor Statistics (or any successor thereto).
“Extension Period” means any TSA Extension Period or LT Extension Period, as applicable.
“Malicious Code” means viruses, “Trojan horses”, worms, spyware, or other malicious code designed or reasonably expected to adversely impact the functionality of, or permit unauthorized access to, or disable, any software or other IT Asset.
“New Rental Customer Revenue” means, for any calendar month during the Composite Trademark License Term (including any extension thereof), all net revenue generated in, or from the conduct of, the TNC-Rental Business, including any and all rental charges, fees, surcharges and other amounts payable by customers of the TNC-Rental Business recognized as revenue of the TNC-Rental Business in accordance with Oro’s consistently applied accounting policies, whether generated by Oro, any other member of the Oro Group or any permitted sublicensee, as reduced to exclude the amount of any and all (a) sales, use, value-added or similar Taxes and (b)
refunds, credits, chargebacks and allowances actually given or remitted to customers.
“Oro Composite Marks” means (a) the “ORO POWERED BY HERTZ” or similar Trademark, or (b) any other Trademark designed by Oro that combines, incorporates or integrates any THC Name and Mark with any “ORO” or “ORO MOBILITY” Trademarks or any other Trademarks used by the Company Group in connection with the Oro Business, in the case of each of clauses (a) and (b), including any foreign language, stylized, logo or spacing variants thereof.
“Oro Group” means “Company Group” as such term is defined in the Contribution Agreement.
“Oro IP” means any and all Intellectual Property Rights (other than Trademarks) that (a) was at any time prior to the Effective Date used or practiced in, or held for use or practice in, the Retained Business, and (b) is owned or freely sublicensable (without notice, consent, payment or any other obligation by Oro), in each case, by Oro.
“Purchase Agreement” means the purchase agreement dated as of October 16, 2026, by and among the Investors (as defined therein) and THC.
“Service Period” means, with respect to a Service, the period commencing on the Effective Date and ending at the close of business on the earliest of (a) the date such Service is terminated in accordance with Section 2.04 (but subject to any extensions in accordance Section 2.03), (b) the expiration of the term of such Service set forth on Exhibit A, as such term may be extended pursuant to Section 2.03, and (c) the date this Agreement is terminated in accordance with Section 8.02, Section 8.03, Section 8.04 or Section 8.05.
“Service Recipient” means, with respect to any Service, the Company Group.
“Services” means the services set forth in Exhibit A, as such exhibit may be amended or updated from time to time in accordance with the terms of this Agreement.
“THC Names and Marks” means any and all Trademarks of THC or any of its Affiliates (other than any Trademark owned by any member of the Oro Group that, for clarity, includes the “ORO” and “ORO MOBILITY” Trademarks) (a) that use, contain or include the word “HERTZ,” (b) the word “HERTZ” in design or stylized form, (c) that were otherwise used by the Oro Business prior to the Effective Date, or (d) that THC or any of its Affiliates agree to license to the Oro Group pursuant to the license set forth in Section 4.01(b) following receipt of a written request by the Oro Group, in each case either alone or in combination with other words or phrases (whether in stylized form or not), design elements, or logos, and any and all Trademarks derived therefrom or confusingly similar thereto.
“THC Retained IP” means all Intellectual Property Rights (other than Trademarks) that (a) was at any time prior to Effective Date related to or used or practiced in, or held for use or practice in the Oro Business, and (b) is owned or freely sublicensable (without notice, consent, payment or any other obligation by THC and its Affiliates), in each case, by THC or any of its Affiliates.
“TNC-Rental Business” means the business, operations, and activities conducted by the
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Oro Group related to the rental, leasing, subscription, provision or management of vehicles provided to independent drivers, couriers, gig-economy workers, or other individual service providers solely for the purpose of operating on TNC platforms within the United States.
Section 1.02. Interpretation. In this Agreement, unless the context clearly indicates otherwise: (a) words used in the singular include the plural and words used in the plural include the singular; (b) references to any Person include such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement; (c) except as otherwise clearly indicated, reference to any gender includes the other gender; (d) the words “include,” “includes” and “including” shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import; (e) the word “will” shall be construed to have the same meaning and effect as the word “shall” and the word “or” when used in this Agreement is not exclusive; (f) reference to any Article, Section or Exhibit means such Article or Section of, or such Exhibit or Schedule to, this Agreement, as the case may be, and references in any Section or definition to any clause means such clause of such Section or definition; (g) all Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein; (h) where there is any inconsistency between the definitions set out in Section 1.01 and the definitions set out in any other Section or Exhibit, then, for the purposes of construing such Section or Exhibit, the definitions set out in such Section or Exhibit shall prevail; (i) the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof; (j) reference to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement; (k) reference to any law (including statutes and ordinances) means such law (including all rules and regulations promulgated thereunder) as amended, modified, codified or reenacted, in whole or in part, and in effect at the time of determining compliance or applicability and shall be deemed also to include any and all Applicable Law; (l) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other theory extends and such phrase shall not mean “if”; (m) relative to the determination of any period of time, “from” means “from and including,” “to” means “to and including” and “through” means “through and including”; (n) the titles to Articles and headings of Sections contained in this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of or to affect the meaning or interpretation of this Agreement; (o) references to “$” are to United States dollars and, unless otherwise specified in this Agreement, all references to currency and monetary values set forth herein shall mean U.S. Dollars and all payments hereunder shall be made in U.S. Dollars; (p) references to “days” shall refer to calendar days unless Business Days are specified; (q) references from or through any date mean, unless otherwise specified, from and including or through and including, respectively; (r) any capitalized term used in an Exhibit but not otherwise defined therein shall have the meaning set forth in this Agreement; (s) “writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; and (t) if any time period for giving notice or taking action hereunder expires on a day that is not a Business Day, the time period for such notice or action shall automatically be extended to the next Business Day following such day.
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Article
2
Description and Provision of Services
Section 2.01. Provision of Services. THC shall, during the applicable Service Period, provide (or cause to be provided) the Services to the applicable Service Recipient subject to, and in accordance with, the terms of this Agreement.
Section 2.02. Omitted Services. In the event that Oro discovers prior to the date that is ninety (90) days after the Effective Date that a service that was provided by THC to the Oro Business during the twelve (12)-month period prior to the Effective Date or is otherwise a service that is an inherent, necessary or required part of the performance or delivery of any Services (an “Omitted Service”) is not being provided by THC to Oro pursuant hereto, Oro may, at its option, notify THC of Oro’s request that THC provide or cause to be provided such Omitted Service hereunder; provided, that such Omitted Service shall not include any services that (a) are prohibited by Applicable Law, or (b) are not capable of being provided by THC without requiring THC to replace or acquire personnel, resources, systems or capabilities that are not otherwise available to THC following the Effective Date. As promptly as practicable following receipt of any such notice, THC shall provide such Omitted Service to Oro consistent with the terms and subject to the conditions set forth herein and the Parties shall promptly meet and use best efforts to identify and document the scope and commercially reasonable pricing of such Omitted Services; provided that (i) the portion of the applicable Service Fees attributable to the internal costs of THC or any of its Affiliates shall not exceed THC’s actual cost in providing such Omitted Services, plus a markup of a seven and a half percent (7.5%) and (ii) the portion of such Service Fees attributable to Services provided by Third-Party Providers shall not exceed THC’s actual cost in providing such Omitted Services, without markup. THC’s provision of any Omitted Services shall be deemed part of the “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement, and the Parties shall amend Exhibit A to include any such Omitted Service.
Section 2.03. Extension Periods.
(a) Upon written notice from Oro to THC (to be provided no later than thirty (30) days prior to the end of the then-current Service Period), the Service Period for each Service for which Exhibit A lists a specific time period in the column labelled “Max Duration (est)” may be extended by Oro (in its sole discretion) for up to three (3) successive periods of six (6) months each (each, an “TSA Extension Period”).
(b) Upon written notice from Oro to THC (to be provided no later than thirty (30) days prior to the end of the then-current Service Period), the Service Period for each Service described for which Exhibit A lists “Hertz as a Vendor” in the column labelled “Max Duration (est)” (each, a “Long-Term Service”) may be extended by Oro (in its sole discretion) for successive periods of six (6) months each (each, an “LT Extension Period”); provided that, in no event shall the Service Period for any Long-Term Service exceed five (5) years following the Effective Date; provided, further, that, promptly following Oro’s reasonable written request, the Parties shall negotiate in good faith to mutually agree to the terms and conditions of a long-term services agreement pursuant to which THC shall provide any Long-Term Service to Oro (it being understood, for the avoidance of doubt, that neither Party shall have any obligation to enter into any such long-term
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services agreement if the Parties are unable to mutually agree to the terms and conditions thereof after negotiating in good faith for a period of no less than three (3) months).
(c) During any Extension Period, THC shall continue to provide any extended Services on the then-current terms and conditions of this Agreement; provided, that the Service Fees payable in respect of a Service during any Extension Period shall be adjusted as follows:
(i) the portion of such Service Fees attributable to the internal costs of THC or any of its Affiliates shall be increased by a percentage equal to the percentage increase (if any) in CPI over the most recent twelve (12)-month period for which CPI has been published as of the date of delivery of the applicable Extension Notice; and
(ii) the portion of such Service Fees attributable to Services provided by Third-Party Providers shall be increased by an amount equal to any actual, documented cost increases (if any) charged to THC by such Third-Party Providers in respect of such Services, without markup; provided, further, that THC shall notify Oro in writing of any such increase, together with reasonable supporting documentation, no later than fifteen (15) days following receipt of the applicable Extension Notice.
Section 2.04. Discontinuation of Services.
(a) Any Service may be discontinued as of a date that is earlier than the expiration of the term for such Service set forth on Exhibit A, as such term may be extended by an Extension Period, upon the mutual written agreement of the Parties, and, in such case, Exhibit A shall be deemed amended to delete such Service as of such date, and this Agreement shall be of no further force and effect with respect to such Service, except as to obligations or liabilities accrued pursuant to this Agreement through the date of discontinuation of such Service or in connection with such termination.
(b) Subject to this Section 2.04, Service Recipient may elect to discontinue any Service by providing no less than thirty (30) days’ advance written notice (“Termination Notice”) to THC at any time, and, in such case, the applicable Service shall terminate on the termination date specified in the Termination Notice (or such other date mutually agreed in writing by the Parties) and Exhibit A shall be deemed amended to delete such Service as of the termination date, and this Agreement shall be of no further force and effect with respect to such Service, except as to obligations or liabilities accrued pursuant to this Agreement prior to the date of termination of such Service, or in connection with such termination.
(c) Any Service may be terminated by Service Recipient pursuant to this Section 2.04 without the termination of any other Service; provided that, if it is technically infeasible or commercially impracticable to terminate one Service without terminating one or more other Services, Service Recipient shall be required to concurrently terminate all such Services for which separate termination would be technically infeasible or commercially impracticable (such required termination, an “Interdependency Termination”). Within a reasonable period of time following receipt of any Termination Notice (but in no event more than fifteen (15) days following receipt of any Termination Notice), THC may provide Service Recipient with written notice (“Termination Impact Notice”) of (i) any documented, reasonable out-of-pocket costs that THC
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has actually incurred, or reasonably expects to incur, that would not have been incurred but for such termination, with respect to such Service or as a result of termination of such Service, including for commitments made to, or in respect of, Third-Party Providers, to provide such Service through the applicable Service Period for such Service, costs related to terminating such commitments, or prepaid expenses related to such Service, in each case net of any amounts THC actually recovers, saves or avoids (including by redeploying Third-Party Provider capacity or other resources to other engagements) (collectively, the “Early Termination Costs”) (it being understood that Oro hereby acknowledges and agrees that any Early Termination Cost that THC or any of its Affiliates is contractually obligated to pay to a Third-Party Provider shall be deemed to be “reasonable” for the purposes of this Section 2.04(c)) and (ii) whether termination of such Service will require (A) an Interdependency Termination (it being understood that any such Termination Impact Notice shall include a reasonably detailed explanation of the basis for any claimed technical infeasibility or commercial impracticability supporting an Interdependency Termination) or (B) otherwise affect the performance of any other Services as a result of the technical infeasibility or commercial impracticality to terminate the Service requested to be terminated (the foregoing clause (A) and (B), “Other Service Implications”). THC shall use commercially reasonable efforts to mitigate any Early Termination Costs (including, where commercially reasonable, by redeploying Third-Party Provider capacity or other resources to other engagements). The Termination Impact Notice shall set forth a good faith, itemized estimate of the amount of the Early Termination Costs, together with reasonable supporting documentation, and an overview of any applicable Other Service Implications (in each case, to the extent then known by THC). Service Recipient may, within fourteen (14) days following receipt of such Termination Impact Notice, either (x) withdraw its Termination Notice by delivering a withdrawal notice to THC or (y) dispute the amount of the estimated Early Termination Costs or the basis for any claimed Other Service Implications by delivering a written notice to THC setting forth the basis for such dispute in reasonable detail, in which case the Parties shall negotiate in good faith to resolve such dispute in accordance with Section 11.08. If Service Recipient does not withdraw its Termination Notice within such period, such Termination Notice will be final and irrevocable (including as to any Other Service Implications), and, subject to resolution of any timely dispute delivered pursuant to clause (y) above, Service Recipient shall reimburse THC for all Early Termination Costs actually incurred by THC as a result of such early termination. Such reimbursement shall be made by Service Recipient to THC in accordance with Section 3.02.
(d) THC shall provide notice to Service Recipient (i) at least two (2) Business Days prior to any scheduled unavailability (other than a Force Majeure Event) of a Service (such unavailability, a “Service Interruption”) (including information regarding the nature and projected length of the Service Interruption), other than any Service Interruption that results from the actions of a Third-Party Provider without providing reasonable prior notice to THC, and (ii) upon becoming aware of the occurrence of any emergency or unscheduled Service Interruption, including, to the extent known by THC, information regarding the nature and projected length of the Service Interruption. In the event of any failure, interruption, delay or outage, THC agrees to use the same degree of care to restore, or cause the restoration of, the Services as THC would use to restore, or cause the restoration of, similar services for itself, but in any event no less than commercially reasonable efforts. In the event that any Service Interruption (planned or emergency) prevents or materially impairs Oro’s ability to use any business critical IT Assets owned or controlled by THC and made available to Oro hereunder, THC shall respond and provide Oro with
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a commensurate service credit for any affected Service in accordance with Exhibit D for the duration of such shutdown or suspension.
Section 2.05. Third Party Licenses and Consents. Each Party shall use its commercially reasonable efforts to obtain, and to keep and maintain in effect, all Permits and other third-party licenses and consents (collectively, “Consents”) required for the provision of any Service, including with respect to access and use of any third-party software, in accordance with the terms of this Agreement. The costs relating to obtaining any such licenses or consents shall be solely borne by THC. If any such Consents are not obtained despite such commercially reasonable efforts, THC shall promptly notify Oro in writing thereof and the Parties shall use commercially reasonable efforts to obtain an alternative arrangement reasonably acceptable to the Parties for provision and receipt of the relevant Services, with the cost of obtaining such alternative arrangements to be borne by THC.
Section 2.06. Service Standard. Except as otherwise provided in this Agreement or Exhibit A hereto, THC shall provide each Service in compliance with Applicable Law, in compliance with all applicable security, confidentiality, integrity, availability, and safety policies and procedures of THC, such that the nature, quality, standard of care, level of priority and the service level at which such Service is provided is at least materially consistent with the nature, quality, standard of care, level of priority and service level at which substantially the same service was provided by or on behalf of THC for the Oro Business during the twelve (12) months prior to the Effective Date (and, in any event, in a timely, professional and workmanlike manner with appropriately qualified personnel), and in compliance with any other service levels with respect to such Service that have been mutually agreed in writing between the Parties in writing (“Services Standard”). If THC fails in any material respect to provide any Service in accordance with the Services Standard, THC shall, at Oro’s request and at no additional cost to Oro, promptly re-perform or correct the deficient Service, and the Parties shall discuss in good faith any equitable adjustment to the applicable Service Fees to reflect the extent to which Oro did not receive the benefit of the affected Service.
Section 2.07. Cooperation; Migration Assistance.
(a) Service Recipient will provide all information that THC reasonably requests that is reasonably necessary for the performance of the Services pursuant to this Agreement, and Service Recipient will cooperate with any reasonable request of THC in connection with the performance of Services pursuant to this Agreement.
(b) THC shall provide reasonable assistance and support to migrate the applicable Services and related books and records, any associated data and other data related to the Oro Business from THC and its Affiliates to Oro (or its designee). Except in connection with any Services expressly contemplated hereunder or the provision of books and records as required pursuant to the terms and conditions of the Contribution Agreement, the Parties acknowledge and agree that, in connection with the services described in the foregoing sentence, Oro shall promptly reimburse THC for any reasonable, out-of-pocket third-party costs incurred in connection therewith. Immediately upon the termination or expiration of this Agreement, THC shall promptly deliver to Oro copies of any and all remaining documents, records and information in THC’s
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possession and owned by Oro or to which Oro is otherwise entitled pursuant to this Agreement or the Contribution Agreement.
Section 2.08. Personnel. THC may utilize such employees, officers and other persons with the qualifications to provide the Services, as appropriate and necessary. THC may, at its discretion, also arrange for the services of nonaffiliated agents, contractors and other personnel and entities in connection with the performance of any of the Services provided under this Agreement (“Third-Party Providers”); provided that THC shall (a) obtain Oro’s prior written consent (not to be unreasonably withheld, conditioned or delayed) prior to engaging a Third-Party Provider that will provide services primarily to the Oro or any of other member of the Oro Group under this Agreement, (b) remain responsible for ensuring that its obligations with respect to such Services, including the Services Standard, are satisfied with respect to all Services provided by any Third-Party Provider, and (c) cause each Third-Party Provider to comply with the terms and conditions of this Agreement (it being understood that no such use of a Third-Party Provider shall relieve THC of any of its obligations hereunder). If a third-party Contract pursuant to which a Service is provided by a Third-Party Provider expires or terminates during the term of this Agreement, THC shall use commercially reasonable effort to renew, extend or replace such third-party Contract
Section 2.09. Changes to the Services. Subject to Section 2.06, the Parties hereby acknowledge and agree that THC may from time to time reasonably modify, substitute, supplement or otherwise alter any Service provided to Service Recipient, including changing Third-Party Providers with respect to the provision thereof; provided that THC shall not make any such modification, substitution, supplement or other alteration that would adversely affect in any material respect the nature, scope, quality, pricing or availability of a Service to Oro without Oro’s prior written consent; provided, further, that (a) in no event shall any such modification, substitution, supplement or other alteration result in (i) any reduction or modification in THC’s obligation to provide the applicable Service in accordance with the Services Standard or (ii) THC prioritizing the provision of any Services to THC or any of its Affiliates over its provision of the Services to the Service Recipients under this Agreement, and (b) THC shall bear any incremental cost or expense incurred by THC in connection with any such modification, substitution, supplement or other alteration. THC shall furnish to Service Recipient reasonable advance notice and substantially the same notice (in content and timing), if any, as THC would furnish to its own organization with respect to such modifications, substitutions, supplements or other alterations. For the avoidance of doubt, any such modification, substitution, supplement or other alteration made in accordance with this Section 2.09, or any temporary suspensions or interruptions to the Services arising out of THC’s or any Third-Party Provider’s maintenance activities and provided in accordance with this Section 2.09, will not be considered a breach of this Agreement.
