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EXHIBIT 10(a)
CORPORATE AGREEMENT
THIS CORPORATE AGREEMENT ("Agreement") is entered into as of April 25,
1997 by and between FORD MOTOR COMPANY, a Delaware corporation ("Ford"), and THE
HERTZ CORPORATION, a Delaware corporation ("Hertz").
RECITALS
X. Xxxx beneficially owns all of the issued and outstanding Class A
Common Stock, par value $.01 per share ("Class A Common Stock"), of Hertz and
owns all of the issued and outstanding Class B Common Stock, par value $.01 per
share ("Class B Common Stock"), of Hertz, and Hertz is a member of Ford's
"affiliated group" of corporations (the "Ford Group") for federal income tax
purposes.
B. The parties are contemplating the possibility that Hertz will
issue shares of Class A Common Stock in an initial public offering (the "Initial
Public Offering") registered under the Securities Act of 1933, as amended.
C. The parties desire to enter into this Agreement to set forth their
agreement regarding (i) Ford's rights to purchase additional shares of Class B
Common Stock upon any issuance of certain classes of capital stock of Hertz to
any person to permit Ford to maintain its percentage ownership interest in
Hertz, (ii) Ford's rights to purchase shares of non-voting classes of capital
stock of Hertz to permit Ford to own 80 percent of each class of such stock
outstanding, (iii) certain registration rights with respect to Class B Common
Stock (and any other securities issued in respect thereof or in exchange
therefor) and (iv) certain representations, warranties, covenants and agreements
applicable so long as Hertz is a subsidiary of Ford.
AGREEMENTS
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Ford and Hertz, for themselves,
their successors, and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. As used in this Agreement, the following terms
will have the following meanings, applicable both to the singular and the plural
forms of the terms described:
"Affiliate" means, with respect to a given Person, any Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control"
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(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as applied to any Person, means the possession, directly
or indirectly, of the power to vote a majority of the securities having voting
power for the election of directors (or other Persons acting in similar
capacities) of such Person or otherwise to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
"Agreement" has the meaning ascribed thereto in the preamble hereto,
as such agreement may be amended and supplemented from time to time in
accordance with its terms.
"Applicable Stock" means at any time the (i) shares of Common Stock
owned by the Ford Entities that were owned on the date hereof, plus (ii) shares
of Class B Common Stock purchased by the Ford Entities pursuant to Article II of
this Agreement, plus (iii) shares of Common Stock that were issued to Ford
Entities in respect of shares described in either clause (i) or clause (ii) in
any reclassification, share combination, share subdivision, share dividend,
share exchange, merger, consolidation or similar transaction or event.
"Class A Common Stock" has the meaning ascribed thereto in the
recitals to this Agreement.
"Class B Common Stock" has the meaning ascribed thereto in the
recitals to this Agreement.
"Class B Common Stock Option" has the meaning ascribed thereto in
Section 2.1(a).
"Class B Common Stock Option Notice" has the meaning ascribed thereto
in Section 2.2.
"Common Stock" means the Class B Common Stock, the Class A Common
Stock, any other class of Hertz' capital stock representing the right to vote
generally for the election of directors and, for so long as Hertz continues to
be a subsidiary corporation includable in a consolidated federal income tax
return of the Ford Group, any other security of Hertz treated as stock for
purposes of Section 1504 of the Internal Revenue Code of 1986, as amended.
"Company Securities" has the meaning ascribed thereto in Section
3.2(b).
"Disadvantageous Condition" has the meaning ascribed thereto in
Section 3.1(a).
"Ford Entities" means Ford and Subsidiaries of Ford (other than
Subsidiaries that constitute Hertz Entities), and "Ford Entity" shall mean any
of the Ford Entities.
"Ford Ownership Reduction" means any decrease at any time in the
Ownership Percentage to less than 45%.
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"Ford Transferee" has the meaning ascribed thereto in Section 3.9.
"Ford" has the meaning ascribed thereto in the preamble hereto.
"Ford Group" has the meaning ascribed thereto in the recitals to this
Agreement.
"Hertz" has the meaning ascribed thereto in the preamble hereto.
"Hertz Entities" means Hertz and its Subsidiaries, and "Hertz Entity"
shall mean any of the Hertz Entities.
"Holder" means Ford, the other Ford Entities and any Transferee.
"Holder Securities" has the meaning ascribed thereto in Section
3.2(b).
"Initial Public Offering" has the meaning ascribed thereto in the
recitals to this Agreement.
"Initial Public Offering Date" means the date of completion of the
initial sale of Class A Common Stock in the Initial Public Offering.
"Issuance Event" has the meaning ascribed thereto in Section 2.2.
"Issuance Event Date" has the meaning ascribed thereto in Section 2.2.
"Market Price" of any shares of Class A Common Stock on any date means
(i) the average of the last sale price of such shares on each of the five
trading days immediately preceding such date on the New York Stock Exchange,
Inc. or, if such shares are not listed thereon, on the principal national
securities exchange or automated interdealer quotation system on which such
shares are traded or (ii) if such sale prices are unavailable or such shares are
not so traded, the value of such shares on such date determined in accordance
with agreed- upon procedures reasonably satisfactory to Hertz and Ford.
"Nonvoting Stock" means any class of Hertz' capital stock not
representing the right to vote generally for the election of directors.
"Nonvoting Stock Option" has the meaning ascribed thereto in Section
2.1(c).
"Nonvoting Stock Option Notice" has the meaning ascribed thereto in
Section 2.2.
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"Other Holders" has the meaning ascribed thereto in Section 3.2(c).
"Other Securities" has the meaning ascribed thereto in Section 3.2.
"Ownership Percentage" means, at any time, the fraction, expressed as
a percentage and rounded to the next highest thousandth of a percent, whose
numerator is the aggregate Value of the Applicable Stock and whose denominator
is the aggregate Value of the then- outstanding shares of Common Stock of Hertz;
provided, however, that any shares of Common Stock issued by Hertz in violation
of its obligations under Article II of this Agreement shall not be deemed
outstanding for the purpose of determining the Ownership Percentage. For
purposes of this definition, "Value" means, with respect to any share of stock,
the value of such share determined by Ford under principles applicable for
purposes of Section 1504 of the Internal Revenue Code of 1986, as amended.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, government (and
any department or agency thereof) or other entity.
