Exhibit
10.21


 


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 Merrill Lynch Global
Partners, Inc., a Delaware corporation (“Manager”).


 


W  I  T  N  E
S  S  E  T  H:


 


WHEREAS,  Clayton, Dubilier & Rice, Inc. (“CD&R”),
Carlyle Investment Management, L.L.C. and Manager (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., Carlyle Partners IV,
L.P., ML Global Private Equity Fund, L.P. (the “Fund”), 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”).


 

















 


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.


 


(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 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 the CD&R consulting
agreement separately compensating CD&R for any quarter during which an
employee of CD&R 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.


 


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 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 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, (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.


 


12.           Certain Relationships.
Nothing in this Agreement shall be construed as precluding Merrill Lynch,
Pierce, Fenner & Smith Incorporated or any of the Manager’s other
Affiliates from having acted or acting in the future as a financial advisor,
corporate broker, underwriter or in any other capacity for the Company (or any
of its Affiliates or beneficial owners) or for any other person or entity, for
separate consideration as may be set forth in a separate engagement letter or
other agreement among the relevant parties. Furthermore, nothing in this
Agreement shall be construed as obliging Merrill Lynch, Pierce, Fenner &
Smith Incorporated or any of the Manager’s other Affiliates to act on behalf
of, or perform any services for, the Company, or any of its subsidiaries,
Affiliates or beneficial owners, for any purpose whatsoever (whether
specifically set forth herein or otherwise) without the negotiation of a
separate engagement letter or other written agreement with respect to such
actions or services among the relevant parties. For the avoidance of doubt,
this Section 12 shall not apply to the provision of Consulting Services by Manager
hereunder


 


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


 


	
   

  	
  MERRILL LYNCH GLOBAL PARTNERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ George A. Bitar

  
	
   

  	
  Name:

  	
  George A. Bitar

  
	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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