Section 2.10. Service Coordinators. Each Party shall nominate a representative to act as the primary contact person with respect to the provision and receipt of the Services (the “Service Coordinators”). The initial Service Coordinators shall be Gaury Nagaraju (***) for THC and Tonya Porter (***) for Oro. Each Party may change its Service Coordinator from time to time at its sole discretion by providing prior written notice to the other Party (including contact information for such Service Coordinator). Unless otherwise agreed to in writing by the Parties, all communications relating to the day-to-day provision and receipt of the Services shall be directed to the Service Coordinators.
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(a) Migration Plan. Oro and THC will work together in good faith to prepare, within one hundred eighty (180) days following the Closing, a plan setting out the steps Oro and THC will take to enable the performance of the Services, where applicable, to be transferred to Oro by the end of the initial Term (the “Migration Plan”). The Migration Plan will include the plan related to transitioning the applicable branding of THC to Oro or a new entity as directed, in writing, by Oro prior to the expiration of the Term. Once it has been agreed and signed, the Parties will comply with their respective obligations under the Migration Plan.
Article
3
Service Fees.
Section 3.01. Compensation. In consideration for the provision of the Services, Oro shall pay to THC the fees and charges for each Service as set forth opposite such Service on Exhibit A (“Service Fees”).
Section 3.02. Payment.
(a) Within thirty (30) days after the end of each calendar month during the Term (or if the Agreement is terminated prior to the end of any calendar month, then within thirty (30) days after the end of the calendar month in which such termination occurred), THC shall deliver to Oro an invoice with respect to the Services provided during such month and which shall set forth the Service Fees owing hereunder with respect thereto (the date of delivery of such invoice, the “Invoice Date”); provided that for the avoidance of doubt, (a) the failure of THC to timely deliver such invoice to Oro shall not relieve Oro of the obligation to make the payments contemplated by this Agreement (it being understood that Oro shall have no obligation to make any payments contemplated by this Agreement until the receipt of an invoice), and (b) if any Service is terminated prior to the end of any calendar month, the applicable Service Fees for such month shall be pro-rated based on the actual last date of the provision of such Service. Each such invoice shall be in a format and contain a level of detail reasonably sufficient under the circumstances to identify the Services provided during the applicable invoice period and support THC’s calculation of the applicable Service Fees. THC shall, upon Oro’s reasonable request, provide Oro with a copy of any supporting documentation for any such invoices. All such invoices and payments shall be made in U.S. dollars.
(b) Oro shall pay to THC, on or before the date that thirty (30) days after the Invoice Date (such date, the “Due Date”) all undisputed amounts specified in the applicable invoice delivered in Oro in accordance with Section 3.02(a). Interest shall accrue on any amount which continues to be due and owing from Oro during the period following the Due Date until such amount is paid in full, at a rate equal to six percent (6%) per annum. In the event of a dispute with respect to the amount of any Service Fees, Oro shall deliver to THC an Invoice Dispute Notice. Any amounts not so disputed shall be deemed accepted and shall be paid (despite disputes on other items) as provided in this Section 3.02(b). The Parties shall endeavor to settle all invoice disputes promptly and in good faith in accordance with the dispute resolution procedures set forth in Section 11.08. Upon resolution of an invoice dispute in favor of THC, Oro, within ten (10) days of the resolution of such dispute, shall be obligated to pay to THC the remaining amount due.
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(c) As used herein, “Invoice Dispute Notice” means a written notice delivered to THC at least three (3) days prior to the Due Date with respect to the disputed invoice listing all disputed items and providing a reasonably detailed description of each dispute.
(d) Oro hereby unconditionally and irrevocably waives any rights of set-off, netting, offset, recoupment, or similar right that Oro has or may have with respect to the payment of the Service Fees or any other payments to be made by Oro or any of other member of the Oro Group pursuant to this Agreement.
(e) Salary and Benefits. THC shall be solely responsible for the payment of all salary and benefits of all personnel of THC used in connection with the Services, including any Sales and Service Taxes in accordance with Section 3.02(f).
(f) Taxes. The Service Fees exclude any and all sales, use, goods, value added and services and other similar taxes imposed on the sale and performance of the Services and any and all such taxes otherwise imposed on, sustained or incurred with respect to, or applicable to, the Services or any payment hereunder (in each case, including, for the avoidance of doubt, any interest, penalties or other additions with respect to such Taxes) (“Sales and Service Taxes”). Oro shall be responsible for and shall timely pay all such Sales and Service Taxes, and if THC pays any Sales and Service Taxes, Oro shall promptly indemnify THC from and against any such Sales and Service Taxes. All Service Fees are exclusive of withholding taxes. Oro may deduct and withhold from any payment under this Agreement any amounts required to be deducted or withheld under applicable Law. Any amounts so deducted or withheld and remitted to the applicable Governmental Authority shall be treated for all purposes of this Agreement as having been paid to THC. THC shall timely provide a properly completed and executed IRS Form W-9 indicating that THC is not subject to backup withholding tax.
(g) Tax Cooperation. Each party undertakes and agrees to cooperate with the other party in accordance with the standard for Services described in Article 2 to enable such party to complete in a timely manner any and all statutory and Tax filings required to be filed by such party and/or its Affiliates pursuant to the Contribution Agreement or Purchase Agreement that include any information related to the Oro Business; provided that nothing in this Section 3.02(g) shall be construed to require THC to make available to any other Party any information relating to, or a copy of, the Income Taxes of THC or any of its respective Affiliates, including any consolidated, combined, affiliated or unitary tax return that includes THC or any of its respective Affiliates, and nothing in this Section 3.02(g) shall be construed to expand the obligations of THC under the Contribution Agreement or the Purchase Agreement. Each party will provide and, as applicable, cause its employees, representatives and its Affiliates and their employees and representatives to provide, all such reasonable cooperation to the other party, its Affiliates and their respective representatives with respect to such filings as is reasonably requested and furnishing or causing to be furnished records, information, work papers, reports and other documents as reasonably requested by such party, its Affiliates or their respective representatives and causing personnel who possess relevant knowledge to make themselves available for consultation with respect to the foregoing.
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Article
4
Transitional Trademark License
Section 4.01. License Grant.
(a) Subject to the terms and conditions of this Agreement and except with respect to the Oro Composite Marks (which, for clarity, is governed by Section 4.01(b)), effective as of the Effective Date, THC (on behalf of itself and its Affiliates) hereby grants to Oro a limited, sublicensable (through multiple tiers), non-transferable, royalty-free, fully paid up, non-exclusive right and license to use the THC Names and Marks in connection with the conduct of the Oro Business (and natural evolutions and extensions thereof) until the later of the date (i) that is twelve (12) months from the Effective Date, and (ii) on which Oro obtains all governmental licenses, authorizations, permits, consents and approvals required to carry on the Oro Business (such period, the “THC Trademark License Term”).
(b) Subject to the terms and conditions of this Agreement, effective as of the Effective Date for a period twenty-four (24) months, THC (on behalf of itself and its Affiliates) hereby grants to Oro a limited, sublicensable (through multiple tiers), non-transferable, royalty-bearing (as set forth in Section 4.02), non-exclusive right and license to use the THC Names and Marks solely in connection with the Oro Composite Marks in connection with the Oro Business (and natural evolutions and extensions thereof) (such period, and any permitted extensions thereof pursuant to this Section 4.01(b), the “Composite Trademark License Term” and, together with the THC Trademark License Term, the “Trademark License Term”). Upon written notice from Oro to THC (to be provided no later than thirty (30) days prior to the end of the then-current Composite Trademark License Term), the Composite Trademark License Term shall be automatically extended for an additional period of up to six (6) months; provided, that any request from Oro for a further extension of the Composite Trademark License Term following such first extension shall be granted in THC’s sole discretion; provided, further, that promptly following the reasonable written request of Oro during the Composite Trademark License Term , the Parties shall negotiate in good faith to mutually agree to the terms and conditions of a license agreement pursuant to which THC shall license certain THC Names and Marks in connection with the Oro Composite Marks following the expiration of such Composite Trademark License Term (it being understood, for the avoidance of doubt, that neither Party shall have any obligation to enter into any such license agreement if the Parties are unable to mutually agree to the terms and conditions thereof after negotiating in good faith for a period of no less than three (3) months).
(c) THC shall (i) diligently maintain all registrations for, and prosecute all pending applications for registration of, the THC Names and Marks included in the Oro Composite Marks, and keep Oro informed of all material developments in connection with the prosecution and maintenance of any registration or application therefor, including any opposition or other challenge by any other Person to the ownership or validity thereof or any registration or application for registration thereof; (ii) provide, at the request of Oro and at Oro’s sole expense, all reasonably necessary assistance in connection with the prosecution (including any oppositions or other challenges), maintenance and enforcement of the Oro Composite Marks, including executing and delivering documents and performing such acts as may be reasonably necessary to give full effect to the terms of this Section 4.01(b), and (iii) promptly notify Oro of any actual or alleged (in writing) infringement, counterfeiting, or other unauthorized use of
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any Intellectual Property Rights of any other Person by the Oro Composite Marks (or any THC Names and Marks included in the Oro Composite Marks) of which it becomes aware, and (iv) promptly notify Oro of any actual or alleged (in writing) infringement by the Oro Composite Mark (or any THC Names and Marks included in the Oro Composite Marks) of which it becomes aware. THC shall give Oro at least thirty (30) days’ prior written notice of its intent to no longer maintain any of the THC Names and Marks included in the Oro Composite Marks, and, at Oro’s reasonable written request, will allow Oro to do so in THC’s name and at Oro’s expense.
(d) Oro shall use commercially reasonable efforts to wind-down use of the THC Names and Marks (other than in connection with the Oro Composite Marks) prior to expiration of the THC Trademark License Term. Oro hereby acknowledges and agrees that, as between the Parties, THC shall retain all right, title and interest in and to the THC Names and Marks and any use by Oro or its sublicensees pursuant to the THC Names and Marks, and any goodwill arising thereby, shall inure solely to the benefit of THC.
(e) The licenses granted under this Section 4.01 shall survive any termination of this Agreement (i) by Oro in accordance with Section 8.02 or termination by THC in accordance with Section 8.02 if such Oro material breach is not a material breach of this Article 4, (ii) under Section 8.03 provided that such Government Authority notice is not with respect to the Trademarks licensed hereunder, and (iii) under Section 8.05.
Section 4.02. Royalty.
(a) In consideration of the grant of the license pursuant to Section 4.01(b), for each month during the Composite Trademark License Term, Oro shall pay to THC a royalty equal to one half per cent (0.5%) of New Rental Customer Revenue (the “Composite Mark Royalty”).
(b) Within thirty (30) days after the end of each calendar month during the Composite Trademark License Term (the “Royalty Due Date”), Oro shall (i) deliver to THC a written statement that sets forth, in reasonable detail, the New Rental Customer Revenue and the Composite Mark Royalty for such calendar month (each, a “Royalty Statement”) and (ii) pay to THC the Composite Mark Royalty set forth in such Royalty Statement.
(c) During the Composite Trademark License Term and for six (6) months thereafter, Oro shall (i) maintain books and records in reasonably sufficient detail to permit THC to verify the calculation and payment of Composite Mark Royalties payable hereunder and (ii) make such books and records reasonably available to THC, upon THC’s reasonable written request, solely as necessary to verify such Composite Mark Royalties and such books and records shall be Oro Confidential Information. THC shall not request such audit more than once in any twelve (12)-month period and shall perform the audit within normal business hours on no less than thirty (30) days’ written notice to Oro. Upon completing any audit, THC shall promptly provide Oro with a copy of any report or summary of findings prepared in connection therewith. If any audit reveals an underpayment of Composite Mark Royalties by Oro to THC then, subject to the dispute resolution provisions in Section 4.02(d), Oro shall pay THC the amount of any underpayment within thirty (30) days after the audit results are delivered to Oro. If any audit reveals an overpayment of Composite Mark Royalties by Oro to THC, the amount of any overpayment shall be credited against Composite Mark Royalties next payable by Oro hereunder; provided that, if no
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further Composite Mark Royalties are or will be payable by Oro hereunder (including because such audit relates to the final Royalty Statement delivered prior to the expiration or termination of the Composite Trademark License Term), THC shall instead refund the amount of such overpayment to Oro in cash within thirty (30) days after the audit results are delivered to Oro. THC shall bear the costs of any audit unless it reveals an underpayment of ten percent (10%) or more of the Composite Mark Royalties during the applicable period, in which case Oro shall reimburse THC for its reasonable and documented costs in relation to such audit.
(d) In the event of a dispute with respect to the amount of any Composite Mark Royalty, THC shall deliver to Oro notice thereof no later than ten (10) Business Days following the Royalty Due Date. In the event of a dispute with respect to the amount of any underpayment of the Composite Mark Royalty identified pursuant to a THC audit, Oro shall deliver to THC notice thereof no later than three (3) days prior to the date such underpayment is due pursuant to Section 4.02(c). Any amounts not so disputed shall be deemed accepted and shall be paid (despite disputes on other items) as provided in this Section 4.02. The Parties shall endeavor to settle all Composite Mark Royalty disputes promptly and in good faith in accordance with the dispute resolution procedures set forth in Section 11.08. Upon resolution of a Composite Mark Royalty dispute in favor of THC, Oro, within ten (10) days of the resolution of such dispute, shall be obligated to pay to THC the remaining amount due. Upon resolution of a Composite Mark Royalty dispute in favor of Oro, THC, within ten (10) days of the resolution of such dispute, the amount of any overpayment shall be credited against Composite Mark Royalties next payable by Oro hereunder; provided that, if no further Composite Mark Royalties are or will be payable by Oro hereunder (including because such dispute relates to the final Royalty Statement delivered prior to the expiration or termination of the Composite Trademark License Term), THC shall instead refund the amount of such overpayment to Oro in cash within ten (10) days after the resolution of such dispute.
(e) Interest shall accrue on any undisputed amount which continues to be due and owing from Oro during the period following the Royalty Due Date until such amount is paid in full, at a rate equal to six percent (6%) per annum.
Section 4.03. Early Termination. Oro may (in its sole discretion) elect to terminate the licenses granted under Section 4.01 by providing no less than thirty (30) days’ advance written notice to THC at any time.
Section 4.04. Reputation and Quality Control.
(a) Oro shall not use any THC Names and Marks in any manner, that would reasonably be expected to (i) tarnish, degrade, disparage or reflect adversely on the THC Names and Marks, (ii) dilute or otherwise harm the value, reputation or distinctiveness of, or THC’s or its Affiliates’ goodwill in, the THC Names and Marks, or (iii) invalidate or cause the cancellation or abandonment of the THC Names and Marks.
(b) Oro shall not make any unlicensed use of, or apply for, file or prosecute any new Trademarks or applications for any Trademarks (other than the Oro Composite Marks) that consist of, incorporate, use, are confusingly similar to, dilutive of, or are a variation, derivation or acronym of (or use a variation, derivation or acronym of) the THC Names and Marks.
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(c) Oro shall use, and cause its permitted sublicensees to use, the THC Names and Marks in a manner consistent with or better than THC’s standards of use as such standards exist as of the Effective Date and any branding and usage guidelines provided by THC to Oro in writing from time to time; provided that, any changes to such branding and usage guidelines shall (i) be consistent with any changes to THC’s use of its own THC Names and Trademarks, and (ii) come into effect at the expiry of a thirty (30) day-period after receipt of a written copy of the updated branding and usage guidelines by Oro.
(d) THC shall notify Oro in writing if any use by Oro of the THC Names and Marks fails to comply with one or more of the provisions of this Article 4 and Oro shall have ninety (90) days to cure such failure (if such failure is reasonably capable of being cured) following receipt of such notice (it being understood, for the avoidance of doubt, that, during such period, Oro shall not be considered to be in breach of this Agreement).
(e) Oro shall notify THC in writing if it becomes aware of any actual or alleged (in writing) infringement, counterfeiting, or other unauthorized use of (i) any THC Names and Marks included in the Oro Composite Marks by any other Person or (ii) any Intellectual Property Rights of any other Person by any THC Names and Marks included in the Oro Composite Marks.
Section 4.05. Fair Use. For the avoidance of doubt, Oro shall be permitted, and nothing herein shall be construed as limiting Oro’s rights, to (a) use any of the THC Names and Marks in a nominative, non-trademark manner, including to reference the historical relationship between the Oro and THC, which references are factually accurate and nondisparaging, (b) retain copies of any books, records and other materials that, as of the effective date of termination, contain or display any of the THC Names and Marks solely for use for internal or archival purposes (and not publicly displayed or otherwise used for any marketing, advertising, promotional or other customer-facing purpose) and (c) use any of the THC Names and Marks in a manner that is required by, or otherwise permitted as “fair use” under, Applicable Law. Without limiting the foregoing, nothing herein shall require Oro to (i) change, amend or modify any contract, agreement, document or other business writing, or (ii) modify, obscure or destroy any internal or non-customer-facing equipment or materials.
Article
5
Confidentiality
Section 5.01. Use and Disclosure. Each Party shall not, and shall cause other Persons under its control (including its Affiliates and Third-Party Providers) that are providing or receiving Services or that otherwise have access to information of the other Party that is confidential or proprietary (such information, “Confidential Information”) not to, disclose to any other Person or use (except to the extent reasonably necessary in order for such Party to perform its obligations under this Agreement and, in the case of Oro, for the Oro Group to receive the benefit of the Services) any Confidential Information of such other Party that, after the Effective Date, is provided or that becomes known or available to the receiving Party pursuant to or as a result of this Agreement; provided, however, that each Party may disclose (subject to Applicable Law) Confidential Information of the other Party to its personnel and such other third parties solely if and to the extent that any of them require such information in order to perform their duties in connection with this Agreement or, in the case of Oro, for the Oro Group to receive the benefit of
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the Services and have agreed to confidentiality obligations at least as restrictive as the terms hereof; provided the receiving Party shall remain responsible for such Party’s personnel and third parties to whom the receiving Party discloses such Confidential Information and any act or omission thereof shall be deemed a breach by the receiving Party hereunder to the extent such act or omission, if performed or omitted by the receiving Party hereunder, would be a breach hereof. As between the Parties, the disclosing Party retains all right, title and interest in any Confidential Information it discloses to the receiving Party, provided, however, that confidential or proprietary information relating to the Oro Business developed or made available by THC for Oro in the performance of the Services shall be the Confidential Information of Oro.
Section 5.02. Protection of Confidential Information. Each Party shall, and shall cause its Affiliates and its and their respective personnel, and Third-Party Providers (if applicable), to use substantially the same degree of care it uses to protect such Confidential Information as it uses for its own confidential information of like kind, but in no event less than a commercially reasonable degree of care.
