# EDGAR Filing Document

**Accession Number:** 0001514587
**File Stem:** 0001193125-23-078252
**Filing Date:** 2023-3
**Character Count:** 1848016
**Document Hash:** 9406f68e4d3f4169e072f08873190e32
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-078252.hdr.sgml**: 20230324

**ACCESSION NUMBER**: 0001193125-23-078252

**CONFORMED SUBMISSION TYPE**: S-1/A

**PUBLIC DOCUMENT COUNT**: 76

**FILED AS OF DATE**: 20230324

**DATE AS OF CHANGE**: 20230323

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Turo Inc.
- **CENTRAL INDEX KEY:** 0001514587
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-AUTO RENTAL & LEASING (NO DRIVERS) [7510]
- **IRS NUMBER:** 270729479
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-1/A
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-262088
- **FILM NUMBER:** 23757533

**BUSINESS ADDRESS:**
- **STREET 1:** 111 SUTTER STREET
- **STREET 2:** FLOOR 12
- **CITY:** SAN FRANCISCO
- **STATE:** CA
- **ZIP:** 94104
- **BUSINESS PHONE:** (415) 965-4525

**MAIL ADDRESS:**
- **STREET 1:** 111 SUTTER STREET
- **STREET 2:** FLOOR 12
- **CITY:** SAN FRANCISCO
- **STATE:** CA
- **ZIP:** 94104

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** RelayRides, Inc.
- **DATE OF NAME CHANGE:** 20110304

##### [**Table of Contents**](#toc)
**As filed with the Securities and Exchange Commission on March 23, 2023.** 

**Registration No. 333-262088** 

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

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**Amendment No. 4** 

**to** 

**FORM S-1** 

**REGISTRATION STATEMENT** 

*UNDER* 

*THE SECURITIES ACT OF 1933* 

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**TURO INC.** 

**(Exact name of Registrant as specified in its charter)** 

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| | | |
|:---|:---|:---|
| **Delaware** | **7372** | **27-0729479** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(Primary Standard Industrial**<br> **Classification Code Number)** | **(I.R.S. Employer**<br> **Identification Number)** |

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**111 Sutter Street, Floor 12** 

**San Francisco, California 94104** 

**(415) 965-4525** 

**(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)** 

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**Andre Haddad** 

**Chief Executive Officer** 

**Turo Inc.** 

**111 Sutter Street, Floor 12** 

**San Francisco, California 94104** 

**(415) 965-4525** 

**(Name, address, including zip code, and telephone number, including area code, of agent for service)** 

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***Copies to:***

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| | | |
|:---|:---|:---|
| **Rachel Proffitt**<br> **Calise Y. Cheng**<br> **Natalie Y. Karam**<br> **Cooley LLP**<br> **3 Embarcadero Center, 20<sup>th</sup> Floor**<br> **San Francisco, California 94111**<br> **(415) 693-2000** | **Michelle Fang**<br> **Chief Legal Officer**<br> **Turo Inc.**<br> **111 Sutter Street, Floor 12**<br> **San Francisco, California 94104**<br> **(415) 965-4525** | **Sarah K. Solum**<br> **Freshfields Bruckhaus Deringer US LLP**<br> **855 Main Street**<br> **Redwood City, California 94063**<br> **(650) 618-9250** |

---

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**Approximate date of commencement of proposed sale to the public:** As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☐ |
|  |  | Emerging growth company | ☒ |

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

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**The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.** 

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##### [**Table of Contents**](#toc)
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell and it does not seek and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

*Subject to Completion, dated , 2023*![LOGO](g145731g34t30.jpg)

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| | |
|:---|:---|
| <br> **Common stock**<br>| <br> **shares**<br>|

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This is an initial public offering of shares of common stock of Turo Inc. We are offering shares of our common stock. The selling stockholders identified in this prospectus are offering shares of our common stock. We will not receive any proceeds from the sale of shares by the selling stockholders.

Prior to this offering, there has been no public market for our common stock. It is currently estimated that the initial public offering price per share will be between $ and $. We have been approved to list our common stock on the New York Stock Exchange under the symbol "TURO."

Following this offering, our executive officers, directors, and stockholders holding more than 5% of our outstanding shares, together with their affiliates, will hold, in the aggregate, approximately % of our outstanding capital stock (or % of our outstanding capital stock if the underwriters exercise their option in full to purchase additional shares of common stock).

We are an "emerging growth company" as defined under the U.S. federal securities laws, and as such, we have elected to comply with certain reduced reporting requirements for this prospectus and may elect to do so in future filings.

**Investing in our common stock involves a high degree of risk. See the section titled "[Risk factors](#toc145731_4)" beginning on page 25 to read about factors you should consider before buying shares of our common stock.** 

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Price to public** | **Underwriting discounts**<br> **and commissions<sup>(1)</sup>** | **Proceeds to Turo** | **Proceeds to<br>selling stockholders** |
|  Per share | $| $| $| $|
|  Total | $| $| $| $|

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(1) See the section titled "Underwriters" for a description of the compensation payable to the underwriters.

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.** 

At our request, the underwriters have reserved up to % of the shares of common stock offered by this prospectus for sale at the initial public offering price through a directed share program to eligible hosts and guests on our platform and certain individuals identified by our officers and directors. See the section titled "Underwriters — Directed share program" for additional information.

We have granted to the underwriters the option for a period of 30 days to purchase up to an additional shares of common stock from us on the same terms as set forth above.

The underwriters expect to deliver the shares of common stock to purchasers on , 2023.

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| | | | |
|:---|:---|:---|:---|
| **Morgan Stanley** | **Morgan Stanley** | **J.P. Morgan** |  |
| **Allen & Company** | **Allen & Company** | **Citigroup** |  |
| TD Cowen | D.A. Davidson & Co. | Wolfe \| Nomura Alliance | LionTree |
| Loop Capital Markets | Loop Capital Markets | Ramirez & Co., Inc. | Siebert Williams Shank |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; , 2023.

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##### [**Table of Contents**](#toc)
The worlds largest car sharing marketplace ![LOGO](g145731g70d01.jpg)

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##### [**Table of Contents**](#toc)
![LOGO](g145731g02a01.jpg)

Our host community Accelerating entrepreneurship with scalable business opportunities $2.1B+ host earnings since inception 300K+ active vehicles\* 1,400+, makes and models 9,500+ cities \* Active as of 12 months ended September 30, 2022. We count the number of active vehicles and active guests as vehicle listings and guests, respectively, with at least one trip in the trailing 12-month period.

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##### [**Table of Contents**](#toc)
![LOGO](g145731g03r51.jpg)

Our guest community Elevating everyday necessity with extraordinary experiences 3.7B+ miles driven since inception 2.7M+ active guests\* 80 net promoter score 110% YoY growth of active guests

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##### [**Table of Contents**](#toc)
Take a look under the hood TURO

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##### [**Table of Contents**](#toc)

## Table of contents

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| | |
|:---|:---|
|  | **Page** |
|  [Prospectus summary](#toc145731_1) | 1 |
|  [Risk factors](#toc145731_4) | 25 |
|  [Special note regarding forward-looking statements](#toc145731_5) | 80 |
|  [Market, industry, and other data](#toc145731_6) | 83 |
|  [Use of proceeds](#toc145731_7) | 86 |
|  [Dividend policy](#toc145731_8) | 87 |
|  [Capitalization](#toc145731_9) | 88 |
|  [Dilution](#toc145731_10) | 90 |
|  [Management's discussion and analysis of financial condition and results of operations](#toc145731_11) | 96 |
|  [Business](#toc145731_12) | 136 |
|  [Management](#toc145731_13) | 207 |

---

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| | |
|:---|:---|
|  | **Page** |
|  [Executive compensation](#toc145731_14) | 216 |
|  [Certain relationships and related party transactions](#toc145731_15) | 235 |
|  [Principal and selling stockholders](#toc145731_16) | 238 |
|  [Description of capital stock](#toc145731_17) | 241 |
|  [Shares eligible for future sale](#toc145731_18) | 247 |
|  [Material U.S. federal income tax consequences to non-U.S. holders of our common stock](#toc145731_19) | 253 |
|  [Underwriters](#toc145731_20) | 257 |
|  [Legal matters](#toc145731_21) | 270 |
|  [Experts](#toc145731_22) | 270 |
|  [Where you can find additional information](#toc145731_23) | 270 |
|  [Index to consolidated financial statements](#toc145731_24) | F-1 |

---

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**Through and including , 2023 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.** 

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Neither we, the selling stockholders, nor any of the underwriters have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. Neither we, the selling stockholders, nor any of the underwriters take any responsibility for, or can provide any assurance as to the reliability of, any other information that others may give you. We, the selling stockholders, and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus or any free writing prospectus is accurate only as of its date, regardless of its time of delivery or of any sale of our common stock. Our business, financial condition, results of operations, and future growth prospects may have changed since that date.

For investors outside the United States: Neither we, the selling stockholders, nor any of the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside of the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside of the United States.

i

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##### [**Table of Contents**](#toc)
Prospectus summary

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##### [**Table of Contents**](#toc)

## Prospectus summary
*This summary highlights selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled "Risk factors," "Special note regarding forward-looking statements," and "Management's discussion and analysis of financial condition and results of operations," and our consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, all references in this prospectus to "we," "us," "our," "ours," "our company," and "Turo" refer to Turo Inc. and its consolidated subsidiaries.* 

**Mission and vision** 

Our mission is to put the world's 1.5 billion cars to better use. Our vision is that wherever you are, you can book the perfect vehicle for your next adventure from a trusted Turo host.

**Overview** 

Turo is the world's largest car sharing marketplace where guests can book any car they want, wherever they want it, from a vibrant community of trusted hosts. Whether they're flying in from afar or looking for a car down the street, searching for a rugged truck or something smooth and swanky for a once-in-a-lifetime event, guests can take the wheel of the perfect car for any occasion, while hosts can take the wheel of their futures by sharing their underutilized personal vehicles or building an accessible, flexible, and scalable car sharing business from the ground up. Turo is home to a supportive and collaborative community that shares thousands of vehicles across the United States, Canada, the United Kingdom, France, and Australia. As of December 31, 2022, we had over 160,000 active hosts and 2.9 million active guests from around the world participating in our marketplace.

We are pioneering a new category of transportation, advancing the next era of personal mobility by connecting consumers with an unrivaled network of privately owned vehicles. Cars remain the preferred means of transportation for short-, medium-, and long-duration trips across a variety of use cases, but traditional mobility options do not provide adequate and efficient access for consumers to vehicles. The peer-to-peer car sharing opportunity Turo delivers to consumers provides a more convenient, economically efficient, and environmentally and socially responsible way to access an extraordinary selection of vehicles compared to traditional car ownership and car rental.

Our platform unlocks peer-to-peer car sharing through technology — a seamless, simple platform that connects hosts and guests and enables them to transact in a trusted, safe environment. With Turo, hosts can quickly list vehicles, adjust their availability, and dynamically modify prices to access the unique demand patterns in their market. Guests can search by location, type, price, use case, and many other categories to find the perfect vehicle for their needs. Our platform supports a variety of use cases — from the minivan for the family road trip, to the convertible for the long-awaited beach getaway, or a simple vehicle for escaping the city grind. Built-in messaging, payments, fraud detection, the proprietary Turo Risk Score, and host and guest protection plans are designed to deliver a safe transaction and experience for our community.

We have experienced rapid growth since our launch in 2010. Our business model has proven to be resilient throughout fluctuations in travel trends and economic climates as our marketplace dynamically adjusts to the needs of our hosts and guests. We have seen increased demand for bespoke and safe forms of transportation, as well as increased supply from hosts, showing that Turo can uniquely serve and elevate our entire community,

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both hosts and guests. We generated net revenue of $149.9 million in 2020, representing 6% growth from $141.7 million in 2019, and a net loss of $97.1 million during 2020, down from $98.6 million in 2019. The increase in net revenue for the year ended December 31, 2020 was due to a combination of the introduction of the Turo Risk Score in April 2020, a tool that dynamically adjusts the fees that we charge guests to complete a booking on our marketplace, as well as hosts increasing the prices for vehicles charged to guests. In 2021, we generated net revenue of $469.0 million, representing 213% growth from $149.9 million in 2020, and a net loss of $40.4 million, down from $97.1 million in 2020. The increase in net revenue for the year ended December 31, 2021 was due to a combination of the effects of the COVID-19 pandemic on our business, improved optimization of the Turo Risk Score, hosts increasing the prices for vehicles charged to guests, as well as a rental car supply shortage. In 2022, we generated net revenue of $746.6 million, representing 59% growth from $469.0 million in 2021, and a net income of $154.7 million, compared to a net loss of $40.4 million in 2021. The increase in net revenue for the year ended December 31, 2022 was due to an increase in total days booked by our guests on our platform (net of days canceled in that period), or Days, as a result of continued travel demand combined with an increase in our supply and new guests on the platform. We continue to improve the efficiency of our marketplace and generated adjusted EBITDA of $79.7 million, $81.1 million, $(38.1) million, and $(91.6) million in 2022, 2021, 2020, and 2019, respectively. For additional information about adjusted EBITDA, a non-GAAP financial measure, and a reconciliation of adjusted EBITDA to the most directly comparable financial measure stated in accordance with GAAP, see the section titled "Management's discussion and analysis of financial condition and results of operations — Non-GAAP financial measures."

In May 2022, we acquired OuiCar SAS, or OuiCar, a car sharing marketplace headquartered in France. Our key business metrics and the numbers of active guests, active hosts, active vehicle listings, cities, and makes and models available on our platform include the results of OuiCar from the acquisition date through December 31, 2022.

**Industry background** 

We believe there are several seismic shifts in consumer behavior underway that are fueling our long-term opportunity.

**Entrepreneurship is on the rise with a focus on utilizing idle assets and skills** 

Technology has created opportunities for entrepreneurial individuals to start their own businesses by monetizing their own skills, time, and existing assets. For example, vacation rental businesses exist in nearly every vacation market, with individuals sharing their homes and improving the utilization of these assets, while also generating a meaningful additional income stream. In addition, e-commerce platforms enable individuals to sell their one-of-a-kind creations and wares to buyers who value small-batch, small business-empowering product offerings. The adoption of flexible work arrangements and working from home is leading more and more individuals to start businesses and supplement their income by utilizing their skills and providing access to assets they already own.

**On-demand, mobile-first services have changed consumer engagement** 

The proliferation of apps has led consumers to demand convenience and ease of use, with access to services whenever they want and wherever they are. From grocery and food delivery, to meeting with a doctor or healthcare provider remotely through digital channels, consumers increasingly place a premium not just on the ability for their needs to be met instantly, but also on the breadth and depth of choice available to them as part of these on-demand services. Successful modern businesses reach and engage consumers through mobile-first technologies, providing an on-demand, real-time, dynamic experience that adjusts to the consumer's changing needs.

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##### [**Table of Contents**](#toc)
**Consumer preferences are shifting to unique experiences** 

While consumers are increasingly relying on mobile channels and expecting on-demand access, there is a concurrent trend in which consumers favor and seek unique, bespoke products and services. Many consumers favor the exclusive, hard-to-get items over the mass-produced, and choose affordable, customized experiences over commoditized or one-size-fits-most options. For consumers, the joy of discovery is dynamic, and the experiences they are looking for change day to day. This trend extends across many consumer-facing industries, from restaurants to e-commerce to travel. In each of these industries, the result has been new income-generating opportunities for those who can supply these unique products and services.

**Cars are increasingly expensive underutilized assets** 

According to an article published in the Journal of Planning Education and Research, owning a car has been among the most powerful economic advantages a family in the United States can have. However, owning a car is expensive. A car's value depreciates rapidly, and automobile insurance and maintenance are costly. Based on data from Kelley Blue Book, between 2016 and 2023, new car values increased 43%. In addition, consumers are increasingly aware that personally owned vehicles sit idle most of the time — 95% of the time, according to an MIT Senseable City Lab publication in August 2018 — and so today's consumers are more open to alternative modes of transportation.

**Mobility is changing as consumers today have more options** 

The ability to access services anywhere, anytime, through mobile devices and connectivity, has rapidly expanded the availability of mobility choices for consumers. This new world of mobility is the result of converging forces, defined by personal car ownership being replaced or complemented by services that provide access to transportation on demand. Shared mobility services have now become firmly integrated into urban transportation systems across the globe. Car sharing, scooter sharing, bike sharing, ride sharing/transportation network companies, or TNCs, and other systems now offer urban travelers access to transportation services that had long been only possible through personal vehicle ownership. These new services are helping to facilitate a shift towards mobility solutions that favor access over ownership and enable a paradigm where consumers have even more flexibility to choose how they want to move through the world and can even choose to forego car ownership completely.

**Limitations of current mobility solutions** 

As consumer preferences shift towards on-demand access to mobility as a complement to car ownership, the limitations inherent in existing mobility solutions have become more apparent.

• **Ride sharing solutions serve limited use cases .** Ride sharing solutions support limited use cases, largely
centered around point-to-point mobility. Ride sharing at its core does not scale to accommodate travel behavior or requirements beyond commuting and intra-urban
mobility. While an incredibly effective method for urban transportation, ride sharing is expensive, and therefore does not unlock travel-oriented use cases. The cost per mile for ride sharing services varies based on vehicle type and location. For
example, in the Denver region, according to The Mountain-Plains Consortium, passenger cost per mile is on average $2.50 per mile with a median of $3.19 per mile after considering total fare, tolls, fees, gratuity, and travel distance. As such, ride
sharing does not support exploration or other unique experiential needs of consumers and travelers.

• **Car rental services offer commoditized, cumbersome experiences .** While car rental solutions provide more
individual flexibility than ride sharing, the existing car rental industry does not adequately solve the ever-changing needs of the consumer. Car rental services do not provide a consumer-friendly approach —

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they're frequently tethered to airports, long lines, and wait times, with generic and unpredictable inventory. For the urban options offered by car rental companies, the location and timing constraints can be significant limitations for customers. This lack of focus on, and care for, the customer is evidenced by their low net promoter scores — according to XM Institute's annual net promoter score benchmark study, the car rental industry's average customer net promoter score is 5 (out of a maximum of 100). By contrast, Turo's net promoter score for the 12-month period ended December 31, 2022 was 80. <br>

• **Personal car ownership is costly and inefficient .** The costs associated with car ownership vary greatly
based on the usage of the vehicle — according to the American Automobile Association, or AAA, for a medium-sized sedan that is driven 15,000 miles per year, the cost per mile was approximately $0.69 per
mile in 2022. This includes all costs, such as license registration and taxes, insurance, maintenance, and financing. For vehicles that are driven fewer than 15,000 miles per year, such as luxury or specialty cars, this cost increases considerably.
In addition to these fixed costs, traditional car ownership limits the use cases available to a household to those expressly serviced by their owned vehicle.

**Turo — pioneering a new category of transportation** 

We have created the world's largest car sharing marketplace. Our peer-to-peer platform connects hosts and guests through our marketplace and is designed to enable guests to book the perfect vehicle for any occasion from our trusted community of hosts. We are the leader in this new way to access vehicles, with over 160,000 active hosts and 320,000 active vehicle listings in over 11,000 cities as of December 31, 2022. We count the number of active hosts as hosts with at least one trip as a host in the trailing 12-month period, and the number of active vehicle listings as vehicle listings with at least one trip in the trailing 12-month period.

We strive to make it easy for our hosts to earn money from their vehicles and for guests to find the perfect vehicle for their next trip. Hosts are our asset owners and deliver differentiated experiences and hospitality to our guests. Our platform avoids the capital intensity and asset-based limitations of the rental car and fleet-based car sharing industries, while providing low-cost access for individual car owners to earn extra income by sharing their vehicles through our marketplace. As a result, our platform is dynamic, as hosts can change the availability, cost, or selection of vehicles to satisfy guest demand. Guests choose from an extraordinary selection of cars. Since the vehicle they choose is provided by a host, the guest can be confident that the specific car that they booked is the exact car they will drive off in, increasing guest satisfaction. Additionally, our hosts can offer various pick-up locations, as well as optional "Extras," such as unlimited mileage, pre-paid refueling, bike and ski racks, camping equipment, and more to make the experience more convenient for the guest.

