Exhibit 10.19


 


This
CONSULTING AGREEMENT, dated as of December 21, 2005 (this “Agreement”), is entered into by and among CCMG
Holdings, Inc., a Delaware corporation (the “Company”), The Hertz
Corporation, a Delaware corporation (“Hertz”), and Clayton, Dubilier
& Rice, Inc, a Delaware corporation (“Manager”).


 


W I  T  N  E  S
S  E  T  H:


 


WHEREAS,  Manager, Carlyle Investment Management,
L.L.C. and Merrill Lynch Global Partners, Inc.(collectively, the “Sponsors”)
organized the Company in connection with the acquisition of all of the
outstanding shares of capital stock of Hertz (the “Acquisition”)
pursuant to a certain Stock Purchase Agreement, dated as of September 12, 2005
(as the same may be amended from time to time in accordance with its terms and
the Stockholders Agreement (as defined below), the “Acquisition Agreement”),
by and among the Company, Ford Holdings LLC, a Delaware limited liability
company (“Holdings”), and for purposes of only the provisions noted on
the signature page thereto, Ford Motor Company, a Delaware corporation (“Ford”).


 


WHEREAS,
the Company, Clayton, Dubilier & Rice Fund VII, L.P. (the “Fund”),
Carlyle Partners IV, L.P., ML Global Private Equity Fund, L.P., Merrill Lynch
Ventures L.P. 2001 and certain other parties have entered into a Stockholders
Agreement, dated as of December 21, 2005 (as the same may be amended from time
to time in accordance with its terms, the “Stockholders Agreement”);


 


WHEREAS,
concurrently with the execution and delivery of this Agreement, the Company,
Hertz, Manager, the Fund and certain other parties are entering into an
Indemnification Agreement, dated as of the date hereof (as the same may be
amended from time to time in accordance with its terms and the Stockholders
Agreement, the “Indemnification Agreement”);


 


WHEREAS,
Manager has performed financial, investment banking, management advisory and
other services for the Company in connection with the Acquisition, including
without limitation assistance in connection with (a) the preparation,
negotiation, execution and delivery of the Acquisition Agreement, (b)
the retention of legal, accounting, insurance, investment banking, financial
and other advisors and consultants in connection with the Acquisition, (c)
the preparation, negotiation, execution and delivery of equity commitment
letters, fee and engagement letters, subscription agreements, registration
rights agreements and agreements, instruments and documents relating to the
financing of the Acquisition and the Company, (d) the preparation and
circulation of information and offering memoranda and other materials in
connection with the financing of the Acquisition and (e) the
structuring, implementation and consummation of the Acquisition (such services
collectively, the “Initial Services”); and


 


WHEREAS,
in addition to the Initial Services, the Company desires that it and its
subsidiaries (together, the “Company Group”) receive future financial,
investment


 

















 


banking,
management advisory and other services from Manager, and Manager desires to
provide such services to the members of the Company Group;


 


NOW,
THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:


 


1.             Engagement. The Company hereby confirms that
Manager has performed the Initial Services as a consultant to the Company. The
Company hereby engages Manager (on behalf of itself and the other members of
the Company Group) as a consultant, and Manager hereby agrees to provide
Consulting Services (as defined below) and Transaction Services (as defined
below) to the Company and the other members of the Company Group on the terms
and subject to the conditions set forth below.


 


2.             Scope of Future Services.


 


(a)           Consulting Services. Manager hereby agrees, during the
term of this Agreement, to provide the members of the Company Group with such
financial, investment banking, management advisory and other services in
connection with the operations of the Company as may reasonably be requested
from time to time by the board of directors of the Company (collectively, the “Consulting Services”), including assistance (i) developing and implementing corporate and business
strategy and planning for the Company Group, including plans and programs for
improving operating, marketing and financial performance, (ii) recruiting key management employees, (iii) establishing and maintaining banking, legal and
other business relationships, (iv) arranging
future debt and equity financings and refinancings for corporate purposes and (v) providing professional employees to serve as directors
or officers of the members of the Company Group (“Manager
Designees”), as permitted pursuant to the Stockholders Agreement.


 


(b)           Transaction
Services. In addition to, and without duplication of, the Initial Services
and the Consulting Services, Manager hereby agrees, during the term of this
Agreement, to provide the members of the Company Group with financial,
investment banking, management advisory and other services as may reasonably be
agreed from time to time by the Company (with Unanimous Investor Approval (as
defined in the Stockholders Agreement)) and Manager with respect to proposed
transactions, including, without limitation, any proposed acquisition, merger,
full or partial recapitalization, structural reorganization (including any
divestiture of one or more subsidiaries or operating divisions of any member of
the Company Group), reorganization of the shareholdings or other ownership
structure of the Company Group, sales or dispositions of assets or equity
interests or any other similar transaction (each, a “Transaction”)
directly or indirectly involving the members of the Company Group
(collectively, the “Transaction Services”).