Section 5.03. Permitted Disclosure. In the event that a Party (a) is required to disclose any Confidential Information of the other Party pursuant to Applicable Law or (b) receives any demand under lawful process or from any Governmental Authority to disclose or provide Confidential Information of the other Party or any of its Affiliates, such Party shall notify the other Party (to the extent permissible under Applicable Law) prior to disclosing or providing such Confidential Information and shall reasonably cooperate, at the sole expense of the other Party, in seeking any reasonable protective arrangements requested by such other Party. Subject to the foregoing, the Party that is required to so disclose or receive such demand, as applicable, may thereafter only disclose or provide Confidential Information which is legally required to be disclosed or provided and shall exercise its commercially reasonable efforts to obtain protective treatment of such Confidential Information.
Section 5.04. Destruction of Confidential Information. Each Party shall, at the request of the other Party or upon termination or expiration of this Agreement, as soon as practicable and (with respect to destruction) except as required to be maintained to comply with provisions of the Contribution Agreement, the Post-Closing LLC Agreement (as defined in the Purchase Agreement), the Purchase Agreement, Applicable Law or retained through routine back-up archival electronic storage in the ordinary course of business, at the receiving Party’s option (a) return to the other Party originals and all copies of all Confidential Information of such other Party or any of its Affiliates in a tangible form (and electronically) or (b) destroy all originals and copies thereof and all notes, extracts or summaries based thereon. Each Party shall, at the other
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Party’s request, confirm compliance with this Article 5 in a writing (electronic mail being sufficient).
Article
6
Intellectual Property Rights; Data Protection
Section 6.01. Ownership; Developed IP.
(a) Nothing in this Agreement shall affect the ownership by either Party or its Affiliates or licensors of Intellectual Property Rights owned by or licensed to such Party or its Affiliates (including rights in proprietary software and third-party software) (i) as of the Effective Date or (ii) arising during the Term but independent of the performance of activities under this Agreement (collectively, “Background IP”).
(b) As between the Parties, and unless otherwise mutually agreed upon by the Parties in writing, any and all Intellectual Property Rights (other than Background IP) developed or acquired by or for THC or any other member of the THC Group, or any Third-Party Provider, whether alone or jointly with any other Person in connection with providing or making available any Services (such Intellectual Property Rights, the “Developed Intellectual Property”) shall be owned solely and exclusively by the Party to whom such Developed Intellectual Property primarily relates, or was otherwise primarily developed for or made available to (such Party, the “IP Owner” and, the other Party, the “Non-Owner Party”). The Parties acknowledge and agree that, where Oro is the IP Owner, with respect to any Developed Intellectual Property that may qualify as a “work made for hire” under Applicable Law, such Developed Intellectual Property is and will be deemed a “work made for hire” for Oro and, as between the Parties, Oro will have the sole and exclusive right to any and all copyrights included in such Developed Intellectual Property. To the extent any Developed Intellectual Property does not qualify as a “work made for hire” under Applicable Law or does not otherwise vest in such IP Owner, the Non-Owner Party (on behalf of itself and its Affiliates) hereby irrevocably assigns to (and without limiting the foregoing, agrees to assign), and shall cause all applicable Third-Party Providers to assign to, the IP Owner or its designee all such right, title and interest in such Developed Intellectual Property, throughout the world and in perpetuity (including all Intellectual Property Rights therein or thereto and all ancillary rights, including the right to collect royalties or other fees and payments in connection therewith). Each Party shall take (or cause to be taken) such further actions, including the execution and delivery of such further documents and instruments, as may be reasonably required by Oro to fully effectuate this Section 6.01(b).
(c) Subject to the terms and conditions of this Agreement, the IP Owner (on behalf of itself and its Affiliates) hereby grants to the Non-Owner Party and its Affiliates a perpetual, irrevocable, non-exclusive, sublicensable, transferable, royalty-free, fully paid up, worldwide right and license under any and all Shared Developed Intellectual Property to use and exploit in connection with, where the Non-Owner Party is THC, the Retained Business, or where the Non-Owner Party is Oro, the Oro Business. For the purposes of this, “Shared Developed Intellectual Property” means any and all Developed Intellectual Property that relates to, or was developed or made available for use in, where the Non-Owner Party is THC, the Retained Business, or where the Non-Owner Party is Oro, the Oro Business, at the time such Developed Intellectual Property
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was developed or acquired, but excludes all Developed Intellectual Property that exclusively relates to or was exclusively developed or made available for use in the Oro Business.
(d) Notwithstanding anything to the contrary herein, as between the Parties, the IP Owner shall have the sole and exclusive right to prosecute, enforce and maintain any and all Intellectual Property Rights of such IP Owner.
Section 6.02. Services Licenses.
(a) Subject to the terms and conditions of this Agreement, with respect to each Service, THC (on behalf of itself and the other members of the THC Group) hereby grants to Oro and each member of the Oro Group a limited, non-exclusive, non-sublicensable (except to contractors, service providers or other third parties acting for or on behalf of Oro or a Oro Group member), non-transferable, royalty-free, fully paid up, worldwide right and license, solely during the Service Period of such Service, to use any and all Intellectual Property Rights (other than Trademarks) that are owned or licensable by the THC Group, in each case, solely to the extent reasonably necessary for the Oro Group to receive and use such Service as provided for and in accordance with this Agreement.
(b) Subject to the terms and conditions of this Agreement, with respect to each Service, Oro (on behalf of itself and the other members of the Oro Group) hereby grants to THC a limited, non-exclusive, non-sublicensable (except to Third-Party Providers), non-transferable, royalty-free, fully paid up, worldwide right and license, solely during the Service Period of such Service, to use any and all Intellectual Property Rights (other than Trademarks) that are owned or licensable by the Oro Group, in each case solely to the extent reasonably necessary for THC to provide such Service as provided for and in accordance with this Agreement.
Section 6.03. Freedom to Operate Licenses.
(a) Subject to the terms and conditions of this Agreement, effective upon the Effective Date and thereafter, THC, on behalf of itself and its Affiliates, hereby grants to Oro and each member of the Oro Group a perpetual, irrevocable, royalty-free, fully paid up, non-transferable (except as set forth in Section 11.02), non-sublicensable (except to contractors, service providers or other third parties acting for or on behalf of Oro or a Oro Group member), worldwide, non-exclusive right and license under any and all THC Retained IP solely for the purpose of the Oro Business (and any natural evolutions and extensions thereof).
(b) Subject to the terms and conditions of this Agreement, effective upon the Effective Date and thereafter, Oro hereby grants to THC and its Affiliates a perpetual, irrevocable, royalty-free, fully paid up, non-transferable (except as set forth in Section 11.02), non-sublicensable (except to contractors, service providers or other third parties acting for or on behalf of THC or its Affiliates), worldwide, non-exclusive right and license under any and all Oro IP solely for the purpose of the Retained Business (and any natural evolutions and extensions thereof).
(c) Without limiting any other rights or remedies granted to Oro or any member of the Oro Group related to Intellectual Property Rights set forth under Section 9.01 of this Agreement, in the Contribution Agreement, Purchase Agreement or any other Ancillary Agreement, the rights and licenses granted pursuant to this Section 6.03 are granted on an “as-is,” “where-is” basis.
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Section 6.04. DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO LICENSES OR OTHER RIGHTS TO INTELLECTUAL PROPERTY OR OTHER ASSETS ARE GRANTED TO ANY PARTY UNDER THIS AGREEMENT, WHETHER BY IMPLICATION, ESTOPPEL, EXHAUSTION OR OTHERWISE, AND EACH PARTY RETAINS AND RESERVES ALL RIGHTS NOT EXPRESSLY GRANTED UNDER THIS AGREEMENT.
Section 6.05. Data Protection. THC shall comply with the obligations set forth in Exhibit B in connection with the performance of the Services.
Article
7
Representations and Warranties
Section 7.01. Mutual Representations and Warranties. Each Party represents and warrants to the other Party, as of the Effective Date, that (a) it is duly organized, validly existing and in good standing under the laws of its place of incorporation, (b) it has full corporate power and authority and legal capacity to enter into this Agreement and perform its obligations hereunder; and (c) the execution, delivery and performance of this Agreement by it (i) does not violate any Applicable Law, (ii) does not conflict with, result in a breach of, or constitute a default under any agreement, license or instrument to which it is a party and (iii) does not require any consent, approval, authorization of, or filing with, any Governmental Authority, except such consents, approvals or authorizations that have been obtained as of the Effective Date.
Section 7.02. THC’s Additional Representations and Warranties. THC represents and warrants to Oro that, as of the Effective Date and throughout the Term, THC shall (a) perform the Services in a professional and workmanlike manner in accordance with the Services Standard, and (b) use commercially reasonable efforts to ensure the Services do not contain any Malicious Code.
Section 7.03. Disclaimer. EXCEPT TO THE EXTENT EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES AND RIGHTS GRANTED TO SERVICE RECIPIENT HEREUNDER ARE PROVIDED AND GRANTED “AS-IS” WITH NO WARRANTIES, AND THC EXPRESSLY EXCLUDES AND DISCLAIMS AND WAIVES ANY WARRANTIES UNDER OR ARISING AS A RESULT OF THIS AGREEMENT, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TIMELINESS, TITLE, NON-INFRINGEMENT OR ANY OTHER WARRANTY WHATSOEVER.
Article
8
Term and Termination.
Section 8.01. Initial Term. This Agreement shall commence as of the Effective Date and shall terminate in its entirety on the expiration of all Service Periods for all Services and Trademark License Term, unless sooner terminated pursuant to this Article 8 (the “Term”).
Section 8.02. Termination for Material Breach. Either Party may terminate this Agreement in whole or in part upon written notice to the other Party if such other Party materially breaches this Agreement and, if such breach is curable within thirty (30) days, does not cure such
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breach within thirty (30) days after receiving written notice of such breach, provided, however, that the failure by Oro to pay any invoiced amount that is the subject of a good faith dispute raised in accordance with Section 3.02(b) shall not constitute a material breach of this Agreement so long as Oro (a) has timely delivered an Invoice Dispute Notice with respect to such amount, (b) has paid all undisputed amounts when due in accordance with this Agreement, and (c) is participating in good faith in the dispute resolution procedures set forth in Section 11.08.
Section 8.03. Termination for violation of Applicable Law. Either Party may terminate this Agreement with respect to a particular Service if either Party (or, in the case of Oro, any other Service Recipient) receives notice from a Governmental Authority that it (or, in the case of Oro, such Service Recipient) is or will be in violation of any Applicable Law as a result of its provision or receipt of such Service.
Section 8.04. Termination by Mutual Agreement. This Agreement may be terminated by the mutual written agreement of the Parties at any time.
Section 8.05. Termination for Bankruptcy. Either Party may terminate this Agreement upon written notice to the other Party if such other Party (a) becomes insolvent or admits its inability to pay its debt obligations as they come due; (b) becomes subject, voluntarily or involuntarily, to any proceeding under any bankruptcy or insolvency law, which is not stayed within ten (10) Business Days or is not dismissed or vacated within thirty (30) Business Days after filing; (c) is dissolved or liquidated or takes any corporate action for such purpose; (d) makes a general assignment for the benefit of creditors; or has a receiver, trustee, custodian or similar agent appointed by order of any court of competent jurisdiction to take charge of or sell any material portion of its property or business.
Section 8.06. Effect of Termination. Upon termination of any Service pursuant to Section 2.04 (Discontinuation of Services), Section 8.02 (Termination for Material Breach), Section 8.03 (Termination for violation of Applicable Law), Section 8.04 (Termination for Mutual Agreement) or Section 8.05 (Termination for Bankruptcy), THC shall have no further obligation to provide any such terminated Service and Oro shall have no obligation to pay any Service Fees relating to such any Services; provided that, notwithstanding such termination, Oro shall remain liable to THC for all Service Fees owed and payable in respect of Services provided prior to the effective date of the termination. Termination of this Agreement as provided for herein shall not prejudice or affect any rights or remedies which shall have accrued prior to such termination or shall thereafter accrue to either Party hereunder.
Section 8.07. Survival. The following Sections shall survive any termination or expiration of this Agreement for any reason: Section 3.02(e) (Salary and Benefits), Section 3.02(f) (Taxes), Section 3.02(g) (Tax Cooperation), Article 5 (Confidentiality), Section 6.01 (Ownership; Developed IP), Section 6.03 (Freedom to Operate Licenses), Article 8 (Term and Termination), Article 9 (Indemnification; Limitation of Liability; Litigation), Article 10 (Independent Contractor), and Article 11 (General). Section 4.01 (License Grant) shall survive termination in accordance with its terms.
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Article
9
Indemnification; Limitation of Liability; Litigation.
Section 9.01. Indemnification by THC. THC shall indemnify, defend and hold harmless Oro, the other members of the Oro Group, and its and their respective officers, directors, employees, agents and representatives (the “Oro Covered Persons”) from and against any and all losses, liabilities, claims, damages, actions, fines, penalties, expenses or costs (including court costs and reasonable attorneys’ fees) (“Losses”) incurred in connection with any third-party claims to the extent resulting from or arising out of (a) any material breach or nonperformance of any provision of this Agreement by THC; (b) fraud, gross negligence, bad faith or willful misconduct of THC or any other THC Covered Person; (c) violation of Applicable Law by THC or any other THC Covered Person in connection with the performance of this Agreement; (d) any liability incurred on account of Oro Business Employees participating in a Hertz Benefit Plan covered under this Agreement, including a plan that did not comply with Applicable Law or IRS qualification provisions; (e) infringement, misappropriation or other violation of any third party Intellectual Property resulting from (i) the provision of the Services hereunder (whether by THC, an Affiliate thereof or a Third-Party Providers), or the use of the Services by any member of the Oro Group solely as permitted by this Agreement, or (ii) the Oro Group’s use of the THC Names and Marks solely as permitted by this Agreement or (f) breach of any confidentiality provisions of this Agreement; provided that THC shall not be responsible for any Losses of any Oro Covered Person to the extent such Losses resulted from such Oro Covered Person’s fraud, gross negligence, bad faith or willful misconduct.
Section 9.02. Indemnification by Oro. Oro shall indemnify, defend and hold harmless THC, the other members of the THC Group, and its and their respective officers, directors, employees, agents and representatives (the “THC Covered Persons”) from and against any and all Losses incurred in connection with any third-party claims to the extent resulting from or arising out of (a) any material breach or nonperformance of any provision of this Agreement by Oro; (b) fraud, gross negligence, bad faith or willful misconduct of Oro or any other Oro Covered Person; (c) violation of Applicable Law by Oro or any other Oro Covered Person in connection with the performance of this Agreement; or (d) breach of any confidentiality provisions of this Agreement; provided that Oro shall not be responsible for any Losses of any THC Covered Person to the extent such Losses resulted from such THC Covered Person’s fraud, gross negligence, bad faith or willful misconduct.
Section 9.03. Indemnification Procedure. The foregoing indemnification obligations are subject to the Oro Covered Person or THC Covered Person, as applicable, seeking indemnification (the “Indemnified Party”) giving THC or Oro, as applicable (the “Indemnifying Party”): (a) prompt written notice of any claim for which defense and indemnification is sought, which notice shall set forth in reasonable detail the basis for the indemnification being sought (taking into account the information then available to the Indemnified Party); provided, that the failure to provide prompt written notice shall not relieve the Indemnifying Party of its indemnification obligations except to the extent that the Indemnifying Party is adversely prejudiced in any material respect by such failure; and (b) sole control of the defense and settlement of such claim and reasonably cooperating in such defense and settlement at the Indemnifying Party’s expense; provided, that, for the avoidance of doubt, notwithstanding the foregoing, THC shall retain sole control of the defense of any Intellectual Property Rights owned or licensed by THC; provided,
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further, that the Indemnifying Party shall not enter into any settlement of any such claim without each Indemnified Party’s prior written consent unless such settlement is solely for monetary payment by the Indemnifying Party and contains an explicit and complete unconditional release of each Indemnified Party in connection with such Claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to retain its own counsel (at its sole expense) to represent its own interests in all cases involving indemnification.
(a) Joint Representation. Without limiting Section 9.03, if both THC and Oro are named as defendants or respondents in a claim, lawsuit, arbitration, or other legal proceeding and agree to be jointly represented by the same counsel in that claim, lawsuit, arbitration or other legal proceeding, then each of THC and Oro shall retain its own counsel to separately represent it with respect to any issues of allocation of liability or Losses between THC and Oro arising from such claim, lawsuit, arbitration or other legal proceeding.
(b) Personal Injury Claims. Notwithstanding anything to the contrary herein, in connection with any Third-Party Claims arising out of any personal injury claim in connection with the TNC-Rental Business during the Term, the Parties shall allocate liability and responsibility for any such Third-Party Claim in accordance with the principles set forth in Exhibit C.
Section 9.04. Disclaimers; Limitation of Liability.
(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCEPT TO THE EXTENT ARISING FROM A PARTY’S (i) GROSS NEGLIGENCE, WILLFUL MISCONDUCT, BAD FAITH OR FRAUD, (ii) INDEMNIFICATION OBLIGATIONS FOR THIRD-PARTY CLAIMS SET FORTH IN SECTION 9.01 OR 9.02, (iii) FAILURE TO CURE PURSUANT TO SECTION 4.04(d), OR (iv) BREACH OF ARTICLE 5 (CONFIDENTIALITY), NO PARTY SHALL BE LIABLE UNDER ANY LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, PUNITIVE, MORAL, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, OR DAMAGES ARISING FROM LOSS OF USE, DATA OR PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCEPT TO THE EXTENT ARISING FROM A PARTY’S (i) GROSS NEGLIGENCE, WILLFUL MISCONDUCT, BAD FAITH OR FRAUD, (ii) INDEMNIFICATION OBLIGATIONS FOR THIRD-PARTY CLAIMS SET FORTH IN SECTION 9.01 OR 9.02, (iii) FAILURE TO CURE PURSUANT TO SECTION 4.04(d), OR (iv) BREACH OF ARTICLE 5 (CONFIDENTIALITY), EACH PARTY’S AGGREGATE LIABILITY UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR OTHERWISE, SHALL NOT EXCEED THE TOTAL AMOUNT OF THE SERVICE FEES PAID OR PAYABLE BY ORO TO THC HEREUNDER IN THE TWELVE (12)-MONTH PERIOD IMMEDIATELY PRIOR TO THE FIRST EVENT GIVING RISE TO SUCH LIABILITY.
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Article
10
Independent Contractor.
Section 10.01. No Partnership or Joint Venture. In performing Services pursuant to this Agreement, THC will be an independent contractor of Service Recipient, and this Agreement will not be deemed to create a partnership, joint venture or other arrangement between THC and any Service Recipient.
Section 10.02. THC Employees. The employees or agents of THC shall not be deemed or construed to be the employees, agents or partners of any Service Recipient, solely as a result of performing Services under this Agreement.
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Article
11
General.
Section 11.01. Entire Agreement. This Agreement, together with its exhibits, constitutes the entire understanding and agreement of the Parties with respect to its subject matter, and effective upon the execution of this Agreement by the Parties, any and all prior agreements, understandings or representations with respect to this subject matter are hereby terminated and canceled in their entirety and are of no further force and effect, except to the extent transactions thereunder have taken place prior to such effective date, in which case such agreements will govern the terms of such transactions.