Guests book cars on our platform for a variety of use cases, and we open up new, longer duration forms of travel. We estimate that in 2022, approximately 35% of Days were part of bookings seven to 29 days in length, and approximately 6% of Days were part of bookings greater than or equal to 30 days in length, highlighting how our platform supports longer duration travel use cases.

**Our hosts** 

As of December 31, 2022, over 160,000 active hosts use our platform to power over 320,000 active vehicle listings. Our platform is designed for entrepreneurs of all sizes, from individuals looking to offset the cost of car ownership, to professional hosts seizing the opportunity to build scalable, accessible, flexible businesses atop our platform. Our platform enables hosts to utilize their idle vehicles to generate income without being perpetually present in the vehicle to benefit from our platform. Our hosts generally fit into one of the three following categories:

• **Consumer hosts.** Consumer hosts typically share one or two cars with the goal of offsetting car ownership costs.
Hosting on our platform often enables consumer hosts to earn extra income to afford their dream car, or to monetize vehicles they already own.

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• **Small business hosts.** Small business hosts typically share three to nine cars with the goal of generating
secondary income to build wealth and pay for life's expenses. They're often car enthusiasts who love cars, and love to share cars with like-minded enthusiasts to be able to afford their dream cars themselves.

• **Professional hosts.** Professional hosts typically share 10 or more cars, often as their primary income source, and
may choose to invest in, and in many cases have invested in, resources like employees and parking to support their operations.

Many of our small business and professional hosts started their journey with us as consumer hosts and scaled their businesses as they saw success on our platform.

**How our platform supports hosts** 

Our platform provides the software and services to help hosts of all sizes thrive, including easy-to-use desktop and mobile websites and native iOS and Android apps, insurance and protection, and safety and support. We continue to innovate and expand our platform capabilities to better help our hosts throughout the entire hosting lifecycle:

• **Onboarding and listing.** Our platform is designed to make it simple and intuitive for a host to sign up, verify
their account, and create an attractive listing. Insurance comes standard, and protection plans for hosts are bundled into the sign-up flow.

• **Listing management.** We provide a suite of software products that enable hosts to easily and intuitively manage
their listings, including an availability calendar and settings, messaging, pricing and trip settings, remote and in-person check-in and checkout options, earnings
payments, and post-trip incidental payments.

• **Pricing optimization.** Our technology platform enables analytics and data-driven decision making, empowering hosts
to determine the optimal price for their cars. Our capabilities include dynamic options such as calendar-based pricing and automatic pricing, allowing hosts to improve their monetization.

• **Scaling.** We provide hosts who are interested in scaling their Turo business with business management capabilities
that enable them to grow, such as performance tracking analytics, training guides in the Host Tools hub, and earnings estimates via the Turo Carculator.

• **Insurance and protection.** We make it simple for hosts to select protection plans, which creates peace of mind. All
host plans automatically include protection against third-party liability and compensation for vehicle damage, whether as reimbursement for physical damage or physical damage insurance (depending on the jurisdiction), as well as roadside assistance.

• **Safety and support.** We offer differentiated, timely support to our hosts, including trust and safety verification
of guests, roadside assistance, assistance in the resolution of billing and payment disputes, and hospitality coaching.

In addition to the above platform capabilities, we reward our top performing hosts by including them in our Power Host program and/or awarding them an All-Star Host badge, which can include benefits such as boosted listing visibility, special access to host marketing promotions, account management, and priority support.

**Benefits to hosts** 

• **Income generation.** With over 2.9 million active guests on our platform as of December 31, 2022, we provide
hosts with access to a highly engaged customer base. We count the number of active guests as

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guests with at least one trip as a guest in the trailing 12-month period. Hosts are empowered to transform their assets into earning engines, dramatically improving the economics of car ownership, without needing to spend hours behind the wheel in order to monetize their asset. Our platform supports a spectrum of hosts, from individuals to small business operators. Consumer hosts can offset the cost of ownership of their car, or even stretch and buy their dream car, while entrepreneurs can start their own businesses and share dozens of vehicles. Hosts of all sizes have earned more than $2.4 billion in the aggregate on our platform since inception. <br>

• **Scalability and flexibility.** Our hosts benefit from the ability to build, maintain, or grow a scalable, flexible
business through increasing the utilization of their vehicles while maintaining full ownership. Hosts can choose how often to make their car available and at what price, and value the ability to earn income or offset the cost of car ownership around
their personal needs and interests. Small business and professional hosts with multiple vehicles can choose the size of their portfolio, how much time they are ready to commit, and how much to reinvest their earnings in growing their business.

• **Ease of use.** We make it easy for hosts to manage their entire business. Signing up and onboarding are simple on
our platform. Once set up, hosts can easily access their Host Hub to manage all aspects of their experience. Our user interface is elegant and intuitive and is backed by our powerful technology infrastructure that enables access and functionality on
the go.

• **Trust and safety.** Our platform and community are built on trust and safety. Our robust platform facilitates secure
transactions and interactions with guests. All trips on our platform include protection against third-party liability, providing hosts with peace of mind. In addition, guests are screened at checkout, and our proprietary Turo Risk Score has
influenced fees charged to each trip in the United States since April 2020 in order to mitigate unsafe behavior. We also offer the ability for the community to provide ratings and reviews to increase the trust in using our platform.

• **Support.** Hosts benefit from the variety of support services we offer. We provide hosts with the tools to grow on
our platform, including advanced analytics and marketing and advertising support. Hosts value the support of the close-knit community of fellow hosts that we foster on our platform. We also offer customer support in the United Kingdom and France,
24/7 customer support in the United States, Canada, and Australia, and access to roadside assistance for hosts and their guests to ease the process when the unexpected happens. We continually invest in product innovation designed to deliver a
seamless experience for hosts.

**Our guests** 

Over 3.0 million guests booked over 19.1 million Days on our platform in 2022. We serve their unique needs across a broad spectrum of use cases, including:

• Local getaways

• Destination vacations

• Business travel

• International travel

• Car replacement

• Flexible month-to-month access

• Hyperlocal, instant access

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• Try-before-you-buy extended test
drives

• Dream drives in luxury, exotic, and classic cars

• Upgraded trips with upscale cars

• Outdoor adventures in camper and conversion vans

• Moving and running errands in trucks and vans

**How our platform supports guests** 

Our platform provides several capabilities designed to best serve our guests:

• **Inspiration and discovery.** Many guests come to our platform to get inspired. We make it easy to search
vehicles based on type, location, availability, ratings and reviews, and even use case, enabling guests to discover the perfect vehicle for any occasion.

• **Secure booking.** Guests book and pay for trips directly through our platform. Our booking flow is simple and easy
to navigate, providing guests with clarity and visibility into cost, Extras, and "rules of the road." Guests are able to quickly upload their profile photo, driver's license, phone number, and preferred payment method in a secure
environment.

• **Trips.** Guests can view their upcoming and past trips within our app and can extend a trip or even rebook a
favorite vehicle based on past activity. Guests can also check in and out of their trips seamlessly in-app and, for many makes and models, can access and unlock the vehicle right from our app using Turo Go, a
feature that leverages remote unlocking technology to enable contactless interactions. For hosts who are delivering their cars to their guests, they have the option to share their location with their guests via our app, so guests know in real time
how far away their host is.

• **Messaging.** Guests can securely and directly message their host within our app. Arranging pick-up, delivery, or other details within the app provides protection to both our guests and our hosts and creates a positive experience for both.

• **Support.** We provide access to detailed frequently asked questions, or FAQs, as well as the ability to
report damage or request roadside assistance, directly through our website or app. We also provide clear instructions on how to change or cancel a trip and arrange delivery, as well as other policies to enhance the guest experience.

**Benefits to guests** 

• **Access and availability.** Guests benefit from access to a vehicle when and where they want it, without the need for
ownership. Our hosts offer vehicles in tens of thousands of locations across a broad geographic footprint, and guests have the option to have vehicles delivered to their doorstep. Without the traditional limitations of a physical retail or parking
footprint, vehicles shared by hosts can be found broadly throughout the geographies in which Turo is available — nearly every block in some neighborhoods — corresponding to thousands of vehicle options that can be accessed wherever guests
need them, including in remote destinations. On our platform, guests can access an extraordinary variety of makes and models, including unique vehicles found on no other platform.

• **Choice.** Our hosts offer an extraordinary selection of vehicles for guests, with over 1,400 makes and models
available on our platform as of December 31, 2022. The extensive selection of vehicles offered by

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our hosts far surpasses the selection offered by rental companies. With Turo, the car you book is the car you get, whereas with rental car companies, the car you get is often whatever car they have in stock within the category you selected when booking. We support a diversity of use cases, ranging from a truck to help on moving day, to a swanky exotic for a luxurious weekend away, to a classic cruiser for a picture-perfect road trip, or an economical commuter car to help you get where you're going. <br>

• **Trust and safety.** Guests can rely on our trusted platform. We have a secure payments network and a robust
technology suite to coordinate safe interactions with hosts. Insurance is included for all trips with hosts if an accident with a third party does occur.

• **Personal experience.** For guests, booking with a host is engaging with a real individual, someone with a
shared passion, hobby, or interest in the vehicles they offer. Hosts may offer local restaurant recommendations and must-see destinations to their guests, adding an extraordinary personal touch that is
distinct from other transportation options that offer commodity vehicles owned by big corporations. This authentic, personal experience improves repeat usage and promotes evangelization of our community.

• **Seamless experience.** Guests can access a hassle-free experience through our marketplace. Guests can book a
vehicle, delivery, and Extras in minutes through the elegant user interface on our app or web platform. Search and discovery, booking, and payment are all easy to navigate on our platform. Our powerful app and technology platform drive the entire
experience from booking to coordination to support.

**Benefits to local communities and the environment** 

• **Economic activity.** As members of their local communities, hosts increase their income and spending power from
bookings generated on our platform. By empowering hosts and enabling guests to access vehicles in their local communities, we help to perpetuate cycles of community investment and growth. A 2021 study we commissioned by The Center for Growth and
Opportunity at Utah State University that evaluated over 1.5 million transactions across eight states plus Washington, D.C. found that Turo is disproportionately used by guests from minority neighborhoods, which benefits those local
communities.

• **Broad access.** Our platform is accessible to a broad range of guests, including those who may have traditionally
struggled to afford a vehicle. The availability of Turo reduces car ownership dependency for these guests, who are better served by access to short-term car sharing rather than by making costly monthly payments to own or lease vehicles. Hosts who
want to own a car, but might not otherwise be able to afford one, can offset the costs of car ownership by sharing their vehicle with neighbors in, or travelers to, their community.

• **Environmental stewardship.** We enable vehicle access on an as-needed basis
to avoid the unnecessary environmental impact of every consumer striving to own a vehicle or multiple vehicles. In addition, on Earth Day 2021, we launched a carbon neutrality initiative to offset 100% of estimated carbon emissions generated by
trips booked on the platform, as well as all emissions from our global office footprint. For every trip, we make an investment in projects addressing transportation and industrial emissions and agriculture forestry initiatives to reduce greenhouse
gases worldwide. Also, by offering access to a selection of energy-efficient vehicles, we contribute to sustainable vehicle use in local communities and help drive the adoption of electric vehicles. As of December 31, 2022, electric vehicles
represented 7% of Turo vehicle listings.

**The Turo flywheel effect** 

Our platform benefits from the self-reinforcing value proposition between hosts and guests. Hosts are engaged with our brand and platform due to the unique income generation opportunity we provide, and they become increasingly engaged as they earn more. As existing hosts grow and new hosts join, our value proposition to guests strengthens as guests have access to a more unique selection of vehicles in more locations. The unique

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inventory of vehicles not available anywhere else, along with the seamless experience we offer guests, spurs organic, word-of-mouth growth, and repeat behavior. Growth in demand leads to greater income opportunities for our hosts, which further strengthens our host value proposition and, in turn, encourages existing hosts to grow and new hosts to join. As we scale and continue improving our offering, our guests book more trips which we leverage to generate data that powers our machine learning algorithms, such as data-driven pricing, search results ranking, and vehicle recommendations. These algorithms improve our host and guest experience and make our business more profitable, resulting in reinvestments to further improve user experience and propel growth.

**Capitalizing on the shift in consumer travel and transportation preferences** 

We believe the effects of the COVID-19 pandemic and supply chain shortages accelerated the adoption of our platform and transition from other transportation services. We enable a variety of trip lengths and trip types, providing a platform customers can rely on for all types of transportation. Our marketplace has proved to be resilient and dynamic as consumer travel and transportation preferences have shifted to favor access to mobility solutions that meet their particular needs. According to research from Destination Analysts, two-thirds of U.S. residents took a road trip during the COVID-19 pandemic, taking 2.5 trips per person on average. The increase in car-based travel turbocharged our growth in awareness and market penetration. A large number of guests were introduced to Turo for the first time, and we believe many will become loyal return guests through their experience on our platform.

**Liability protection included** 

We have pioneered the offering of protection plans for hosts and guests that are seamlessly integrated into the Turo experience. Protection plans provide hosts with peace of mind to offer their vehicles on our platform and allow their guests to drive with the confidence of knowing they have liability protection from third parties through products provided by insurance companies or companies that offer regulated financial risk products. We have made the ability to obtain protection easy, simple, and seamless for both hosts and guests. In the United States, Canada, France, and the United Kingdom, all trips provided by hosts are automatically insured by one of our third-party insurance providers. In Australia, all trips include protection from legal liability through a regulated financial risk product known as discretionary risk protection. We reimburse the host for eligible repairs up to the actual cash value of the car, or $200,000 (in the United States), whichever is the lesser amount, subject to the terms of each plan. Similarly, all guests in the United States automatically receive at least the state-required financial responsibility limits (sometimes called "state minimum insurance") with trips booked with hosts, regardless of whether they select a protection plan or not. Where peer-to-peer car sharing statutes or permits require greater coverage limits, those are provided on trips as applicable.

**Turo Risk Score** 

Every trip booked on our platform in the United States since April 2020 automatically generates a proprietary Turo Risk Score, which we use to promote responsibility and trust within our community. As of December 31, 2022, we have collected data from over 46 million Days, 13 million transactions, 4 billion miles driven, and over 10 years of claims data since inception to inform our proprietary Turo Risk Score algorithms and use more than 50 data inputs per transaction. We leverage insights from this data to control for fraud, manage risk, and customize marketplace fees. We believe this contributes to better access for all trips, expanding the economic opportunity for hosts, and garnering deeper loyalty from the members of our community. The more trips taken, the better we are able to refine our algorithms and continuously improve the accuracy of the Turo Risk Score to drive actionable insights that inform fees, inventory adjustments, trust and safety practices, and more.

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**Large market opportunity** 

Transportation is one of the largest household expenses — in 2021, households in the United States alone spent almost $11,000 per year on their mobility needs, according to the U.S. Bureau of Transportation Statistics. We are the pioneer in peer-to-peer car sharing and we are helping to drive the global transition to a new world of mobility, which will make transportation more convenient, accessible, and economical. We have a substantial market opportunity in the growing car sharing economy. We view our revenue opportunity in terms of a serviceable addressable market, or SAM, which we believe we can address today, and a total addressable market, or TAM, which we believe we can address over the longer term. These market opportunity estimates are based on revenue potential and involve a number of estimates and assumptions, which are discussed in more detail below.

**Serviceable Addressable Market (SAM)** 

We estimate our current SAM to be $124 billion, reflecting the revenue we could earn on our platform by monetizing the 862 billion miles from long-duration trips, which we define as trips of greater than 30 miles, in the United States, Canada, the United Kingdom, France, and Australia, which are the countries in which we operate on a peer-to-peer basis today. To calculate our SAM estimate, we apply the average percentage of our fees per trip to long-duration trip costs. We derive the long-duration trip costs by multiplying annual passenger vehicle miles traveled for long-duration trips by our estimated guest cost per allotted mile of $0.38, $0.30, $0.37, $0.37, and $0.37 for the United States, Canada, the United Kingdom, France, and Australia, respectively, based on historical prices, fees, and fuel costs. We define allotted miles as the mileage included in a trip, rather than the miles actually driven. We derive the number of passenger vehicle miles in our SAM by available country-level estimates of passenger vehicle miles traveled per car, based on data included in reports issued in 2021 by the International Road Federation, Geneva Switzerland (<sup>©</sup>IRF, 2021 World Road Statistics). We estimate that guests traveled approximately 1.8 billion miles on our platform in 2022, implying a less than 1% penetration rate of our SAM.

**Total Addressable Market (TAM)** 

We estimate our TAM to be $188 billion, using the same methodology as our SAM, including the potential opportunity from countries in Europe, Latin America, the Middle East, and South Africa as adjusted for the Organisation for Economic Co-operation and Development's estimates of purchasing power parity, which is a given country's purchasing power relative to U.S. purchasing power and utilizes cost adjustments relative to the United States, Canada, the United Kingdom, France, and Australia and exchange rates as of 2022. Over time, we believe that guests may increasingly use our peer-to-peer car sharing platform for trips greater than 30 miles as the cost of such trips, and ultimately the degree to which individuals choose to own their own vehicles, declines. As with SAM, we have excluded short-duration trips from our TAM to provide a more conservative view of our long-term opportunity. We estimate that our $188 billion TAM includes $96 billion in North America, $59 billion in Europe, and $33 billion in the rest of the world (which consists of selected countries in which we believe we have a medium- to long-term opportunity to onboard hosts).

**Our competitive strengths** 

• **Unique, exclusive inventory.** As of December 31, 2022, the vast majority of the over 320,000 active vehicle
listings on our platform are available only on our platform, up 67% year over year. The diversity, breadth, and depth of our platform make us highly differentiated from competing offerings.

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• **Marketplace density.** Without the traditional limitations of a physical retail or parking footprint, vehicles
shared by hosts can be found broadly throughout the geographies in which Turo is available, on nearly every block in some neighborhoods, corresponding to thousands of vehicle options.

• **Compelling value.** We offer a better economic value than many other transportation solutions. For example, the cost
per mile of owning a medium-sized sedan in the United States that is driven 15,000 miles per year was approximately $0.69 per mile in 2022, including fuel, license registration and taxes, insurance,
maintenance, and financing costs, according to AAA. The same vehicle would cost guests only approximately $0.20 per mile on Turo, after including incidentals and fees but excluding sales tax, based on 2022 data.

• **Innovative, custom-built platform.** We have purposely built our technology infrastructure and app to empower hosts
and guests with specific features to directly address their needs. For hosts, our robust offering provides an entrepreneurial platform to build their businesses. Guests benefit from seamless apps to search, discover, book, and experience a vehicle
when they need it.

• **Proprietary data and machine learning driven insights.** Our proprietary data gleaned from well over a billion
driving miles and millions of trips since inception allows us to develop and refine our proprietary Turo Risk Score, continuously improve our offering, provide personalization, and optimize the economics in an intelligent manner.

• **Engaged community and powerful brand.** The uniqueness of our offering has created strong brand advocates who are
loyal to our platform, drive word-of-mouth growth, and take repeat trips with increasing frequency. In 2022, approximately 79% of our site traffic was organic and
approximately 48% of Days were generated from bookings by repeat guests.

• **Culture and team.** We have a world-class team and culture aligned around our mission to put the world's
1.5 billion cars to better use. For example, our CEO is one of our All-Star Hosts with a decade of activity on our platform. Our culture has received numerous recognitions externally and contributes to
our ability to attract and retain premier talent across functions including product, engineering, marketing, sales, and government relations.

**Our growth strategy** 

Key elements of our growth strategy include:

• **Innovate on our platform.** We intend to continue to invest in our technology platform to make the complicated
aspects of engaging with the marketplace dramatically easier. As we invest in our platform, we intend to make it easier for hosts to list their vehicles, automate pricing and onboarding workflows, and even provide assistance with vehicle management
and suggested maintenance through our software.

• **Grow supply and unlock new use cases.** We intend to invest in research and development to continue introducing new
features and services for hosts that make it easier for them to grow their income and operate profitably on our platform. In addition, we plan to invest in sales and marketing to expand our supply globally and across more vehicle categories and use
cases. Our long-term vision is to drive a profound behavior shift that moves all the underutilized vehicles out of their garages and onto our platform.