 


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3.             Compensation;
Reimbursement of Expenses.


 


(a)           Compensation for Initial Services. As compensation
for the Initial Services, immediately following the later of the date of this
Agreement and the date of the consummation of the Acquisition, the Company shall, or shall cause one or
more of its Affiliates to, on behalf of the Company Group, pay Manager a fee of
$25,000,000. For purposes of this Agreement, “Affiliate” shall mean,
with respect to any person or entity, any other person or entity directly or
indirectly controlling, controlled by or under common control with, such person
or entity


 


(b)           Compensation
for Consulting Services. As compensation for the Consulting Services, the
Company shall, or shall cause one or more of its Affiliates to, on behalf of
the Company Group (subject to the provisions of Section 3(e)), pay Manager a
fee of $1,000,000 per year (together, the “Consulting Fee”), one quarter
of which shall be payable quarterly in advance on the first day of each
January, April, July and October (each, a “Consulting Services Payment Date”).
The Consulting Fee shall begin accruing immediately following the consummation
of the Acquisition, and the amount of the Consulting Fee accrued prior to the
next succeeding Consulting Services Payment Date shall be payable on such
Consulting Services Payment Date, together with the regular installment of the
Consulting Fee payable on such Consulting Services Payment Date. The Consulting
Fee may be increased if (and only if) approved by Unanimous Investor Approval
in accordance with the Stockholders Agreement, but may not be decreased without
the prior written consent of Manager. If an employee of Manager or any of its
subsidiaries or Affiliates serves as the Chief Executive Officer of the Company
or Hertz, as permitted pursuant to Section 2.5 of the Stockholders Agreement,
then, for the period of such employee’s service as Chief Executive Officer, the
Consulting Fee shall be increased by an amount equal to $500,000 for each quarter during which such
employee serves as Chief Executive Officer.


 


(c)           Compensation
for Transaction Services. As compensation for the Transaction Services, in
connection with each Transaction that is consummated, the Company (with
Unanimous Investor Approval) may, and may cause one or more of its Affiliates
to, on behalf of the Company Group (subject to the provisions of Section 3(e)),
pay Manager a fee (a “Transaction Fee”), which may be based on a
percentage of the Transaction Value of such Transaction in an amount reasonably
agreed by Manager and the Company (with Unanimous Investor Approval), on behalf
of itself and the members of the Company Group. As used herein, “Transaction
Value” means the total value of the applicable Transaction, including,
without limitation, the aggregate amount of the cash funds and the aggregate
value of the other securities or obligations required to complete such
Transaction (excluding any fees payable pursuant to this Section 3(c)),
including any indebtedness, guarantees, capital stock or similar items issued
or made to facilitate, and the amount of any revolving credit or other
liquidity facilities or arrangements established in connection with, such
Transaction or assumed, refinanced or left outstanding in connection with or
immediately following such Transaction. For purposes


 


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of
calculating a Transaction Fee, the value of any securities included in the
Transaction Value will be determined by the average of the last sales prices
for such securities on the five trading days ending five days prior to the
consummation of the applicable Transaction, provided that if such
securities do not have an existing public trading market, the value of the
securities shall be their fair market value as mutually reasonably agreed
between Manager and the Company (with Unanimous Investor Approval), on behalf
of itself and the other members of the Company Group, on the day prior to
consummation of such Transaction. For the avoidance of doubt, no Transaction
Fee shall be payable to Manager in respect of the Initial Services.


 


(d)           Reimbursement of Expenses. The Company shall, or
shall cause one or more its Affiliates to, on behalf of itself and the other
members of the Company Group, (subject to the provisions of Section 3(e)),
reimburse Manager for such reasonable travel and other out-of-pocket expenses (“Expenses”)
as may be incurred by Manager and its subsidiaries and Affiliates and its and
their respective employees and agents in the course or on account of rendering
any services under this Agreement (including the Initial Services), including
but not limited to any applicable fees and expenses of any legal, accounting or
other professional advisors to Manager and its subsidiaries and Affiliates and
any expenses incurred by any Manager Designee in connection with the
performance of his or her duties to any member of the Company Group. Manager
may submit monthly expense statements to the Company or any other such member
of the Company Group, which statements shall be payable within thirty days. Nothing
in this Section 3(d) shall limit any obligations of the Company to reimburse
any costs and expenses to Manager, its subsidiaries or Affiliates under the
Stockholders Agreement.


 


(e)           Obligations
Joint and Several; Payment Obligations for Certain Transaction Fees and
Expenses. Hertz and the Company (on behalf of itself and the other members
of the Company Group) hereby agree that the obligations of the Company under
this Section 3 shall be borne jointly and severally by each member of the
Company Group.