Section 11.02. Assignment and Binding Effect. No assignment of this Agreement or a Party’s rights, interests or obligations hereunder (whether by operation of law or otherwise) may be made without the other Party’s written consent, and any attempted or purported assignment in violation of this Section 11.02 shall be null and void ab initio; provided, that Oro may, without the consent of THC, assign this Agreement or any of its rights, interests or obligations hereunder, in whole or in part, to any of its Subsidiaries (including any member of the Oro Group), so long as (i) Oro remains fully liable for the performance of all of its obligations under this Agreement notwithstanding such assignment and (ii) Oro provides prompt written notice of such assignment to THC. This Agreement shall inure to the benefit of, and shall be binding upon, the Parties and their respective successors and assigns.
Section 11.03. Notice. Where written notice is required by this Agreement, all notices, consents, certificates or other communications hereunder shall be in writing and shall be deemed given to the persons and at the addresses identified below (or to such other person and address as a Party may give in a notice given in accordance with the provisions hereof) only as follows: (a) if given by personal delivery, upon such personal delivery, (b) if sent for next day delivery by United States registered, certified or express mail, or overnight delivery service, on the date of delivery as confirmed by written confirmation of delivery, or (c) if sent by electronic mail, upon electronic confirmation of receipt, except that if such confirmation occurs on a day that is not a Business Day, then such notice or other communication will not be deemed effective or given until the next succeeding Business Day. Notices sent in any other manner will not be effective.
To Oro:
Oro Mobility Holdings, LLC
8501 Williams Road
Estero, Florida 33928
Email: [***]
To THC:
The Hertz
Corporation
8501 Williams Road
Estero, Florida 33928
Email: [***]
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Section 11.04. Extension of Time; Waiver. A Party may (a) extend the time for the performance of any of the obligations of the other Party under this Agreement and/or (b) waive compliance with any of the agreements or conditions for the other Party’s benefit contained herein. Any such extension or waiver will be valid only if set forth in a writing signed by the acting Party. No waiver by a Party of any default, misrepresentation or breach hereunder, whether intentional or not, may be deemed to extend to any prior or subsequent default, misrepresentation or breach hereunder or affect in any way any rights arising because of any prior or subsequent occurrence. No failure or delay of a Party to exercise any right or remedy under this Agreement will operate as a waiver thereof, and no single or partial exercise of any right or remedy will preclude any other or further exercise of the same, or of any other, right or remedy.
Section 11.05. Force Majeure. Neither Party shall be responsible for a delay in its performance under this Agreement if prohibited by Applicable Law or caused by any of the following to the extent not reasonably foreseeable to, and beyond the reasonable control of, the affected Party: (a) man-made or natural disasters, including weather, storm, fire, flood, earthquake, tornado, tsunami, effects of climate change, hurricane or explosion, (b) war (whether or not declared), invasion, sabotage, terrorism, police action, local, regional, national or international political or social conditions or any national or international hostilities, riot or other civil unrest, or any escalation or worsening of any such conditions, hostilities or acts, actions, embargoes or blockades in effect on or after the date of this Agreement, (c) national or regional emergency or accident, (d) pandemics, disease, outbreak and public health crises, in each case, including any direct or indirect consequence or condition thereof, including outbreaks or additional waves of outbreaks of any contagious diseases (including influenza, COVID-19 or any variation thereof) or (e) power or other utility failures, disruptions or other failures in internet and/or other telecommunication lines (a “Force Majeure Event”). For the avoidance of doubt, a Force Majeure Event shall not include any event to the extent solely caused by (i) any general economic, market, financial or industry conditions, (ii) any strike, lockout, labor stoppage or other industrial disturbance involving the personnel of THC, its Affiliates or a Third-Party Provider, (iii) any failure, breach or default of any Third-Party Provider or other subcontractor, (iv) any shortage of equipment or materials, (v) any failure of THC or its Affiliates to timely renew, extend, replace or procure any license, consent, Permit or Contract, or (vi) any insolvency or financial condition of THC or its Affiliates, in each case of the foregoing clauses (ii), (iii), (iv) and (vi), other than to the extent such failure or event is itself caused by a Force Majeure Event. In the event of a Force Majeure Event, the Party affected by such Force Majeure Event shall notify the other Party as soon as reasonably practicable (and in any event within two (2) days), in writing, upon learning of the occurrence of the Force Majeure Event, including a reasonably detailed description of the Force Majeure Event, its anticipated duration and impact on the Services, and the mitigation steps being taken by THC or its applicable Affiliate. THC shall use its commercially reasonable efforts to mitigate the effect of any Force Majeure Event that affects THC and to continue the provision of the Services to the fullest extent possible during the Force Majeure Event, including by implementing its business continuity and disaster recovery plans and, to the extent commercially reasonable, by providing the affected Services from an alternate location or through alternate means (including through Third-Party Providers). Subject to compliance with the foregoing, THC’s obligations hereunder in respect of the Services directly affected by the Force Majeure Event shall be postponed for such time as its performance is actually suspended or delayed on account of the Force Majeure Event, and, upon the cessation of the Force Majeure Event, THC will use commercially reasonable efforts to promptly resume its performance hereunder without
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delay. Notwithstanding anything to the contrary herein, Oro shall have no obligation to pay Service Fees for any Service to the extent such Service is not provided due to a Force Majeure Event. In the event a Force Majeure Event continues for a period of ten (10) or more consecutive days, Oro may terminate this Agreement in whole or with respect to any affected Service upon written notice to THC, and THC shall promptly refund to Oro any prepaid and unearned Service Fees as of the effective date of such termination.
Section 11.06. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of law provisions.
Section 11.07. Jurisdiction. The Parties hereby acknowledge and agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware (or if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any federal or state court sitting in the State of Delaware and any federal or state appellate court therefrom), and each Party hereby irrevocably consents to the exclusive jurisdiction of such courts in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or outside of the jurisdiction of any such court.
Section 11.08. Dispute Resolution. Any dispute arising under this Agreement shall be considered by a meeting, in person or otherwise, the Service Coordinators, within five (5) Business Days after receipt of a written notice from either Party specifying a dispute and the nature thereof. In the event that the Service Coordinators are unable to resolve a dispute within five (5) Business Days of such initial meeting or other initial discussion, each Service Coordinator shall escalate the dispute to a senior executive (or their designee) (the “Designees”). The Designees shall consider such dispute in person, teleconference or by telephone within five (5) Business Days after receipt of the escalation of such dispute from the Service Coordinators and shall meet as often as reasonably necessary and confer in good faith to resolve the dispute. If the Designees are unable to resolve the dispute within fifteen (15) days after their initial meeting, either Party may initiate (and the Parties shall seek to resolve such dispute by) mediation for an additional thirty (30) days. If the dispute is not resolved within such thirty (30) day period, either Party may bring an action in accordance with the Post-Closing LLC Agreement to resolve the dispute.
Section 11.09. WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.10. Equitable Remedies; Injunctive Relief. The Parties hereby acknowledge and agree that a violation of any of the terms of this Agreement will cause the other Party irreparable injury for which an adequate remedy at law is not available. Accordingly, the Parties expressly agree that in addition to any other remedy that each of the Parties and each Party may
25
be entitled to in law or in equity, each of the Parties will, except as specifically provided otherwise in this Agreement, be entitled to specific performance of the terms of this Agreement and any injunction, restraining order or other equitable relief that may be necessary to prevent any breach(es) thereof. Furthermore, the Parties hereby expressly agree that if any of the Parties institutes any action or proceeding to enforce the provisions hereof, any other Party against whom such action or proceeding is brought shall be deemed to have expressly, knowingly and voluntarily waived the claim or defense that an adequate remedy exists at law. Each Party hereby waives any requirement of any posting of bond.
Section 11.11. Expenses. Except as expressly set forth herein, all costs and expenses incurred in connection with this Agreement shall be paid by the Party incurring such cost or expense.
Section 11.12. Severability. The provisions of this Agreement will be deemed severable, and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof.
Section 11.13. Modification. This Agreement may not be amended or modified except by a writing signed by THC and Oro.
Section 11.14. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. This Agreement will become effective when one or more counterparts have been signed by each Party and delivered to the other Party, it being understood that the Parties need not sign the same counterpart. The exchange of copies of this Agreement and of executed signature pages by electronic mail in “portable document format” (“.pdf”), or by a combination of such means, will constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of an original Agreement for all purposes. Signatures of the Parties transmitted by electronic mail or by .pdf shall be deemed to be original signatures for all purposes.
Section 11.15. Third Party Beneficiaries. Except to the extent expressly set forth herein, nothing in this Agreement shall be deemed to create any right in any creditor or other person or entity not a party hereto. This Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any third party.
Signatures to follow on next page
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed effective as of the date first above written.
| The Hertz Corporation | Oro Mobility Holdings, LLC | |||
| By: | /s/ W. Gil West | By: | /s/ Doria Holbrook | |
| Name: W. Gil West | Name: Doria Holbrook | |||
| Title: Chief Executive Officer | Title: Chief Executive Officer | |||
| Date: October 19, 2026 | Date: October 19, 2026 | |||
EXHIBIT A
SERVICES
[Omitted]
A-1
EXHIBIT B
Data Processing Agreement
[Omitted]
B-1
ANNEX 1 TO EXHIBIT B
Oro Information Security Standards
[Omitted]
B-2
EXHIBIT C
ALLOCATION OF LIABILITY FOR THIRD-PARTY PERSONAL INJURY CLAIMS ARISING FROM THE TNC-RENTAL BUSINESS
[Omitted]
C-1
EXHIBIT D
SERVICE CREDITS
[Omitted]
D-1
Exhibit 10.5
Execution Version
MASTER MOTOR VEHICLE
LEASE AGREEMENT
(OPERATING LEASE)
dated as of October 16, 2026
between
ORO MOBILITY HOLDINGS,
LLC,
the Lessee,
and
THE HERTZ CORPORATION,
the Lessor
MASTER MOTOR
VEHICLE LEASE AGREEMENT
(OPERATING LEASE)
This Master Motor Vehicle Lease Agreement (Operating Lease) (this “Agreement”), dated as of October 16, 2026, is made between ORO MOBILITY HOLDINGS, LLC (“Oro JV” or the “Lessee”) and THE HERTZ CORPORATION (“Hertz” or the “Lessor”).
W I T N E S S E T H :
WHEREAS, Hertz is party to that certain Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of June 29, 2021 (as amended by the First Amendment, dated as of June 27, 2022, as further amended, modified or supplemented from time to time in accordance with its terms, the “HVF III Lease”) by and among Hertz Vehicle Financing III LLC (“HVF III”), Hertz, DTG Operations, Inc. and those permitted lessees from time to time becoming lessees thereunder, pursuant to which HVF III leases certain passenger automobiles, vans, light-duty trucks or medium-duty trucks (collectively, “Vehicles” and each, a “Vehicle”) specified in the HVF III Lease to Hertz, DTG and the permitted lessees named therein; and
WHEREAS, Hertz subleases from time to time certain Vehicles leased by it under the HVF III Lease to Oro JV pursuant to the terms of the Master Motor Vehicle Operating Sublease Agreement, dated as of October 16, 2026 (the “HVF III Oro Sublease”) by and between Hertz, as sublessor and Oro JV, as sublessee;
WHEREAS, Vehicles subleased by Hertz to Oro JV pursuant to the HVF III Oro Sublease are subject to certain conditions set forth in the HVF III Lease;
WHEREAS, pursuant to the HVF III Oro Sublease, following the earlier of (x) the date Hertz notifies Oro JV that Hertz has acquired a Vehicle from HVF III pursuant to the terms of the HVF III Lease and (y) the last day of the “Vehicle Term” for such Vehicle as determined under the HVF III Lease (such period of time, the “Sublease Term” for such Vehicle), Hertz shall use best efforts to acquire such Vehicles from HVF III pursuant to the terms of the HVF III Lease and immediately lease such Vehicles to Oro JV pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree that:
| 1. | LEASED VEHICLES; LEASE TERM. |
| i. | Each Vehicle subleased by Hertz to Oro JV pursuant to the HVF III Oro Sublease that is acquired by Hertz from HVF III pursuant to the terms of the HVF III Lease shall be deemed leased by Lessor to Lessee pursuant to the terms of this Agreement immediately following the acquisition of such Vehicle by Hertz. On the first Business Day of each calendar month, the Hertz shall make available to Oro JV in electronic form (or by other commercially reasonable means) a report of all Vehicles acquired by Hertz from HVF III pursuant to the terms of the HVF III Lease during the prior calendar month (such report, the “Oro Direct Lease Conversion Report”), which report shall indicate the date on which Hertz acquired such Vehicle from HVF III. Any Vehicle listed on the Oro Direct Lease Conversion Report shall be deemed to be subject to the Oro Direct Lease commencing on the date such Vehicle was acquired by Hertz from HVF III as indicated in the Oro Direct Lease Conversion Report. |
| ii. | With respect to Vehicles not previously subject to the HVF III Oro Sublease (which Vehicles previously subject to the HVF III Oro Sublease are subject to clause (i) above), Lessor shall propose Vehicles to be leased to the Lessee in accordance with the terms of this Agreement as specified by the Lessor, subject in each case to Lessee’s prior written approval of such Vehicle and its applicable sublease terms (including the Monthly Rent, Contract Residual Value, Contract Lease Rate and Sublease Term). Upon Lessee’s prior written approval of a Vehicle and its applicable lease terms, the Lessee agrees to lease from the Lessor such Vehicle for the period so specified by the Lessor. |
| iii. | Each Vehicle leased by Lessor to Lessee pursuant to this Agreement shall be specifically identified (including VIN and individual pricing terms) in a supplement to this Agreement designated as the “Oro Direct Lease Vehicle Schedule” (a form of which is attached hereto as Schedule A) which forms a part of this Agreement as if set forth in full herein. The Oro Direct Lease Vehicle Schedule shall be made available to the Lessee in electronic form (or by other commercially reasonable means) by the Lessor on the first Business Day of each calendar month. No Vehicle shall be deemed leased hereunder, and no Vehicle shall be bindingly designated for lease to the Lessee, solely by virtue of its inclusion in the Oro Direct Lease Vehicle Schedule. Any modification, amendment, correction or other change to the Oro Direct Lease Vehicle Schedule (including any revision made by the Lessor to correct a manifest error) shall require the Lessee's prior written consent, and the Lessee shall have the right to review the corrected or modified terms and to reject the affected Vehicle, in which case such Vehicle shall cease to be subject to this Agreement. |
| iv. | The term of the lease (the “Lease Term”) for each Vehicle under this Agreement shall begin on the date specified in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Direct Lease Start Date” (the “Rental Start Date”) and shall end on the earlier of (x) the date specified in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Direct Lease End Date” and (y) the date such Vehicle is surrendered or is deemed surrendered pursuant to Section 13(ii) hereof (due to casualty loss or similar event as described therein). |
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| v. | Lessee shall surrender each Vehicle to Lessor on or prior to the end of the intended maximum Lease Term for such Vehicle, unless Lessor consents (such consent not to be unreasonably withheld, conditioned or delayed) to Lessee retaining possession thereafter. The intended maximum Lease Term shall be the period (I) with respect to Program Vehicles, the date specified in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Combined Start Date” and ending on the date specified as Hertz’s contractual turnback date for such Vehicle as set forth in the related Repurchase Program and (II) with respect to Vehicles that are not Program Vehicles, the date specified in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Combined Start Date” and ending on (i) with respect to internal combustion engine automobiles and hybrid automobiles, a date based on remaining miles to a 225,000-mile target divided by an assumed 3,000 miles per month and (ii) with respect to battery electric vehicles, a date based on remaining miles to a 325,000-mile target divided by an assumed 3,000 miles per month. |
| vi. | As used in this Agreement: |
| (a) | “Manufacturer” means a manufacturer or distributor of passenger automobiles, vans and/or light-duty or medium-duty trucks. |
| (b) | “Non-Program Vehicle” means, as of any date of determination, a Vehicle subject to this Agreement that is not a Program Vehicle as of such date. |
| (c) | “Program Vehicle” means, as of any date of determination, a Vehicle subject to this Agreement that is (i) eligible under, and subject to, a Repurchase Program as of such date and (ii) not re-designated as a Non-Program Vehicle pursuant to this Agreement as of such date. |
| (d) | “Repurchase Program” means a program pursuant to which a Manufacturer or one or more of its affiliates has agreed to repurchase (prior to any attempt to sell to a third party) Vehicles manufactured by such Manufacturer or one or more of its affiliates during a specified period. |
| 2. | PAYMENT TERMS. |
| i. | Each Vehicle to be leased hereunder shall be priced in accordance with the terms set forth in the Oro Direct Lease Vehicle Schedule. |
| ii. | Monthly rent is payable during the Lease Term for each Vehicle (and shall be prorated for partial months). |
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| iii. | The Lessee agrees to pay to the Lessor, on the first (1st) Business Day of each calendar month (each, a “Direct Lease Payment Date”), as rent for each Vehicle leased by it hereunder during such calendar month, an amount equal to the product of (x) the Monthly Rent for such calendar month with respect to such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during such related calendar month that each such Vehicle is leased to the Lessee pursuant to this Agreement and the denominator of which is the total number of days during such related calendar month; provided, however, that for the transitional period during which Hertz collects TNC’s receipts and remits such receipts to Oro JV monthly in arrears (the “Transitional Period”), the Direct Lease Payment Date shall be the tenth (10th) Business Day of a calendar month, with Monthly Rent paid in arrears; provided, further, that following the Transitional Period, with respect to the initial Direct Lease Payment Date for a Vehicle subject to this Agreement, rent for such Vehicle shall equal the sum of (1) an amount equal to the product of (x) the Monthly Rent for such calendar month with respect to such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during such related calendar month that each such Vehicle is leased to the Lessee pursuant to this Agreement and the denominator of which is the total number of days during such related calendar month plus (2) an amount equal to the product of (x) the Monthly Rent for such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during the prior calendar month that such Vehicle was leased to the Lessee pursuant to this Agreement and the denominator of which is the total number of days during such related calendar month. With respect to the Direct Lease Payment Date related to the final calendar month of the Lease Term, Lessee agrees to pay to Lessor (x) the Monthly Rent with respect to such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days of such calendar month prior to the end of the Lease Term and the denominator of which is the total number of days during such related calendar month. The Lessor and the Lessee may from time to time agree to any other method of calculating the Monthly Rent hereunder that is mutually acceptable to them. |
If any Monthly Rent is not paid by Lessee on the applicable Direct Lease Payment Date, Lessee shall have a period of ten (10) Business Days following such Direct Lease Payment Date (the “Cure Period”) to pay such Monthly Rent in full without penalty. If any Monthly Rent remains unpaid upon expiration of the Cure Period, such overdue amount shall thereafter accrue interest, payable by Lessee to Lessor on demand, at a rate per annum equal to the lesser of (i) the Prime Rate (as published in The Wall Street Journal from time to time) plus two percent (2%) and (ii) the maximum rate permitted by applicable law (the “Default Rate”), calculated from the applicable Direct Lease Payment Date (and not from the expiration of the Cure Period) until such overdue amount, together with all accrued interest thereon, is paid in full.