• **Grow and deepen guest engagement.** We intend to invest in research and development to continue introducing new
features and services for guests that make it easier and more convenient for them to book from the widest selection of vehicles. Our long-term vision is to become guests' go-to platform to book the
perfect vehicle for any occasion.

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• **Expand internationally.** We plan to enter new international markets with the vision of being a truly global
platform. Over time, we plan to enter new markets to deliver our value proposition to hosts and guests in more markets worldwide, and further develop the strength of an interconnected, global network.

• **Pursue additional strategic acquisitions and partnerships.** We aim to pursue strategic acquisitions and
partnerships to offer our hosts and guests services and features that we do not currently offer in-house. We intend to build on the strong relationships we have developed with many constituents in our
ecosystem to expand our market opportunity, enhance our capabilities, and increase the value of our platform.

**Risk factors summary** 

There are a number of risks that you should understand before making an investment decision regarding this offering. These risks are discussed more fully in the section titled "Risk factors" following this prospectus summary. If any of these risks actually occur, our business, reputation, financial condition, or results of operations would likely be materially and adversely affected. In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment. These risks include, but are not limited to:

• If we fail to retain existing hosts and guests, increase existing host vehicle listings and guest bookings, or add new
hosts and guests, or if hosts fail to provide high-quality, as-advertised vehicles and services, our business, results of operations, reputation, and financial condition would be materially and adversely
affected.

• Our financial results depend on many factors outside of our control, and are inherently complex and interrelated, and may
fluctuate from quarter to quarter, as well as seasonally, which makes our future results difficult to predict.

• Although we generated net income of $154.7 million in the year ended December 31, 2022, we have incurred net losses in
all other years since our inception, anticipate increasing our operating expenses in the future, and may not achieve or sustain profitability in the future. We incurred net losses of $40.4 million, $97.1 million, and $98.6 million in the
years ended December 31, 2021, 2020, and 2019, respectively; and as of December 31, 2022, we had an accumulated deficit of $299.6 million.

• We may be found to be subject to liability for the activities of hosts, guests, or third parties, which could harm our
reputation, increase our operating costs, and materially and adversely affect our business, results of operations, and financial condition.

• Our business is subject to substantial regulation and may be found to be subject to a multitude of potential additional
legal and regulatory frameworks, including those related to insurance and taxation, that are constantly evolving, and any unfavorable changes or negative court interpretations of these regulations or frameworks, failure by us to comply, or
incompatibility with these legal and regulatory requirements could have an adverse effect on our business.

• The insurance coverage and other elements of protection plans afforded to hosts and guests, or our insurance coverage
related to our operations-related risks, may be inadequate, either of which could adversely affect our business, results of operations, and financial condition.

• The market in which we participate is highly competitive and continually and rapidly evolving, and we may be unable to
compete successfully with our current or future competitors.

• The market for online platforms for peer-to-peer car sharing is relatively new and rapidly evolving. If we fail to predict the manner in which our market develops, or if peer-to-peer car sharing does not achieve global acceptance, our business, results of operations, and prospects may be adversely affected.

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• Any major disruption or failure of our information technology systems, or our failure to successfully implement new
technology effectively, could adversely affect our business and results of operations or the effectiveness of internal controls over financial reporting.

• The impact of adverse or changing economic conditions, including the resulting effects on consumer spending, may
adversely affect our business, financial condition, and results of operations.

• Our business has experienced, and may in the future experience, an adverse impact from the COVID-19 pandemic.

• Our workforce and operations have grown substantially since our inception, and we expect that they will continue to do
so. If we are unable to effectively manage that growth, our financial performance and future prospects will be adversely affected.

• Breaches and other types of security incidents of our networks or systems, or those of our third-party service providers,
could negatively impact our ability to conduct our business, our brand and reputation, and our ability to retain existing hosts and guests and attract new hosts and guests, and may cause us to incur significant liabilities and adversely affect our
business, results of operations, financial condition, and future prospects.

**Corporate information** 

We were incorporated as RelayRides, Inc. in Delaware in August 2009. In March 2016, we formally changed our name to Turo Inc. Our principal executive offices are located at 111 Sutter Street, Floor 12, San Francisco, California 94104. Our telephone number is (415) 965-4525. Our website address is turo.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

The Turo design logos, "Turo," and our other registered or common law trademarks, service marks, or trade names appearing in this prospectus are the property of Turo Inc. Solely for convenience, our trademarks, tradenames, and service marks referred to in this prospectus appear without the <sup>®</sup>, TM, and SM symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, tradenames, and service marks. Other trade names, trademarks, and service marks used in this prospectus are the property of their respective owners.

**Implications of being an emerging growth company** 

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012. An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable generally to public companies. These provisions include, but are not limited to:

• not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of
2002, as amended;

• reduced obligations with respect to financial data, including presenting only two years of audited financial statements
in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's discussion and analysis of financial condition and results of operations" disclosure;

• reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements, and
registration statements;

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• exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute
payments not previously approved; and

• an exemption from compliance with the requirement of the Public Company Accounting Oversight Board regarding the
communication of critical audit matters in the auditor's report on the financial statements.

We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock in this offering. However, if certain events occur prior to the end of such five-year period, including if (i) we become a "large accelerated filer," under the Securities Exchange Act of 1934, as amended, with at least $700.0 million of equity securities held by non-affiliates as of the prior June 30; (ii) our total annual gross revenue exceeds $1.235 billion; or (iii) we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period to enable us to comply with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

For risks related to our status as an emerging growth company, see the section titled "Risk factors — Risks related to this offering and ownership of our common stock — We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors."

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## The offering
Common stock offered by us &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares

Common stock offered by the selling stockholders &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares

Option to purchase additional shares of common stock offered by us We have granted the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to additional shares from us.

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| | |
|:---|:---|
| &nbsp;&nbsp; Common stock to be outstanding after this offering  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares (or shares if the underwriters exercise in full their option to purchase additional shares of common stock in full)  |

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| | |
|:---|:---|
| &nbsp;&nbsp; Use of proceeds  | We estimate that we will receive net proceeds from this offering of approximately $ million (or approximately $ million if the underwriters' option to purchase additional shares is exercised in full), assuming an initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of our shares of our common stock by the selling stockholders in this offering.  |

---

We currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. We may also use a portion of the net proceeds for acquisitions of, or strategic investments in, complementary businesses, products, services, or technologies. See the section titled "Use of proceeds" for additional information. <br>

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| | |
|:---|:---|
| &nbsp;&nbsp; Concentration of ownership  | Following this offering, our executive officers, directors, and stockholders holding more than 5% of our outstanding shares, together with their affiliates, will hold, in the aggregate, approximately % of our outstanding capital stock (or % of our outstanding capital stock following this offering if the underwriters exercise their option in full to purchase additional shares of common stock). See the section titled "Principal and selling stockholders" for additional information.  |

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|:---|:---|
| &nbsp;&nbsp; Directed share program  | At our request, the underwriters have reserved up to % of the shares of common stock offered by this prospectus for sale at the initial public offering price through a directed share program to:  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Eligible hosts;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Eligible guests; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Certain individuals identified by our officers and directors.

Eligible hosts consist of hosts who have met the performance criteria to become All-Star Hosts, reside in the United States or United Kingdom, had, between and , completed a trip as a host, and as of , had at least 95% of rated trips earn five stars. <br>

Eligible guests consist of guests who have met the criteria for our Insider Rewards program, reside in the United States, and had, between and , completed a trip as a guest.

The number of shares of our common stock available for sale to the general public will be reduced to the extent that these individuals purchase such reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered by this prospectus. See the section titled "Underwriters — Directed share program" for additional information.

Risk factors See the section titled "Risk factors" and the other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.

New York Stock Exchange trading symbol "TURO"

The number of shares of our common stock that will be outstanding after this offering is based on 215,410,939 shares of our common stock (including shares of our redeemable convertible preferred stock on an as-converted basis) outstanding as of December 31, 2022, and excludes:

• 26,253,071 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock
outstanding as of December 31, 2022, with a weighted-average exercise price of $3.71 per share;

• 8,401,114 restricted stock units covering shares of our common stock that are issuable upon satisfaction of service-based
and liquidity-based vesting conditions outstanding as of December 31, 2022, for which the liquidity-based vesting condition was not yet satisfied as of December 31, 2022;

• 1,040,291 restricted stock units covering shares of our common stock that are issuable upon satisfaction of service-based
and liquidity-based vesting conditions granted after December 31, 2022, for which the liquidity-based vesting condition was not yet satisfied as of December 31, 2022;

• up to $51.0 million of shares of our common stock issuable upon the exchange of securities issued in connection with our
acquisition of OuiCar and outstanding as of December 31, 2022;

• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our common stock reserved for future
issuance under our 2023 Equity Incentive Plan, or 2023 Plan, including new shares plus the number of shares (not to exceed
 shares) underlying outstanding stock awards granted under our 2010 Equity Incentive Plan or 2020 Equity Incentive Plan that expire, or are forfeited, canceled, withheld, or
reacquired; and

• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our common stock reserved for future issuance under our 2023 Employee Stock Purchase Plan, or ESPP, which will become effective in connection with this offering.

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Our 2023 Plan and ESPP provide for annual automatic increases in the number of shares reserved thereunder. See the section titled "Executive compensation — Employee benefit and stock plans" for additional information.

Unless otherwise indicated, the information in this prospectus assumes:

• the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our amended and
restated bylaws, each of which will occur immediately prior to the completion of this offering;

• the automatic conversion of 169,952,096 shares of our redeemable convertible preferred stock outstanding as of December
31, 2022 into 183,768,391 shares of our common stock immediately prior to the completion of this offering;

• the issuance of an aggregate of
 shares of common stock pursuant to a warrant held by IAC Inc., or the IAC Warrant, in connection with this offering, based
on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus; and

• no exercise by the underwriters of their option to purchase up to an additional
 shares of our common stock in this offering.

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##### [**Table of Contents**](#toc)

## Summary consolidated financial

## and other data
The following tables summarize our consolidated financial and other data. The summary consolidated statements of operations data for the years ended December 31, 2019, 2020, 2021, and 2022 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. You should read the following summary consolidated financial data together with the section titled "Management's discussion and analysis of financial condition and results of operations" and our audited consolidated financial statements and the related notes included elsewhere in this prospectus. The summary consolidated financial data in this section is not intended to replace our audited consolidated financial statements and the related notes and are qualified in their entirety by our audited consolidated financial statements and the related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of our results in any future period.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands, except per share amounts)** | **(in thousands, except per share amounts)** | **(in thousands, except per share amounts)** | **(in thousands, except per share amounts)** |
|  **Consolidated statements of operations data:** |  |  |  |  |
|  Net revenue | $141689 | $149905 | $469047 | $746592 |
|  Costs and expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of net revenue<sup>(1)</sup> | 97598 | 96716 | 199988 | 341510 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operations and support<sup>(1)</sup> | 15400 | 13082 | 33546 | 64286 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development<sup>(1)</sup> | 26649 | 17749 | 33269 | 55082 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing<sup>(1)</sup> | 57845 | 20037 | 52713 | 111297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative<sup>(1)</sup> | 49428 | 58039 | 102975 | 140597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total costs and expenses | 246920 | 205623 | 422491 | 712772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from operations | (105231) | (55718) | 46556 | 33820 |
|  Other income and (expense), net |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of redeemable convertible preferred stock warrant | 5181 | (41934) | (85238) | 50724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income and (expense), net | 1538 | 655 | (594) | 5883 |
|  Other income and (expense), net | 6719 | (41279) | (85832) | 56607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before provision for income taxes | (98512) | (96997) | (39276) | 90427 |
|  Provision for (benefit from) income taxes | 47 | 86 | 1106 | (64237) |
|  Net (loss) income | $(98559) | $(97083) | $(40382) | $154664 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Add: net loss attributable to non-controlling interests |  |  |  | 870 |
|  Net (loss) income for Turo Inc. | (98559) | (97083) | (40382) | 155534 |
|  Deemed dividend attributable to tender and repurchases of preferred stock | (17081) |  |  | (653) |
|  Adjustments to redemption value for redeemable non-controlling interests |  |  |  | (22197) |
|  Undistributed earnings attributable to participating securities |  |  |  | (119184) |
|  Net (loss) income attributable to Turo Inc. common stockholders<sup>(2)</sup> | $(115640) | $(97083) | $(40382) | $13500 |
|  Net (loss) income per share attributable to Turo Inc. common stockholders |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic<sup>(2)</sup> | $(4.21) | $(3.80) | $(1.37) | $0.43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted<sup>(2)</sup> | $(4.21) | $(3.80) | $(1.37) | $(1.13) |

---

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---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands, except per share<br>amounts)** | **(in thousands, except per share<br>amounts)** | **(in thousands, except per share<br>amounts)** | **(in thousands, except per share<br>amounts)** |
|  Weighted-average number of shares outstanding attributable to Turo Inc. common stockholders: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic<sup>(2)</sup> | 27452 | 25555 | 29380 | 31265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted<sup>(2)</sup> | 27452 | 25555 | 29380 | 32875 |
|  Pro forma net (loss) income per share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic<sup>(3)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted<sup>(3)</sup> |  |  |  |  |
|  Weighted-average shares used in computing pro forma net (loss) income per share |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic (unaudited)<sup>(3)</sup> |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted (unaudited)<sup>(3)</sup> |  |  |  |  |

---

------

(1) Amounts include stock-based compensation expense as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Cost of net revenue | $607 | $204 | $1025 | $590 |
|  Operations and support | 92 | 142 | 110 | 188 |
|  Product development | 3140 | 2281 | 4779 | 4942 |
|  Sales and marketing | 669 | 827 | 983 | 988 |
|  General and administrative | 4126 | 5219 | 7495 | 11905 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8634 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8673 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14392 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18613 |

---

(2) See Notes 1 and 13 to our consolidated financial statements included elsewhere in this prospectus for an explanation of
the method used to calculate our basic and diluted net (loss) income per share and the weighted-average number of shares used in the computation of the per share amounts.

(3) The pro forma net (loss) income per share, basic and diluted, and weighted-average shares used in computing pro forma
net (loss) income per share, basic and diluted reflects (a) the automatic conversion of an aggregate of 169,952,096 shares of our outstanding redeemable convertible preferred stock into 183,768,391 shares of common stock immediately prior to
the completion of this offering and (b) the issuance of an aggregate of shares of common stock pursuant to the IAC Warrant in
connection with this offering, based on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus.

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31, 2022** | **As of December 31, 2022** | **As of December 31, 2022** |
|  | **Actual** | **Pro forma<sup>(1)</sup>** | **Pro forma as<br>adjusted<sup>(2)(3)</sup>** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  **Consolidated balance sheet data:** |  |  |  |
|  Cash and cash equivalents | $300953 | $| $|
|  Working capital<sup>(4)</sup> | 125660 |  |  |
|  Total assets | 763156 |  |  |
|  Redeemable convertible preferred stock warrant liability | 95247 |  |  |
|  Redeemable non-controlling interest | 33857 |  |  |
|  Redeemable convertible preferred stock | 471264 |  |  |
|  Additional paid-in capital | 61723 |  |  |
|  Accumulated deficit | (299586) |  |  |
|  Total stockholders' (deficit) equity | (238198) |  |  |

---

------

(1) The pro forma column in the balance sheet data above reflects (a) the automatic conversion of an aggregate of
169,952,096 shares of our outstanding redeemable convertible preferred stock into 183,768,391 shares of common stock immediately prior to the completion of this offering, (b) the issuance of an aggregate
of shares of common stock pursuant to the IAC Warrant in connection with this offering, based on an assumed initial public
offering price of $ per share, the midpoint of the price range set forth on the cover page

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of this prospectus, and (c) the filing and effectiveness of our amended and restated certificate of incorporation that will be in effect immediately prior to the completion of this offering.

(2) The pro forma as adjusted column further reflects the receipt of
$ million in net proceeds from our sale
of shares of common stock in this offering at an assumed initial public offering price of
$ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and
commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders in this offering.

(3) Each $1.00 increase or decrease in the assumed initial public offering price of
$ per share, the midpoint of the price range set forth on the cover of this prospectus, would increase or decrease, as applicable, the amount of our pro
forma as adjusted cash, working capital, total assets, and total stockholders' (deficit) equity by $ million, assuming that the number of shares
offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase or decrease of 1.0 million shares in
the number of shares offered by us would increase or decrease, as applicable, the amount of our pro forma as adjusted cash, working capital, total assets, and total stockholders' (deficit) equity by
$ million, assuming the assumed initial public offering price remains the same, and after deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders in this offering.

(4) Working capital is defined as current assets less current liabilities.

**Key business metrics** 

In addition to the measures presented in our consolidated financial statements included elsewhere in this prospectus, we use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies that may calculate similarly titled metrics in a different way.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in millions, unless otherwise noted)** | **(in millions, unless otherwise noted)** | **(in millions, unless otherwise noted)** | **(in millions, unless otherwise noted)** |
|  Days<sup>(1)</sup> | 4675 | 3825 | 10917 | 19149 |
|  Gross Booking Value | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;351.6 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;335.9 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1256.4 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2061.0 |

---

------

(1) In thousands.

**Days** 

We define Days as total days for a vehicle booked by our guests on our platform in a given period over the period of measurement, net of days canceled in that period. We believe Days is a key business metric to help investors and others understand and evaluate our results of operations in the same manner as our management team, as it represents a unit of transaction volume on our platform.

**Gross Booking Value** 

We define Gross Booking Value, or GBV, as the total value of Days booked on our platform, including reimbursable expenses owed to the host by the guest, applicable pass through taxes, and other fees required to be remitted to local authorities, which are excluded from net revenue. GBV is driven by the number of Days and price per day or price per booking, as applicable. Revenue from bookings is recognized at the time of check-in for the reservation or over the duration of the trip; accordingly, GBV is a leading indicator of net revenue.

For additional information about our key business metrics, see the section titled "Management's discussion and analysis of financial condition and results of operations — Key business metrics."

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##### [**Table of Contents**](#toc)
**Non-GAAP financial measures** 

In addition to our results determined in accordance with U.S. generally accepted accounting principles, or GAAP, we believe the following non-GAAP financial measures help us to evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. We use the following non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. The non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered as a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP financial measures used by other companies. Because of these limitations, we consider, and you should consider, our non-GAAP financial measures alongside other financial performance measures presented in accordance with GAAP. A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP is provided below. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures contained below and in the section titled "Management's discussion and analysis of financial condition and results of operations — Non-GAAP financial measures."

The following table summarizes our non-GAAP financial measures, along with the most directly comparable GAAP measure, for each period presented below.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Gross profit | $44091 | $53189 | $269059 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;405082 |
|  Contribution (loss) profit | $(27094) | $17282 | $176188 | $216006 |
|  Gross margin | 31.1% | 35.5% | 57.4% | 54.3% |
|  Contribution margin | (19.1)% | 11.5% | 37.6% | 28.9% |
|  Net (loss) income | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(98559) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(97083) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40382) | $154664 |
|  Adjusted EBITDA | $(91621) | $(38050) | $81135 | $79663 |

---

**Contribution profit (loss) and contribution margin** 

We define contribution profit (loss) as our gross profit less our (a) operations and support (excluding stock-based compensation expense), (b) sales and marketing expense attributable to customer acquisition, including media spend, sales, headcount costs (excluding stock-based compensation expense), and marketing promotions, and (c) chargebacks, bad debt expense, and trust and safety verifications included in general and administrative expense, plus (i) stock-based compensation expense included in cost of net revenue, and (ii) amortization of internal-use software included in cost of net revenue. We define contribution margin as contribution profit (loss) as a percentage of net revenue for the same period. We use contribution profit (loss) and contribution margin as indicators of the economic impact of a new booking on our platform as it captures the direct expenses attributable to a new booking on our platform and the cost it takes to generate revenue. While certain contribution profit (loss) adjustments may not be non-recurring, non-cash, non-operating, or unusual, contribution profit (loss) is a metric our management and board of directors find useful, and we believe investors may find useful, in understanding the costs most directly associated with revenue-generating activities.