"Registrable Securities" means shares of Class B Common Stock, shares
of Class A Common Stock and any stock or other securities into which or for
which such Common Stock may hereafter be changed, converted or exchanged and any
other shares or securities issued to Holders of such Common Stock (or such
shares or other securities into which or for which such shares are so changed,
converted or exchanged) upon any reclassification, share combination, share
subdivision, share dividend, share exchange, merger, consolidation or similar
transaction or event or pursuant to the Nonvoting Stock Option. As to any
particular Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale by the Holder thereof shall have been declared effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been distributed to the
public in accordance with Rule 144, (iii) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by Hertz and subsequent disposition of them
shall not require registration or qualification of them under the Securities Act
or any state securities or blue sky law then in effect or (iv) they shall have
ceased to be outstanding.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article III, including, without limitation, (i) the fees, disbursements and
expenses of Hertz' counsel and accountants and the fees and expenses of counsel
selected by the Holders in accordance with this Agreement in connection with the
registration of the securities to be disposed
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of, such fees and expenses of such counsel selected by the Holders to be
reasonable in the reasonable discretion of Hertz; (ii) all expenses, including
filing fees, in connection with the preparation, printing and filing of the
registration statement, any preliminary prospectus or final prospectus, any
other offering document and amendments and supplements thereto and the mailing
and delivering of copies thereof to any underwriters and dealers; (iii) the cost
of printing or producing any underwriting agreements and blue sky or legal
investment memoranda and any other documents in connection with the offering,
sale or delivery of the securities to be disposed of; (iv) all expenses in
connection with the qualification of the securities to be disposed of for
offering and sale under state securities laws, including the fees and
disbursements of counsel for the underwriters or the Holders of securities in
connection with such qualification and in connection with any blue sky and legal
investment surveys; (v) the filing fees incident to securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the
sale of the securities to be disposed of; (vi) transfer agents' and registrars'
fees and expenses and the fees and expenses of any other agent or trustee
appointed in connection with such offering; (vii) all security engraving and
security printing expenses; (viii) all fees and expenses payable in connection
with the listing of the securities on any securities exchange or automated
interdealer quotation system or the rating of such securities, (ix) any other
fees and disbursements of underwriters customarily paid by the sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, and (x) other reasonable out-of-pocket expenses of Holders other
than legal fees and expenses referred to in clause (i) above.
"Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated under
the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Selling Holder" has the meaning ascribed thereto in Section 3.4(e).
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled, directly or indirectly, by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof. "Subsidiary," when
used with respect to Ford or Hertz, shall also include any other entity
affiliated with Ford or Hertz, as the case may be, that
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Ford and Hertz may hereafter agree in writing shall be treated as a "Subsidiary"
for the purposes of this Agreement.
"Transferee" has the meaning ascribed thereto in Section 3.9.
1.2. Internal References. Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the corresponding
articles, sections and paragraphs in this Agreement and references to the
parties shall mean the parties to this Agreement.
ARTICLE II
OPTIONS
2.1. Options. (a) Hertz hereby grants to Ford, on the terms and
conditions set forth herein, a continuing right (the "Class B Common Stock
Option") to purchase from Hertz, at the times set forth herein, such number of
shares of Class B Common Stock as is necessary to allow the Ford Entities to
maintain the percentage of the then-outstanding Common Stock of Hertz that is
equal to the Ownership Percentage. The Class B Common Stock Option shall be
assignable, in whole or in part and from time to time, by Ford to any Ford
Entity. The exercise price for the shares of Class B Common Stock purchased
pursuant to the Class B Common Stock Option shall be the Market Price of the
Class A Common Stock as of the date of first delivery of notice of exercise of
the Class B Common Stock Option by Ford (or its permitted assignee hereunder) to
Hertz.
(b) The provisions of Section 2.1(a) hereof notwithstanding, the
Class B Common Stock Option granted pursuant to Section 2.1(a) shall not apply
and shall not be exercisable in connection with the issuance by Hertz of any
shares of Common Stock pursuant to any stock option or other executive or
employee benefit or compensation plan maintained by Hertz, so long as, from and
after the date hereof and prior to the issuance of such shares, Hertz has
repurchased from shareholders and not subsequently reissued a number of shares
equal or greater to the number of shares to be issued in any such issuance.
(c) Hertz hereby grants to Ford, on the terms and conditions set
forth herein, a continuing right (the "Nonvoting Stock Option" and, together
with the Class B Common Stock Option, the "Options") to purchase from Hertz, at
the times set forth herein, such number of shares of Nonvoting Stock as is
necessary to allow the Ford Entities to own 80 percent of each class of
outstanding Nonvoting Stock. The Nonvoting Stock Option shall be assignable, in
whole or in part and from time to time, by Ford to any Ford Entity. The
exercise price for the shares of Nonvoting Stock purchased pursuant to the
Nonvoting Stock Option shall be the price at which such Nonvoting Stock is then
being sold to third parties, or, if no Nonvoting Stock is being sold, the fair
market value thereof as determined in good faith by the Board of Directors of
Hertz.
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2.2. Notice. At least 20 business days prior to the issuance of any
shares of Common Stock (other than in connection with the Initial Public
Offering, including the full exercise of all underwriters' over-allotment
options granted in connection therewith and other than issuances of Common Stock
to any Ford Entity) or the first date on which any event could occur that, in
the absence of a full or partial exercise of the Class B Common Stock Option,
would result in a reduction in the Ownership Percentage, Hertz will notify Ford
in writing (a "Class B Common Stock Option Notice") of any plans it has to issue
such shares or the date on which such event could first occur. At least 20
business days prior to the issuance of any shares of Nonvoting Stock (other than
issuances of Nonvoting Stock to any Ford entity) or the first date on which any
event could occur that, in the absence of a full or partial exercise of the
Nonvoting Stock Option, would result in the Ford Entities owning less than 80
percent of each class of outstanding Nonvoting Stock, Hertz will notify Ford in
writing (a "Nonvoting Stock Option Notice" and, together with a Class B Common
Stock Option Notice, an "Option Notice") of any plans it has to issue such
shares or the date on which such event could first occur. Each Option Notice
must specify the date on which Hertz intends to issue such additional shares or
on which such event could first occur (such issuance or event being referred to
herein as an "Issuance Event" and the date of such issuance or event as an
"Issuance Event Date"), the number of shares Hertz intends to issue or may issue
and the other terms and conditions of such Issuance Event.
2.3. Option Exercise and Payment. The Class B Common Stock Option
may be exercised by Ford (or any Ford Entity to which all or any part of the
Class B Common Stock Option has been assigned) for a number of shares equal to
or less than the number of shares that are necessary for the Ford Entities to
maintain, in the aggregate, the percentage of the then-outstanding shares of
Common Stock of Hertz that is equal to the then-current Ownership Percentage.
