Hertz 2007 Annual Report Download - page 186

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Registration Rights Agreement
On the Closing Date, we entered into a registration rights agreement, or, as amended, the ‘‘Registration
Rights Agreement,’’ with investment funds associated with or designated by the Sponsors. The
Registration Rights Agreement grants to certain of these investment funds the right, following the earlier
of the initial public offering of our common stock and the eighth anniversary of the Closing Date, to cause
us, at our own expense, to use our best efforts to register such securities held by the investment funds for
public resale, subject to certain limitations. The exercise of this right is limited to three requests by the
group of investment funds associated with each Sponsor, except for registrations effected pursuant to
Form S-3, which are unlimited, subject to certain limitations, if we are eligible to use Form S-3. In the
event we register any of our common stock, these investment funds also have the right to require us to
use our best efforts to include shares of our common stock held by them, subject to certain limitations,
including as determined by the underwriters. The Registration Rights Agreement also provides for us to
indemnify the investment funds party to that agreement and their affiliates in connection with the
registration of our securities.
Consulting agreements
Sponsor Consulting Agreements
On the Closing Date, Hertz Holdings and Hertz entered into consulting agreements, or the ‘‘Consulting
Agreements,’’ with each of the Sponsors (or one of their affiliates), pursuant to which such Sponsor or its
affiliate provides Hertz Holdings, Hertz and Hertz’s subsidiaries with financial advisory and management
consulting services. Pursuant to the Consulting Agreements, Hertz paid to each Sponsor or its affiliate
an annual fee of $1 million for such services, plus expenses, unless the Sponsors unanimously agree to
a higher amount. In connection with the Acquisition, Hertz paid a fee of $25 million to each Sponsor and
reimbursed certain expenses of the Sponsors and their affiliates. Upon completion of the initial public
offering of our common stock, each of these consulting agreements was terminated for a fee of
$5 million ($15 million in the aggregate).
Other Consulting Arrangements
On September 29, 2006, Hertz entered into an agreement with Tenzing Consulting LLC, a management
consulting firm in which Thomas McLeod, who is the brother-in-law of our director David H. Wasserman,
is a principal. Under the arrangement, which has now been fully performed, Tenzing Consulting LLC
provided supply chain management and corporate purchasing management consulting. In exchange
for these services, Tenzing Consulting LLC received fees of $25,000 per week, plus reimbursement of
out-of-pocket expenses. For the year ended December 31, 2006, the total amount of such fees and
expenses paid to Tenzing Consulting LLC under this agreement was approximately $0.2 million.
Guarantees
Hertz’s obligations under the Senior Term Facility and Senior ABL Facility are guaranteed by Hertz’s
immediate parent, Hertz Investors, Inc. (previously known as CCMG Corporation). Hertz Holdings is not
a guarantor of these facilities. See Note 3—Debt.
Indemnification Agreements
On the Closing Date, Hertz entered into customary indemnification agreements with Hertz Holdings, the
Sponsors and Hertz Holdings’ stockholders affiliated with the Sponsors, pursuant to which Hertz
Holdings and Hertz will indemnify the Sponsors, the Hertz Holdings’ stockholders affiliated with the
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