Contribution profit (loss) and contribution margin are non-GAAP financial measures with certain limitations regarding their usefulness, should be considered as supplemental in nature, and are not meant as substitutes

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for gross profit and gross margin, which are measures prepared in accordance with GAAP. For purposes of the non-GAAP financial measures, gross profit is defined as net revenue minus cost of revenue, each of which is presented on the consolidated statements of operations. Our definitions of contribution profit (loss) and contribution margin may differ from the definitions used by other companies in our industry and therefore, comparability may be limited. In addition, other companies may not publish these or other similar metrics. Further, our definition of contribution profit (loss) does not include the impact of certain expenses that are reflected in our consolidated statements of operations. Thus, our contribution profit (loss) should be considered in addition to, not as a substitute for, or in isolation from, gross profit prepared in accordance with GAAP. The following tables present reconciliations of gross profit to contribution (loss) profit and gross margin to contribution margin for each of the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Gross profit | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44091 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53189 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;269059 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;405082 |
|  Add: Stock-based compensation included in cost of net revenue | 607 | 205 | 1025 | 590 |
|  Add: Depreciation and amortization included in cost of net revenue | 1320 | 2610 | 3895 | 5969 |
|  Less: Operations and support | 15308 | 12941 | 33436 | 64098 |
|  Less: Customer acquisition costs | 48238 | 14222 | 44502 | 95248 |
|  Less: Verification costs | 4552 | 4136 | 9593 | 13888 |
|  Less: Chargebacks and bad debt expense | 5014 | 7423 | 10260 | 22401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contribution (loss) profit | $(27094) | $17282 | $176188 | $216006 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross margin | 31.1% | 35.5% | 57.4% | 54.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contribution margin | (19.1)% | 11.5% | 37.6% | 28.9% |

---

**Adjusted EBITDA** 

Adjusted EBITDA is a non-GAAP financial measure that represents our net income or loss adjusted for (i) provision for income taxes; (ii) other income and expense, net; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) impairment charges; (vi) certain legal, regulatory, and indirect tax reserves; and (vii) change in fair value of our redeemable convertible preferred stock warrant liability. We use adjusted EBITDA in conjunction with net income or loss, its corresponding GAAP measure, as a performance measure that we use to assess our operating performance and operating leverage in our business. We also measure our adjusted EBITDA as a percentage of net revenue on a trailing 12-month basis in order to provide a longer-term view and account for seasonal fluctuations in our net revenue and associated profitability. The above items are excluded from our adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items is unpredictable, or not driven by core results of operations, thereby rendering comparisons with prior periods and competitors less meaningful. We believe adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business performance. Moreover, we have included adjusted EBITDA in this prospectus because it is a key measurement used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting.

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Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:

• Adjusted EBITDA does not reflect other income and (expense), net, which includes interest income on cash, cash
equivalents, and restricted cash, net of interest expense and gains and losses on foreign currency transactions and balances;

• Adjusted EBITDA excludes certain recurring, non-cash charges, such as
depreciation of property and equipment and amortization of intangible assets, and although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and
adjusted EBITDA does not reflect all cash requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA excludes stock-based compensation expense, which has been, and will continue to be for the foreseeable
future, a significant recurring expense in our business and an important part of our compensation strategy;

• Adjusted EBITDA does not reflect impairment charges, which primarily include lease and other asset impairments;

• Adjusted EBITDA excludes certain legal, regulatory, and indirect tax reserve changes and settlements that may reduce cash
available to us; and

• Adjusted EBITDA excludes change in fair value of redeemable convertible preferred stock warrant liability.

The following is a reconciliation of adjusted EBITDA to the most comparable GAAP measure, net loss:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Net (loss) income | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(98559) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(97083) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40382) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;154664 |
|  Add (deduct): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for (benefit from) income taxes | 47 | 86 | 1106 | (64237) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other (income) and expense, net | (1538) | (655) | 594 | (5883) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 1551 | 3023 | 4188 | 9143 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation expense | 8634 | 8673 | 14392 | 18613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment charges | 539 | 1816 | 48 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal, regulatory, and indirect tax<br>reserves | 2886 | 4156 | 15951 | 18087 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of redeemable convertible preferred stock warrant liability | (5181) | 41934 | 85238 | (50724) |
|  Adjusted EBITDA | $(91621) | $(38050) | $81135 | $79663 |

---

For additional information about these non-GAAP financial measures and reconciliations of the non-GAAP financial measures to the most directly comparable financial measures stated in accordance with GAAP, see the section titled "Management's discussion and analysis of financial condition and results of operations — Non-GAAP financial measures."

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Risk factors

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## Risk factors
*Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including the section titled "Management's discussion and analysis of financial condition and results of operations" and our consolidated financial statements and the related notes thereto, before making a decision to invest in our common stock. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect us. If any of the following risks occur, our business, financial condition, results of operations, and prospects could be materially and adversely affected. In that event, the price of our common stock could decline, and you could lose part or all of your investment.* 

**Risks related to our business and industry** 

**If we fail to retain existing hosts and guests, increase existing host vehicle listings and guest bookings, or add new hosts and guests, or if hosts fail to provide high-quality, as-advertised vehicles and services, our business, results of operations, reputation, and financial condition would be materially and adversely affected.** 

Our business depends on hosts establishing and maintaining their vehicle listings on our platform and engaging in practices that encourage guests to book those vehicles, including increasing the number of days that are available to book, providing timely responses to inquiries from guests, honoring reservations, and offering a variety of desirable, well-maintained, and differentiated vehicles at competitive prices and with the convenience that meet and exceed the expectations of guests. These practices are outside of our direct control. If not enough hosts establish or maintain a sufficient number of attractive listings for readily available vehicles, the number of trips booked declines for a particular period, the price charged by hosts fails to optimize revenue yield, the quality, maintenance, cleanliness, or safety of the vehicles our hosts list declines, or there is a mismatch between the location of inventory and where consumers want to book vehicles, our revenue would decline and our business, results of operations, reputation, and financial condition would be materially and adversely affected. In addition, hosts may be unable to list their vehicles or required to temporarily or permanently remove their vehicles from our platform due to safety recalls by manufacturers or delays in repair or maintenance, including as a result of the recent global semiconductor chip shortage.

Hosts manage, maintain, and control their vehicles and typically market them on our platform with no obligation to make them available to guests for specified dates and with no obligation to accept trip bookings from prospective guests. We have had hosts who chose to list their vehicles on our platform in one period and ceased to offer these vehicles in subsequent periods for a variety of reasons. For example, hosts may be concerned that the increased usage of their vehicles may negatively impact the resale value of their vehicles due to increased mileage, potential guest damage or lack of care to the standard of the host, or excessive wear and tear. In addition, a host's active vehicle listings and earning potential depend on a number of factors, such as vehicle availability, demand in the host's area, and economic conditions, including rising interest rates, limited availability of credit, economic uncertainty, and inflation. While we plan to continue to invest in our host community and in tools to assist hosts, these investments may not be successful in growing the number of hosts and listings on our platform. For example, our pricing engine, which enables hosts to estimate a fair price for their vehicle that maximizes their earnings potential while also retaining the ability to set their own price, may not be accurate, or hosts may be unsatisfied with such tools. In addition, hosts may not establish or maintain listings if we cannot attract prospective guests to our platform and generate trip bookings from a large number of guests or if there is over-saturation of hosts in a particular area that causes downward pressure on the prices hosts are able to charge. We have in some markets experienced, and expect to continue to experience, host supply constraints. If we are unable to retain existing hosts or add new hosts, or if hosts decide to remove vehicle listings from our platform and instead list their vehicles with a competitor, we may be unable to offer a sufficient supply and variety of vehicles to attract guests to use our platform.

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In addition, our business depends on guests booking trips on our platform. If we fail to retain existing guests because they elect to use a competitor's platform or decide not to share their car, or if we are unable to sustain growth in the value of guest bookings or attract new guests to our platform, our business, results of operations, reputation, and financial condition would be adversely affected. A decrease in the number of guests or reduction in the value of trips booked on our platform may also result in host attrition if hosts are unable to realize sufficient value from bookings of their vehicles through our platform. Maintaining a balance between supply and demand between hosts and guests in any given area at any given time and our ability to execute operationally may be more important to service quality than the absolute size of our platform.

Moreover, as the severity of the COVID-19 pandemic in certain geographies subsides, we have experienced an increase in the number of guests booking trips on our platform, and an improvement in the risk profile of the trips booked, which may not continue in the future, particularly as we experience fluctuations in the use of our platform since the emergence of variants of concern, including the Delta and Omicron variants that emerged in the second half of 2021, and we may experience a decrease in growth rate in future periods after the effects of the pandemic diminish. If we experience reductions in the number of hosts, vehicles listed on our platform, or guests using our platform or increases in expenses to us from trips, or if our hosts are unable or unwilling to return to the same rate of listings in the near to immediate term, our business, results of operations, and financial condition would be adversely affected.

**Our financial results may fluctuate from quarter to quarter and year over year, which makes our future results difficult to predict.** 

Our quarterly and annual financial results have fluctuated in the past and are expected to fluctuate in the future. In addition, our limited operating history and current scale of our business make it difficult to forecast our future results. You should not rely upon our past quarterly or annual financial results as indicators of future performance, including the impact of the current pricing environment on our growth and profitability. You should take into account the risks and uncertainties frequently encountered by companies in rapidly evolving markets. Our financial results in any given quarter can be influenced by numerous factors, many of which are unpredictable or are outside of our control, including:

• our ability to generate significant revenue from new offerings, or revisions to existing offerings, in which we have
invested significant time and resources;

• changes in the prices hosts charge, which we do not control;

• our ability to maintain or grow our number of hosts and guests, and provide our hosts and guests with the experience or
service they expect from us;

• adverse shifts in the distribution of the risk profiles of hosts, guests, vehicles, or trips, leading to increased costs
for us and eroding satisfaction and retention of hosts and guests, as well as potential injury to our brand or public perception;

• our ability to secure, maintain, expand, and enhance our partnerships and relationships with third parties, including
with insurance and risk protection providers, vehicle manufacturers, technology providers, marketing partners, and online travel search engines;

• our ability to secure, maintain, and enhance economically advantageous agreements with airports and other governmental or
quasi-governmental entities;

• the success of our geographic expansions;

• the development and introduction of new offerings or promotions by our competitors;

• increases in, and adverse timing of, operating expenses that we may incur to grow and expand our operations and to remain
competitive;

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• costs related to the acquisition of businesses, talent, technologies, or intellectual property, including potentially
significant amortization costs and possible write-downs;

• failures or breaches of security or privacy, and the costs associated with remediating any such failures or breaches, or
the costs of compliance with quickly evolving security and privacy laws, as well as any injury to our brand or reputational capital due to such failures or breaches;

• litigation costs and adverse litigation outcomes such as detrimental judgments, settlements, or other court orders;

• changes in the legislative or regulatory environment or enforcement by any one or more government regulators, including
fines, orders, or consent decrees and lobbying-related costs;

• fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign
currencies;

• general economic conditions in either domestic or international markets;

• the extent to which use of our platform is affected by spyware, viruses, malware, phishing, spam emails, denial of
service attacks, data theft, computer intrusions, ransomware attacks, account takeovers, and similar events; and

• reduced travel and increased cancellations, as well as changes in consumer preferences for vehicle travel, due to events
beyond our control such as health concerns, including the COVID-19 pandemic, other epidemics and pandemics, wars, terrorist attacks, regional hostilities, or the impact of climate change on travel, including
fires, floods, severe weather, and other natural disasters, and the impact of climate change on seasonal destinations.

In particular, the COVID-19 pandemic has caused significant fluctuations in our quarterly financial results. Initially, we experienced a period of decreased use of our platform due to shelter-in-place orders and the uncertainty resulting from the pandemic, which adversely impacted our revenue, results of operations, and cash flows in the first half of 2020. In response to these impacts, we implemented certain temporary cost-cutting measures in March 2020, such as decreased marketing-related spend, layoffs, furloughs, and salary reductions. We also discontinued our operations in Germany, in part, as a cost-cutting measure in response to the COVID-19 pandemic.

As shelter-in-place orders started to be lifted in the second half of 2020, we began experiencing use of our platform above pre-COVID-19 levels. The conditions related to and arising from the COVID-19 pandemic have incentivized additional individuals to seek entrepreneurial forms of primary and supplementary income, which we believe has led to increases in both the total number of hosts listing vehicles on our platform and the number of small business hosts sharing three or more vehicles on our platform. Further, the COVID-19 pandemic has transformed consumer behaviors by elevating the desire for private transportation options instead of public or shared transportation options. In the first half of 2021, we continued to experience use of our platform above pre-COVID-19 levels arising from consumers' return to recreational and professional travel and rental car companies' inability to meet consumer demand in many markets. Rental car companies reduced their fleet sizes in the early days of the COVID-19 pandemic and were unable to quickly rebuild their fleets due to constraints in automobile manufacturing capacity. In light of these conditions, more consumers turned to peer-to-peer car sharing for their vehicle needs.

Beginning in July 2021, variants of COVID-19, including the Delta and Omicron variants, emerged, causing a surge in COVID-19 cases globally and resulting in fluctuations in the use of our platform. As the severity of the COVID-19 pandemic subsides, which may not continue in the future, particularly in light of continued and emerging variants of concern and the impacts on our business, results of operations, and financial condition, we have experienced an increase in the number of guests booking trips on our platform, an improvement in the risk

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profile of the trips booked, and an increase in pricing. The combination of circumstances that have accelerated the growth and anticipated profitability of our business stemming from the effects of the COVID-19 pandemic are not expected to continue in the future, and we may experience a decrease in growth rate in future periods after the effects of the pandemic diminish, including as a result of reversing many of the cost-cutting measures we employed.

**We have a history of net losses, anticipate increasing our operating expenses in the future, and may not achieve or maintain profitability in the future.** 

We have a history of net losses. We incurred net losses of $98.6 million, $97.1 million, and $40.4 million in the years ended December 31, 2019, 2020, and 2021, respectively. While we generated net income of $154.7 million in the year ended December 31, 2022, we do not expect to continue to generate net income on a consistent basis in future periods. We expect our operating expenses to increase substantially in the foreseeable future as we implement initiatives designed to grow our business, including but not limited to acquiring new hosts and guests, growing partnerships and relationships with third parties, including with insurance providers, vehicle manufacturers, and online travel search engines, developing new or enhanced offerings, hiring additional employees, expanding internationally, and expanding our infrastructure. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses. Growth of our revenue may slow or revenue may decline for a number of possible reasons, including a decrease in our ability to attract and retain hosts and guests, failure to provide our hosts and guests with the experience or service they expect from us, failure to engage or capitalize on the value of partners, increasing competition, decreasing growth of our overall market, and an inability to quickly introduce new offerings that are favorably received by hosts and guests. If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to achieve or maintain profitability.

**We may be found to be subject to liability for the activities of hosts and guests, which could harm our reputation, increase our operating costs, and materially and adversely affect our business, results of operations, and financial condition.** 

We may be found to be subject to liability for the activities of hosts and guests on our platform. For example, we have in the past received, and expect to continue to receive, complaints from hosts regarding damage to, or loss, theft, or impounding of, their vehicles and requests for damage reimbursement, and from guests regarding quality or serviceability of the vehicles, other safety and security issues, and actual or perceived discrimination in connection with hosts declining trips and requests for reimbursement of their trip fees, as well as actual or threatened legal action against us if no reimbursement or perceived incomplete reimbursement is made. In addition, some of our hosts may list or have listed vehicles on our platform in violation of their lease or financing agreements or personal automobile insurance policies, or in violation of applicable legal restrictions on subleasing. Hosts have in the past, and may in the future, deliver vehicles on private or governmental property without the authorization of the property owner. In the absence of a court order or contractual obligation, Turo does not verify that a pick-up or delivery location is authorized by a property owner. We do not screen vehicles for compliance with safety standards or whether they are legally registered to be driven on public roads, and it is possible that some of our hosts may list or have listed vehicles on our platform that fail to meet basic safety or legal requirements for a vehicle. Even if we detect and ban such vehicles or hosts from our platform, we may fail to detect if the host re-lists the vehicle or rejoins our platform. Our trust and safety checks and qualification procedures may not be capable of identifying all quality and safety issues, including safety recalls, and our systems are not designed to identify legal, quality, and safety issues that may occur after initial sign-up. Consequently, we could be and have been subject to liabilities incurred from local or state regulators and courts regarding the activities of hosts and guests on our platform or related legal, safety, and security issues.

We and our hosts and guests may further be subject to claims of liability based on traffic or motor vehicle violations or accidents, fatalities, injuries, property damage, or other similar incidents that are caused during or

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after a reservation booked on our platform, including by unauthorized drivers. These incidents may subject us to liability, which would increase our operating costs and materially and adversely affect our business, results of operations, and financial condition. Even if these claims do not result in liability to us or our users, we could incur significant costs in investigating and defending against them, and such claims, if made public, could deter hosts or guests from continuing to use our platform. If we are found to be subject to liability or claims of liability relating to the acts of hosts or guests, or for failure to pay fees, fines, or taxes owed by them, we may be subject to negative publicity or other reputational harm, even if we are not found to be subject to such liability, and incur additional expenses, which could harm our business, results of operations, and financial condition.

**The market in which we participate is highly competitive and continually and rapidly evolving, and we may be unable to compete successfully with our current or future competitors.** 

The market in which we participate is highly competitive and contains a significant diversity, number, and variety of types and sizes of competitors. All of the offerings that we provide may also be provided in part or in combination by other companies that currently, or may in the future, compete with us, including in the peer-to-peer car sharing, fleet-based car sharing, ride sharing/transportation network companies, or TNCs, and rental car sectors, as well as players currently outside those sectors. Our current or new competitors may adopt certain aspects of our business model, which could reduce our ability to differentiate our services. Increased competition could result in a reduction in our revenue and in the number of hosts and guests on our platform, or the loss of market share.

We compete to attract and retain hosts who share their vehicles on our marketplace, as hosts have other options should they choose to generate income from car sharing, may not be aware of peer-to-peer car sharing, its benefits, or the economic opportunities it provides, or may not be motivated to monetize their vehicles. We compete for motivated hosts based on many factors, including the amount of income they generate, the ease of use of our platform, the marketplace fees we charge, host protection plans, and the strength of our brand.

We compete to attract and retain guests, as guests have a range of options to find and book vehicles. We compete for guests based on many factors, including the unique selection and availability of vehicles, the value and all-in cost of our offerings relative to other options, the convenience and locations of accessing our vehicles, our brand, the ease of use of our platform, the trust and safety our platform offers, and customer support.

We also compete generally with car ownership, car leasing, car subscription services, and a variety of transportation options that are focused on long-duration and long-distance trips, including public transit, railways, and airlines. While some customers may choose TNCs, taxis, or hourly rentals in lieu of peer-to-peer car sharing, these modes of transportation are better suited for short-term, short-duration trips. Our primary competitors are in the long-distance and long-duration automobile transportation space, including:

• Peer-to-peer car sharing competitors,
such as Getaround, Inc., or Getaround, and ANIHI Newco, LLC (doing business as Avail) in the United States, Hiyacar Limited and Getaround in the United Kingdom and in France, and Car Next Door Australia Pty Ltd. (doing business as Uber Carshare) in
Australia; and

• Car rental companies, such as Avis Budget Group, Inc., which operates Avis and Budget; Hertz Global Holdings, Inc., which
operates Hertz, Dollar, and Thrifty; Enterprise Holdings, Inc., which operates Enterprise Rent-A-Car, National Car Rental, and Alamo Rent A Car; Fox Rent A Car; HyreCar
Inc.; Silvercar, Inc.; Sixt Rent A Car, LLC; and rental options available through TNCs such as Uber Technologies, Inc. and Lyft, Inc. Some of these companies also offer, either directly or through subsidiaries, hourly or fleet-based car sharing
solutions such as Zipcar, Inc., and Enterprise CarShare, AAA's fleet-based car sharing solution Gig Car Share (operated by A3 Mobility LLC) in the United States, Communauto in Canada, and Virtuo Technologies Limited and Enterprise Car Club in
the United Kingdom.