As used herein, the term “Monthly Rent” for a Vehicle shall be the level monthly payment specified in the Oro Direct Lease Schedule for such Vehicle in the column titled “Monthly Rent”, which Monthly Rent shall be calculated for each Vehicle in accordance with the following formula:
Monthly Rent = [ (C − R × (1 + i)^−N) × i ] ÷ [ 1 − (1 + i)^−N ]
where:
“C” is the initial gross capitalized cost of such Vehicle as specified in the column titled Gross Capitalized Cost” for such Vehicle in the Oro Direct Lease Schedule;
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“R” is the residual value of such Vehicle as specified in the column titled “Contract RV” for such Vehicle in the Oro Direct Lease Schedule;
“i” is one-twelfth (1/12) of the lease rate for such Vehicle as specified in the column titled “Contract Lease Rate” for such Vehicle in the Oro Direct Lease Schedule; and
“N” is the number of months in the lease term for such Vehicle, as specified in the column titled “Lease Term Months” for such Vehicle in the Oro Direct Lease Schedule.
As used herein, the term “Initial Vehicle Value” for a Vehicle shall mean 103% of the Manheim Market Report (“MMR”) value for such Vehicle at the time the Lease Term for such Vehicle begins; provided that, if an MMR value is not available for such Vehicle at such time, the Initial Vehicle Value for such Vehicle shall be determined using an alternative methodology mutually agreed by Lessor and Lessee.
As used herein, the term “Gross Capitalized Cost” for a Vehicle shall mean the sum of (x) the Initial Vehicle Value for such Vehicle and (y) any other incremental costs incurred by Lessor in procuring, preparing, registering, delivering or assigning such Vehicle to Lessee; provided that, with respect to any Vehicle leased from Hertz's existing fleet, no incremental cost under clause (y) shall be assumed and the Gross Capitalized Cost for such Vehicle shall equal its Initial Vehicle Value.
As used herein, the term “Admin Fee Premium” shall mean 0.5% of the Gross Capitalized Cost for a Vehicle, assessed annually and amortized into the Monthly Rent for such Vehicle.
Title and registration costs shall be billed separately pursuant to Section 5 and are excluded from the Monthly Rent.
| iv. | Any Vehicle voluntarily surrendered by Lessee prior to the end of the Lease Term (such date, an “Early Termination Date”) shall be subject to an early termination fee (such fee, the “Early Termination Penalty”) which shall equal the number of calendar months from the Early Termination Date for such Vehicle to the date specified in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Direct Lease End Date” multiplied by the Monthly Rent for such Vehicle minus the difference between the Contract Residual Value for such Vehicle and actual resale proceeds for such Vehicle (or, the Market Value for such Vehicle if no such net resale proceeds are available) discounted at the Contract Lease Rate for such Vehicle. Lessee shall pay the Early Termination Penalty to Lessor in arrears on or before the tenth (10th) Business Day of the calendar month following the Sublessee Early Termination Notice Date. |
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As used herein, the term “Contract Residual Value” for a Vehicle shall be the residual value for such Vehicle jointly agreed in writing by Lessor and Lessee, which agreed value shall be set forth in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Contract RV.” Lessor and Lessee shall agree to the Contract Residual Value for a Vehicle prior to such Vehicle being leased pursuant to the terms of this Agreement and prior to such Vehicle being included in the Oro Direct Lease Vehicle Schedule.
As used herein, the term “Contract Lease Rate” for a Vehicle shall be the contractually agreed rate for such Vehicle specified in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Contract Lease Rate.”
| v. | If any Vehicle shall be converted from a Program Vehicle to a Non-Program Vehicle, including as a result of a total loss event with respect to such Vehicle or as a result of damage to such Vehicle or mileage exceeding the threshold specified under the applicable Repurchase Program, Lessee shall be responsible for the loss and all costs associated with such conversion, including any costs associated with finding a replacement Vehicle, to Lessor, and where such conversion does not arise from a total loss event, Lessor shall provide a replacement Vehicle to be subject to this Agreement. |
| 3. | CROSS-RENTING. If, during the Lease Term, Lessor and Lessee mutually agree that Lessor shall utilize any Vehicle subject to this Agreement for a period of one or more days in its daily domestic business, Lessor shall be permitted to utilize such Vehicle for such agreed period of time (such period of time, a “Cross-Renting Period”). In connection with any Cross-Renting Period, Lessor shall pay to Lessee in arrears on or before the tenth (10th) Business Day of the calendar month following any month during which there is a Cross-Renting Period an amount equal to product of (x) the Monthly Rent for the Vehicle subject to the Cross-Renting Period and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during such related calendar month that each such Vehicle was subject to a Cross-Renting Period and the denominator of which is the total number of days during such related calendar month. During any Cross-Renting Period, Lessor shall have sole possession and risk of loss of the Vehicle, bear all costs of its use, operation, maintenance and insurance, and indemnify Lessee for all claims arising from such use, except to the extent caused by Lessee's gross negligence, willful misconduct, fraud or breach of this Agreement. |
| 4. | LEASE ONLY. This Agreement is one of leasing only and Lessee shall not have or acquire any right, title or interest in or to any Vehicle except the right to use and operate it as provided herein. This Agreement is intended to be and shall be treated by the parties hereto as a true lease. Neither the Lessee nor any of its agents or employees is in any way the agent of Lessor in possessing, using or operating any Vehicle. Neither party is a partner or joint venturer of the other. This Agreement evidences a net lease and Lessee’s obligation to pay rent and all other amounts payable by Lessee hereunder is absolute, unconditional and irrevocable and shall be paid without abatement, reduction, set-off or defense of any kind. |
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| 5. | TAXES AND OTHER CHARGES. Lessee shall be liable for all use, excise, personal property, sales, gross receipts and other taxes (other than federal or state income taxes on Lessor's income) and governmental assessments, and all other costs, expenses, fees and charges with respect to the use, ownership, possession, rental, transportation, delivery or operation of each Vehicle. Lessee shall pay such liabilities directly or shall pay to Lessor the amount thereof if Lessor has advanced payment thereof (without regard to governmental credits that may be available to Lessor with respect to its fleet generally). Sales tax may be included in the capitalized cost of the Vehicle rather than charged separately to Lessee. Title, registration and related licensing costs shall be passed through to Lessee on a reasonable best-efforts basis and amortized into a separate monthly charge, distinct from and in addition to the Monthly Rent. Lessee shall keep each Vehicle free of all fines, liens and encumbrances and shall promptly pay or discharge all such fines, liens or encumbrances, including, without limitation, all fines and assessments arising out of toll or parking violations by its operators. In addition, Lessee shall pay to Lessor a reasonable administrative charge for each unpaid violation or other amount owed by Lessee that is paid by Lessor. |
| 6. | OPERATING EXPENSES; MAINTENANCE; RISK OF LOSS. Lessee shall pay all costs and expenses of using and operating each Vehicle until it is surrendered hereunder, including without limitation, gasoline, oil, grease, anti-freeze, adjustments, repairs, tires, tubes, storage, parking, tolls, fines, towing and servicing. Lessee, at Lessee's own expense, shall at all times maintain each Vehicle in good working order and condition and make all necessary repairs and replacements thereto, and shall bear the cost of any mechanical liquidation of a Vehicle. Title to any parts, modifications, improvements, additions or replacements shall vest in Lessor as soon as installed in or attached to any Vehicle. The value of any damage repair, damage liquidation, total loss, or theft with respect to a Vehicle shall be determined based on the last Lessee renting or using such Vehicle, and shall be calculated as the present value of unpaid amounts, adjusted for the agreed difference between such Vehicle's Contract Residual Value or depreciated value and the net resale proceeds or then-current market value for such Vehicle. Lessor shall in no way be liable for any direct or indirect damage or inconvenience resulting from any defect in or loss, theft, damage or destruction of each Vehicle or of the cargo or contents thereof or the time consumed in recovery, repairing, adjusting, servicing or replacing the same and there shall be no abatement or apportionment of rental during such time. Upon surrender, Lessee shall return the Vehicle to Lessor in good working condition, ordinary wear and tear excepted. |
| 7. | QUIET ENJOYMENT; TERMINATION.Lessee shall have the right to peaceably hold and quietly enjoy the Vehicles without interruption by Lessor or any person or entity lawfully claiming through Lessor at all times on or prior to termination of this Agreement, so long as no default pursuant to Section 16 hereof has occurred, and subject to applicable law and the terms and provisions of this Agreement. The Lessor or the Lessee may declare a termination date (the “Termination Date”) under this Agreement upon mutually agreed terms among the parties. All Vehicles on lease prior to the Termination Date shall continue to be governed by the terms hereof, and no such Termination Date shall affect the obligations of either party arising prior or subsequent thereto. This Agreement shall terminate on the date after the Termination Date in which all Vehicles have been surrendered and obligations due or accrued hereunder (liquidated or unliquidated, absolute or contingent) have been indefeasibly paid in full. |
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Notwithstanding anything to the contrary in this Agreement, during the Lease Term for any Vehicle, Lessor shall not sell, lease, transfer, assign or otherwise dispose of such Vehicle, or take possession of such Vehicle, except (a) following the occurrence and during the continuance of an event of default by Lessee under Section 17 hereof that has not been cured within any applicable cure period, (b) in connection with a Casualty or Loss/Theft as described in Section 13(ii) hereof, (c) in connection with a voluntary surrender by Lessee or other permitted early return of such Vehicle in accordance with the terms of this Agreement, or (d) with Lessee’s prior written consent.
| 8. | TITLING, REGISTRATIONS AND INSPECTIONS. Lessee shall pay for the initial registration, titling and licensing for each Vehicle and shall thereafter obtain and pay for all required plates, permits or licenses (in the name of Lessor as applicable) and for all inspections required by any governmental authority. Lessor shall provide a power of attorney if needed for Lessee to act for it for such purposes. Lessor may charge a reasonable administrative charge if Lessor performs any of the foregoing upon failure of Lessee to so perform (other than with respect to the initial registration, titling and licensing for each Vehicle). Lessor makes no representations or warranties with respect to any work performed or parts and/or accessories added to any Vehicle by such third party. Lessee agrees that its obligation to pay rent and other amounts hereunder with respect to such Vehicles are unconditional and may not be reduced by claims against such third party. |
| 9. | USAGE. Lessee shall use and operate, and permit use and operation of each Vehicle in a careful manner and in compliance with all requirements of law and any governmental authority, including such requirements as pertain to the age and licensing of drivers and to disclosure of Lessor's interest in the Vehicle. In no event shall any Vehicle be used or operated for any illegal purpose, or by a person under the influence of alcohol or narcotics, or for the transportation of goods or persons for hire, or for towing any property other than in accordance with the manufacturer’s specifications for any such Vehicle or, unless the Lessor has given its express consent, for transportation of explosive, radioactive, flammable or hazardous materials, or in any manner or for any purpose that would cause any insurance required hereunder to be canceled or suspended, or outside of the United States of America. Default of this provision by Lessee shall be deemed an incurable default, regardless of whether Lessee discontinues the proscribed usage constituting the default. In any event, Lessee agrees that it shall continue to be obligated to pay all rent and all other sums due hereunder even if such Vehicle is located or becomes stranded or impounded outside of the United States of America and shall pay (or reimburse Lessor) promptly upon demand for all costs and expense (including reasonable fees of local counsel) for obtaining possession of any Vehicle located, impounded, or stranded in Mexico or Canada and transporting such Vehicle back to the United States of America. Vehicles leased hereunder shall be used and operated solely by Lessee and its affiliates in their respective trades or businesses and not any other third party. Lessee shall promptly supply Lessor with the name and address of each driver (if any) assigned to each Vehicle and the location of each Vehicle, and shall promptly update such information as it may change from time to time. Lessee shall permit Lessor to inspect any Vehicle during normal business hours and upon reasonable notice. |
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| 10. | INDEMNITY. Lessee shall indemnify and hold harmless the Lessor and Lessor's affiliates and their respective officers, directors, employees and agents from and against any and all claims, whether arising as a result of any product liability, negligence or contract action and whether asserted against such indemnified party with or without litigation (including reasonable legal expenses), and any and all losses, damages, injuries, demands, costs, liabilities, and expenses (collectively, “Claims”) arising out of or connected with this Agreement unless caused by the gross negligence, breach of this Agreement or willful misconduct of the Lessor or any of its affiliates, officers, directors, employees or agents, and any Claims arising out of or connected with the lease, maintenance, use, condition, operation or storage of any vehicle or any accident or incident involving any vehicle. Lessor shall promptly notify Lessee of such asserted Claims, and if the interests of the Lessor and Lessee are not adverse, the Lessee shall be entitled to control the defense thereof as long as it provides Lessor with evidence satisfactory to Lessor (which may, at the request of Lessor, include evidence of insurance or a surety bond) that it has the financial ability to pay any potential amount that may be owed by Lessor. Lessor shall not settle any Claim subject to this indemnity without Lessee’s prior written consent (not to be unreasonably withheld, conditioned or delayed). This provision shall survive termination of this Agreement and the applicable Lease Term for any Vehicle. In the event of any conflict between the terms this Section 10 and that certain services agreement dated as of the date of this Agreement by and between Hertz and Oro JV and each of its subsidiaries (as may be amended, modified or supplemented from time to time in accordance with its terms, the “Services Agreement”), the terms of the Services Agreement shall govern. |
| 11. | INSURANCE. |
| i. | The Lessor shall remain a self-insurer, or will provide insurance, in accordance with all applicable state law requirements and agrees to maintain or cause to be maintained insurance/self-insurance coverage in force as follows: |
| (e) | Comprehensive Public Liability, Property Damage, and Catastrophic Physical Damage. Comprehensive public liability and property damage protection in respect of the possession, condition, maintenance, operation and use of the Vehicles, in the amount required to meet the minimum financial responsibility requirements mandated by applicable state law for each occurrence, and catastrophic physical damage insurance, in an amount not less than $50,000,000. |
| ii. | Lessee shall cooperate with Lessor in all matters pertaining to claims involving any Vehicle and Lessee shall be responsible for payment of any claims involving any Vehicle subject to this Agreement. Lessee shall accrue for public liability and property damage (“PLPD”) claims consistent with Lessee’s current practice, and shall be responsible for the cost of any such claims that materialize or are settled. Lessor shall be responsible for posting any collateralization requirements associated with Lessor's self-insurance program referenced in this Section 11. |
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| 12. | REIMBURSEMENT. If Lessee shall fail, for any reason, to perform any provision of Sections 4, 5, 7 or 10 hereof, Lessor may, at its option, perform the same and Lessee shall reimburse Lessor upon demand for all reasonable sums paid or incurred by Lessor. |
| 13. | SURRENDER AND SALE OF VEHICLES. |
| i. | At any time on or after the completion of the Lease Term for any Vehicle (subject to the terms hereof), Lessee shall surrender such Vehicle to Lessor for sale. Surrender of any Vehicle shall not be effective until Lessor or its agent has actual physical possession of such Vehicle and has received all license plates, registration certificates, documents of title, odometer and damage disclosures and other documentation necessary to sell such Vehicle. Any personal property in a Vehicle upon surrender shall be deemed abandoned and may be disposed of by Lessor or its agent without liability. |
| ii. | If any Vehicle shall be damaged to the extent that it does not warrant repairs or further maintenance (a “Casualty”), Lessee shall promptly notify Lessor of such event and hold the Vehicle or wreckage thereof for disposal by Lessor. Such Vehicle shall be deemed surrendered by Lessee to Lessor as of the date Lessor or its agent takes possession of such wreckage. Lessor shall, as soon as practicable, cause the Vehicle (or wreckage) to be sold. If any Vehicle is lost or stolen, or wreckage is not held by Lessee for disposal by Lessor, or any Vehicle (including any Vehicle that is not located in the United States of America) becomes impounded, stranded, seized or otherwise unavailable to Lessee (such Vehicle, a “Loss/Theft”), Lessee shall notify Lessor thereof and upon such notice the same shall be deemed to have been surrendered to Lessor. The cost of any Casualty or Loss/Theft (such cost, the “Damage Loss”) shall be borne by the Lessee; provided, that during any Cross-Renting Period, any Damage Loss shall be borne by the Lessor. The amount of any Damage Loss for a Vehicle shall be calculated based on the Monthly Rent for such Vehicle multiplied by the number of calendar months from the date Lessor notifies Lessee of the Casualty or Loss/Theft to the date specified in the Oro Direct Lease Vehicle Schedule for such Vehicle in the column titled “Direct Lease End Date”, minus the Contract Residual Value for such Vehicle, as adjusted for the net resale proceeds for such Vehicle (or, the Market Value for such Vehicle if no such net resale proceeds are available). |
| iii. | If Lessee surrenders any Vehicle prior to the end of the Lease Term, such Vehicle shall be subject to the Early Termination Penalty as set forth in Section 2(iv). |
| iv. | Lessee shall be responsible for all costs associated with the disposition of Vehicles subject to this Agreement and shall be responsible for all program return costs associated with any Program Vehicles, including any costs associated with the conversion of a Program Vehicle to a Non-Program Vehicle, including as a result of a total loss event with respect to such Vehicle or as a result of damage to such Vehicle or mileage exceeding the threshold specified under the applicable Repurchase Program, any costs associated with finding a replacement Vehicle. |
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| 14. | SINGLE INDIVISIBLE LEASE. Notwithstanding any language to the contrary contained herein, the parties hereto intend that this Agreement constitutes one indivisible lease of the Vehicles and not separate leases governed by similar terms. The Vehicles constitute one economic unit, and the Monthly Rent and all other provisions hereof have been negotiated and agreed to based on a premise of all of the Vehicles being leased to the Lessee as a single, composite, inseparable transaction and would have been substantially different had separate leases or a divisible lease been intended. The parties intend that the provisions of this Agreement shall at all times be construed, interpreted and applied so as to carry out their mutual objective to create an indivisible lease of all of the Vehicles and, in particular but without limitation, that, for purposes of any assumption, rejection or assignment of this Agreement under 11 U.S.C. Section 365, or any successor or replacement thereof or any analogous state law, this is one indivisible lease and non-severable lease and executory contract dealing with one legal and economic unit and that this Agreement must be assumed, rejected or assigned as a whole with respect to all (and only as to all) of the Vehicles. Except as expressly provided in this Agreement for specific, isolated purposes (and then only to the extent expressly otherwise stated), all provisions of this Agreement apply equally and uniformly to all of the Vehicles as one unit. Upon the occurrence and during the continuance of any default under Section 17 hereof, the Lessor shall be entitled to exercise any applicable remedies under Section 17 hereof with respect to all of the Vehicles or any portion of the Vehicles, regardless of the portion of the Vehicles to which such default relates. The parties may amend this Agreement from time to time to add or remove one or more additional vehicles as part of the Vehicles and such future addition to, or removal from, the Vehicles shall not in any way change the indivisible and non-severable nature of this Agreement and all of the foregoing provisions shall continue to apply in full force. Each party agrees that it shall not assert that this Agreement is not, and shall not challenge the characterization of this Agreement as, a single indivisible lease of all of the Vehicles. Each party hereby waives any claim or defense based on a recharacterization of this Agreement as any agreement other than a single indivisible lease of all of the Vehicles. |
| 15. | ODOMETER DISCLOSURE STATEMENT. Federal Law (and certain State laws) requires that Lessee disclose, and Lessee shall disclose, the mileage of each Vehicle to Lessor in connection with the transfer of ownership of each Vehicle. Failure to complete an odometer disclosure statement or making a false statement may result in fines and/or imprisonment in accordance with law. Lessee agrees to pay an administrative fee reasonably determined by Lessor in its discretion if Lessee fails to provide a required odometer or damage disclosure statement at the time of surrender of any Vehicle. |