The Nonvoting Stock Option may be exercised by Ford (or any Ford Entity to which
all or any part of the Nonvoting Stock Option has been assigned) for a number of
shares equal to or less than the number of shares that are necessary for the
Ford Entities to own, in the aggregate, 80 percent of each class of outstanding
Nonvoting Stock. Each Option may be exercised at any time after receipt of an
applicable Option Notice and prior to the applicable Issuance Event Date by the
delivery to Hertz of a written notice to such effect specifying (i) the number
of shares of Class B Common Stock or Nonvoting Stock, as the case may be, to be
purchased by Ford, or any of the Ford Entities and (ii) a calculation of the
exercise price for such shares; provided, however, that if Hertz shall have
issued any shares of Common Stock in violation of its obligations under this
Article II, the Option may be exercised at any time by the delivery to Hertz of
a written notice to such effect specifying the information described in clauses
(i) and (ii) above. Upon any exercise of an Option, Hertz will promptly (and in
any event on or prior to the applicable Issuance Event Date) deliver to Ford (or
any Ford Entity designated by Ford), against payment therefor, certificates
(issued in the name of
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Ford or its permitted assignee hereunder or as directed by Ford) representing
the shares of Class B Common Stock or Nonvoting Stock, as the case may be,
being purchased upon such exercise. Payment for such shares shall be made by
wire transfer or intrabank transfer of immediately- available funds to such
account as shall be specified by Hertz, for the full purchase price for such
shares.
2.4. Effect of Failure to Exercise. Except as provided in Section
2.6, any failure by Ford to exercise either Option, or any exercise for less
than all shares purchasable under either Option, in connection with any
particular Issuance Event shall not affect Ford's right to exercise the relevant
Option in connection with any subsequent Issuance Event.
2.5. Initial Public Offering. Notwithstanding the foregoing, Ford
shall not be entitled to exercise the Class B Common Stock Option in connection
with the Initial Public Offering of the Class A Common Stock if, upon the
completion of the Initial Public Offering, including the full exercise of all
underwriters' over-allotment options granted in connection therewith, the
Ownership Percentage would be no less than 80%.
2.6. Termination of Options. The Options shall terminate upon the
occurrence of any Issuance Event that, after considering Ford's response thereto
and to any other Issuance Events, results in the Ownership Percentage being less
than 20%, other than any Issuance Event in violation of this Agreement. Each
Option, or any portion thereof assigned to any Ford Entity other than Ford, also
shall terminate in the event that the Person to whom such Option, or such
portion thereof has been transferred, ceases to be a Ford Entity for any reason
whatsoever.
ARTICLE III
REGISTRATION RIGHTS
3.1. Demand Registration - Registrable Securities. (a) Upon written
notice provided at any time after the Initial Public Offering Date from any
Holder of Registrable Securities requesting that Hertz effect the registration
under the Securities Act of any or all of the Registrable Securities held by
such Holder, which notice shall specify the intended method or methods of
disposition of such Registrable Securities, Hertz shall use its best efforts to
effect the registration under the Securities Act and applicable state securities
laws of such Registrable Securities for disposition in accordance with the
intended method or methods of disposition stated in such request (including in a
Rule 415 Offering, if Hertz is then eligible to register such Registrable
Securities on Form S-3 (or a successor form) for such offering); provided that:
(i) with respect to any registration statement filed, or to be
filed, pursuant to this Section 3.1, if Hertz shall furnish to the Holders
of Registrable Securities
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that have made such request a certified resolution of the Board of
Directors of Hertz (adopted by the affirmative vote of a majority of the
directors not designated by the Ford Entities) stating that in the Board of
Directors' good faith judgment it would (because of the existence of, or in
anticipation of, any acquisition or financing activity, or the
unavailability for reasons beyond Hertz's reasonable control of any
required financial statements, or any other event or condition of similar
significance to Hertz) be significantly disadvantageous (a "Disadvantageous
Condition") to Hertz for such a registration statement to be maintained
effective, or to be filed and become effective, and setting forth the
general reasons for such judgment, Hertz shall be entitled to cause such
registration statement to be withdrawn and the effectiveness of such
registration statement terminated, or, in the event no registration
statement has yet been filed, shall be entitled not to file any such
registration statement, until such Disadvantageous Condition no longer
exists (notice of which Hertz shall promptly deliver to such Holders).
Upon receipt of any such notice of a Disadvantageous Condition, such
Holders shall forthwith discontinue use of the prospectus contained in such
registration statement and, if so directed by Hertz, each such Holder will
deliver to Hertz all copies, other than permanent file copies then in such
Holder's possession, of the prospectus then covering such Registrable
Securities current at the time of receipt of such notice; provided, that
the filing of any such registration statement may not be delayed for a
period in excess of six months due to the occurrence of any particular
Disadvantageous Condition;
(ii) after any Ford Ownership Reduction, the Holders of Registrable
Securities may collectively exercise their rights under this Section 3.1
(through notice delivered by Holders owning in the aggregate a majority in
economic interest of the Registrable Securities then held by Holders) on
not more than three occasions (it being acknowledged that prior to any Ford
Ownership Reduction, there shall be no limit to the number of occasions on
which such Holders (other than any Ford Transferees and their Affiliates
(other than Ford Entities)) may exercise such rights);
(iii) Except as otherwise provided herein, the Holders of
Registrable Securities shall not have the right to exercise registration
rights pursuant to this Section 3.1 within the 180-day period following the
registration and sale of Registrable Securities effected pursuant to a
prior exercise of the registration rights provided in this Section 3.1; and
(iv) the Holders of Registrable Securities shall not have the right
to exercise registration rights pursuant to this Section 3.1 within the
180-day period following the effective date of the Registration Statement
in connection with the Initial Public Offering.
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(b) Notwithstanding any other provision of this Agreement to the
contrary, a registration requested by a Holder of Registrable Securities
pursuant to this Section 3.1 shall not be deemed to have been effected (and,
therefore, not requested for purposes of paragraph (a) above), (i) unless it has
become effective, (ii) if after it has become effective such registration is
interfered with by any stop order, injunction or other order or requirement of
the SEC or other governmental agency or court for any reason other than a
misrepresentation or an omission by such Holder and, as a result thereof, the
Registrable Securities requested to be registered cannot be completely
distributed in accordance with the plan of distribution set forth in the related
registration statement or (iii) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied or waived other than by reason of some act
or omission by such Holder of Registrable Securities.