Some of our current or potential competitors, including the traditional car rental companies, are larger and have more resources than we do. Many of our competitors offer discounted services, incentives, or alternative

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pricing models or focus on a particular geographic location or market segment. Our competitors may also make acquisitions or establish cooperative or other strategic relationships among themselves or with other complementary companies. Many of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories, more well-established regulatory environments and permitting regimes, larger marketing and lobbying or campaign contribution budgets, and preferential treatment by credit card insurance policies or personal insurance policies that may provide coverage to renters, which are not equally available to customers of peer-to-peer car sharing, as well as substantially greater financial, technical, and other resources. In addition, our current or potential competitors may have access to larger host or guest bases. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements. Further, because of these advantages, existing and potential hosts and guests might accept our competitors' offerings, even if they may be inferior to ours.

As we and our competitors introduce new offerings and as existing offerings evolve, we expect to become subject to additional competition. In addition, our competitors may adopt certain of our platform features or may adopt innovations that hosts and guests value more highly than ours, which would render our platform less attractive and reduce our ability to differentiate our platform. Increased competition could result in, among other things, reductions of the revenue we generate from the use of our platform, the number of hosts and guests, the frequency of use of our platform, and our margins.

For all of these reasons, we may not be able to compete successfully. If we lose existing hosts or guests, fail to attract or retain new hosts or guests, fail to provide our hosts and guests with the experience or service they expect from us, or are forced to make pricing concessions as a result of increased competition, our business, financial condition, and results of operations would be adversely affected.

**The market for online platforms for peer-to-peer car sharing is relatively new and rapidly evolving. If we fail to predict the manner in which our market develops, or if peer-to-peer car sharing does not achieve global acceptance, our business, results of operations, and prospects may be materially and adversely affected.** 

The market for online car sharing platforms to connect guests with hosts is relatively new and unproven with little data or research available regarding the market and industry. It is uncertain whether this market will continue to develop or if our services will achieve and sustain a level of demand and market acceptance sufficient for us to generate meaningful revenue, net income, and free cash flow growth. Our success will depend to a substantial extent on the willingness of hosts to use an online platform for connecting with guests. Further, some hosts may be reluctant or unwilling to use an online platform for connecting with guests because of concerns regarding the cost structure, supply of available guests, tax or regulatory implications, data privacy and security concerns, adequacy of insurance coverage, compliance with restrictive provisions in lease or financing agreements, or possible damage to their vehicles or other property. Hosts may also be reluctant or unwilling to provide personally identifiable information, including their Social Security number or similar governmental identifying information, vehicle registration, and Vehicle Identification Number.

If hosts do not recognize the benefits of connecting with guests using our platform, then our market may not develop as we expect, or it may develop more slowly than we expect, either of which would significantly harm our business and results of operations.

In addition, our success will depend on guests' use of our platform to book vehicles, which will depend on their willingness to use our platform and their belief in the integrity of our products and services. Guests may be reluctant or unwilling to use a platform and provide personally identifiable information, including credit card information and driver's license details, or submit to background, credit, or other checks, which would significantly harm our business and results of operations. Guests may have concerns regarding the cost structure, data privacy and security (including payment security) concerns, or adequacy of insurance coverage. Further, guests may be reluctant to book vehicles containing telematics or monitoring devices accessible by hosts, Turo, or both, or to use our platform at all due to the perception of the use of such devices.

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In addition, since we operate in an unproven and understudied market, we have limited insight into trends that may develop in the market and affect our business. We may make errors in predicting and reacting to other relevant business trends, which could harm our business. This uncertainty is exacerbated by the current system of regulations that govern the peer-to-peer car sharing market, which may not directly or appropriately address the new business models in the industry. These laws and regulations may be interpreted in a way that is unfavorable to our business or that may result in higher compliance or advocacy costs than we have planned for.

Further, while peer-to-peer car sharing has grown in popularity, it may not achieve global acceptance, particularly in regions where peer-to-peer car sharing may not be deemed attractive to hosts and guests due to cultural considerations. The attractiveness of our platform for hosts and guests is impacted by a number of factors, including the willingness of consumer hosts to offer their vehicles on our platform, the willingness of guests to book trips on our platform in lieu of more traditional options, such as car rentals, or other alternatives, such as fleet-based car sharing and ride sharing, our ability to continue to extend our operating model internationally and offer localized services that are desirable to our hosts and guests, and our ability to offer cost-effective alternatives compared to traditional car rentals or other alternatives, such as fleet-based car sharing and ride sharing. Further, both hosts and guests may be reluctant or unwilling to use our platform because of concerns regarding their safety or the quality of the vehicles they book.

This uncertainty surrounding acceptance of peer-to-peer car sharing is exacerbated by the legacy system of laws and regulations that govern car sharing and car rentals, which generally did not anticipate the peer-to-peer car sharing industry, and may be interpreted negatively to limit, prohibit, or economically negate the value offered by peer-to-peer car sharing. If peer-to-peer car sharing does not achieve global acceptance, our growth could be limited, which could materially and adversely affect our business, results of operations, and prospects.

**The impact of adverse or changing economic conditions, including the resulting effects on consumer spending, may adversely affect our business, financial condition, and results of operations.** 

Our business depends on the overall demand for vehicle bookings. Any significant weakening of the economy in the United States, Canada, Australia, or Europe or of the global economy, including more limited availability of credit, economic uncertainty, inflation, financial turmoil affecting the banking system or financial markets, bank failures, liquidity issues at financial institutions, increased unemployment rates, restrictions and reduction in domestic or international travel, fluctuations in the price or availability of gasoline, and other adverse economic or market conditions may adversely impact our business and operating results. Global economic and political events or uncertainty, such as the military conflict involving Russia and Ukraine and economic sanctions imposed on Russia, may cause some of our current or potential hosts and guests to curtail their use of our platform. In addition, travel has been disproportionately impacted by the COVID-19 pandemic and may further be disproportionately impacted by a macroeconomic downturn. In response to such downturns, including after the effects of the COVID-19 pandemic on the economy subside, hosts and guests may not use or spend on our platform at rates we expect, thus further reducing demand for vehicle bookings. These adverse conditions have in the past resulted, and could in the future result, in reductions in consumer spending, slower adoption of new technologies, and increased competition. We cannot predict the timing, strength, or duration of any economic slowdown or any subsequent recovery generally. In addition, increases in the price of gasoline or overall inflation may cause guests to decrease their travel or choose alternative or lower cost methods of transportation than our offering. Similarly, increasing awareness around the impact of travel on climate change may adversely impact the travel and hospitality industries and demand for our platform and services. If the conditions in the general economy significantly deviate from present levels and continue to deteriorate, our business, financial condition, and results of operations could be adversely affected.

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**We experience seasonal fluctuations in our business and financial results, which could cause our common stock price to fluctuate, make it difficult to forecast our future results, and make our results of operations and financial condition particularly susceptible to the effects of fluctuations during our peak periods.** 

Our overall business is seasonal, reflecting typical travel behavior patterns over the course of the calendar year. In addition, each city and region where we operate has unique seasonality, events, and weather that can increase or decrease demand for our offering. Certain holidays can also have an impact on demand on the holiday itself or during the preceding and subsequent weekends. Typically, our second and third quarters experience higher revenue as this is the peak travel season in North America, the United Kingdom, and France. Our Gross Booking Value, or GBV, typically follows the seasonality patterns of revenue. We recognize revenue when the trip occurs, and as a result, our net revenue, contribution profit (loss), which we define as our gross profit plus (i) stock-based compensation expense included in cost of net revenue, and (ii) amortization of internal-use software included in cost of net revenue, less (a) sales and marketing expense attributable to customer acquisition, including media spend, sales headcount costs (excluding stock-based compensation expense), and marketing promotions, and (b) chargebacks, bad debt expense, and trust and safety verifications included in general and administrative expense, and adjusted EBITDA, which we define as net income or loss adjusted for (i) provision for income taxes; (ii) other income and (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) impairment charges; (vi) certain legal, regulatory, and indirect tax reserves; and (vii) change in fair value of our redeemable convertible preferred stock warrant liability, tend to be highest in the third and fourth quarters of the year. Our customer support costs also increase in the second and third quarters as we increase our staffing to handle increased activity on our platform in those periods.

In 2020, 2021, and 2022, we saw the COVID-19 pandemic and resulting macroeconomic effects, including on the travel and rental car industries, overwhelm the historical seasonality pattern in our Days, GBV, contribution profit (loss), contribution margin, and adjusted EBITDA as a result of shelter-in-place orders and changing travel preferences. We expect this impact on typical seasonality to continue as long as COVID-19 continues to impact travel restrictions and customer preferences and makeup globally. Our rapid growth and the impact of the COVID-19 pandemic have made, and may continue to make, seasonal fluctuations difficult to predict. As our business matures, other seasonal trends may develop, or these existing seasonal trends may become more extreme. As such, we may not accurately forecast our results of operations. However, we base our spending and investment plans on forecasts and estimates, and we may not be able to adjust our spending quickly enough if our revenue is less than expected, causing our results of operations to fail to meet our expectations or the expectations of investors. In addition, any circumstance or occurrence that disrupts use of our platform during the peak season, especially in North America, the United Kingdom, France, and Australia, could have a disproportionately adverse impact on our results of operations or financial condition.

**Our workforce and operations have grown substantially since our inception, and we expect that they will continue to do so. If we are unable to effectively manage that growth, our financial performance and future prospects will be adversely affected.** 

Since our inception, we have experienced rapid growth. For example, the number of our full-time employees has increased from 143 as of December 31, 2016, to 814 as of December 31, 2022. We are committed to expanding our global operations. This expansion increases the complexity of our business and places significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. We may not be able to manage growth effectively, which could damage our reputation, limit our growth, increase our costs, and negatively affect our results of operations. In addition, as our operations have expanded, our headcount has increased significantly over time, and we have increased reliance on third-party providers, which introduces additional complexities, including increasingly complex and expanding reporting structures. Our business is becoming increasingly complex, and this complexity and our rapid growth have demanded, and will continue to demand, substantial resources and attention from our management.

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We expect to continue to increase headcount and to hire more specialized personnel in the future as we grow our business. We will need to continue to hire, train, integrate, and manage additional qualified website developers, software engineers, account services personnel, government relations, legal and compliance personnel, and sales and marketing staff, and improve and maintain our technology to properly manage our growth. The San Francisco Bay Area continues to be a challenging recruiting market; overall, certain key roles and skillsets have been difficult to fill due to a competitive market and limited candidate pool, including but not limited to engineers, product managers, and design professionals. If our new hires do not perform as expected or take longer than expected to ramp up, if we are unsuccessful in hiring, training, integrating, and managing these new employees, or if we are not successful in retaining our existing employees, our business may be harmed.

Further, to accommodate our expected growth, we must improve and maintain our platform, technology, systems, and network infrastructure. Failure to effectively upgrade our technology or network infrastructure to support the expected increased traffic on our platform could result in unanticipated system disruptions, slow response times, or poor experiences for hosts and guests. To manage the expected growth of our operations and personnel and to support financial reporting requirements, we will need to improve our transaction processing and reporting, operational and financial systems, procedures, and controls. These improvements will be particularly challenging if we acquire new operations with different systems. Our current and planned personnel, systems, procedures, and controls may not be adequate to support our future operations. If we are unable to expand our operations and hire additional qualified personnel in an efficient manner, it could adversely affect customer satisfaction and cause our expenses to grow disproportionately relative to our revenue, and our financial performance and future prospects will be adversely affected.

**Host, guest, or third-party actions that are criminal, violent, inappropriate, dangerous, or fraudulent may undermine the trust and safety or perception of trust and safety of our marketplace and our ability to attract and retain hosts and guests, which could materially and adversely affect our reputation, business, results of operations, and financial condition.** 

We have no control over or ability to predict the actions of our hosts, guests, and other third parties, such as additional passengers in, or drivers of, vehicles booked on our platform, and therefore we cannot guarantee the safety of our hosts, guests, and such third parties. From time to time, we are subject to legal proceedings, including personal injury suits, claims, arbitrations, administrative proceedings, and government investigations or enforcement actions in the ordinary course of business. The actions of hosts, guests, and other third parties may result in fatalities, injuries, other bodily harm, assault, fraud, invasion of privacy, property damage, theft, including cases in which we are unable to recover the vehicle, discrimination, harassment, and libel, among other negative impacts, which could create potential legal or other substantial liabilities for us, hosts, or guests. For example, hosts may incur and have incurred liability due to the unlawful actions of their guests or other third parties guests present in the vehicle, such as traffic violations or other legal violations and guests may incur and have incurred liability due to the unlawful actions of their hosts, such as vehicle or registration violations. In addition, there have been rare instances where guests were pulled over or detained by police because the vehicles they were driving had been reported as stolen by the vehicle owner, sometimes in error, or where law enforcement did not properly remove stolen vehicle notifications. Depending on the circumstances, hosts or guests may also attempt to assert that we should be liable for unlawful actions stemming from the use of vehicles available on our platform. Such liabilities could materially and adversely affect our reputation, business, results of operations, and financial condition.

Moreover, we cannot conclusively verify the identity of all guests, nor do we verify or screen third parties who may be present during a trip using a vehicle booked through our platform. Our trust and safety processes focus primarily on guests to reduce the risk of vehicle theft and motor vehicle accidents. While we do some limited screening of hosts at sign up, our efforts to date have focused primarily on screening guests. Our identity verification processes rely on, among other things, information provided by users at sign up and booking, and our ability to validate that information and the effectiveness of third-party service providers that support our verification processes may be limited. In addition, we do not currently, and may not in the future, require users

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to re-verify their identity following their successful completion of the initial verification process or require guests to provide documentation of or any updates regarding their driving record or license status. Certain verification processes, including legacy verification processes on which we previously relied, may be less reliable than others. We conduct certain trust and safety screening processes to flag and investigate suspicious activities and in an attempt to prevent guests with certain criminal backgrounds from accessing our services. These processes are beneficial but not exhaustive and have limitations due to a variety of factors, including laws and regulations that prohibit or limit our ability to conduct effective background checks in some jurisdictions, the unavailability of information, and the inability of our systems to detect all suspicious activity or human or technical error or delay in addressing suspicious activity. In addition, there may be times when someone is misidentified as a person with a criminal background, when in fact they are not. There can be no assurances that these measures will significantly reduce criminal or fraudulent activity on our platform. In addition, such checks may not identify instances of identity fraud where a guest books a vehicle under another person's identity for criminal or other unlawful purposes. The background checks and other screening processes we rely on, among other things, information provided by users, our ability to validate that information, the accuracy, completeness, and availability of the underlying information relating to criminal records, the digitization of certain records, the evolving regulatory landscape in this area such as personal data protection and privacy laws, and the effectiveness of third-party service providers that may fail to conduct such background checks adequately or disclose information that could be relevant to a determination of eligibility, and we do not run criminal background checks and other screening processes on additional parties who may be present in a vehicle reserved through our platform. If unexpected and more burdensome laws and regulations regarding identity verification or screening are introduced, including with respect to screenings of restricted parties, we would have to implement new screening and verification policies, tools, and procedures, and we could face increased costs. As a result, we may have to increase the costs of our services for hosts and guests, which may make our services less attractive to our existing or potential future customers. In addition, while there are laws in certain jurisdictions that regulate the use of criminal background checks in the employment setting and other consumer use cases, it is unclear if those laws apply to our industry. Given this ambiguity, it is possible we are not now, or may not be in the future, compliant with those laws. Further, the use of criminal background checks or credit checks in our marketplace may open us up to allegations of discrimination. Therefore, we may be subject to negative publicity and incur additional expenses, which could harm our business, results of operations, and financial condition.

In addition, we have not in the past, and may not in the future, undertake to independently verify the safety, suitability, quality, and compliance with our policies or standards of our hosts' vehicles. We have created policies and standards to respond to issues reported with listings, but certain listings may pose heightened safety risks to individual users because those issues have not been reported to us or because our customer support team has not taken the requisite action based on our policies. We rely, at least in part, on reports of issues from hosts and guests to investigate and enforce many of our policies and standards. In addition, our policies may not contemplate certain safety risks posed by listings or consumer hosts or guests or may not sufficiently address those risks.

If hosts, guests, or other third parties engage in misconduct or actions that are criminal, violent, fraudulent, negligent, or inappropriate, or if they use our platform as a conduit for criminal activity, consumers may not consider our platform and the vehicles listed on our platform as safe, and we may receive negative media coverage, or be subject to involvement in a government investigation concerning such activity, which could adversely impact our brand and reputation, cause hosts and guests not to use our platforms at the rates we expect, and lower the adoption rate of our platform. While we recognize that we need to continue to build trust and invest in innovations that will support trust when it comes to our policies, tools, and procedures to protect hosts and guests, we may not be successful in doing so. Similarly, vehicle listings that are inaccurate, of a lower-than-expected quality, or that do not comply with our policies may harm guests and public perception of the quality and safety of vehicle listings on our platform and materially adversely affect our reputation, business, results of operations, and financial condition.

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**Because we recognize revenue at the time of check-in for the reservation or over trip duration instead of upon booking, upticks or downturns in bookings are not immediately reflected in our results of operations.** 

We recognize revenue related to our marketplace fees at the time of check-in for the reservation, and we recognize protection plan services fees over the duration of the trip. The effect of significant upticks or downturns in trip bookings in a particular quarter may not be fully reflected in our results of operations until future periods because of this timing in revenue recognition. We issue refunds to guests as part of our customer support activities in the form of cash or travel credits to be applied to future trip bookings, which we account for as consideration paid to a guest and which results in a reduction to revenue.

**If we are not able to maintain and enhance our brand, our business, financial condition, reputation, and results of operations may be adversely affected.** 

Maintaining and enhancing our brand identity are critical to our ability to attract new hosts and guests to our platform, preserve our existing community of hosts and guests, and engage positively with third parties, including governmental and regulatory authorities. The successful promotion of our brand will depend largely on our ability to execute on our offering and marketing and public relations efforts. Maintaining and enhancing our brand may require us to make substantial investments, and these investments may not be successful. If we fail to promote and maintain our brand, or if we incur excessive expenses in this effort, our business, results of operations, and financial condition will be adversely affected. In addition, we may partner with third parties for marketing or promotional opportunities, and we cannot control the actions of any of our partners. A development that affects the reputation or brand of one of our partners may also have an impact on our business or our brand. We anticipate that as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive. If we do not successfully maintain and enhance our brand, we could lose booking volume, which could, in turn, cause hosts to cease offering their vehicles on our platform. Our brand promotion activities may not be successful or may not yield revenue sufficient to offset their cost, which could adversely affect our reputation and business.

We have been, and may in the future be, the subject of media coverage, including on blogs and online forums. Unfavorable publicity, other campaigns or publications encouraging users to cease use of our platform or consumer perception of our platform, practices, or offerings, or our business relationships, which has occurred in the past, could adversely affect our reputation, resulting in difficulties in recruiting, decreased revenue, a negative impact on the number of hosts who list their vehicles and the number of potential guests, and may complicate relationships with third-party business partners and governmental and regulatory authorities. For example, the traffic accidents caused by or involving cars listed on our platform could have a negative impact on the number of potential hosts who use our platform. In addition, any incident involving the personal safety or security of our hosts or guests, whether actual or rumored to have occurred, could create a negative public perception of our platform, which would adversely impact our ability to attract and retain hosts and guests. As a result, our business, financial condition, and results of operations could be adversely affected.

In addition, we rely on hosts and guests to provide reliable and trustworthy ratings and reviews that our hosts or guests can rely upon when making decisions about trip bookings to accept or trips to book, as applicable. We also monitor the ratings on our website and review system to enforce quality standards and build trust among members of our community. Our hosts and guests may be less likely to rely on ratings and reviews if they believe that our review system is not trustworthy. We have procedures in place to combat fraud or abuse of our review system, but we cannot guarantee that these procedures are or will be effective. Further, hosts and guests can leave reviews on third-party websites which we do not have the ability to monitor. In addition, if hosts and guests do not leave reliable ratings and reviews, hosts or guests who rely on such ratings and reviews may have negative experiences, which would cause a decrease in customer satisfaction. Unreliable ratings and reviews could also make it more difficult for us to enforce quality standards, which could reduce trust within our community. Any of these effects could damage our brand and reputation and materially adversely affect our business, financial condition, and results of operations.