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| 16. | ASSIGNMENT OF WARRANTIES; NO CONSEQUENTIAL DAMAGES; FORCE MAJEURE. The Lessor will assign or otherwise make available to the Lessee all of the Lessor's rights, if any, under the manufacturer's warranty on each Vehicle fully to the extent that such rights are assignable. The occurrence of the Lease Commencement Date for a Vehicle constitutes Lessee’s acknowledgement and agreement hereunder that: (i) such Vehicle is the make and model and is equipped as specified by Lessee; and (ii) such Vehicle is an authorized addition under this Agreement. LESSOR IS NOT A PRODUCER, MANUFACTURER, DESIGNER OR DISTRIBUTOR OF THE VEHICLES AND LESSEE ACKNOWLEDGES THAT EACH VEHICLE ORDERED HEREUNDER INCLUDING, WITHOUT LIMITATION, ANY USED VEHICLE, IS OF A DESIGN SELECTED BY LESSEE AND IN ITS JUDGMENT IS SUITABLE FOR ITS PURPOSES. LESSEE HEREBY CONFIRMS AND AGREES THAT THE LESSOR HAS MADE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESSED OR IMPLIED, WITH RESPECT TO ANY VEHICLE INCLUDING, WITHOUT LIMITATION, ANY USED VEHICLE, AND LESSOR SHALL NOT BE LIABLE FOR ANY SUCH REPRESENTATIONS OR WARRANTIES INCLUDING WARRANTIES AS TO DESIGN, QUALITY OR CAPACITY, AND THERE IS NO IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES OF THE OTHER EXCEPT WITH RESPECT TO THIRD PARTY INDEMNITY CLAIMS. Neither party shall be liable for any failure or delay in the performance of any provision hereof (including, in the case of Lessor, delivery of any Vehicle) resulting from acts of God, acts of civil or military authority, acts of public enemy or terrorism, epidemic, civil disturbance, insurrection, explosion, earthquake, the elements, fire or other casualty, riots, strikes or other labor difficulties, governmental regulations or restrictions or any cause beyond such party’s control provided that such party acts with reasonable diligence provided, however, in no event shall either party be excused pursuant to the terms of this Section from the performance of any payment obligation hereunder (which, in the event of a casualty loss, shall be as set forth in Section 13(ii) hereof), compliance with law or, in the case of Lessee, compliance with the insurance requirements set forth herein. |
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| 17. | DEFAULT. If (a) Lessee shall fail to pay any rent or other payment obligation when due hereunder and such failure continues for five (5) Business Days after written notice from Lessor or fail to pay any insurance claims hereunder, or (b) Lessee shall otherwise fail to observe or perform any other covenant or obligation to be observed or performed by Lessee hereunder, and such failure continues for a period of fifteen (15) days from the initial occurrence thereof after written notice from Lessor, or (c) there shall be filed by or against Lessee or any guarantor any petition in bankruptcy under any state or federal law, or a receiver or trustee shall be appointed for its business or property or Lessee or any guarantor shall make an assignment for the benefit of creditors, or (d) Lessee or any guarantor shall cease to operate or shall sell all or substantially all of its assets to an entity not approved by Lessor in writing or that has not expressly assumed this Agreement, or (e) Lessee or any guarantor shall fail to be or remain solvent, or (f) Lessee shall make or permit any lien, attachment or levy to be asserted against any Vehicle which shall not be removed within five days, or (g) there shall be a material deterioration in the creditworthiness or financial condition of Lessee or any guarantor, including, without limitation, due to any consolidation or merger of such party with or into any other entity or Lessee shall otherwise not meet current credit standards of Lessor (including, without limitation, due to any change of control or deterioration of the credit condition of any parent company or any guarantor of Lessee), or (h) Lessee or any affiliate of Lessee shall be in material default beyond any applicable notice and cure period under the terms of any maintenance, services or other agreement entered into with Lessor or any of its respective affiliates (the “Other Agreements”), or (i) Lessee, any parent company or any guarantor, or any principal owner, senior officer or director of any of the foregoing, is convicted of a felony; or (j) Lessee is owned or controlled by any Blocked Person (as hereafter defined), then the Lessee shall be in default hereunder. For purposes hereof, a “Blocked Person” means any person or entity that is now or at any time (A) on a list of Specially Designated Nationals issued by the Office of Foreign Assets Control (“OFAC”) of the United States Department of the Treasury or any sectoral sanctions identification list, or (B) whose property or interests in property are blocked by OFAC or who is subject to sanctions imposed by law, including any executive order of any branch or department of the United States government or (C) otherwise designated by the United States or any regulator having jurisdiction or regulatory oversight over Lessor, to be a person with whom Lessor is not permitted to extend credit to or with regard to whom, a lessee relationship may result in penalties against Lessor or limitations on a lessor’s ability to enforce a transaction. At any time upon or after the occurrence of a default that has not been cured within any applicable cure period, Lessor may notify Lessee that all of the rights of Lessee hereunder and with respect to the Vehicles shall forthwith terminate and all Vehicles leased hereunder shall forthwith be surrendered to Lessor or Lessor may repossess said Vehicles without court order or other process of law, and for such purpose Lessor (or its designee) may enter upon any premises where the Vehicles may be during normal business hours and upon reasonable prior notice to Lessee, remove the same, and in connection with any such default, Lessor may exercise any other remedy at law or equity available to Lessor, notice thereof being expressly waived by Lessee. Lessor’s action or failure to act on one remedy constitutes neither an election to be limited thereto nor a waiver of any other remedy or a release of Lessee from the liability to return the Vehicles or for any loss or claim by the Lessor or its affiliates with respect thereto. After the occurrence of a default that has not been cured within any applicable cure period, Lessor may, consistent with its ownership of the Vehicles and anything in this Agreement to the contrary notwithstanding, deal with the Vehicles in any manner it sees fit and may, without notice, but shall not be obligated to, sell Vehicles or any of them, at a public or private sale, upon such terms as Lessor may reasonably deem advisable, and in the event of any such sale or sales the Lessor shall, in addition to all other rights or remedies hereunder, be entitled to retain as owner of such Vehicles all proceeds of any and all such sales. In addition, at any time on or after a default hereunder that has not been cured within any applicable cure period, the Lessor may retain all resale proceeds and payments of any nature theretofore or thereafter received by Lessor including any resale proceeds, refunds and other sums, if any, otherwise payable to the Lessee under Section 13 hereof or any other provision of this Agreement. Lessor shall also be entitled to recover from the Lessee all unpaid monthly rental payments for the rental term as provided herein and all additional rents (as calculated pursuant to Section 13) in respect of the Vehicles sold and all additional sums, if any, due and unpaid, together with costs and expenses, including reasonable attorneys' fees, incurred by Lessor in repossession of the Vehicles and in the enforcement of its rights and remedies under this Section 17 or any other provision of this Agreement. To the extent permitted by law, the parties hereto hereby agree that in the event that Lessee files for protection under applicable bankruptcy laws, the Lessee shall assume or reject this Agreement on or prior to the 60th day after the date of such filing. |
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| 18. | ASSIGNMENTS. This Agreement may not be assigned nor any Vehicle subleased by Lessee without Lessor's prior written consent. In no event shall Lessee assign, lien, encumber or transfer any interest in any Vehicle leased hereunder or any interest in this Agreement to any third party, including any customer of Lessee. Lessor may assign this Agreement or any rentals or charges due or to become due hereunder; provided, that the assignee (i) is not a Blocked Person and (ii) assumes in writing Lessor's obligations under this Agreement arising from and after the effective date of such assignment. No assignment shall relieve Lessor of liability for any breach occurring prior to such assignment or impair any claim, defense or right of set-off Lessee has against Lessor accrued on or prior to the date of such notice. After notice of any assignment, Lessee shall make all payments to the assignee(s). Lessor shall also have the right to place a security interest or assign as part of a financing this Agreement and the Vehicles. Lessee agrees that any such security interest or assignment shall be superior to this Agreement and that it will not assert against any secured party or assignee any claim, defense or set-off it may have against the Lessor. |
| 19. | REPORTING; INTEGRATED AGREEMENTS; OTHER ADDITIONAL PROVISIONS. |
| i. | If not publicly available, Lessee shall furnish to Lessor (i) within forty five (45) days after the end of each of the first three quarters of any fiscal year, the consolidated balance sheet and related statements of operations of Lessee and any guarantor, in each case, showing the consolidated financial condition as of the close of the fiscal quarter and the consolidated financial results during such fiscal quarter, certified by the Financial Officer as fairly presenting the consolidated financial condition and consolidated results of operations in accordance with generally accepted accounting principles (GAAP) (subject to normal year-end audit adjustments), and (ii) within ninety (90) days after the end of each fiscal year, the consolidated or combined annual audit report of Lessee and any guarantor, in each case, prepared in accordance with generally accepted accounting principles (GAAP) by independent accountants of recognized national standing accompanied by an opinion of such accountants to the effect that such financial statements fairly present the financial condition and results of operations, and (iii) such other financial information with respect to itself or any guarantor reasonably requested by and satisfactory to Lessor. Lessee shall notify the Lessor, in writing, of any of the following events or any contractual arrangement to consummate any of the following events with respect to Lessee or any guarantor: (A) change in name, (B) material change of ownership or control, (C) merger, consolidation, amalgamation or transfer of all or substantially all of its assets and (D) spin-off or sale of any operating division or affiliate that uses or has possession of any Vehicle at the time of such spin-off or sale (and the surrender date or re-assignment location for such Vehicles). Lessee shall execute or provide Lessor with all documents reasonably requested by Lessor to evidence what party is obligated (directly or as guarantor) hereunder following any of the foregoing events. |
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| ii. | The parties hereto hereby acknowledge that this Agreement and each Other Agreement (as defined in Section 17 hereof) collectively are integrated agreements with each other and arise out of integrated business transactions. The Lessor and each of its affiliates, collectively, have a right of recoupment and set-off with respect to any obligations owing to Lessee under any such agreement and any obligations owing by Lessee under any such agreement (whether the obligations owing to Lessee arise under the same or different agreement as the obligations owing by Lessee). In addition, Lessor has the right to hold any credits and proceeds (from resale, insurance or otherwise) otherwise payable to Lessee hereunder as cash collateral to secure any obligations owed by Lessee or any affiliate hereunder or under any such Other Agreement, whether such obligations are then existing or may be thereafter arising until all such agreements have been terminated and all such obligations have been paid in full (and subject to retention of such amounts in accordance with Section 17 hereof), and Lessee hereby grants Lessor a security interest therein. |
| iii. | Lessee does hereby constitute and appoint Lessor (and any employee of Lessor with responsibility for the same) as its attorney in fact with full authority to sign and/or endorse in the name of Lessee and to file on behalf of Lessee, all documentation required or useful in connection with the disposition of a Vehicle, any police report for any lost or stolen Vehicle or other evidence that such Vehicle has been lost or stolen as Lessor shall deem necessary or desirable, any documentation required by any governmental authority with respect to each Vehicle and any insurance checks or other payments or proceeds related to the Vehicles. Lessee does hereby ratify and confirm all acts that may lawfully be done in pursuance of the foregoing power. Lessee further agrees to provide Lessor with a separate power of attorney with respect to a particular Vehicle and such other documentation as is reasonably requested by Lessor from time to time to further the legitimate purposes of this Agreement. |
| iv. | Lessee hereby acknowledges and agrees that in using computer-based services of Lessor, it is bound by all terms and conditions of use set forth therein and all online agreements for users. Lessee shall bear the risk and hold harmless Lessor with respect to the accuracy and completeness of all information provided by Lessee on such computer-based services, including, without limitation, the selection of vehicles and components thereof in connection with any vehicle ordering hereunder. |
| v. | Lessee acknowledges and agrees that Lessor is not providing accounting, legal, tax or other professional advice or services to Lessee in connection with this Agreement including, without limitation, Lessee’s leasing of any Vehicles hereunder. |
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| 20. | CONFIDENTIALITY. Each of the parties will regard and preserve as confidential and proprietary to the other party all such other party’s Confidential Information (as hereinafter defined), whether written, oral or computer based, to which it had access in connection with this Agreement. As used herein, “Confidential Information” means any information that is disclosed by or on behalf of either party (the “Disclosing Party”) to the other party (the “Receiving Party”) that is identified as “confidential” or reasonably should be considered to be proprietary or confidential. Confidential Information includes, without limitation: (a) the terms of this Agreement (including, with respect to Lessor as Disclosing Party, all pricing and charges hereunder and all data files provided by Lessor in connection with any services provided to Lessee by Lessor); (b) all financial information; and (c) all technology, technology applications, computer programs, and software (expressly including, with respect to Lessor as Disclosing Party, all computer-based information and its tools), including, proprietary computer-based design, operational or consulting tools, screen shots, reports resulting therefrom, hardware/software licenses, computer source code, algorithms, and modules (with respect to any of the foregoing, whether owned or licensed. “Confidential Information” does not include any information which: (i) the Receiving Party rightfully knew before the Disclosing Party disclosed it to the Receiving Party; (ii) is or becomes generally available to the public through no wrongful act of the Receiving Party; (iii) the Receiving Party develops independently and without the use of any Confidential Information of the Disclosing Party, or (iv) the Receiving Party rightfully obtains from a third party who has the right to disclose it to the Receiving Party. The Receiving Party may disclose Confidential Information on a confidential basis to agents, representatives, subcontractors, investors, lenders, rating agencies, and actual or prospective assignees. Upon termination of this Agreement, Lessor may retain one archival copy of Lessee’s Confidential Information on a strictly confidential basis for audit purposes (and the terms of this Section will survive termination of this Agreement with respect to such retained Confidential Information). Notwithstanding anything to the contrary set forth herein, the Receiving Party will have a right to comply with any court order, subpoena, or requirement of law in disclosing any Confidential Information. Breach of this Section may cause irreparable harm and the injured party will be entitled to injunctive relief for unauthorized disclosures. |
| 21. | MISCELLANEOUS PROVISIONS. |
| i. | All notices, requests and other communications to any party hereunder shall be in writing (including email transmission or similar writing) and shall be given to such party, addressed to it, at its address or email set forth below, or at such other address or email as such party may hereafter specify for the purpose by notice to the other party. Copies of notices, requests and other communications delivered pursuant to the foregoing sentence shall be sent to the following addresses: |
LESSEE: Oro Mobility
Holdings, LLC
8501 Williams Road
Estero, Florida 33928
Email: [***]
LESSOR: The Hertz
Corporation
8501 Williams Road
Estero, FL 33928
E-mail: [***]
Each such notice, request or communication shall be effective when received at the address specified above.
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| ii. | This Agreement (together with all schedules and riders hereto) constitutes the entire agreement between the parties with respect to the subject matter hereof and cannot be modified, altered or otherwise changed except by either (i) written notice by Lessor to Lessee to which Lessee does not object in writing within 10 days after receipt or (ii) an agreement in writing signed by both parties. The parties acknowledge that the pricing and other economic terms have been determined on a pool-wide basis and this Agreement constitutes one integrated lease for multiple Vehicles. This Agreement shall supersede any predecessor agreement with respect to the subject matter hereof; provided, however, pricing shall continue to be determined in accordance with any applicable predecessor agreement and any Schedule A issued thereunder. Lessee represents and warrants that in entering into this Agreement it is relying on its own judgment, belief and knowledge and the counsel of its attorneys of choice. Lessee is not relying on representations or statements made by Lessor or any person representing Lessor except for the representations and warranties expressed in this Agreement. If one or more provisions of this Agreement shall be for any reason unenforceable or invalid, then such provisions shall be deemed severable from the remaining provisions of this Agreement and shall in no way affect the validity or enforceability of such other provisions or the rights of the parties hereunder. |
| iii. | THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 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 Lessee and all rights of the Lessor expressed herein shall be in addition to and not in limitation of those provided by applicable law or in any other written instrument or agreement. |
| iv. | Each Party may enforce any claim arising out of this Agreement in any state or federal court having subject matter jurisdiction, including, without limitation, any state or federal court located in the State of New York. For the purpose of any action or proceeding instituted with respect to any such claim, each Party hereby irrevocably submits to the jurisdiction of such courts. Each Party further irrevocably consents to the service of process out of said courts by mailing a copy thereof, by registered mail, postage prepaid, to the Lessee and agrees that such service, to the fullest extent permitted by law, (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall be taken and held to be valid personal service upon and personal delivery to it. Each Party hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may have or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court located in the State of New York and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. |
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| v. | This Agreement shall be binding upon and inure to the benefit of the parties, their respective successors and assigns and upon all affiliates of Lessee, if any, which may use any Vehicle leased hereunder. No use by an affiliate of Lessee shall constitute a sublease or assignment to such affiliate. Each signatory as “Lessee” hereto and each such affiliate that may use a Vehicle shall be jointly and severally liable for all payment and performance obligations hereunder, and Lessee hereby guarantees performance by such affiliates until such time as all payments owed hereunder have been paid in full. Use of the Vehicles by such affiliate shall evidence acceptance of this subsection (d) without further action. This provision shall survive the termination of this Agreement. |
| vi. | EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. |
| vii. | Prior to commencing any action or proceeding with respect to any dispute, controversy or claim arising out of or relating to this Agreement (each, a “Dispute”), the parties shall attempt in good faith to resolve such Dispute through negotiation between senior executives of each party who have authority to settle the Dispute, for a period of not less than thirty (30) days following written notice of the Dispute from one party to the other. If the Dispute is not resolved within such period, either party may pursue any remedy available at law or in equity, subject to Sections 21(iii) and 21(iv) hereof. Nothing in this Section shall preclude either party from seeking a temporary restraining order or preliminary injunction in any court of competent jurisdiction at any time to preserve the status quo or prevent irreparable harm, including in connection with Lessor's rights and remedies under Section 17 hereof. |
| viii. | In the event that any petition in bankruptcy under any state or federal law is filed by or against Lessee (“Lessee Bankruptcy”), Lessee will be obligated and shall pay to Lessor all costs and expenses, including reasonable attorneys’ fees and costs, incurred by Lessor in connection with such Lessee Bankruptcy to enforce this Agreement, collect amounts owed under this Agreement, protect the rights of Lessor under this Agreement, including the rights regarding assumption or rejection of this Agreement, and/or protect the interests of Lessor in connection with such Lessee Bankruptcy. |
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| ix. | The headings set forth in this Agreement are inserted for convenience of reference only and shall not be deemed to constitute part of the Agreement. This Agreement may be signed in any number of counterparts, each constituting a duplicate original. A facsimile or photocopy of a fully executed version of this Agreement shall have the same force and effect as an original. The parties agree that this Agreement may be electronically signed. The parties agree that electronic signatures appearing on this Agreement are the same as handwritten signatures for the purposes of validity, enforceability and admissibility. |
| x. | In addition to those express provisions of this Agreement, any provision of or obligation under this Agreement, which contemplates performance or observance subsequent to any termination or expiration of this Agreement, shall survive any such termination or expiration, and shall continue in full force and effect. In addition, all provisions of this Agreement shall survive the termination or expiration of this Agreement to the fullest extent necessary to give the parties the full benefit of the bargain expressed herein and of the intent contemplated hereunder. |
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused it to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
| LESSOR: | |||
| THE HERTZ CORPORATION | |||
| By: | /s/ Ricardo Fonzaghi | ||
| Name: | Ricardo Fonzaghi | ||
| Title: | President, Fleet Division | ||
| LESSEE: | |||
| ORO MOBILITY HOLDINGS, LLC | |||
| By: | /s/ Doria Holbrook | ||
| Name: | Doria Holbrook | ||
| Title: | Chief Executive Officer | ||
SCHEDULE A
FORM OF Oro Operating Lease Vehicle Schedule
[Omitted]
Exhibit 10.6
Execution Version
MASTER MOTOR VEHICLE OPERATING SUBLEASE AGREEMENT
dated as of October 16, 2026
between
ORO MOBILITY HOLDINGS,
LLC,
the Sublessee,
and
THE HERTZ CORPORATION,
the Sublessor
MASTER MOTOR VEHICLE OPERATING SUBLEASE AGREEMENT
This Sublease Agreement (this “Agreement”), dated as of October 16, 2026, is made between ORO MOBILITY HOLDINGS, LLC (the “Sublessee”) and THE HERTZ CORPORATION (“Hertz” or the “Sublessor”).