(c) In the event that any registration pursuant to this Section 3.1
shall involve, in whole or in part, an underwritten offering, the Holders of a
majority of the Registrable Securities to be registered shall have the right to
designate an underwriter or underwriters reasonably acceptable to Hertz as the
lead or managing underwriters of such underwritten offering and, in connection
with each registration pursuant to this Section 3.1, such Holders may select one
counsel reasonably acceptable to Hertz to represent all such Holders.
(d) Hertz shall have the right to cause the registration of
additional equity securities for sale for its account, the account of any Hertz
Entity or any existing or former directors, officers or employees of the Hertz
Entities in any registration of Registrable Securities requested by the Holders
pursuant to paragraph (a) above; provided, however, that if the registration and
sale of such additional equity securities would require Ford or any Ford Entity
to exercise the Options to maintain the then-current Ownership Percentage or
ownership of 80% of each class of outstanding Nonvoting Stock, then the number
of such additional equity securities shall be reduced so that exercise of the
Options would not be necessary for Ford or any Ford Entity to maintain such
ownership levels and, provided, further, that if such Holders are advised in
writing (with a copy to Hertz) by a nationally recognized investment banking
firm selected by such Holders reasonably acceptable to Hertz (which shall be the
lead underwriter or a managing underwriter in the case of an underwritten
offering) that, in such firm's good faith view, all or a part of such additional
equity securities cannot be sold and the inclusion of such additional equity
securities in such registration would be likely to have an adverse effect on the
price, timing or distribution of the offering and sale of the Registrable
Securities then contemplated by any Holder, the registration of such additional
equity securities or part thereof shall not be permitted. The Holders of the
Registrable Securities to be offered may require that any such additional equity
securities be included in the offering proposed by such
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Holders on the same conditions as the Registrable Securities that are included
therein. In the event that the number of Registrable Securities requested to be
included in a registration statement by the Holders thereof exceeds the number
which, in the good faith view of such investment banking firm, can be sold
without adversely affecting the price, timing, distribution or sale of
securities in the offering, the number shall be allocated pro rata among the
requesting Holders on the basis of the relative number of Registrable Securities
then held by each such Holder (provided that any number in excess of a Holder's
request may be reallocated among the remaining requesting Holders in a like
manner).
3.2. Piggyback Registration. In the event that Hertz at any time
after the Initial Public Offering Date proposes to register any of its Common
Stock, any other of its equity securities or securities convertible into or
exchangeable for its equity securities (collectively, including Common Stock,
"Other Securities") under the Securities Act, whether or not for sale for its
own account, in a manner that would permit registration of Registerable
Securities for sale for cash to the public under the Securities Act, it shall at
each such time give prompt written notice to each Holder of Registrable
Securities of its intention to do so and of the rights of such Holder under this
Section 3.2. Subject to the terms and conditions hereof, such notice shall
offer each such Holder the opportunity to include in such registration statement
such number of Registerable Securities as such Holder may request. Upon the
written request of any such Holder made within 15 days after the receipt of
Hertz' notice (which request shall specify the number of Registrable Securities
intended to be disposed of and the intended method of disposition thereof),
Hertz shall use its best efforts to effect, in connection with the registration
of the Other Securities, the registration under the Securities Act of all
Registerable Securities which Hertz has been so requested to register, to the
extent required to permit the disposition (in accordance with such intended
method of disposition thereof) of the Registrable Securities so requested to be
registered; provided, that:
(a) if, at any time after giving such written notice of its intention
to register any Other Securities and prior to the effective date of the
registration statement filed in connection with such registration, Hertz shall
determine for any reason not to register the Other Securities, Hertz may, at its
election, give written notice of such determination to such Holders and
thereupon Hertz shall be relieved of its obligation to register such Registrable
Securities in connection with the registration of such Other Securities, without
prejudice, however, to the rights of the Holders of Registrable Securities
immediately to request that such registration be effected as a registration
under Section 3.1 to the extent permitted thereunder;
(b) if the registration referred to in the first sentence of this
Section 3.2 is to be an underwritten
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registration on behalf of Hertz, and a nationally recognized investment banking
firm selected by Hertz advises Hertz in writing that, in such firm's good faith
view, all or a part of such Registrable Securities cannot be sold and the
inclusion of all or a part of such Registrable Securities in such registration
would be likely to have an adverse effect upon the price, timing or distribution
of the offering and sale of the Other Securities then contemplated, Hertz shall
include in such registration: (i) first, all Other Securities Hertz proposes to
sell for its own account ("Company Securities"), (ii) second, up to the full
number of Registrable Securities held by Holders constituting Ford Entities that
are requested to be included in such registration (Registrable Securities that
are so held being sometimes referred to herein as "Holder Securities") in excess
of the number of Company Securities to be sold in such offering which, in the
good faith view of such investment banking firm, can be sold without adversely
affecting such offering (and (x) if such number is less than the full number of
such Holder Securities, such number shall be allocated by Ford among such Ford
Entities and (y) in the event that such investment banking firm advises that
less than all of such Holder Securities may be included in such offering, such
Ford Entities may withdraw their request for registration of their Registrable
Securities under this Section 3.2 and 90 days subsequent to the effective date
of the registration statement for the registration of such Other Securities
request that such registration be effected as a registration under Section 3.1
to the extent permitted thereunder), (iii) third, up to the full number of
Registrable Securities held by Holders (other than Ford Entities) of Registrable
Securities that are requested to be included in such registration in excess of
the number of Company Securities and Holder Securities to be sold in such
offering which, in the good faith view of such investment banking firm, can be
so sold without so adversely affecting such offering (and (x) if such number is
less than the full number of such Registrable Securities, such number shall be
allocated pro rata among such Holders on the basis of the number of Registrable
Securities requested to be included therein by each such Holder and (y) in the
event that such investment banking firm advises that less than all of such
Registrable Securities may be included in such offering, such Holders may
withdraw their request for registration of their Registrable Securities under
this Section 3.2 and 90 days subsequent to the effective date of the
registration statement for the registration of such Other Securities request
that such registration be effected as a registration under Section 3.1 to the
extent permitted thereunder) and (iv) fourth, up to the full number of the Other
Securities (other than Company Securities), if any, in excess of the number of
Company Securities and Registrable Securities to be sold in such offering which,
in the good faith view of such investment banking firm, can be so sold without
so adversely affecting such offering (and, if such number is less than the full
number of such Other Securities, such number shall be allocated pro rata among
the holders of such Other Securities (other than Company Securities) on the
basis of the number of securities requested to be included therein by each such
Holder);
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(c) if the registration referred to in the first sentence of this
Section 3.2 is to be an underwritten secondary registration on behalf of holders
of Other Securities (the "Other Holders"), and the lead underwriter or managing