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**Any failure to offer high-quality support may harm our relationships with hosts and guests and could adversely affect our business, financial condition, and results of operations.** 

Our ability to attract and retain hosts and guests is dependent in part on our ability to provide high-quality support and services. Hosts and guests depend on our support organization to resolve any issues relating to our platform or their experience listing or booking vehicles through our platform and during and after their trips. We primarily rely on third parties to provide many of our support services, and our ability to provide effective support is substantially dependent on our ability to attract and retain third-party service providers, and their employees, who need to be not only qualified to support users of our platform but also well versed in the relevant aspects of our platform. As we continue to grow our business and improve our offerings, we will face challenges related to providing high-quality support services at scale. In addition, as we continue to grow our international business and the number of international users on our platform generally, our support organization will face additional challenges, including those associated with delivering support in languages other than English and French, where applicable. Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support, could harm our reputation and adversely affect our ability to scale our platform and business, our financial condition, and results of operations.

Moreover, customer complaints or negative publicity about our company, our services, or our business activities could severely diminish consumer confidence in and use of our platform. Measures we may take to combat risks of quality issues, safety issues, and breaches of privacy and security, such as removing low-rated vehicle listings from our platform or otherwise enforcing violations of our terms of service, can damage our relations with our hosts. Similarly, our trust and safety efforts to reduce the risk of vehicle loss or theft can damage our relations with our guests. These measures heighten the need for prompt and accurate customer service to resolve irregularities and disputes. Satisfaction with our process for physical damage reimbursement and offerings and implementation of protection plans can also impact both host and guest satisfaction. Effective customer service requires significant personnel expense, and this expense, if not managed properly, could significantly impact our profitability. Failure to manage or train our customer service representatives properly could compromise our ability to handle customer complaints effectively. If we do not handle these complaints effectively, our reputation may be harmed, which could adversely affect our business, financial condition, and results of operations.

**If we are unable to introduce new or upgraded services or features that hosts or guests recognize as valuable, we may fail to drive additional users to our platform or retain existing users on our platform. Our efforts to develop new and upgraded offerings could require us to incur significant costs.** 

In order to continue to attract and retain hosts and guests on our platform and to encourage hosts to list additional vehicles on our platform, we will need to continue to invest in the development of new offerings that add value for hosts and guests and differentiate us from our competitors. The success of new offerings depends on several factors, including the timely completion, introduction, and market acceptance of the offering and investment in new technologies. If hosts and guests do not recognize the value of our new offerings, they may choose not to utilize our platform.

Any new offerings have a high degree of risk, as they may involve unproven businesses with which we have limited or no prior development or operating experience. Developing and delivering these new or upgraded offerings may increase our expenses, as this process can be costly, and we may experience difficulties in developing and delivering such new or upgraded offerings. Moreover, we cannot assure you that any such new or upgraded product, service, or feature will work as intended, that consumer demand will exist or be sustained at the levels that we anticipate, or that any of these offerings will gain sufficient market acceptance to generate sufficient revenue to offset associated expenses or liabilities. In addition, successfully launching, marketing, and selling a new offering will require the use of our marketing or sales resources. It is also possible that offerings developed by others will render our offerings noncompetitive or obsolete. Further, these efforts could distract management from current operations and divert capital and other resources from our more established

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offerings. Even if we are successful in developing new offerings, regulatory authorities may subject us or our hosts and guests to new rules, taxes, or restrictions or more aggressively enforce existing rules, taxes, or restrictions, that could increase our expenses or prevent us from successfully commercializing such new products, services, and features. If we are unable to continue to develop new or upgraded products, services, or features, we may fail to grow and our business, results of operations, and financial condition would be materially adversely affected.

**We rely on traffic to our platform to grow revenue, and if we are unable to drive traffic cost-effectively, it would materially adversely affect our business, results of operations, and financial condition.** 

Promoting awareness of our platform is important to our ability to drive traffic to our platform and grow our business. Our marketing efforts currently include, or have historically included, referrals, affiliate programs, partnerships, display advertising, television, billboards, radio, video, direct mail, social media, email, podcasts, classified advertisement websites, mobile "push" communications, online travel agency and travel metasearch engine advertisements, and search engine marketing. Our marketing initiatives may become increasingly expensive, and generating a meaningful return on these initiatives may be difficult. Even if we successfully increase revenue as a result of our paid marketing efforts, it may not offset the additional marketing expenses we incur. If our marketing efforts to help grow our business are not effective, our business, financial condition, and results of operations would be adversely affected.

In addition, driving traffic to our platform depends, in part, on our ability to attract consumers through unpaid placement within search results on search engines like Google. The number of consumers we attract to our platform from search engines is due in large part to how and where our website or app ranks in unpaid search results. These rankings can be affected by a number of factors, many of which are not under our direct control and may change frequently. For example, a search engine may change its ranking algorithms, methodologies, or design layouts. As a result, links to our website or app may not be prominent enough to drive traffic to our website or app, and we may not know how or otherwise be in a position to influence the results. In some instances, search engine companies may change these rankings in a way that promotes their own competing products or services or the products or services of one or more of our competitors. Search engines may also expand or add new paid advertising placements for keywords that would reduce our market visibility to prospective hosts and guests. Our website has experienced fluctuations in search result rankings in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of consumers directed to our platform from search engines could adversely affect our business, financial condition, and results of operations.

Moreover, as guests increase their booking activity across multiple car sharing platforms, or compare offerings across platforms, our marketing efficiency and effectiveness may be adversely impacted. In response, we may increase our sales and marketing expenditures in the future, which may not be offset by additional revenue, and could materially adversely affect our business, results of operations, and financial condition.

**We rely on our proprietary risk scoring model to determine trip fees for each booking in the United States. If our risk scoring model is unable to permit us to effectively generate accurate trip fees for each trip, it may adversely impact our operating results, business, results of operations, and financial condition.** 

We rely on our internally developed proprietary machine learning algorithms, which incorporate data from third-party sources as well as our own data, to improve our offering, offer personalization, and optimize the economics of trip bookings on our platform in an intelligent manner, including through our proprietary Turo Risk Score for trips in the United States. The Turo Risk Score capability, built on machine learning algorithms, enables us to implement real-time, risk-based trip fees. The Turo Risk Score takes a broad view of risk to account for an array of undesirable outcomes. The Turo Risk Score is not used in the pricing of protection plans.

If we rely on a model that fails to effectively take into account appropriate variables, including failing to learn from data quickly enough, we may generate trip fees that do not optimize the economics of trip bookings on our platform

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either by setting fees too low for riskier trips or setting fees to a degree that discourages guests from completing valuable trip bookings. In addition, the Turo Risk Score was introduced in the United States in April 2020, and the information and data collected since that time may not be representative of future risk, particularly with respect to business trends experienced during and after the COVID-19 pandemic, which may contribute to potentially setting fees too low or too high. We have since rolled out the Turo Risk Score in the testing phase in Canada and the United Kingdom. Moreover, there are fewer third-party sources that provide data used to build our pricing model for our markets outside the United States, and if any such sources of U.S. or international data provide inaccurate information or limit our use of such source, in part or entirely, including by raising the price to use such third-party data, our model may suffer and become less accurate. The application of certain laws, including consumer protection and fee transparency laws, in jurisdictions in which we operate may increase the scrutiny or limit the effectiveness of the Turo Risk Score. As a result, our results of operations, business, results of operations, and financial condition may be adversely affected.

Even though our machine learning algorithms do not collect, analyze, or utilize attributes such as race or ethnicity, including in the calculation of the Turo Risk Score, if consumers believe we are discriminating on the basis of race or ethnicity, or we rely on third-party data sources that have been influenced by institutional or systemic racism, it may subject us to liability and adversely impact our brand and resulting business, operations, and financial condition.

**We have a limited operating history in an evolving industry, which makes it difficult to evaluate our current business and future prospects and may increase the risk of your investment.** 

Since our inception in 2009, our business model has not been fully proven. As a result, we have only a limited operating history, which may make it difficult to evaluate our current business and our future prospects. We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly changing industries, including, in our case:

• achieving market acceptance of our existing and future offerings;

• challenges in accurate financial planning and forecasting;

• the impact of the current pricing environment on our growth and profitability;

• attracting and retaining hosts and guests;

• competing against companies with greater financial resources;

• increasing expenses as we continue to grow our business;

• risk of litigation losses or regulatory enforcement actions;

• successfully expanding our business in existing markets and entering into new markets and geographies;

• maintaining and enhancing the value of our reputation and brand;

• anticipating and responding to macroeconomic changes and changes in the markets in which we operate;

• avoiding interruptions or disruptions in our service;

• developing a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased
usage, as well as the deployment of new features and services;

• securing our platform against technological threats;

• hiring, integrating, and retaining talented technology, sales and marketing, customer service, and other personnel;

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• effectively managing rapid growth in our personnel and operations; and

• maintaining and growing our partnerships and relationships with third parties, including with insurance providers,
vehicle manufacturers, and online search engines.

We cannot assure you that we will be successful in addressing these and other challenges we may face in the future and if we do not manage these risks successfully, our business and results of operations may be adversely affected. You should consider our business and prospects in light of the risks and difficulties we may encounter as an early-stage company. Further, we may not be able to maintain our current rate of growth often characteristic of early-stage companies, and there is no assurance that our rate of growth will continue. We may not achieve sufficient revenue to achieve or maintain positive cash flow from operations or profitability in any given period.

**We could face liability for information on or accessible through our platform.** 

We could face claims relating to information that is published or made available through our platform. Our platform allows hosts and guests to receive certain information about one another. Although this information is provided by third parties, claims of breaches of privacy or violation of consumer protection laws, as well as claims of harassment or criminal activities by participants in our marketplace, may be made against us for information distributed through our platform. Our potential liability for information on our platform or distributed by us to others and for the activities of hosts and guests could require us to implement additional measures to reduce our exposure to such liability, which may require us to expend substantial resources and limit the attractiveness of our platform to users. Our insurance policies may not cover all potential claims to which we are exposed and may not be adequate to indemnify us for all liability that may be imposed.

**If we are unable to adapt to changes in technology, our business could be harmed.** 

Because current and potential hosts and guests can access our website and platform on a variety of devices, we will need to continuously modify and enhance our service to keep pace with changes in mobile devices, native apps, and other internet-related hardware, software, communication, browser technologies, and industry standards. There may be other technologies in the future that are not foreseen today that may transform our processes and services and may need to be adopted in order to remain competitive and responsive to host and guest expectations. Our future success will also depend on our ability to integrate new or emerging payment methods into our platform to offer alternative payment solutions to consumers, particularly if we expand into markets where usage of credit and debit cards is not ubiquitous and/or e-commerce is largely carried out through mobile devices. We may not be successful in either developing these modifications and enhancements or in timely bringing them to market. Further, uncertainties about the timing and nature of new devices and other network platforms or technologies, or modifications to existing devices, platforms, or technologies, could increase our research and development expenses more than we have currently planned. Any failure of our platform to operate effectively with future technologies could result in decreased customer satisfaction and harm our business.

**Our long-term success depends, in part, on our ability to expand our operations outside of the United States and, as a result, our business is susceptible to risks associated with international operations.** 

A small but important portion of our revenue comes from trips booked outside of the United States. We have offices and a small number of employees outside the United States to support our international operations. We have limited experience in operating in foreign jurisdictions and plan to make significant investments to build our international operations. In addition, we recently acquired OuiCar in France and launched operations in Australia. We plan to continue our efforts to expand globally, including potential additional acquisitions of international businesses and establishment of foreign offices in jurisdictions where we do not currently operate. Managing a global organization is difficult, time consuming, and expensive, and any international expansion

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efforts that we may undertake may not be successful. In addition, conducting international operations subjects us to risks that we generally do not face in the United States. These risks include:

• the cost and resources required to localize our services, which requires the translation of our website and platform into
foreign languages, use of foreign currencies and payment methods, and adaptation for local practice, regulatory, motor vehicle, taxation, and insurance requirements;

• unexpected and more restrictive laws and regulations, including those laws and regulations governing internet activities, peer-to-peer car sharing platforms, leasing or renting cars, licensing and usage of vehicles, employment, tax, licensing and permitting, identify verification and
screening, email and text messaging, collection and use of personal information, consumer protection and fee transparency, privacy and data protection, payment processing, availability of criminal background check services, auto insurance scores, or
other third-party data sources of the type available in the United States for trust and safety screening purposes, and other activities important to our online business practices;

• competition with companies that understand the local market better than we do or that have preexisting relationships with
potential hosts and guests in those markets;

• lack of relationships with law enforcement, or availability of third-party criminal investigators, used by us in the
United States, Canada, the United Kingdom, France, and Australia to help with the recovery of missing vehicles;

• legal uncertainty regarding our liability for the actions of hosts and guests, including uncertainty resulting from
unique local laws or a lack of clear precedent of applicable law;

• lack of familiarity with and the burden of complying with a wide variety of foreign laws, legal standards, and legal,
regulatory, insurance requirements, and consumer protection laws, which may change or be interpreted in unexpected ways;

• difficulties in managing and staffing international operations, including as a result of our foreign employees being
members of labor unions or work councils or subject to collective bargaining agreements and having less centralized oversight and training;

• fluctuations in currency exchange rates;

• higher levels of credit risk and payment fraud;

• regulations governing the control of local currencies and impacting the ability to collect and remit funds to hosts in
those currencies;

• potentially adverse tax consequences, including the complexities of foreign value added tax systems and restrictions on
the repatriation of earnings;

• increased financial accounting and reporting burdens and complexities and difficulties of implementing and maintaining
adequate internal controls;

• political, social, and economic instability abroad, terrorist attacks, and security concerns in general;

• breakdowns in infrastructure, utilities, and other services;

• exposure to a business culture in which improper business practices may be prevalent;

• compliance with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, the Canadian Corruption of Foreign Public
Officials Act, the Organisation for Economic Co-operation and Development, the Anti-Bribery Convention, and similar laws in other jurisdictions;

• reduced or varied protection of intellectual property rights in some countries; and

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• the other risks and uncertainties described in this prospectus.

Operating in international markets also requires significant management attention and financial resources. We cannot assure you that our international expansion efforts will be successful. Further, the investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability. Operating or other issues in one or more foreign jurisdictions may have an adverse impact on the business as a whole.

**We may be unable to integrate acquired businesses and technologies successfully or to achieve the expected benefits of such acquisitions. We may acquire or invest in additional companies, which may divert our management's attention, result in additional dilution to our stockholders, and consume resources that are necessary to sustain our business.** 

Our business strategy may, from time to time, include acquiring other complementary products, technologies, or businesses. For example, in May 2022, we acquired OuiCar in France. An acquisition, investment, or business relationship may result in unforeseen operating difficulties and expenditures. In particular, we may encounter difficulties assimilating or integrating the businesses, technologies, products, personnel, or operations of the acquired companies, particularly if the key personnel of the acquired companies choose not to work for us, if an acquired company's software is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in management, product offering, or otherwise. Integration of a business outside of the United States may pose additional challenges given the risks associated with international operations as discussed above. Acquisitions may also disrupt our business, divert our resources, and require significant management attention that would otherwise be available for development of our business. Moreover, the anticipated benefits or synergies of any acquisition, investment, or business relationship may not be realized or we may fail to identify problems, liabilities, or other shortcomings or challenges and be exposed to unknown liabilities. For example, in July 2017, we acquired Croove GmbH (subsequently rebranded as Turo Germany), which operated peer-to-peer car sharing services in Germany, and in March 2020, we discontinued our operations in Germany, in part, as a result of the COVID-19 pandemic.

We may in the future seek to acquire or invest in additional businesses, products, technologies, or other assets. We may also enter into relationships with other businesses to expand our products and services or our ability to provide our products and services in foreign jurisdictions, which could involve preferred or exclusive licenses, additional channels of distribution, discount pricing, or investments in other companies. Negotiating these transactions can be time consuming, difficult, and expensive, and our ability to close these transactions may often be subject to approvals that are beyond our control. Consequently, these transactions, even if undertaken and announced, may not close. Further, for one or more of these transactions, we may:

• issue additional equity securities that would dilute our stockholders;

• use cash that we may need in the future to operate our business;

• incur debt on terms unfavorable to us or that we are unable to repay;

• incur large charges or substantial liabilities;

• be subject to ongoing obligations of the acquired company that are difficult or time-consuming to satisfy;

• encounter difficulties retaining and integrating key employees of the acquired company, or integrating diverse software
code bases, controls, or business cultures; and

• become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.

Any of these risks, or other risks related to such acquisitions, could adversely affect our business and results of operations.

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**Our business depends on attracting and retaining capable management and operating personnel.** 

Our success depends in large part on our ability to attract and retain high-quality management and operating personnel. In particular, we are highly dependent on Andre Haddad, our Chief Executive Officer, who has been instrumental in devising and leading our strategies for growth. His in-depth knowledge of, and deep relationships with, the participants in our industry are extremely valuable to us. Our business also requires skilled technical, marketing, and design personnel, who are in high demand and are often subject to competing offers.

Competition for qualified employees is intense in our industry. Our employees, including members of our management team, could leave our company with little or no prior notice and would be free to work for a competitor. The loss of even a few qualified employees, or an inability to attract, retain, and motivate additional highly skilled employees required for the planned expansion of our business could harm our operating results and impair our ability to grow.

We also do not maintain "key person" life insurance on any of our employees. The departure of one or more of our senior management team members or other key employees could be disruptive to our business until we are able to hire qualified successors.

To attract and retain key personnel, we use various measures, including an equity incentive program for key executive officers and other employees. These measures may not be enough to attract and retain the personnel we require to operate and grow our business effectively.

**We track certain operational metrics, which are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and materially adversely affect our stock price, business, results of operations, and financial condition.** 

We track certain operational metrics, including key business metrics such as Days and GBV, which may differ from estimates or similar metrics published by third parties due to differences in sources, methodologies, or the assumptions on which we rely. Our internal systems and tools, including third-party software, are subject to a number of limitations, and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we publicly disclose. If the internal systems and tools we use to track these metrics undercount or overcount performance or contain algorithmic or other technical errors, the data we report may not be accurate. While these numbers are based on what we believe to be reasonable estimates of our metrics for the applicable period of measurement, there are inherent challenges in measuring how our platform is used across large populations globally.

Limitations or errors with respect to how we measure data or with respect to the data that we measure may affect our understanding of certain details of our business, which could affect our long-term strategies and short-term activities. If our operational metrics are not accurate representations of our business, or if investors do not perceive these metrics to be accurate, or if we discover material inaccuracies with respect to these figures, our reputation may be significantly harmed, our stock price could decline, we may be subject to stockholder litigation, and our business, results of operations, and financial condition could be materially adversely affected.

**If we cannot maintain and cultivate our corporate culture as we grow, we could lose the innovation, teamwork, passion, and focus on execution that we believe contribute to our success, and our business could be harmed.** 

We believe that our corporate culture has been vital to our success, including in attracting, developing, motivating, and retaining personnel. As we continue to grow and face industry challenges, including additional regulatory, compliance, and governance requirements, it may become more challenging to maintain that culture. In addition, we plan to expand our international operations into other countries in the future, which may impact

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our culture as we seek to find, hire, and integrate additional employees while maintaining our corporate culture. If we are unable to maintain and cultivate our corporate culture, we could lose key employees, innovation, teamwork, passion, and focus on execution, and as a result, our business could be harmed.

**Our revolving credit facility contains financial covenants and other restrictions on our actions that may limit our operational flexibility or otherwise adversely affect our results of operations.** 

The terms of our revolving credit facility include a number of covenants that limit our ability and our subsidiaries' ability to, among other things, incur additional indebtedness, grant liens, merge or consolidate with other companies or sell substantially all of our assets, pay dividends, make redemptions and repurchases of stock, make investments, loans and acquisitions, or engage in transactions with affiliates, as well as a $25 million minimum liquidity requirement. The terms of our revolving credit facility may restrict our current and future operations and could adversely affect our ability to finance our future operations or capital needs. In addition, complying with these covenants may make it more difficult for us to successfully execute our business strategy, including potential acquisitions, and compete against companies which are not subject to such restrictions.