W I T N E S S E T H :
WHEREAS, Hertz Vehicle Financing III LLC (“HVF III”), the Sublessor, DTG Operations, Inc. (“DTG”) and those Permitted Lessees from time to time becoming Lessees thereunder are parties to the Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of June 29, 2021 (as amended by the First Amendment, dated as of June 27, 2022, as further amended, modified or supplemented from time to time in accordance with its terms, the “HVF III Lease”), pursuant to which HVF III leases certain Vehicles specified in the HVF III Lease to the Sublessor, DTG and the Permitted Lessees; and
WHEREAS, the Sublessor wishes to sublease from time to time certain passenger automobiles, vans, light-duty trucks or medium-duty trucks (collectively, “Vehicles” and each, a “Vehicle”) leased by the Sublessor pursuant to the HVF III Lease to the Sublessee, and the Sublessee desires to sublease from time to time from the Sublessor such Vehicles for use in its daily business;
WHEREAS, the HVF III Lease permits the Sublessor to sublease Vehicles subject to the HVF III Lease only during the Vehicle Term (as determined under the HVF III Lease) for such Vehicle, and Sublessee wishes to utilize such Vehicles for a period of time beyond such Vehicle Term;
WHEREAS, the Sublessor and the Sublessee are parties to the Master Operating Lease dated as of October 16, 2026 (the “Oro Direct Lease”), a copy of which is attached as Exhibit A hereto;
WHEREAS, Sublessor and Sublessee have determined that following the Sublease Term for any Vehicle, so long as Sublessor has acquired such Vehicle pursuant to the terms of the HVF III Lease and in accordance with this Agreement, it is commercially beneficial to Sublessor and Sublessee to deem such Vehicle subject to the Oro Direct Lease;
WHEREAS, Sublessor agrees it shall use best efforts to acquire such Vehicles from HVF III pursuant to the terms of the HVF III Lease;
NOW, THEREFORE, in consideration of the foregoing premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree that:
| 1. | DEFINITIONS. Unless otherwise specified herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Definitions List attached as Schedule I to the HVF III Lease. If a capitalized term is not defined in Schedule I, such capitalized terms shall have the meaning ascribed to such term in the Definitions List attached as Schedule I to the Base Indenture, dated as of June 29, 2021 (as amended by the First Amendment, dated as of June 27, 2022, as further amended, modified or supplemented from time to time in accordance with its terms, exclusive of Supplements creating a new Series of Notes, the |
“Base Indenture”), between HVF III, as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee, as such Definitions List may from time to time be amended in accordance with the terms of the Base Indenture. The Base Indenture and each related Series Supplement are referred to herein as the “Indenture”.
| 2. | SUBLEASE OF VEHICLES. From time to time during the Term of the HVF III Lease, the Sublessor shall propose Vehicles leased by it from HVF III under the HVF III Lease to be subleased to the Sublessee in accordance with the terms of this Agreement for a period of one or more days during the Vehicle Term for such Vehicles as specified by the Sublessor, subject in each case to Sublessee’s prior written approval of such Vehicle and its applicable sublease terms (including the Monthly Rent, Contract Residual Value, Contract Lease Rate and Sublease Term). Upon Sublessee’s prior written approval of a Vehicle and its applicable sublease terms, the Sublessee agrees to sublease from the Sublessor such Vehicle for the period so specified by the Sublessor. Each Vehicle subleased to the Sublessee under this Agreement shall be specifically identified (including VIN and individual pricing terms) in a supplement to this Agreement designated as the “Sublease Vehicle Schedule” (a form of which is attached hereto as Annex A) which forms a part of this Agreement as if set forth in full herein. The Sublease Vehicle Schedule shall be made available to the Sublessee in electronic form (or by other commercially reasonable means) by the Sublessor on the first Business Day of each calendar month. No Vehicle shall be deemed subleased hereunder, and no Vehicle shall be bindingly designated for sublease to the Sublessee, solely by virtue of its inclusion in the Sublease Vehicle Schedule. A Vehicle shall become subject to this Agreement only upon the Sublessee's prior written approval of such Vehicle and its applicable sublease terms, and the Sublessee may, in its sole discretion, decline to approve any Vehicle, in which case such Vehicle shall not be subject to this Agreement. Any modification, amendment, correction or other change to the Sublease Vehicle Schedule (including any revision made by the Sublessor to correct a manifest error) shall require the Sublessee's prior written consent, and the Sublessee shall have the right to review the corrected or modified terms and to reject the affected Vehicle, in which case such Vehicle shall cease to be subject to this Agreement. |
| 3. | Term of Sublease. The Sublessee agrees that any Vehicle subleased pursuant to this Agreement shall be for a term commencing on the date specified in the column titled “Sublease Start Date” in the Sublease Vehicle Schedule for such Vehicle (following the Sublessee’s prior written approval of such Vehicle and its applicable sublease terms in accordance with Section 2) and ending on the earlier of (x) the date the Sublessor notifies the Sublessee that Sublessor has acquired such Vehicle from HVF III pursuant to the terms of the HVF III Lease and (y) the last day of the Vehicle Term for such Vehicle as determined under the HVF III Lease (such period of time, the “Sublease Term” for such Vehicle). On the first Business Day of each calendar month, the Sublessor shall make available to the Sublessee in electronic form (or by other commercially reasonable means) a report of all Vehicles acquired by Sublessor from HVF III pursuant to the terms of the HVF III Lease during the prior calendar month (such report, the “Oro Direct Lease Conversion Report”), which report shall indicate the date on which Sublessor acquired such Vehicle from HVF III. Any Vehicle listed on the Oro Direct Lease Conversion Report shall be deemed to be subject to the Oro Direct Lease commencing on the date such Vehicle |
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was acquired by Sublessor from HVF III as indicated in the Oro Direct Lease Conversion Report.
| 4. | Rent. The Sublessee agrees to pay to the Sublessor, on the first (1st) Business Day of each calendar month (each, a “Sublease Payment Date”), as sublease rent for each Vehicle subleased by it hereunder during such calendar month, an amount equal to the product of (x) the Monthly Rent for such calendar month with respect to such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during such related calendar month that each such Vehicle is subleased to the Sublessee pursuant to this Agreement and the denominator of which is the total number of days during such related calendar month; provided, however, that for the transitional period during which Hertz collects TNC’s receipts and remits such receipts to Oro JV monthly in arrears (the “Transitional Period”), the Sublease Payment Date shall be the tenth (10th) Business Day of a calendar month, with Monthly Rent paid in arrears; provided, further, that following the Transitional Period, with respect to the initial Sublease Payment Date for a Vehicle subject to this Agreement, sublease rent for such Vehicle shall equal the sum of (1) an amount equal to the product of (x) the Monthly Rent for such calendar month with respect to such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during such related calendar month that each such Vehicle is subleased to the Sublessee pursuant to this Agreement and the denominator of which is the total number of days during such related calendar month plus (2) an amount equal to the product of (x) the Monthly Rent for such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during the prior calendar month that such Vehicle was subleased to the Sublessee pursuant to this Agreement and the denominator of which is the total number of days during such related calendar month. With respect to the Sublease Payment Date related to the final calendar month of the Sublease Term, Sublessee agrees to pay to Sublessor (x) the Monthly Rent with respect to such Vehicle and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days of such calendar month prior to the end of the Sublease Term and the denominator of which is the total number of days during such related calendar month. |
If any Monthly Rent is not paid by Sublessee on the applicable Sublease Payment Date, Sublessee shall have a period of ten (10) Business Days following such Sublease Payment Date (the “Cure Period”) to pay such Monthly Rent in full without penalty. If any Monthly Rent remains unpaid upon expiration of the Cure Period, such overdue amount shall thereafter accrue interest, payable by Sublessee to Sublessor on demand, at a rate per annum equal to the lesser of (i) the Prime Rate (as published in The Wall Street Journal from time to time) plus two percent (2%) and (ii) the maximum rate permitted by applicable law (the “Default Rate”), calculated from the applicable Sublease Payment Date (and not from the expiration of the Cure Period) until such overdue amount, together with all accrued interest thereon, is paid in full.
As used herein, the term “Monthly Rent” for a Vehicle shall be the level monthly payment specified in the Sublease Vehicle Schedule for such Vehicle in the column titled “Monthly Rent”, which Monthly Rent shall be calculated for each Vehicle in accordance with the following formula:
Monthly Rent = [ (C − R × (1 + i)^−N) × i ] ÷ [ 1 − (1 + i)^−N ]
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where:
“C” is the initial gross capitalized cost of such Vehicle as specified in the column titled Gross Capitalized Cost” for such Vehicle in the Sublease Vehicle Schedule;
“R” is the residual value of such Vehicle as specified in the column titled “Contract RV” for such Vehicle in the Sublease Vehicle Schedule;
“i” is one-twelfth (1/12) of the lease rate for such Vehicle as specified in the column titled “Contract Lease Rate” for such Vehicle in the Sublease Vehicle Schedule; and
“N” is the number of months in the lease term for such Vehicle, as specified in the column titled “Lease Term Months” for such Vehicle in the Sublease Vehicle Schedule.
The Sublessor and the Sublessee may from time to time agree to any other method of calculating the sublease rent hereunder that is mutually acceptable to them.
| 5. | EARLY TERMINATION of SubleaSE TERM BY SUBLESSEE. If Sublessee notifies Sublessor that it voluntarily no longer wishes to sublease a Vehicle identified on the Sublease Vehicle Schedule prior to the end of the Sublease Term for such Vehicle (the date of such notification, a “Sublessee Early Termination Notice Date”), Sublessee agrees to pay to Sublessor a fee (such fee, the “Early Termination Penalty”) which shall equal the number of calendar months from the Sublessee Early Termination Notice Date for such Vehicle to the Early Termination Calculation Date for such Vehicle indicated in the Sublease Vehicle Schedule multiplied by the Monthly Rent for such Vehicle minus the difference between the Contract Residual Value for such Vehicle and actual resale proceeds for such Vehicle (or, the Market Value for such Vehicle if no such net resale proceeds are available) discounted at the Contract Lease Rate for such Vehicle. Sublessee shall pay the Early Termination Penalty to Sublessor in arrears on or before the tenth (10th) Business Day of the calendar month following the Sublessee Early Termination Notice Date. |
As used herein, the term “Contract Residual Value” for a Vehicle shall be the residual value for such Vehicle jointly agreed in writing by Sublessor and Sublessee, which agreed value shall be set forth in the Sublease Vehicle Schedule for such Vehicle in the column titled “Contract RV.” Sublessor and Sublessee shall agree to the Contract Residual Value for a Vehicle prior to such Vehicle being subleased pursuant to the terms of this Agreement and prior to such Vehicle being included in the Sublease Vehicle Schedule.
As used herein, the term “Contract Lease Rate” for a Vehicle shall be the contractually agreed rate for such Vehicle specified in the Sublease Vehicle Schedule for such Vehicle in the column titled “Contract Lease Rate.”
As used herein, the term “Early Termination Calculation Date” for a Vehicle shall be the contractually agreed end date for such Vehicle specified in the Sublease Vehicle Schedule for such Vehicle in the column titled “Date Termination Penalty”.
| 6. | PROGRAM VEHICLES SUBJECT TO SUBLEASE. If any Vehicle subject to this Agreement shall be converted from a Program Vehicle to a Non-Program Vehicle, including as a result of a total loss event with respect to such Vehicle or as a result of |
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damage to such Vehicle or mileage exceeding the threshold specified under the applicable Repurchase Program, Sublessee shall be responsible for the loss and all costs associated with such conversion, including any costs associated with finding a replacement Vehicle, to Sublessor.
| 7. | CROSS-RENTING. If, during the Sublease Term, Sublessor and Sublessee mutually agree that Sublessor shall utilize any Vehicle subject to this Agreement for a period of one or more days in its daily domestic business, Sublessor shall be permitted to utilize such Vehicle for such agreed period of time (such period of time, a “Cross-Renting Period”). In connection with any Cross-Renting Period, Sublessor shall pay to Sublessee in arrears on or before the tenth (10th) Business Day of the calendar month following any month during which there is a Cross-Renting Period an amount equal to product of (x) the Monthly Rent for the Vehicle subject to the Cross-Renting Period and (y) the percentage equivalent of a fraction, the numerator of which is the total number of days during such related calendar month that each such Vehicle was subject to a Cross-Renting Period and the denominator of which is the total number of days during such related calendar month. During any Cross-Renting Period, Sublessor shall have sole possession and risk of loss of the Vehicle, bear all costs of its use, operation, maintenance and insurance, and indemnify Sublessee for all claims arising from such use, except to the extent caused by Sublessee's gross negligence, willful misconduct, fraud or breach of this Agreement. |
| 8. | OPERATING EXPENSES; MAINTENANCE; RISK OF LOSS. Sublessee shall pay all costs and expenses of using and operating each Vehicle until it is surrendered hereunder, including without limitation, gasoline, oil, grease, anti-freeze, adjustments, repairs, tires, tubes, storage, parking, tolls, fines, towing and servicing. Lessee, at Lessee's own expense, shall at all times maintain each Vehicle in good working order and condition and make all necessary repairs and replacements thereto, and shall bear the cost of any mechanical liquidation of a Vehicle. Upon surrender, Sublessee shall return the Vehicle to Sublessor in good working condition, ordinary wear and tear excepted. |
If any Vehicle shall be damaged to the extent that it does not warrant repairs or further maintenance (a “Casualty”), Sublessee shall promptly notify Sublessor of such event and hold the Vehicle or wreckage thereof for disposal by Sublessor. Such Vehicle shall be deemed surrendered by Sublessee to Sublessor as of the date Sublessor or its agent takes possession of such wreckage. Sublessor shall, as soon as practicable, cause the Vehicle (or wreckage) to be sold. If any Vehicle is lost or stolen, or wreckage is not held by Sublessee for disposal by Sublessor, or any Vehicle (including any Vehicle that is not located in the United States of America) becomes impounded, stranded, seized or otherwise unavailable to Sublessee (such Vehicle, a “Loss/Theft”), Sublessee shall notify Sublessor thereof and upon such notice the same shall be deemed to have been surrendered to Sublessor. The cost of any Casualty or Loss/Theft (such cost, the “Damage Loss”) shall be borne by the Sublessee; provided, that during any Cross-Renting Period, any Damage Loss shall be borne by the Sublessor. The amount of any Damage Loss for a Vehicle shall be calculated based on the Monthly Rent for such Vehicle multiplied by the number of calendar months from the date Lessor notifies Lessee of the Casualty or Loss/Theft to the date specified in the Sublease Vehicle Schedule for such Vehicle in the column titled “Date Termination Penalty”, minus the Contract Residual Value for such Vehicle, as adjusted for the net resale proceeds for such Vehicle (or, the Market Value for such Vehicle if no such net resale proceeds are available).
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| 9. | CERTAIN REPRESENTATIONS AND WARRANTIES. The Sublessee represents and warrants to the Sublessor that, as of the date hereof: |
| i. | the Sublessee is (i) a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of Delaware, (ii) has the limited liability company power and authority to own its properties and to carry on its business as now being and hereafter proposed to be conducted, and (iii) is duly qualified, in good standing and authorized to do business in each jurisdiction in which the character of its properties or the nature of its businesses requires such qualification or authorization; |
| ii. | the Sublessee has the limited liability company power, and has taken all necessary corporate action to authorize it, to execute, deliver and perform this Agreement in accordance with its terms, and to consummate the transactions contemplated hereby; and this Agreement has been duly executed and delivered by the Sublessee and is a legal, valid and binding obligation of the Sublessee enforceable in accordance with its terms; |
| iii. | all of the issued equity interests of the Sublessee are owned directly or indirectly by the Sublessor, free and clear of all liens, encumbrances, equities or claims; |
| iv. | no consent, action by or in respect of, approval or other authorization of, or registration, declaration or filing with, any Governmental Authority or other Person is required for the valid execution and delivery by the Sublessee of this Agreement or for the performance of any of the Sublessee’s obligations hereunder other than such consents, approvals, authorizations, registrations, declarations or filings as would not have in the aggregate a Material Adverse Effect; |
| v. | the Sublessee is not (i) in violation of its certificate of formation or limited liability company agreement; (ii) in violation of any Requirement of Law with respect to it or (iii) in violation of any Contractual Obligation with respect to it, except in the case of this clause (iii) as would not have in the aggregate a Material Adverse Effect; and |
| vi. | the regular course of the Sublessee’s business is renting vehicles in its daily domestic business, including its car sharing business. |
| 10. | CERTAIN AFFIRMATIVE COVENANTS. (a) Until the expiration or termination of this Agreement, and thereafter until the obligations of the Sublessee under this Agreement are satisfied in full, the Sublessee covenants and agrees that: |
| i. | it will use the Vehicles which are subject to this Agreement primarily in its daily domestic business; |
| ii. | it will take all actions within its power, and use its best efforts, to permit the Sublessor to perform all of the Sublessor’s obligations under, and comply with all of the terms and conditions of, the HVF III Lease and, if applicable, it shall comply with the terms and conditions of the HVF III Lease; |
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| iii. | it will permit any Person designated in writing by HVF III, the Trustee or the Sublessor to visit and inspect any of the properties, corporate books or financial records of the Sublessee and discuss its affairs, finances and accounts with officers and employees of the Sublessee, all at such reasonable times and as often as HVF III, the Trustee or the Sublessor may reasonably request; and |
| iv. | it will do and cause to be done at all times all things necessary, including, without limitation, filing UCC financing statements and continuation statements to maintain and preserve the Sublessor’s first-priority perfected security interest in the Vehicles. |
(b) Until the expiration or termination of this Agreement, and thereafter until all obligations of the Sublessor under this Agreement and under the HVF III Lease are satisfied in full, the Sublessor covenants and agrees that it will perform all obligations required to be performed by it under the HVF III Lease with respect to each Vehicle subleased to the Sublessee pursuant to this Agreement.