 


(f)            Coordination
of Services. Manager acknowledges that, concurrently with the execution of
this Agreement, the Company and Hertz are entering into substantially similar
consulting agreements (other than the provision in this Agreement separately
compensating Manager for any quarter during which an employee of Manager or its
Affiliates serves as Chief Executive Officer) with the other Sponsors in
accordance with Section 1.9 of the Stockholders Agreement and pursuant to which
each of the other Sponsors are to provide consulting and transaction services
to the Company Group comparable to those to be provided by Manager hereunder. Each
of the Sponsors shall coordinate their provision of such services to the
Company Group with each other, however no Sponsor shall be liable to any member
of the Company Group as a result of any such services provided by any other
Sponsor.


 


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4.             Term, etc. (a)         This Agreement shall be in
effect until, and shall terminate upon, the earlier to occur of the (i)
consummation of the initial public offering of the capital stock of the Company
or any successor company, provided (x) such termination has been
requested by the Company (with Majority Approval (as defined in the
Stockholders Agreement)) and (y) each other consulting agreement of the Company
and Hertz with the other Sponsors has either terminated or terminates
concurrently with this Agreement, (ii) tenth anniversary of the date
hereof and (iii) date on which the Fund, together with the other
members of its Principal Investor Group (as defined in the Stockholders
Agreement), no longer own, directly or indirectly, at least 25% of its Original
Shares (as defined in the Stockholders Agreement), and may be earlier
terminated by Manager upon thirty days’ prior written notice to the Company. The
provisions of this Agreement shall survive any termination hereof, provided
that, notwithstanding the foregoing, Sections 1 and 2 shall not survive any
termination hereof and provided, further, that Section 3 shall
survive any termination hereof solely as to any portion of any Consulting Fee,
Transaction Fee or Expenses not paid or reimbursed prior to such termination
and not required to be paid or reimbursed thereafter pursuant to Section 4(c).


 


(b)           Upon any consolidation or merger of the Company, or any
conveyance, transfer or lease of all or substantially all of the assets of the
Company, whether in connection with the Acquisition or otherwise, the entity
formed by such consolidation, or into which the Company or Hertz is merged or
to which such conveyance, transfer or lease is made (each, a “Successor
Entity”), shall succeed to and be substituted for the Company or Hertz, as
applicable, under this Agreement with the same effect as if the Successor
Entity had been a party hereto. Subject to Section 4(a)(iii), no such
consolidation, merger or conveyance, transfer or lease shall have the effect of
terminating this Agreement or of releasing the Company, Hertz or any Successor
Entity from its obligations hereunder.


 


(c)           Upon any termination of this Agreement, the Company,
agrees immediately to pay or reimburse, (or cause one or more other members of
the Company Group to pay or reimburse), as the case may be, any accrued and
unpaid installment of the Consulting Fee or portion thereof (pro rated, with
respect to the month in which such termination occurs, for the portion of such
month that precedes such termination), and (subject to the provisions of
Section 3(e)) any accrued and unpaid Transaction Fee or portion thereof and any
unpaid and unreimbursed Expenses that shall have been incurred prior to such
termination (whether or not such Expenses shall then have become payable). If,
at any time, no member of the Company Group is permitted to make any payment or
reimbursement due to Manager under this Agreement under the terms of any credit
agreement or other financing agreement to which any member of the Company Group
is a party, such obligations shall accrue as provided herein, but payment or
reimbursement thereof shall be deferred until such time as (i) such
payments are no longer prohibited under the terms of the applicable agreement,
or (ii) the loan amount due thereunder is repaid in full. In the event
of the liquidation of the Company, all amounts due Manager


 


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under
this Agreement shall be paid to Manager before any liquidating distributions or
similar payments are made to stockholders of the Company.


 


5.             Information. The Company will, and will cause
each member of the Company Group to, use its reasonable best efforts to
furnish, or to cause their respective subsidiaries and agents to furnish,
Manager with such information (the “Information”) as Manager reasonably
believes appropriate to its engagement hereunder. The Company acknowledges and
agrees that (a) Manager will rely on the Information and on information
available from generally recognized public sources in performing the Consulting
Services and the Transaction Services and (b) Manager does not assume
responsibility for the accuracy or completeness of the Information and such
other information.