underwriter advises Hertz in writing that in their good faith view, all or a
part of such additional securities cannot be sold and the inclusion of such
additional securities in such registration would be likely to have an adverse
effect on the price, timing or distribution of the offering and sale of the
Other Securities then contemplated, Hertz shall include in such registration the
number of securities (including Registrable Securities) that such underwriters
advise can be so sold without adversely affecting such offering, allocated pro
rata among the Other Holders and the Holders of Registrable Securities on the
basis of the number of securities (including Registrable Securities) requested
to be included therein by each Other Holder and each Holder of Registrable
Securities; provided, that if such registration statement is to be filed at any
time after a Ford Ownership Reduction, if such Other Holders have requested that
such registration statement be filed pursuant to demand registration rights
granted to them by Hertz, Hertz shall include in such registration (i) first,
Other Securities sought to be included therein by the Other Holders pursuant to
the exercise of such demand registration rights, (ii) second, the number of
Holder Securities sought to be included in such registration in excess of the
number of Other Securities sought to be included in such registration by the
Other Holders which in the good faith view of such investment banking firm, can
be so sold without so adversely affecting such offering (and (x) if such number
is less than the full number of such Holder Securities, such number shall be
allocated by Ford among such Ford Entities and (y) in the event that such
investment banking firm advises that less than all of such Holder Securities may
be included in such offering, such Ford Entities may withdraw their request for
registration of their Registrable Securities under this Section 3.2 and 90 days
subsequent to the effective date of the registration statement for the
registration of such Other Securities request that such registration be effected
as a registration under Section 3.1 to the extent permitted thereunder) and
(iii) third, the number of Registrable Securities sought to be included in such
registration by Holders (other than Ford Entities) of Registrable Securities in
excess of the number of Other Securities and the number of Holder Securities
sought to be included in such registration which, in the good faith view of such
investment banking firm, can be so sold without so adversely affecting such
offering (and (x) if such number is less than the full number of such
Registrable Securities, such number shall be allocated pro rata among such
Holders on the basis of the number of Registrable Securities requested to be
included therein by each such Holder and (y) in the event that such investment
banking firm advises that less than all of such Registrable Securities may be
included in such offering, such Holders may withdraw their request for
registration of their Registrable Securities under this Section 3.2 and 90 days
subsequent to the effective date of the registration statement for the
registration of such Other Securities request that such registration be effected
as a
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registration under Section 3.1 to the extent permitted thereunder);
(d) Hertz shall not be required to effect any registration of
Registrable Securities under this Section 3.2 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans; and
(e) no registration of Registrable Securities effected under this
Section 3.2 shall relieve Hertz of its obligation to effect a registration of
Registrable Securities pursuant to Section 3.1.
3.3. Expenses. Except as provided herein, Hertz shall pay all
Registration Expenses with respect to a particular offering (or proposed
offering). Notwithstanding the foregoing, each Holder and Hertz shall be
responsible for its own internal administrative and similar costs, which shall
not constitute Registration Expenses.
3.4. Registration and Qualification. If and whenever Hertz is
required to effect the registration of any Registrable Securities under the
Securities Act as provided in Sections 3.1 or 3.2, Hertz shall as promptly as
practicable:
(a) prepare, file and use its reasonable best efforts to cause to
become effective a registration statement under the Securities Act relating to
the Registrable Securities to be offered;
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus 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 until the earlier of (A) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition set forth in such registration statement and (B) the
expiration of six months after such registration statement becomes effective;
provided, that such six-month period shall be extended for such number of days
that equals the number of days elapsing from (x) the date the written notice
contemplated by paragraph (f) below is given by Hertz to (y) the date on which
Hertz delivers to the Holders of Registrable Securities the supplement or
amendment contemplated by paragraph (f) below;
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary prospectus
and any summary prospectus), in conformity with the
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requirements of the Securities Act, such documents incorporated by reference in
such registration statement or prospectus, and such other documents, as the
Holders of Registrable Securities or such underwriter may reasonably request,
and upon request a copy of any and all transmittal letters or other
correspondence to or received from, the SEC or any other governmental agency or
self-regulatory body or other body having jurisdiction (including any domestic
or foreign securities exchange) relating to such offering;
(d) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such U.S. jurisdictions as the Holders of such
Registrable Securities or any underwriter to such Registrable Securities shall
request, and use its reasonable best efforts to obtain all appropriate
registrations, permits and consents in connection therewith, and do any and all
other acts and things which may be necessary or advisable to enable the Holders
of Registrable Securities or any such underwriter to consummate the disposition
in such jurisdictions of its Registrable Securities covered by such registration
statement; provided, that Hertz shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any such
jurisdiction wherein it is not so qualified or to consent to general service of
process in any such jurisdiction;
(e) (i) use its best efforts to furnish to each Holder of Registrable
Securities included in such registration (each, a "Selling Holder") and to any
underwriter of such Registrable Securities an opinion of counsel for Hertz
addressed to each Selling Holder and dated the date of the closing under the
underwriting agreement (if any) (or if such offering is not underwritten, dated
the effective date of the registration statement) and (ii) use its best efforts
to furnish to each Selling Holder a "cold comfort" letter addressed to each
Selling Holder and signed by the independent public accountants who have audited
the financial statements of Hertz included in such registration statement, in
each such case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) as are customarily
covered in opinions of issuer's counsel and in accountants' letters delivered to
underwriters in underwritten public offerings of securities and such other
matters as the Selling Holders may reasonably request and, in the case of such
accountants' letter, with respect to events subsequent to the date of such
financial statements;
(f) as promptly as practicable, notify the Selling Holders in writing
(i) at any time when a prospectus relating to a registration pursuant to
Sections 3.1 or 3.2 is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein, in
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light of the circumstances under which they were made, not misleading and (ii)
of any request by the SEC or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration statement or
other document relating to such offering, and in either such case, at the
request of the Selling Holders prepare and furnish to the Selling Holders a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading;
(g) if reasonably requested by the lead or managing underwriters, use
its best efforts to list all such Registrable Securities covered by such
registration on each securities exchange and automated inter-dealer quotation
system on which a class of common equity securities of Hertz is then listed;
(h) to the extent reasonably requested by the lead or managing
underwriters, send appropriate officers of Hertz to attend any "road shows"
scheduled in connection with any such registration, with all out-of-pocket costs
and expense incurred by Hertz or such officers in connection with such
attendance to be paid by Hertz; and
(i) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to Sections 3.1 or 3.2 unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
the Selling Holders or the underwriters.