| 11. | NO Breach OF Lease.The Sublessee agrees and covenants that it will not take any action, or fail to take any action, in each case that would cause the Sublessor to be in violation or breach of any term of the HVF III Lease, including, but not limited to, creating or permitting to exist any Lien with respect to any Vehicle subleased hereunder, except for Permitted Liens. |
| 12. | Non-Liability of Sublessor. The Sublessor shall not be liable to the Sublessee for any failure or delay in obtaining Vehicles or making delivery thereof, except to the extent arising from the gross negligence, willful misconduct, fraud or breach of this Agreement by Sublessor or any of its Affiliates. AS BETWEEN THE SUBLESSOR AND THE SUBLESSEE, ACCEPTANCE FOR SUBLEASE OF THE VEHICLES SUBLEASED BY THE SUBLESSEE SHALL CONSTITUTE THE SUBLESSEE’S ACKNOWLEDGMENT AND AGREEMENT THAT THE SUBLESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT SUCH VEHICLES ARE IN GOOD ORDER AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND CAPACITY SELECTED BY THE SUBLESSEE, THAT THE SUBLESSEE IS SATISFIED THAT THE SAME ARE SUITABLE FOR THIS USE AND THAT THE SUBLESSOR IS NOT A MANUFACTURER OR ENGAGED IN THE SALE OR DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY REPRESENTATION, WARRANTY OR COVENANT WITH RESPECT TO MERCHANTABILITY, CONDITION, QUALITY, DURABILITY OR SUITABILITY OF SUCH VEHICLE IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF THE SUBLESSEE, OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT THERETO. The Sublessor shall not be liable to the Sublessee for any failure or delay in delivering any VEHICLE designated for sublease pursuant to this Agreement, or for any failure to perform any provision hereof, resulting from fire or other casualty, natural disaster, riot, strike or other labor difficulty, governmental regulation or restriction, or any cause beyond |
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their direct control. IN NO EVENT SHALL THE SUBLESSOR BE LIABLE TO THE SUBLESSEE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR FAILURE OF ANY GROUP I CPF TRUCK, AND THERE SHALL BE NO ABATEMENT OF SUBLEASE RENT, MONTHLY BASE RENT, SUPPLEMENTAL RENT OR OTHER AMOUNTS PAYABLE HEREUNDER BECAUSE OF THE SAME.
| 13. | No Sublessor Warranties. THE SUBLESSEE ACKNOWLEDGES THAT THE SUBLESSOR, HVF III, THE TRUSTEE AND THE NOTEHOLDERS ARE NOT THE MANUFACTURER, THE AGENT OF THE MANUFACTURER, OR THE DISTRIBUTOR OF THE VEHICLES SUBLEASED BY SUCH SUBLESSEE HEREUNDER. THE SUBLESSOR, HVF III, THE TRUSTEE AND THE NOTEHOLDERS MAKE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE FITNESS, SAFENESS, DESIGN, MERCHANTABILITY, CONDITION, QUALITY, CAPACITY OR WORKMANSHIP OF THE VEHICLES NOR ANY WARRANTY THAT THE VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR ANY CONTRACT SPECIFICATION, AND AS BETWEEN THE SUBLESSOR, HVF III, THE TRUSTEE AND THE NOTEHOLDERS ON THE ONE HAND AND THE SUBLESSEE ON THE OTHER, THE SUBLESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND EXPENSE. THE SUBLESSEE SPECIFICALLY WAIVES ALL RIGHTS TO MAKE CLAIMS AGAINST THE SUBLESSOR, HVF III, THE TRUSTEE AND THE NOTEHOLDERS AND ANY VEHICLE FOR BREACH OF ANY WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE SUBLESSOR, HVF III, THE TRUSTEE AND THE NOTEHOLDERS, THE SUBLESSEE SUBLEASES THE VEHICLES “AS IS.” IN NO EVENT SHALL THE SUBLESSOR, HVF III, THE TRUSTEE OR ANY NOTEHOLDER BE LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED. |
| 14. | NO PETITION. The Sublessee hereby covenants and agrees that, prior to the date which is one year and one day after the payment in full of all of the Notes, it will not institute against, or join any other Person in instituting against, HVF III any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceeding under the laws of the United States or any state of the United States. In the event that the Sublessee takes action in violation of this Section 14, the Sublessor agrees, for the benefit of the Secured Parties, that it shall file an answer with the bankruptcy court or otherwise properly contest the filing of such a petition by the Sublessee against HVF III or the commencement of such action and raise the defense that the Sublessee has agreed in writing not to take such action and should be estopped and precluded therefrom and such other defenses, if any, as its counsel advises that it may assert. The provisions of this Section 14 shall survive the termination of this Agreement. |
| 15. | SUBMISSION TO JURISDICTION. Each of HVF III, the Trustee and the Sublessor may enforce any claim arising out of this Agreement in any state or federal court having subject matter jurisdiction, including, without limitation, any state or federal court located in the State of New York. For the purpose of any action or proceeding instituted with respect to any such claim, the Sublessee hereby irrevocably submits to the jurisdiction of such courts. |
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The Sublessee further irrevocably consents to the service of process out of said courts by mailing a copy thereof, by registered mail, postage prepaid, to the Sublessee and agrees that such service, to the fullest extent permitted by law, (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall be taken and held to be valid personal service upon and personal delivery to it. Nothing herein contained shall affect the right of each of HVF III, the Trustee and the Sublessor to serve process in any other manner permitted by law or preclude each of HVF III, the Trustee and the Sublessor from bringing an action or proceeding in respect hereof in any other country, state or place having jurisdiction over such action. The Sublessee hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may have or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court located in the State of New York and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum.
| 16. | GOVERNING LAW. THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 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 Sublessee and all rights of the Sublessor expressed herein shall be in addition to and not in limitation of those provided by applicable law or in any other written instrument or agreement. |
| 17. | JURY TRIAL. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. |
| 18. | DISPUTES. Prior to commencing any action or proceeding with respect to any dispute, controversy or claim arising out of or relating to this Agreement (each, a “Dispute”), the parties shall attempt in good faith to resolve such Dispute through negotiation between senior executives of each party who have authority to settle the Dispute, for a period of not less than thirty (30) days following written notice of the Dispute from one party to the other. |
| 19. | NOTICES. All notices, requests and other communications to any party hereunder shall be in writing (including email transmission or similar writing) and shall be given to such party, addressed to it, at its address or email set forth below, or at such other address or email as such party may hereafter specify for the purpose by notice to the other party. Copies of notices, requests and other communications delivered pursuant to the foregoing sentence shall be sent to the following addresses: |
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| SUBLESSEE: | Oro Mobility Holdings, LLC |
| 8501 Williams Road | |
| Estero, Florida 33928 | |
| Email: [***] |
| SUBLESSOR: | The Hertz Corporation |
| 8501 Williams Road | |
| Estero, FL 33928 | |
| Email: [***] |
Each such notice, request or communication shall be effective when received at the address specified above. AMENDMENTS. The terms of this Agreement will not be waived, altered, modified, amended, supplemented or terminated in any manner whatsoever unless the same shall be in writing and signed and delivered by the Sublessor and the Sublessee.
| 20. | TERMINATION OF AGREEMENT. This Agreement shall (i) terminate with respect to any Vehicle subleased hereunder on the last day of the Sublease Term with respect to such Vehicle and (ii) terminate in its entirety upon the earlier of (a) the Operating Lease Expiration Date, (b) the date on which the HVF III Lease is terminated pursuant to Section 9.2 or Section 9.4 thereof or (c) the date on which the Sublessor and the Sublessee mutually agree to terminate this Agreement. This Agreement shall also terminate at the option of the Lessor or the Trustee upon an Operating Lease Event of Default, Limited Liquidation Event of Default or a Liquidation Event of Default. Upon the termination of this Agreement in its entirety, any accrued and unpaid rent, and all other payments accrued but unpaid under this Agreement shall, automatically and without further action by the Sublessor, become immediately due and payable. Upon the termination of this Agreement as it applies to any particular Vehicle subleased hereunder, the Sublessee shall, at the request of the Sublessor, return or cause to be returned such Vehicle to the Sublessor or to such other Person as the Sublessor directs. |
| 21. | OWNERSHIP OF VEHICLES. The Sublessee, by its execution hereof, acknowledges and agrees that (i) this is an agreement to sublease only and title to the Vehicles will at all times remain in HVF III’s name or in the name of HVF III’s Nominee, (ii) all Vehicles remained owned by the Lessor and (iii) the Sublessee will not have any rights, title or interest whatsoever other than a leasehold interest subject to and as provided by this Agreement. |
| 22. | RIGHTS OF SUBLESSOR PLEDGED TO LESSEE AND TRUSTEE. The Sublessee acknowledges that (i) pursuant to the HVF III Lease, the Sublessor has granted to HVF III all of the rights, remedies, powers, privileges and claims of the Sublessor under this Agreement and that HVF III may act in lieu of the Sublessor in the exercise of such rights, remedies, powers, privileges and claims and (ii) pursuant to the Base Indenture, HVF III has granted to the Trustee all of HVF III’s rights, remedies, powers, privileges and claims under the HVF III Lease and this Agreement and that, under certain circumstances set forth in the Base Indenture, the Trustee may act in lieu of HVF III in the exercise of such rights, remedies, powers, privileges and claims. |
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| 23. | SUBORDINATION; ENFORCEMENT. (a) This Agreement and the rights of the Sublessee hereunder shall be expressly subject to, and subordinate in all respects to, the terms of, and the rights of HVF III under, the HVF III Lease. In the event of any conflict between the terms of the HVF III Lease and the terms hereof, the terms of the HVF III Lease shall govern. |
(b) The Sublessee expressly acknowledges the provisions of Section 1(b) of the HVF III Lease and agrees that Notwithstanding any language to the contrary contained herein, the parties hereto intend that this Agreement constitutes one indivisible lease of the Vehicles and not separate leases governed by similar terms. The Vehicles constitute one economic unit, and the Monthly Rent and all other provisions hereof have been negotiated and agreed to based on a premise of all of the Vehicles being leased to the Sublessee as a single, composite, inseparable transaction and would have been substantially different had separate leases or a divisible lease been intended. The parties intend that the provisions of this Agreement shall at all times be construed, interpreted and applied so as to carry out their mutual objective to create an indivisible lease of all of the Vehicles and, in particular but without limitation, that, for purposes of any assumption, rejection or assignment of this Agreement under 11 U.S.C. Section 365, or any successor or replacement thereof or any analogous state law, this is one indivisible lease and non-severable lease and executory contract dealing with one legal and economic unit and that this Agreement must be assumed, rejected or assigned as a whole with respect to all (and only as to all) of the Vehicles. Except as expressly provided in this Agreement for specific, isolated purposes (and then only to the extent expressly otherwise stated), all provisions of this Agreement apply equally and uniformly to all of the Vehicles as one unit. The parties may amend this Agreement from time to time to add or remove one or more additional vehicles as part of the Vehicles and such future addition to, or removal from, the Vehicles shall not in any way change the indivisible and non-severable nature of this Agreement and all of the foregoing provisions shall continue to apply in full force. Each party agrees that it shall not assert that this Agreement is not, and shall not challenge the characterization of this Agreement as, a single indivisible lease of all of the Vehicles. Each party hereby waives any claim or defense based on a recharacterization of this Agreement as any agreement other than a single indivisible lease of all of the Vehicles. The Sublessee expressly acknowledges and agrees that the Lessor, or its assignee, may, upon the occurrence and during the continuance of any Operating Lease Event of Default, be entitled to exercise any applicable remedies under Section 9 of the HVF III Lease with respect to all of the Vehicles or any portion of the Vehicles, regardless of the portion of the Vehicles to which such Operating Lease Event of Default relates.
(c) The Sublessee expressly acknowledges the provisions of Section 9 of the HVF III Lease and agrees that the Lessor, or its assignee, may enforce any of the provisions of such Section 9 against such Sublessee hereunder.
| 24. | HEADINGS. Section headings used in this Agreement are for convenience of reference only and shall not affect the construction of this Agreement. |
| 25. | EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute one and the same Agreement. |
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| 26. | EFFECTIVE DATE; TERMINATION. (a) This Agreement shall become effective on the date hereof when each of the parties to this Agreement have executed the signature pages attached hereto. |
. (b) This Agreement shall terminate upon the termination of the HVF III Lease.
| 27. | ASSIGNMENT. Other than renting the Vehicles subleased hereunder to its customers, the Sublessee shall not (i) assign any of its interests under this Agreement to any other party or (ii) sublease any of the Vehicles it subleases hereunder to any other party. The Sublessor shall not assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Sublessee, other than to any Person that, in accordance with the terms of the HVF III Lease, succeeds to or is assigned the Sublessor's rights and obligations as "Lessee" under the HVF III Lease with respect to the Vehicles subleased hereunder. |
| 28. | SET-OFF AND RECOUPMENT. The parties hereto hereby acknowledge that this Agreement and the Oro Direct Lease collectively are integrated agreements with each other and arise out of integrated business transactions. The Sublessor and each of its affiliates, collectively, have a right of recoupment and set-off with respect to any obligations owing to Sublessee under any such agreement and any obligations owing by Sublessee under any such agreement (whether the obligations owing to Sublessee arise under the same or different agreement as the obligations owing by Sublessee). In addition, Sublessor has the right to hold any credits and proceeds (from resale, insurance or otherwise) otherwise payable to Sublessee hereunder as cash collateral to secure any obligations owed by Sublessee or any affiliate hereunder or under the Oro Direct Lease, whether such obligations are then existing or may be thereafter arising until all such agreements have been terminated and all such obligations have been paid in full. |
| 29. | THIRD-PARTY BENEFICIARY. The parties hereto agree that each of HVF III and the Trustee is an express third-party beneficiary to this Agreement with respect to each and every right granted to HVF III or the Trustee, as applicable, hereunder. |
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused it to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
| SUBLESSOR: | ||
| THE HERTZ CORPORATION | ||
| By: | /s/ Ricardo Fonzaghi | |
| Name: Ricardo Fonzaghi | ||
| Title: President, Fleet Division | ||
| SUBLESSEE: | ||
| Oro Mobility Holdings, LLC | ||
| By: | /s/ Doria Holbrook | |
| Name: Doria Holbrook | ||
| Title: Chief Executive Officer | ||
[Signature Page to Sublease Agreement]
EXHIBIT A
ORO OPERATING LEASE
[Omitted]
ANNEX A
FORM OF SUBLEASE VEHICLE SCHEDULE
[Omitted]
Exhibit 99.1
Hertz-Backed Oro Mobility Secures $80 Million Strategic Equity Investment to Accelerate Independent Growth
Investment positions Oro to scale its platform across driver-led and autonomous mobility models
ESTERO, Fla., October 20, 2026 – Hertz Global Holdings, Inc. (NASDAQ: HTZ) today announced that Oro Mobility has secured an $80 million strategic equity investment from a consortium of investors, including Cohen Private Ventures and certain funds or accounts affiliated with each of Certares Opportunities LLC and/or Knighthead Capital Management, LLC or an affiliate. This investment establishes Oro as a standalone growth platform, with the dedicated capital, talent, flexibility and strategic focus to scale across the evolving mobility ecosystem.
Built on Hertz's century of expertise in fleet operations, maintenance, logistics and asset management, Oro fills a critical gap in the transition from personal vehicle ownership to driver-led and autonomous fleets. Serving as the ownership, orchestration and operations layer, Oro connects vehicles, technology providers and consumer demand through a seamless operating platform. Today, Oro partners with leading mobility companies to deliver integrated solutions safely, reliably and at scale, operating approximately 45,000 vehicles across every major U.S. mobility market.
Hertz established Oro as part of its transformation strategy, leveraging its core capabilities and expertise to capture new opportunities for growth. Hertz will retain majority economic ownership of Oro and support the business as its fleet and corporate services partner, enabling Hertz to participate in Oro’s growth while Oro continues to benefit from Hertz’s operational capabilities and scale. The new capital will support the expansion of Oro’s fleet, operational infrastructure, technology capabilities, talent and strategic partnerships across rideshare rentals, driver-led fleet management and autonomous vehicle fleet management.
“At Hertz, our strategy is anchored in the belief that our century of expertise can lead a new era of mobility, and Oro is a powerful example of that in action,” said Gil West, CEO of Hertz and Executive Chairman of Oro Mobility. “As ride-hail demand expands, autonomous vehicle deployments accelerate and consumers increasingly choose mobility services over personal car ownership, demand is growing for purpose-built operators like Oro. This investment underscores the strong foundation we’ve built at Oro and the immense opportunity ahead, validating both Oro’s trajectory and Hertz’s transformation strategy.”
“The future of mobility will be powered by professionally managed fleets,” said Doria Holbrook, CEO of Oro Mobility. “As new mobility models emerge, there will be growing demand for companies that can own, finance, operate and maintain vehicles at scale while delivering safe, reliable service. Oro was built to fill that role. This investment gives us the capital, focus and strategic partners to accelerate our growth and support the evolving mobility ecosystem.”
“We believe Oro has established a differentiated position in a growing and dynamic mobility market,” said Andrew B. Cohen, Chief Investment Officer and Co-Founder of Cohen Private Ventures. “We look forward to supporting the team as they continue to scale Oro, strengthen its capabilities and deliver long-term value.”
About Oro Mobility
Oro Mobility (Oro) is a fleet platform built for the next era of mobility, connecting vehicles, technology providers and demand platforms at scale. Designed as the industry’s critical ownership, orchestration and operations layer, Oro operates across three business lines: rideshare rentals, driver-led fleet management and autonomous vehicle fleet management. Hertz Global Holdings, Inc., its majority owner, established Oro to expand beyond its core rental business. For more information about Oro, visit www.oromobility.com.
About Hertz
Hertz Global Holdings, Inc. is one of the world’s leading car rental and mobility solutions providers. Its subsidiaries, including The Hertz Corporation, and licensees operate the Hertz, Dollar, Thrifty and Firefly vehicle rental brands, with more than 11,000 rental locations in 160 countries around the globe. The Company also operates the Hertz Car Sales brand, which offers a range of quality, competitively priced used cars for sale online and at locations across the United States, and the Hertz 24/7 car-sharing business in Europe. The Company holds a majority stake in Oro Mobility, which provides integrated fleet management solutions across both driver-led and autonomous segments. For more information about Hertz, visit www.hertz.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the federal securities laws. Words such as “expect,” “will,” and “intend” and similar expressions identify forward-looking statements, which include but are not limited to statements related to our expectations with respect to our strategy, vision, operational and technology capabilities, growth prospects, forward looking investments, partnerships, and conditions in the travel or mobility industries. We caution you that these statements are not guarantees of future performance and are subject to numerous evolving risks and uncertainties that we may not be able to accurately predict or assess, including risks and uncertainties described in our risk factors that we identify in our most recent annual report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 26, 2026, and any updates thereto in the Company’s quarterly reports on Form 10-Q and current reports on Form 8-K. We caution you not to place undue reliance on our forward-looking statements, which speak only as of their date, and we undertake no obligation to update this information.