A failure by us to comply with the covenants or payment requirements specified in our credit agreement could result in an event of default under the agreement, which would give the lenders the right to terminate their commitments to provide additional loans under our revolving credit facility and to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately due and payable. If the debt under our revolving credit facility were to be accelerated, we may not have sufficient cash or be able to borrow sufficient funds to refinance the debt or sell sufficient assets to repay the debt, which could immediately adversely affect our business, cash flows, results of operations, and financial condition. Even if we were able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us.

**We may require additional capital to support business growth, and this capital may not be available on favorable or acceptable terms, if at all.** 

We have funded our operations since inception primarily through issuances of equity and convertible debt securities and revenue generated from our platform. We cannot be certain when or if our operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new products and services or enhance our existing products and services, enhance our operating infrastructure, and acquire complementary businesses and technologies. We have always been committed to expanding the number of geographic areas in which our services are offered, and we may make future commitments of capital resources. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could be adversely affected by significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock. Any additional debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited. In particular, the recent macroeconomic downturn, bank failures, and other liquidity issues at financial institutions have caused disruption in the credit and financial markets in the United States and worldwide, which may reduce our ability to access capital and negatively affect our liquidity in the future. If we are unable to obtain adequate financing or financing on terms satisfactory to us, our ability to develop our platform, support our business growth, and respond to business challenges could be significantly impaired, and our business may be adversely affected.

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**We are exposed to fluctuations in currency exchange rates.** 

Because we conduct a growing portion of our business outside the United States, we face exposure to adverse movements in currency exchange rates. A decline in the U.S. dollar relative to foreign currencies would increase our non-U.S. revenue, when translated into U.S. dollars. Conversely, if the U.S. dollar strengthens relative to foreign currencies, our revenue from our foreign operations would be adversely affected. Our operating results could be negatively impacted, depending on the amount of expense denominated in foreign currencies. As exchange rates vary, revenue, cost of revenue, operating expenses, and other operating results, when translated, may differ materially. In addition, our revenue and operating results are subject to fluctuation if our mix of U.S. and foreign currency denominated transactions and expenses changes in the future. We may enter into hedging arrangements in order to manage foreign currency translation, but such activity may not completely eliminate fluctuations in our results of operations.

**We have been, and may in the future be, adversely affected by natural disasters, the physical effects of climate change, and other catastrophic events, including the COVID-19 pandemic, and by man-made problems such as acts of war and terrorism, that could disrupt our business operations and adversely affect our financial condition and results of operations.** 

We have been, and may in the future be, adversely affected by significant natural disasters, the physical effects of climate change, or other catastrophic events, such as the COVID-19 pandemic, earthquakes, blizzards, tsunamis, hurricanes, droughts, fires, or floods, or other catastrophic events, such as terrorism, the military conflict involving Russia and Ukraine and economic sanctions imposed on Russia, extended outages of critical utilities, power loss, telecommunications failure, or any critical resource shortages affecting us, our third-party providers, guests, or hosts. In the event of a natural disaster or other catastrophic event, we and our third-party providers may be unable to continue operations, may endure system interruptions, and vehicles booked on our platform may experience additional damage, any of which could result in reputational harm, delays in development of our platform, lengthy interruptions in service, breaches of data security, and loss of critical data, all of which could have an adverse effect on our business, financial condition, and results of operations. We currently do not have a comprehensive disaster recovery plan in place. Natural disasters, including hurricanes, tsunamis, earthquakes, and volcanic eruptions, as well as other catastrophic events, such as outbreaks of H1N1 influenza (swine flu), avian flu, COVID-19, and other pandemics and epidemics, have significantly disrupted business operations and normal transportation patterns and levels. To the extent climate change causes changes in weather patterns, our coastal destinations could experience increases in storm intensity and rising sea-levels causing damage to our hosts' vehicles and result in a reduced number of listings in these areas. Moreover, our corporate headquarters is located in the San Francisco Bay Area, a region known for seismic activity, and we may be subject to shortages of water, electric power, and natural gas from time to time and potentially subject to catastrophic fires. To the extent we maintain insurance against natural disasters, it may not be adequate to cover our losses in any particular case. In addition, natural disasters and other catastrophic events could affect our partners' ability to perform services for users on a timely basis. In the event any such partners' information technology systems or service abilities are hindered by any of the events discussed above, our ability to provide services to hosts and guests may be impaired. Further, if a natural disaster or other catastrophic event occurs in a region from which we derive a significant portion of our revenue, users in that region may delay or forego use of our platform or other services, which may adversely impact our business, including potentially increasing our losses due to damaged vehicles in the region for which we may be deemed responsible. In addition, acts of terrorism, civil disorder, or military conflict could cause disruptions in our business or the business and activity of our partners, hosts, guests, or the economy as a whole. These disruptions may be more severe than in the case of natural disasters. All of the aforementioned risks may be augmented if our or our partners' business continuity and disaster recovery plans prove to be inadequate. To the extent that any of the above results in delays or reductions in marketplace availability, activities, or other services, our business, financial condition, and results of operations would be adversely affected.

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**Our business has experienced, and may in the future experience, an adverse impact from the COVID-19 pandemic.** 

The COVID-19 pandemic has adversely impacted our business and has resulted in reductions in demand for our offerings to varying degrees throughout the pandemic. If guests reduce their spending on and use of our platform due to the COVID-19 pandemic, as has occasionally occurred with increases in temporary restrictions or prevalence of variants, we may experience a material and adverse effect on our business, financial condition, results of operations, and cash flows. The extent to which the COVID-19 pandemic may adversely affect our business, financial condition, results of operations, and cash flows will depend on future developments, which are highly uncertain and cannot reasonably be predicted with confidence at this time, including the duration, spread, and severity of the pandemic; subsequent waves of infection or variant strains; the timing, availability, and effectiveness of vaccines as well as vaccination rates among the population; future government responses to the pandemic; potential restrictions on our business and the business of our hosts; the impact of the pandemic on the United States and global economics and demand for our offering; how quickly and to what extent normal economic and operating conditions resume; and the reaction of hosts and guests to these developments. The potential impacts of such developments include, but are not limited to:

• reduced guest spend on our services through our platform, resulting in lower revenue;

• increased costs or reduced revenue as a result of marketing and promotional efforts to reach and support those affected
by the COVID-19 pandemic;

• more frequent declines of guest payment methods or guest-issued chargebacks, which may negatively impact our cash flows
and may result in higher credit card processing fees or restrictions by issuers;

• adverse shifts in the distribution of the risk profiles of hosts, guests, vehicles, or trips, leading to increased costs
for us;

• increases in the frequency and severity of collisions and similar incidents due to riskier driving during the COVID-19
pandemic, resulting in increased costs, as well as reduced ability to collect payments for costs associated with these incidents;

• increases in costs and duration of repair for damage to hosts' vehicles, owing to increased use of expensive
manufacturing parts and electronic components, as well as supply chain slowdowns and similar economic dislocation;

• hosts choosing to delay or forgo maintenance to their vehicles due to economic considerations, resulting in increased
potential liability and costs;

• the diversion of resources and attention of our management and workforce away from important ongoing initiatives,
including the introduction of new, or modifications to existing, offerings, as well as long-term strategic investments and business objectives;

• impacts on important third-party service providers may cause delays in important functions of our platform or cause a
decline in quality of service, negatively affect our reputation or user activity on our platform, or increase our operating costs;

• reduced ability to attract, train, integrate, and retain highly skilled personnel;

• difficulty in business planning and forecasting due to significant uncertainty of the impact of the COVID-19 pandemic on
all aspects of our business and on our hosts and guests;

• significant disruption of global financial markets and companies in the peer-to-peer car sharing industry specifically,
which may impact our ability to access capital now or in the future or make capital available only on terms less favorable to us;

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• reduced spend by guests located in areas or regions more affected by the COVID-19 pandemic;

• reduced local, regional, or international travel, including government travel bans and restrictions;

• de-globalization, which may result in hosts and guests being less willing to connect with foreign hosts and guests; and

• potential legal claims by hosts, guests, or their immediate family of exposure to COVID-19 as a result of using our
marketplace.

Many of these risk factors are unpredictable and outside of our control, and any of these factors could amplify the other risks and uncertainties described elsewhere herein. It is uncertain what impact that the various legislative and other government responses being undertaken in the United States and other countries in which our hosts and guests are located will have on the economy, our industry, our partners, our hosts, our guests, and our company. The COVID-19 pandemic has to varying degrees adversely affected our near-term financial results and may adversely impact our long-term financial results. For example, in response to the effects of the COVID-19 pandemic on our business, we took certain temporary cost-cutting measures, including layoffs, furloughs, and salary reductions, and we discontinued our German business beginning in March 2020, in part, as a cost-cutting measure in response to the COVID-19 pandemic. If we take similar measures in the future in response to the COVID-19 pandemic, we may experience adverse effects on employee morale, our culture, and our ability to attract and retain employees.

We have also implemented measures to protect the health of our workforce, including temporarily allowing all employees to work remotely in connection with the COVID-19 pandemic and requiring compliance with applicable shelter-in-place orders. In October 2021, we reopened our offices and required all employees to be vaccinated against COVID-19 and to transition back to the office on a hybrid basis. As a result of the emergence of the Omicron variant in December 2021, we temporarily returned to remote working. In February 2022, we reopened our offices on a hybrid basis and are allowing more flexibility for remote work. In February 2023, we sunset our COVID-19 vaccine requirement. Our remote work, hybrid transition, and other policies may negatively impact workforce productivity and may cause disruptions to our business. There can be no assurance that these measures will be or have been effective, however, or that we can adopt them without adversely affecting our business operations. In addition, there can be no guarantee that our remote work and return-to-office measures will reduce the risk of our workforce falling ill as a result of coming into the office or traveling for work. In addition, we may have difficulty retaining employees who have a different personal risk assessment or would prefer additional flexibility. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of the macroeconomic downturn that has occurred as a result and is likely to continue in the future.

**Risks related to our legal and regulatory environment** 

**Our business is subject to substantial regulation and may be found to be subject to a multitude of potential additional legal and regulatory frameworks, including those related to insurance and taxation, that are constantly evolving, and any unfavorable changes or negative court interpretations of these regulations or frameworks, failure by us to comply, or incompatibility with these and other legal and regulatory requirements could have an adverse effect on our business.** 

We and our marketplace participants are subject to a wide variety of foreign and domestic laws and regulations. The application to our business of existing laws and regulations, such as those related to car rental or peer-to-peer car sharing, insurance, and taxes, can be unclear and continues to evolve, and there can be no assurances that such regulations, laws, and taxes will not be, or continue not to be, applicable to us, our hosts, or guests, or that the related consequences arising out of such regulations, laws, and taxes will not have a significant adverse effect on our business. It is possible that a regulatory body, court, or permitting body could find us responsible for the compliance obligations or failures not only of ourselves, but also those of our hosts

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or guests. We have in the past received communications from local, domestic, and foreign governments and agencies regarding taxes and insurance or lawsuits or cease and desist demands from airports regarding permitting and fees and the application of other regulations and laws and how they believe they relate to our business or the business of our hosts.

For example, we have in the past been, and may continue to be, subject to lawsuits brought by, or on behalf of, government entities such as municipalities and/or airport authorities that regulate and/or operate airports, or by government officials such as city attorneys, county counsel, district attorneys, or state attorneys general. These government entities and officials have alleged that our hosts' provision and guests' use of delivery services on airport property, and our alleged enabling or advertising of those activities, violates various laws and regulations and otherwise gives rise to liability. Among other legal claims, these entities and officials have alleged violation of laws and regulations regarding commercial activity on airport property generally or car rental or other ground transportation services specifically, violation of laws governing unfair or deceptive competition or trade practices, trespass, aiding and abetting trespass, and unjust enrichment. These entities have sought monetary relief, such as penalties, fines, damages, restitution, and disgorgement, orders requiring us to obtain certain operating permits in connection with hosts' and guests' activities on airport property, and/or orders enjoining hosts' and guests' activities at airports and our alleged enabling or advertising of those activities.

For example, in June 2019, the Massachusetts Port Authority, or Massport, filed a complaint against us, and one or more of our hosts, in the Superior Court of the Commonwealth of Massachusetts alleging that our services at Boston Logan International Airport, or BOS, constitute a violation of state regulations prohibiting unauthorized commercial activity on airport property, trespass, aiding and abetting trespass, unjust enrichment, and violation of the Massachusetts Consumer Protection Law, as well as a claim seeking a declaratory judgment that we are operating an unauthorized car rental business at BOS and thereby trespassing and aiding and abetting host and guest trespasses. Massport sought declaratory and injunctive relief, as well as damages. We filed counterclaims against Massport seeking declarations that we are immune from liability under the federal Communications Decency Act, that we are not a rental car company, that Massport's proposed permitting charges violate the U.S. Constitution's Dormant Commerce Clause and Equal Protection Clause and the Massachusetts Constitution's Equal Protection Clause, and that Massport lacks legislative authority to assess these charges against us. In January 2020, the court entered a preliminary injunction against us, which took effect in April 2020. Following our interlocutory appeal, the Massachusetts Supreme Judicial Court ruled in April 2021 to affirm the entry of a preliminary injunction, although modifying the injunction's scope. We and Massport reached a settlement in principle to resolve the litigation in December 2021, which was finalized in September 2022. The agreement includes a go-forward car sharing permit at BOS and an immaterial monetary payment. The lawsuit has been dismissed.

In addition, we have been subject to similar litigation with respect to hosts' provision and guests' use of delivery services, and our alleged enabling or advertising of those activities, at San Francisco International Airport, or SFO, Los Angeles International Airport, or LAX, and Dallas/Fort Worth International Airport, or DFW.

In January 2018, the People of the State of California, acting by and through the City Attorney of San Francisco, brought a lawsuit against us in the Superior Court of California for the County of San Francisco, alleging that hosts offer vehicles for delivery at SFO while we do not hold a rental car permit and alleging that we violate California's Unfair Competition Law, or UCL. The plaintiffs seek injunctive relief and penalties of up to $2,500 per alleged violation, among other relief. We filed a cross-complaint against the City and County of San Francisco seeking declarations that we are not a rental car company and that the charges and conditions associated with SFO's rental car permit cannot lawfully be imposed on us. We are also seeking injunctive relief, including precluding San Francisco from compelling us to apply for a rental car company permit. In April 2020, the Superior Court granted the plaintiffs' motions for partial summary adjudication on certain of our cross-claims and affirmative defenses. Specifically, the Superior Court granted summary adjudication on our cross-claim for declaratory relief that Turo cannot be legally classified as a rental car company under California law, holding that we could lawfully be classified as a rental car company under relevant California statutory law because Turo is "in the business of renting passenger vehicles to the public." The Superior Court nonetheless

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recognized that this cross-claim presented a novel, consequential question of statutory interpretation on which reasonable jurists could differ, and therefore certified the issue for interlocutory review under Code of Civil Procedure section 166.1. The Superior Court further held that SFO's permitting charges are not unlawful taxes under Article XIII C of the California Constitution, reasoning that the challenged permitting charges are not taxes requiring voter approval under Proposition 26. Finally, the Superior Court held that SFO's permitting charges, as applied to us, do not establish a Dormant Commerce Clause violation or an Equal Protection Clause violation under the U.S. or California Constitutions.

We filed a petition for writ of mandate in the California Court of Appeal, seeking interlocutory review on the issue of whether we can be classified as a rental car company within the meaning of relevant California statutory law. The Court of Appeal denied our petition. In June 2021, we filed a petition for review in the California Supreme Court. On September 1, 2021, the California Supreme Court granted our petition for review and transferred the matter to the Court of Appeal with directions to vacate its order denying our petition for writ of mandate and to issue an order directing the superior court to show cause why the relief sought in the petition should not be granted. In conformity with the Supreme Court's order, on September 9, 2021, the Court of Appeal vacated its earlier order denying our petition for writ of mandate, issued an order to show cause, and set a schedule for further briefing. The Court of Appeal heard oral arguments on June 22, 2022, and on June 28, 2022 issued a ruling, reversing the lower court and holding that we cannot be classified as a rental car company within the meaning of relevant California statutory law. San Francisco did not file a petition for review with the California Supreme Court by the deadline to do so. The litigation has been stayed until April 30, 2023 to facilitate settlement discussions.

In July 2018, we initiated a similar lawsuit against the City of Los Angeles in the United States District Court for the Central District of California, alleging that LAX's purported requirement that we obtain a rental car company permit in order for hosts to deliver cars to LAX is unlawful and seeking declaratory and injunctive relief. Los Angeles filed counterclaims against us, and one or more of our hosts, alleging violations of municipal law and airport regulations prohibiting unauthorized commercial activity on airport property, trespass, aiding and abetting trespass, unjust enrichment, and violation of the UCL. Los Angeles sought declaratory relief, a permanent injunction, damages, civil penalties of up to $2,500 for each violation under the UCL, and attorneys' fees and costs, among other relief. In June 2020, the District Court entered a preliminary injunction against us, which took effect in August 2020. In March 2021, the United States Court of Appeals for the Ninth Circuit vacated the preliminary injunction and remanded the case back to the District Court. In February 2022, we and the City of Los Angeles reached a settlement in principle to resolve all claims, which was finalized in October 2022. The agreement includes a go-forward car sharing permit at LAX and an immaterial monetary payment. The lawsuit has been dismissed.

In October 2021, the Dallas/Fort Worth International Airport Board, or the DFW Board, filed a complaint against us in Texas state court, Fort Worth Division. The DFW Board alleges that Turo user vehicle handoffs at DFW violate the DFW Board Code of Rules & Regulations, or the Airport Code, and specifically the provision governing commercial activity on airport property. The DFW Board filed an amended complaint in June 2022 naming five Turo hosts as defendants. The DFW Board pleads four causes of action: enforcement of the Airport Code provision governing commercial activity and a permanent injunction enjoining us from unpermitted commercial activity at the airport; declaratory relief that, among other things, the commercial activity provision is enforceable against us, we can be required to have our users' vehicle handoffs take place at the rental car company facility, and the DFW Board can enforce state and municipal rental car taxes against us; unjust enrichment in restitution for all disgorgement of profits obtained from alleged violations; and a demand for accounting. The DFW Board seeks declaratory and injunctive relief, an order for an accounting, attorneys' fees, and costs, and monetary relief. We filed counterclaims against DFW seeking declarations that (1) we are immune from liability under the federal Communications Decency Act, (2) DFW's proposed permitting fees and taxes violate the U.S. Constitution's dormant commerce clause, (3) DFW's proposed permit violates our rights to equal protection under the U.S. and Texas Constitutions, (4) we do not have the authority to collect and remit rental car company taxes under Texas Tax Code Chapter 152, (5) we are a marketplace provider under Texas Tax Code Chapter 151 and subject only to the provisions under that Chapter, (6) we do not have the authority to collect and remit rental car company taxes under certain local and municipal laws, and (7) DFW's proposed

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permitting charges are unreasonable under Texas Transportation Code Section 22.021(b). The parties are engaged in discovery, with summary judgment briefing due on or before June 28, 2023 and trial set for the week of September 18, 2023.

We have also settled similar litigation in connection with user activities, and our alleged enabling or advertising of those activities, at Tampa International Airport, Nashville International Airport, and Asheville Regional Airport.