3.5. Conversion of Other Securities, Etc. In the event that any
Holder offers any options, rights, warrants or other securities issued by it or
any other Person that are offered with, convertible into or exercisable or
exchangeable for any Registrable Securities, the Registrable Securities
underlying such options, rights, warrants or other securities shall continue to
be eligible for registration pursuant to Sections 3.1 and 3.2.
3.6. Underwriting; Due Diligence. (a) If requested by the
underwriters for any underwritten offering of Registrable Securities pursuant to
a registration requested under this Article III, Hertz shall enter into an
underwriting agreement with such underwriters for such offering, which agreement
will contain such representations and warranties by Hertz and such other terms
and provisions as are customarily contained in underwriting agreements of Hertz
to the extent relevant and as are customarily contained in underwriting
agreements generally with respect to secondary distributions to the extent
relevant, including, without limitation, indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
3.7, and agreements as to the provision of opinions of
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counsel and accountants' letters to the effect and to the extent provided in
Section 3.4(e). The Selling Holders on whose behalf the Registrable Securities
are to be distributed by such underwriters shall be parties to any such
underwriting agreement and the representations and warranties by, and the other
agreements on the part of, Hertz to and for the benefit of such underwriters,
shall also be made to and for the benefit of such Selling Holders. Such
underwriting agreement shall also contain such representations and warranties by
such Selling Holders and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
when relevant, including, without limitation, indemnification and contribution
provisions substantially to the effect and to the extent provided in Section
3.7.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article III, Hertz shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books and
records and such opportunities to discuss the business of Hertz with its
officers and the independent public accountants who have certified the financial
statements of Hertz as shall be necessary, in the opinion of such Holders and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
3.7. Indemnification and Contribution. (a) In the case of each
offering of Registrable Securities made pursuant to this Article III, Hertz
agrees to indemnify and hold harmless, to the extent permitted by law, each
Selling Holder, each underwriter of Registrable Securities so offered and each
Person, if any, who controls any of the foregoing Persons within the meaning of
the Securities Act and the officers, directors, affiliates, employees and agents
of each of the foregoing, against any and all losses, liabilities, costs
(including reasonable attorney's fees and disbursements), claims and damages,
joint or several, to which they or any of them may become subject, under the
Securities Act or otherwise, including any amount paid in settlement of any
litigation commenced or threatened, insofar as such losses, liabilities, costs,
claims and damages (or actions or proceedings in respect thereof, whether or not
such indemnified Person is a party thereto) arise out of or are based upon any
untrue statement by Hertz or alleged untrue statement by Hertz of a material
fact contained in the registration statement (or in any preliminary or final
prospectus included therein) or in any offering memorandum or other offering
document relating to the offering and sale of such Registrable Securities
prepared by Hertz or at its direction, or any amendment thereof or supplement
thereto, or in any document incorporated by reference therein, or any omission
by Hertz or alleged omission by Hertz to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
provided, however that Hertz shall not be liable to any Person in any such case
to the extent that any such
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loss, liability, cost, claim or damage arises out of or relates to any untrue
statement or alleged untrue statement, or any omission, if such statement or
omission shall have been made in reliance upon and in conformity with
information relating to a Selling Holder, another holder of securities included
in such registration statement or underwriter furnished to Hertz by or on
behalf of such Selling Holder, other holder or underwriter specifically for use
in the registration statement (or in any preliminary or final prospectus
included therein), offering memorandum or other offering document, or any
amendment thereof or supplement thereto. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of any
Selling Holder, any other holder or any underwriter and shall survive the
transfer of such securities. The foregoing indemnity agreement is in addition
to any liability that Hertz may otherwise have to each Selling Holder, other
holder or underwriter of the Registrable Securities or any controlling person
of the foregoing and the officers, directors, affiliates, employees and agents
of each of the foregoing; provided, further, that, in the case of an offering
with respect to which a Selling Holder has designated the lead or managing
underwriters (or a Selling Holder is offering Registrable Securities directly,
without an underwriter), this indemnity does not apply to any loss, liability,
cost, claim or damage arising out of or relating to any untrue statement or
alleged untrue statement or omission or alleged omission in any preliminary
prospectus or offering memorandum if a copy of a final prospectus or offering
memorandum was not sent or given by or on behalf of any underwriter (or such
Selling Holder or other holder, as the case may be) to such Person asserting
such loss, liability, cost, claim or damage at or prior to the written
confirmation of the sale of the Registrable Securities as required by the
Securities Act and such untrue statement or omission had been corrected in such
final prospectus or offering memorandum.
(b) In the case of each offering made pursuant to this Agreement,
each Selling Holder, by exercising its registration rights hereunder, agrees to
indemnify and hold harmless, and to cause each underwriter of Registrable
Securities included in such offering (in the same manner and to the same extent
as set forth in Section 3.7(a)) to agree to indemnify and hold harmless, Hertz,
each other underwriter who participates in such offering, each other Selling
Holder or other holder with securities included in such offering and in the case
of an underwriter, such Selling Holder or other holder, and each Person, if any,
who controls any of the foregoing within the meaning of the Securities Act and
the officers, directors, affiliates, employees and agents of each of the
foregoing, against any and all losses, liabilities, costs (including reasonable
attorney's fees and disbursements), claims and damages to which they or any of
them may become subject, under the Securities Act or otherwise, including any
amount paid in settlement of any litigation commenced or threatened, insofar as
such losses, liabilities, costs, claims and damages (or actions or proceedings
in respect thereof, whether or not such indemnified Person is a party thereto)
arise out of or are based upon any untrue statement or
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alleged untrue statement by such Selling Holder or underwriter, as the case may
be, of a material fact contained in the registration statement (or in any
preliminary or final prospectus included therein) or in any offering memorandum
or other offering document relating to the offering and sale of such Registrable
Securities prepared by Hertz or at its direction, or any amendment thereof or
supplement thereto, or any omission by such Selling Holder or underwriter, as
the case may be, or alleged omission by such Selling Holder or underwriter, as
the case may be, of a material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that such untrue statement of a material fact is contained in, or such
material fact is omitted from information relating to such Selling Holder or
underwriter, as the case may be, furnished to Hertz by or on behalf of such
Selling Holder or underwriter, as the case may be, specifically for use in such
registration statement (or in any preliminary or final prospectus included
therein), offering memorandum or other offering document, or any amendment
thereof or supplement thereto. The foregoing indemnity is in addition to any
liability which such Selling Holder or underwriter, as the case may be, may
otherwise have to Hertz, or controlling persons and the officers, directors,
affiliates, employees, and agents of each of the foregoing; provided, however,
that, in the case of an offering made pursuant to this Agreement with respect to
which Hertz has designated the lead or managing underwriters (or Hertz is
offering securities directly, without an underwriter), this indemnity does not
apply to any loss, liability, cost, claim, or damage arising out of or based
upon any untrue statement or alleged untrue statement or omission or alleged
omission in any preliminary prospectus or offering memorandum if a copy of a
final prospectus or offering memorandum was not sent or given by or on behalf of
any underwriter (or Hertz, as the case may be) to such Person asserting such
loss, liability, cost, claim or damage at or prior to the written confirmation
of the sale of the Registrable Securities as required by the Securities Act and
such untrue statement or omission had been corrected in such final prospectus or
offering memorandum.