 


6.             Independent Contractor Status. The parties
acknowledge and agree that Manager has performed the Initial Services, and shall
perform the Consulting Services and the Transaction Services, as an independent
contractor, retaining control over and responsibility for its own operations
and personnel and those of its subsidiaries. The Company further acknowledges
and agrees that Manager may, in its sole discretion, remove or substitute any
of the members of, or add members to, the team of professional employees of
Manager and its subsidiaries and Affiliates that will be providing services
pursuant to this Agreement, and that any such removal, substitution or addition
shall not in any way modify or affect any of the obligations of the Company
hereunder, including, without limitation, its obligation to pay the any fee or
reimburse any Expenses. None of Manager and its subsidiaries and Affiliates and
its and their respective employees and agents shall, solely by virtue of this
Agreement or the arrangements hereunder, be considered employees or agents of
any member of the Company Group, nor shall any of them have authority hereunder
to contract in the name of or bind any member of the Company Group, except (i)
to the extent that any professional employee of Manager or any of its
subsidiaries may be serving as a director or an officer of any member of the
Company Group or (ii) as expressly agreed to in writing by such member
of the Company Group. Any duties of Manager arising out of its engagement to
perform services hereunder shall be owed solely to the members of the Company
Group.


 


7.             Limitation on Liability. Except in cases of gross
negligence or willful misconduct, Manager, its Affiliates and any of their
respective employees, officers, directors, partners, consultants, members,
stockholders or Affiliates shall have no liability of any kind whatsoever to
any member of the Company Group for any damages, losses or expenses (including,
without limitation, special, punitive, incidental or consequential damages and
interest, penalties and fees and disbursements of attorneys, accountants,
investment bankers and other professional advisors) with respect to the
provision of the Initial Services, the Consulting Services and the Transaction
Services.


 


8.             Entire Agreement; No Representations or Warranties.
This Agreement, the Stockholders Agreement and the Indemnification Agreement (a)
contain the complete


 


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and entire understanding and agreement between Manager and the Company
with respect to the subject matter hereof and (b) supersede all prior
and contemporaneous understandings, conditions and agreements, whether written
or oral, express or implied, in respect of the subject matter hereof. The
Company acknowledges and agrees that Manager makes no representations or
warranties in connection with this Agreement or its provision of the Initial
Services, the Consulting Services and the Transaction Services. The Company
agrees that any acknowledgment or agreement made by the Company in this
Agreement is made on behalf of the Company and the other members of the Company
Group.


 


9.             Counterparts; Amendments and Waivers. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and which together shall constitute one agreement. This
Agreement may not be amended, restated, supplemented or otherwise modified, and
no provision of this Agreement may be waived, other than in a writing duly
executed by the parties hereto and approved by Unanimous Investor Approval.


 


10.           Binding Effect; Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties to this
Agreement and their respective successors and assigns; provided, that (i)
neither this Agreement nor any right, interest or obligation hereunder may be
assigned by either party, whether by operation of law or otherwise, without the
express written consent of the other party hereto, (ii) any such
assignment in connection with the Acquisition shall be expressly permitted hereunder
and shall not require the prior written consent of Manager, and (iii) any
assignment by Manager of its rights but not the obligations under this
Agreement to any entity directly or indirectly controlling, controlled by or
under common control with Manager shall be expressly permitted hereunder and
shall not require the prior written consent of the Company. This Agreement is
not intended to confer any right or remedy hereunder upon any person or entity
other than the parties to this Agreement and their respective successors and
assigns.


 


11.           Governing Law; Jurisdiction;
Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT SUCH PRINCIPLES WOULD
REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. Each of the parties hereto irrevocably and
unconditionally (a) agrees that any legal suit, action or
proceeding brought by any party hereto arising out of or based upon this
Agreement or the transactions contemplated hereby may be brought in any court
of the State of New York or Federal District Court for the Southern District of
New York located in the City, County and State of New York (each, a “New
York Court”), (b) waives, to the fullest extent that it may
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any such proceeding brought in a New York Court, and any
claim that any such action or proceeding brought in a New York Court has been
brought in an inconvenient forum,


 


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(c) submits to the non-exclusive jurisdiction of any New York
Court in any suit, action or proceeding and (d) ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE HEREBY WAIVES ANY RIGHT THAT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT. With respect to clause (d) of the
immediately preceding sentence, each of the parties hereto acknowledges and
certifies that (i) no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the waiver contained therein, (ii)
it understands and has considered the implications of such waiver, (iii)
it makes such waiver voluntarily and (iv) it has been induced to enter
into this Agreement by, among other things, the mutual waivers and
certifications contained in this Section 11.


 


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IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.


 


	
   

  	
  CLAYTON,
  DUBILIER & RICE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Theresa A.
  Gore

  
	
   

  	
  Name:

  	
  Theresa A. Gore

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CCMG HOLDINGS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David H.
  Wasserman

  
	
   

  	
  Name:

  	
  David H.
  Wasserman

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE HERTZ
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harold E.
  Rolfe

  
	
   

  	
  Name:

  	
  Harold E. Rolfe

  
	
   

  	
  Title:

  	
  Senior Vice
  President