(c) Each party indemnified under paragraph (a) or (b) above shall,
promptly after receipt of notice of a claim or action against such indemnified
party in respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the claim or action; provided, that the failure
to notify the indemnifying party shall not relieve it from any liability that it
may have to an indemnified party on account of the indemnity agreement contained
in paragraph (a) or (b) above otherwise than under such subsection. If any such
claim or action shall be brought against an indemnified party, and it shall have
notified the indemnifying party thereof, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified party and
indemnifying parties may exist in respect of such claim, the indemnifying party
shall be entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume the
defense thereof with counsel satisfactory to
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the indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party). After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 3.7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation. If the indemnifying party
does not assume the defense of such claim or action, it is understood that the
indemnifying party shall not, in connection with any one such claim or action or
separate but substantially similar or related claims or actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to one separate firm of local attorneys in each such jurisdiction) at
any time for all such indemnified parties. Any indemnifying party against whom
indemnity may be sought under this Section 3.7 shall not be liable to indemnify
an indemnified party if such indemnified party settles such claim or action
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 3.7 shall for
any reason be unavailable (other than in accordance with its terms) to an
indemnified party in respect of any loss, liability, cost, claim or damage
referred to therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, cost, claim or damage in
such proportion as shall be appropriate to reflect (i) the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other hand or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the indemnified party failed to give the
notice required under paragraph (c) above, the relative benefits and the
relative fault of the indemnifying party on the one hand and the indemnified
party on the other with respect to the statements or omissions which resulted in
such loss, liability, cost, claim or damage as well as any other relevant
equitable considerations. The relative benefits received by the indemnifying
party and the indemnified party shall be deemed to be in the same respective
proportion as the net proceeds (before deducting expenses) of the offering
received by such party (or, in the case of an underwriter, such underwriter's
discounts and commissions) bear to the aggregate offering price of the
Registrable Securities or Other Securities. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not by reference to any indemnified party's stock
ownership in Hertz. The amount paid or payable by an indemnified party as a
result of the loss, cost,
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claim, damage or liability, or action in respect thereof, referred to above in
this paragraph (d) shall be deemed to include, for purposes of this paragraph
(d), any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) Indemnification and contribution similar to that specified in the
preceding paragraphs of this Section 3.7 (with appropriate modifications) shall
be given by Hertz, the Selling Holders and underwriters with respect to any
required registration or other qualification of securities under any state law
or regulation or governmental authority.
(f) The obligations of the parties under this Section 3.7 shall be in
addition to any liability which any party may otherwise have to any other party.
3.8. Rule 144 and Form S-3. Commencing 90 days after the Initial
Public Offering Date, Hertz shall use its best efforts to ensure that the
conditions to the availability of Rule 144 set forth in paragraph (c) thereof
shall be satisfied. Upon the request of any Holder of Registrable Securities,
Hertz will deliver to such Holder a written statement as to whether it has
complied with such requirements. Hertz further agrees to use its reasonable
efforts to cause all conditions to the availability of Form S-3 (or any
successor form) under the Securities Act of the filing of registration
statements under this Agreement to be met as soon as practicable after the
Initial Public offering Date. Notwithstanding anything contained in this
Section 3.8, Hertz may deregister under Section 12 of the Securities Exchange
Act of 1934, as amended, if it then is permitted to do so pursuant to said Act
and the rules and regulations thereunder.
3.9. Transfer of Registration Rights. Any Holder may transfer all or
any portion of its rights under Article III to any transferee of a number of
Registrable Securities owned by such Holder exceeding three percent (3%) of the
outstanding class or series of such securities at the time of transfer (each
transferee that receives such minimum number of Registrable Securities, a
"Transferee"); provided, that each Transferee of Registrable Securities (other
than Ford Entities) to which Registrable Securities are transferred, sold or
assigned directly by a Ford Entity (such Transferee, a "Ford Transferee"),
together with any Affiliate of such Ford Transferee (and any subsequent direct
or indirect Transferees of Registrable Securities from such Ford Transferee and
any Affiliates thereof) shall be entitled to request the registration of
Registrable Securities pursuant to this Section 3.9 only once prior to a Ford
Ownership Reduction and thereafter shall only be entitled to request the
registration of Registrable Securities pursuant to Section 3.1(a)(ii) and,
provided, further, that no Transferee shall be entitled to request registration
pursuant to this Section 3.9 for
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an amount of Registrable Securities equal to less than $50,000,000. Any
transfer of registration rights pursuant to this Section 3.9 shall be effective
upon receipt by Hertz of (i) written notice from such Holder stating the name
and address of any Transferee and identifying the number of Registrable
Securities with respect to which the rights under this Agreement are being
transferred and the nature of the rights so transferred and (ii) a written
agreement from such Transferee to be bound by the terms of this Article III and
Sections 5.3, 5.4, 5.9, 5.10, and 5.12 of this Agreement. The Holders may
exercise their rights hereunder in such priority as they shall agree upon among
themselves.
3.10. Holdback Agreement. If any registration pursuant to this
Article III shall be in connection with an underwritten public offering of
Registrable Securities, each Selling Holder agrees not to effect any public sale
or distribution, including any sale under Rule 144, of any equity security of
Hertz or any security convertible into or exchangeable or exercisable for any
equity security of Hertz, in the case of Registrable Securities (otherwise than
through the registered public offering then being made), within 7 days prior to
or 90 days (or such lesser period as the lead or managing underwriters may
permit) after the effective date of the registration statement (or the
commencement of the offering to the public of such Registrable Securities in the
case of Rule 415 offerings). Hertz hereby also so agrees; provided, that,
subject to Section 3.6(a) hereof, Hertz shall not be so restricted from
effecting any public sale or distribution of any security in connection with any
merger, acquisition, exchange offer, subscription offer, dividend reinvestment
plan or stock option or other executive or employee benefit or compensation
plan.
3.11. Registration of Preferred Stock. Hertz agrees that it shall
from time to time enter into one or more agreements with Ford and/or the Class B
Transferee, if any, in form and substance reasonably satisfactory to the parties
thereto, granting to Ford or the Class B Transferee, as the case may be,
registration rights for the registration of any shares of preferred stock of
Hertz that may hereafter be owned, directly or indirectly, by Ford or the Class
B Transferee, as the case may be, substantially upon the same terms and
conditions as those contained in Article III for the benefit of Ford.
ARTICLE IV
CERTAIN COVENANT AND AGREEMENTS
4.1. No Violations. (a) For so long as the Ownership Percentage is
equal to or greater than 50%, Hertz covenants and agrees that it will not take
any action or enter into any commitment or agreement which may reasonably be
anticipated to result, with or without notice and with or without lapse of time
or otherwise, in a contravention or event of default by any Ford Entity of (i)
any provisions of applicable law or regulation, including but not limited to
provisions pertaining to the Internal Revenue Code of 1986, as amended, or the
Employee
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Retirement Income Security Act of 1974, as amended, (ii) any provision of Ford's
or Ford Holdings, Inc.'s certificate of incorporation or bylaws, (iii) any
credit agreement or other material instrument binding upon Ford or Ford
Holdings, Inc. or (iv) any judgment, order or decree of any governmental body,
agency or court having jurisdiction over Ford or Ford Holdings, Inc. or any of
their respective assets.
(b) Hertz and Ford agree to provide to the other any information and
documentation requested by the other for the purpose of evaluating and ensuring
compliance with Section 4.1(a) hereof.
(c) Notwithstanding the foregoing Sections 4.1(a) and 4.1(b), nothing
in this Agreement is intended to limit or restrict in any way Ford's rights as a
shareholder of Hertz.
4.2. Confidentiality. Except as required by law, regulation or legal
or judicial process, Ford agrees that neither it nor any Ford Entity nor any of
their respective directors, officers or employees will without the prior written
consent of Hertz disclose to any Person any material, non-public information
concerning the business or affairs of Hertz acquired from any director, officer
or employee of Hertz (including any director, officer or employee of Hertz who
is also a director, officer or employee of Ford).
ARTICLE V
MISCELLANEOUS
5.1. Limitation of Liability. Neither Ford nor Hertz shall be liable
to the other for any special, indirect, incidental or consequential damages of
the other arising in connection with this Agreement.
5.2. Subsidiaries. Ford agrees and acknowledges that Ford shall be
responsible for the performance by each Ford Entity of the obligations hereunder
applicable to such Ford Entity.
5.3. Amendments. This Agreement may not be amended or terminated
orally, but only by a writing duly executed by or on behalf of the parties
hereto. Any such amendment shall be validly and sufficiently authorized for
purposes of this Agreement if it is signed on behalf of Ford and Hertz by any of
their respective presidents or vice presidents.
5.4. Term. This Agreement shall remain in effect until all
Registrable Securities held by Holders have been transferred by them to Persons
other than Transferees; provided, that the provisions of Section 3.7 shall
survive any such expiration.
5.5. Severability. If any provision of this Agreement or the
application of any such provision to any party or circumstances shall be
determined by any court of competent jurisdiction to be invalid, illegal or
unenforceable to any
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extent, the remainder of this Agreement or such provision of the application of
such provision to such party or circumstances, other than those to which it is
so determined to be invalid, illegal or unenforceable, shall remain in full
force and effect to the fullest extent permitted by law and shall not be
affected thereby, unless such a construction would be unreasonable.
5.6. Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be deemed duly given upon actual
receipt, and shall be delivered (a) in person, (b) by registered or certified
mail, postage prepaid, return receipt requested or (c) by facsimile or other
generally accepted means of electronic transmission (provided that a copy of any
notice delivered pursuant to this clause (c) shall also be sent pursuant to
clause (b)), addressed as follows:
(a) if to Hertz, to:
The Hertz Corporation
000 Xxxx Xxxxxxxxx
Xxxx Xxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telecopy No.: 000-000-0000
(b) If to Ford, to:
Ford Motor Company
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Telecopy No.: 000-000-0000
or to such other addresses or telecopy numbers as may be specified by
like notice to the other parties.
5.7. Further Assurances. Ford and Hertz shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments and take such other action as may be
necessary or advisable to carry out their obligations under this
Agreement and under any exhibit, document or other instrument
delivered pursuant hereto.
5.8. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original instrument,
but all of which together shall constitute but one and the same
agreement.
5.9. Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and
governed by, the laws of the State of Delaware.
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5.10. Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter
hereof.
5.11. Class B Transferee. Hertz agrees that it shall enter into
an agreement with the Class B Transferee (as defined in Hertz'
Restated Certificate of Incorporation), if any, in form and substance
reasonably satisfactory to the Class B Transferee and Hertz (i)
granting to the Class B Transferee options for the purchase of Class B
Common Stock and Nonvoting Stock substantially upon the same terms and
conditions as those contained in Article II, (ii) granting to the
Class B Transferee registration rights for the registration of
Registrable Securities substantially upon the same terms and
conditions as those contained in Article III for the benefit of Ford
and (iii) containing other covenants and agreement for the benefit of
the Class B Transferee that are substantially similar to the other
covenants and agreements contained in this Agreement for the benefit
of Ford; provided, that such agreement shall contain terms (including
covenants and agreements of the Class B Transferee) for the benefit of
Hertz that are substantially similar to the terms (including the
covenants and agreements of Ford) for the benefit of Hertz contained
herein.
5.12. Successors. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns. Nothing contained in this Agreement, express
or implied, is intended to confer upon any other person or entity any
benefits, rights or remedies.
5.13. Specific Performance. The parties hereto acknowledge and
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. Accordingly, it is
agreed that they shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce
specifically the terms and provisions hereof in any court of competent
jurisdiction in the United States or any state thereof, in addition to
any other remedy to which they may be entitled at law or equity.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
Ford Motor Company
By: /s/ X.X. Xxxxx
----------------------------
Name: X.X. Xxxxx
Title: Assistant Treasurer
The Hertz Corporation
By: /s/ Xxxxxxx Xxxxx
----------------------------
Name: Xxxxxxx Xxxxx
Title: Executive Vice President &
Chief Financial Officer