While we have sought appellate review of certain negative rulings in connection with these lawsuits, there is no guarantee that we will ultimately be successful or that additional avenues for appeal would be available or advisable. In addition to significant legal fees, litigation losses could result in significant monetary liabilities and orders that could prohibit hosts' provision and guests' use of delivery services on airport property and our enabling or advertising of those delivery services, or could otherwise hurt our value proposition for hosts and guests using airport delivery and pickup by requiring us to enter into an airport operating permit with unfavorable terms. Moreover, some of our highest revenue trips originate at airports. If airports or airport regulatory authorities, including the Federal Aviation Administration, continue to impose restrictions on hosts' ability to provide delivery services at airports, including by requiring permitting or imposing fees, or otherwise burden, restrict, or limit hosts' activities at airports, it may adversely affect hosts' ability or desire to provide vehicle delivery at airports, which has and could continue to result in a reduction in trip bookings and adversely affect our business. For the 12 months ended December 31, 2022, approximately 63% of GBV was collected from guests for trips that originated from non-airport locations and approximately 37% of GBV was collected from guests for trips that originated at airport locations. The rental car industry has disclosed that it has lobbied the federal government to pass legislation that would prohibit airports that receive federal funding from permitting peer-to-peer car sharing on any terms other than those granted to rental car companies. Any requirements that force hosts to operate similarly or identically to rental car companies may also negatively impact our value proposition and harm our brand and reputation. If an airport or airport regulatory authority were to prohibit hosts' operations at an airport entirely, or impose prohibitively onerous requirements on hosts, it could significantly disrupt our operations and adversely affect our business.

In addition, we will also be subject to new laws and regulations directly applicable to our activities. There have in the past been, there are currently, and there may in the future be, many legislative proposals regarding issues that could impact our business before the United States Congress, various state legislative bodies, and various local, municipal, and foreign regulatory entities. Some of our competitors have engaged, and will likely continue to engage, or additional third parties may in the future engage, in various lobbying and political efforts to impose stricter laws and regulations on our business which, if enacted, could make compliance difficult, costly, and even impossible for us. It is not possible to predict whether or when such legislation or regulation may be adopted, and certain proposals, if adopted, could significantly harm our business, financial condition, and results of operations through limitations on how we operate our business and could decrease both host and guest usage of our platform. Any existing or new legislation applicable to us could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations, and dampen growth and usage of our platform. In addition, the application and interpretation of these laws and regulations often are uncertain, particularly in the new and rapidly evolving industry that we are helping to pioneer, such as the uncertain applicability of rental car laws to our industry, which we oppose and do not think is appropriate, but is lobbied for by entrenched incumbents in the industry we are disrupting and others such as taxing and airport authorities. If one or more regulatory agencies or court rulings determine that we are a rental car company, we, or our hosts, may be unwilling or unable to comply with the various rental car laws and regulations, which vary from state to state and locality to locality, which could harm our business, financial condition, and results of operations.

Our platform is accessible in markets around the world, each of which has its own legal, regulatory, insurance, consumer protection, and taxation requirements. Since we began our operations in 2010, there have been, and continue to be, regulatory developments that affect our ability to provide services and operate our business, including those related to the regulatory and legislative framework for peer-to-peer car sharing. For example, the laws of some states limit the protections afforded to car owners who engage in personal vehicle sharing, or

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may preclude guests who book vehicles through peer-to-peer car sharing platforms from using those vehicles in connection with commercial activity. It is uncertain if we, and/or any of our hosts in such states, are currently in compliance, or will in the future be in compliance, with such laws or what the consequences might be for lack of compliance. If we and/or hosts are found to be in violation of any such laws, it could limit hosts' ability to use our platform, restrict our growth, and have a negative impact on our brand and reputation. In addition, insurance laws in the State of New York previously prohibited the use of insurance policies like those we seek and have had issued to us in order to cover our hosts and guests without an explicit statutory exemption, which prevented us from operating the full scope of our business in the State of New York. In December 2021, the Governor of the State of New York signed a new bill into law, which authorizes peer-to-peer car sharing in the State of New York. Following the effective date of the law, we launched peer-to-peer car sharing in the State of New York on June 27, 2022. States may also enact laws and regulations related to insurance requirements that increase our compliance costs and may adversely affect our profitability and financial results. For instance, recently enacted legislation in the States of New York and Hawaii have substantially increased our compliance costs in those states. Moreover, some states, airports, or municipalities may regard us and/or some or all of our hosts as a car rental company, and therefore may require compliance with car rental regulations, fees, and/or taxes. These regulations may require a thorough permitting process, which may be further limited with a cap on the aggregate number of vehicles any one host can deliver to the airport, or may be withheld altogether. It is also unclear whether, or if, laws that prohibit rental car companies from using telematics or monitoring devices in certain circumstances would apply to our Turo Go service or to hosts who choose to install telematics or monitoring devices in their vehicles or who purchase vehicles that come standard with telematics or monitoring functionality. These and other similar developments could reduce the number of vehicles available on our platform, the number of pickup locations for vehicles booked on our platform, or otherwise harm the convenience or value proposition for guests who want to use peer-to-peer car sharing at airports, which could harm our business and results of operations. In addition, some states and foreign jurisdictions have not adopted any laws, rules, or regulations which govern peer-to-peer car sharing specifically and some foreign jurisdictions may outlaw it altogether. This uncertainty and fragmented regulatory environment create significant complexities for our business and operating model.

Further, each region in which we operate has different regulations with respect to licensing and other requirements for the provision of our services. If a governmental entity sought to apply applicable regulations in a manner that would limit or curtail our ability or willingness to provide our services in that particular region, there can be no assurance that we would be successful in defending against the application of these laws and regulations. Further, if we were required to comply with regulations and government requests that negatively impact our relations with hosts and guests, our business, operations, and financial results could be adversely impacted. As a result of regulations in certain markets, we are unable to make our service available in certain jurisdictions, which could adversely affect our business and financial results should we desire to enter those markets in the future.

Compliance with laws and regulations of different jurisdictions imposing different standards and requirements is burdensome, costly, and time-consuming. Our platform is accessed by hosts and guests in multiple states and foreign jurisdictions. Our business efficiencies and economies of scale depend on generally uniform treatment of our business model across all jurisdictions in which we operate. Compliance requirements that vary significantly from jurisdiction to jurisdiction, and from municipality to municipality, impose an added cost to our business and increased liability for compliance deficiencies. In addition, laws or regulations that could harm our business could be adopted, or reinterpreted in a manner that affects our activities, by the U.S. government, state, local, or municipal governments, airports, and regulatory agencies or by foreign governments or agencies, including but not limited to the regulation of personal and consumer information and financial or other licensing requirements. Violations or new interpretations of these laws or regulations may result in penalties, negatively impact our operations, and damage our reputation and business.

Further, our platform is subject to differing — and sometimes conflicting — laws, rules, and regulations in the numerous states and jurisdictions in which we operate. Some laws impose limitations on our hosts' ability to grow their business on our platform or could impose liability on our hosts or us. In the United States, many state

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and local laws, rules, and regulations impose or seek to impose legal restrictions and other requirements on operating our business, including airport permitting, insurance, licensure, screening, and other requirements. For example, zoning laws or homeowner's association restrictions and the like could impact the ability of hosts to operate from, or park their vehicles in, desirable locations such as at or near their homes. If such affected hosts are unwilling or unable to comply with such zoning laws, we may fail to attract or retain hosts on our platform. In addition, because global laws and regulations continue to develop and evolve rapidly, it is possible that we and our hosts may not be, or may not have been, compliant with each such applicable law or regulation.

In addition, new, changed, modified, or newly interpreted or applied tax laws, statutes, rules, regulations, ordinances, or permitting fees could increase our hosts' and our compliance, operating, and other costs, which could deter hosts from listing their vehicles on our platform and negatively affect our available network of vehicles or may make the pricing of trips less attractive to our guests who might choose other forms of transportation options available to them. Also, laws and regulations that may not be directly applicable to us, but would directly apply to hosts, may still result in potential costs and liabilities to us. Any or all of these events could adversely impact our business and financial performance.

Moreover, we are subject to regulations and laws specifically governing the internet, e-commerce, and electronic devices. These regulations and laws may cover taxation, privacy, data protection, pricing, accessibility, user generated content, copyrights, distribution, mobile communications, location services, electronic device certification, electronic waste, electronic contracts and other communications, consumer protection, web services, the provision of online payment services, unencumbered internet access to our services, the design and operation of websites, and the characteristics and quality of products and services. It is not clear how existing laws governing issues such as property ownership and libel apply to the internet, e-commerce, digital content, and web services. Jurisdictions may regulate peer-to-peer or consumer-to-consumer online businesses, including certain aspects of our platform. Unfavorable regulations and laws could diminish the demand for our products and services and increase our cost of doing business.

Laws, regulations, and orders enacted in response to the COVID-19 pandemic may also affect our business in ways that we did not anticipate, and existing laws and regulations may be interpreted and enforced differently than they have in the past in response to the COVID-19 pandemic. These laws may change rapidly, and compliance may be costly to us. For example, the shelter-in-place orders or similar measures enacted in many jurisdictions as a result of the COVID-19 pandemic may result in a loss of productivity of our workforce and our ability to effectively market to new hosts and guests, among other things.

Additionally, the U.S. Congress and other legislative and regulatory authorities in the United States and internationally have considered, and will likely continue to consider, numerous measures related to climate change and greenhouse gas emissions. Should rules establishing limitations on greenhouse gas emissions become effective, demand for our services could decline, and our business could be adversely affected.

**We are subject to stringent and changing laws, regulations, and standards, and contractual obligations related to privacy and data security. The actual or perceived failure to comply with applicable data protection, privacy, and security laws, regulations, standards, and other requirements could adversely affect our business, results of operations, and financial condition.** 

We are subject to numerous foreign and domestic laws, regulations, and standards regarding privacy and data security that govern the personal information and other data we may collect, store, use, or process. The regulatory framework for privacy issues is rapidly evolving and is likely to remain uncertain for the foreseeable future. Many government bodies and agencies have adopted, or are considering adopting, laws and regulations regarding the collection, use, storage, destruction, disclosure, and other processing of personal information, including personal data breach notification requirements. We are also required to comply with laws, rules, and regulations relating to data security. Interpretation of these laws, rules and regulations in applicable jurisdictions is subject to change and cannot be fully determined at this time.

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Privacy has become a significant issue in the United States. For example, the California Consumer Privacy Act of 2018, or CCPA, gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA also provides for civil penalties for violations and contains a private right of action for data breaches that is expected to increase litigation involving misuse of personal information of California residents. The CCPA may increase our compliance costs and potential liability. In addition, the California Privacy Rights Act of 2020, or CPRA, which amends the CCPA and goes into effect on January 1, 2023, is expected to, among other things, give California residents the additional ability to limit the use of their personal information, further restrict the use of cross-contextual or behavioral advertising, establish restrictions on the retention of personal information, expand the types of data breaches subject to the CCPA's private right of action, provide for increased penalties for CPRA violations concerning California residents under the age of 16, and establish a new California Privacy Protection Agency to implement and enforce the new law. Some observers have noted that the CCPA/CPRA could mark the beginning of a trend of states adopting more stringent privacy laws in the United States, which could further increase our compliance costs, potential liability, and adversely affect our business. For example, Virginia recently passed the Consumer Data Protection Act, Colorado recently passed the Colorado Privacy Act, Connecticut passed the Connecticut Personal Data Privacy and Online Monitoring Act, and Utah passed the Utah Consumer Privacy Act, all of which differ from the CPRA and will go into effect in 2023, and similar laws are being considered in other states and at the federal level. The enactment of such laws could have potentially conflicting requirements that would make compliance challenging and expose us to additional liability as we expand our operations. We are currently working to meet System and Organization Controls 2<sup>®</sup> (SOC2) standards but have not fully satisfied its requirements.

The global data protection landscape is also rapidly evolving, and we expect there will continue to be new and proposed laws, regulations, and industry standards concerning privacy, data protection, and information security. We cannot yet determine the impact that such future laws, regulations, and standards may have on our business. For example, in May 2018, the General Data Protection Regulation, or GDPR, went into effect in the European Union. The GDPR imposes stringent data protection requirements and has increased compliance burdens on us, including by mandating burdensome documentation requirements and granting certain rights to individuals to control how we collect, use, disclose, retain, and process their personal data. The GDPR also provides for more robust regulatory enforcement and greater penalties for noncompliance than previous data protection laws, including fines of up to €20 million or 4% of global annual revenue of any noncompliant company for the preceding financial year, whichever is greater. Violations of the GDPR can result in prohibitions on data processing, other corrective action, and class action litigation. GDPR litigation risk may increase due to a recent decision by the EU's highest court finding that a consumer protection association may bring representative actions alleging GDPR violations, even without a mandate to do so from any specific individuals and whether or not their data protection rights have been violated.

European data protection laws, including the GDPR, also generally prohibit the transfer of personal information from Europe to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal information. The Court of Justice of the European Union, or CJEU, recently raised questions about whether the European Commission's Standard Contractual Clauses, or SCCs, one of the primary mechanisms used by U.S. companies to import personal information from Europe, complies with the GDPR. While the CJEU upheld the validity of SCCs, the CJEU ruled that the underlying data transfers must be assessed on a case-by-case basis by the data controller to determine whether the personal information will be adequately protected. Additionally, the European Commission recently adopted new SCCs that will replace the SCCs adopted under the Data Protection Directive. This means we will need to update our contracts that involve the transfer of personal data outside of the European Economic Area, or EEA, to the new SCCs. Further, the French data protection authority has indicated in a recent ruling that the use of Google Analytics by European website operators involves the unlawful transfer of personal data to the United States, which may impact other business tools that we use. As supervisory authorities issue further guidance on personal data export mechanisms, including on the new SCCs, and/or start taking enforcement action, our compliance costs could increase, we may be subject to complaints and/or regulatory

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investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, this could negatively impact our business.

Further, the United Kingdom's decision to leave the European Union, often referred to as Brexit, has created uncertainty about the regulation of data protection in the United Kingdom, including with respect to whether laws or regulations will apply to us consistent with the GDPR in the future and how data transfers to and from the United Kingdom will be regulated. Following December 31, 2020, and the expiry of transitional arrangements between the United Kingdom and European Union, the data protection obligations of the GDPR continue to apply to U.K.-related processing of personal data in substantially unvaried form under the so-called "U.K. GDPR" (i.e., the GDPR as it continues to form part of U.K. law by virtue of section 3 of the EU (Withdrawal) Act 2018, as amended). However, going forward, there is increasing risk for divergence in application, interpretation, and enforcement of the data protection laws as between the United Kingdom and EEA. Further, the relationship between the United Kingdom and the EEA in relation to certain aspects of data protection law remains uncertain, including with respect to regulation of data transfers between EU member states and the United Kingdom. On June 28, 2021, the European Commission issued an adequacy decision under the GDPR which allows transfers (other than those carried out for the purposes of United Kingdom immigration control) of personal data from the EEA to the United Kingdom to continue without restriction for a period of four years ending June 27, 2025. After that period, the adequacy decision may be renewed, but only if the United Kingdom continues to ensure an adequate level of data protection. During these four years, the European Commission will continue to monitor the legal situation in the United Kingdom and could intervene at any point if the United Kingdom deviates from the level of data protection in place at the time of issuance of the adequacy decision. If the adequacy decision is withdrawn or not renewed, transfers of personal data from the EEA to the United Kingdom will require a valid "transfer mechanism," and we may be required to implement new processes and put new agreements in place, such as SCCs, to enable transfers of personal data from the EEA to the United Kingdom to continue.

In addition, EU laws (and member states' implementations of them) also regulate the processing of personal data and the protection of privacy in the context of electronic communications. These rules are currently under review, and the EU Regulation on Privacy and Electronic Communications, or the ePrivacy Regulation, is likely to be adopted in the near future and would replace the existing Privacy and Electronic Communications Directive 2002/58/EC on Privacy and Electronic Communications, otherwise known as ePrivacy Directive. The ePrivacy Regulation would impose new obligations regarding the collection and use of data in the context of electronic communications, particularly with respect to online tracking technologies and direct marketing.

We expect that there will continue to be new or amended laws, regulations, and industry standards concerning privacy, data protection, and information security proposed and enacted in various foreign jurisdictions in which we operate. For example, in Canada, the Personal Information Protection and Electronic Documents Act, or PIPEDA, and various provincial laws require that companies give detailed privacy notices to consumers, obtain consent to use personal information, with limited exceptions, allow individuals to access and correct their personal information, and report certain data breaches. In addition, Canada's Anti-Spam Legislation, or CASL, prohibits email marketing without the recipient's consent, with limited exceptions. Failure to comply with PIPEDA, CASL, or provincial privacy or data protection laws could result in significant fines and penalties or possible damage awards. For example, penalties for non-compliance with CASL are up to CAD $10 million per violation.

Compliance with these and any other applicable privacy and data security laws and regulations is a rigorous, costly, and time-intensive process, and we may be required to put in place additional mechanisms or change or reduce our services or activities to ensure compliance with the new data protection rules. Any failure or perceived failure by us or third parties working on our behalf to comply with applicable laws and regulations, any privacy and data security obligations pursuant to contract, our stated privacy or security policies, or obligations to hosts, guests, or other third parties may result in governmental enforcement actions (including fines, penalties, judgments, settlements, imprisonment of company officials, and public censure), civil claims, litigation, damage to our brand and reputation, and loss of goodwill (in relation to both existing and prospective

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hosts and guests), any of which could have a material and adverse effect on our business, results of operations, and financial condition.

**Adverse litigation judgments or settlements resulting from legal proceedings in which we may be involved could expose us to monetary damages or other monetary payments or limit our ability to operate our business.** 

We have in the past been, and may in the future become, involved in private actions, collective actions, investigations, and various other legal proceedings by hosts, guests, third parties involved in accidents with cars listed on our platform, suppliers, competitors, government agencies, airports, or others. Our automobile liability insurance providers arrange for the legal representation of us, hosts, guests, and authorized additional drivers for accidents that occur during a trip booked on our platform. Sometimes, non-approved drivers are named as defendants, in which case no defense or indemnification is available, or we and our community are named as defendants in cases where there was no authorized trip. While there has never been a settlement or judgment against us, or, to the best of our knowledge, our hosts, above our policy limits, it is possible there could be such a result in the future, in which case, we or the applicable host may be required to bear the excess costs, which could adversely affect our financial condition and results of operations.

In the ordinary course of our business, various parties have from time to time claimed, and may claim in the future, that we are liable for damages related to accidents or other incidents involving hosts, guests, or additional drivers using or who have used services offered on our platform, as well as from third parties. We are currently named as a defendant in a number of matters related to automobile accidents or other incidents involving guests, hosts, and additional drivers on our platform, other passengers, and third parties. In many of these matters, we believe we have meritorious defenses, dispute the allegations of wrongdoing, and intend to defend ourselves vigorously. We do not believe that any individual legal proceeding of this type that is currently pending or threatened legal proceeding that has arisen from these accidents or incidents is likely to have a material impact on our business, financial condition, or results of operations; however, results of litigation and claims are inherently unpredictable and legal proceedings related to such accidents or incidents, in the aggregate, could have a material impact on our business, financial condition, and results of operations. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs individually and in the aggregate, diversion of management resources, and other factors.

We have also been subject to purported class action lawsuits regarding local consumer protection laws in Montreal and domestic litigation involving consumers who purchased a protection plan.

In November 2016, a putative class action was filed against us in the State of California on behalf of consumers who purchased a protection plan. The court twice denied plaintiffs' motion for class certification. Plaintiffs were given leave to move for class certification a third time, which just one of the plaintiffs filed in December 2021 and then withdrew in January 2022, so that only one plaintiff's individual claims remained. In October 2022, we reached and finalized a settlement agreement with the one remaining plaintiff, and the lawsuit was dismissed.

In 2018, a lawsuit was filed against us and our former insurance carrier, Nautilus Insurance Company, or Nautilus, in the Superior Court of New Jersey, Middlesex County, by two former users. The plaintiffs alleged claims for violation of the New Jersey Consumer Fraud Act, unconscionable commercial practices, and false advertising against Turo in connection with Nautilus's denial of a liability insurance claim related to a Turo trip. We agreed to a settlement with the plaintiffs in December 2022.

In November 2019, a putative class action was filed against us in the Superior Court, Quebec, District of Montreal, alleging violations of local consumer protection laws. The suit sought injunctive relief and damages on behalf of the purported class. We and the purported class agreed to a class-wide settlement agreement, which was approved by the Court in April 2022. The case remains open pending final implementation of the settlement terms.

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In September 2020, two individuals filed a putative class action on behalf of all consumers in the State of Washington who purchased a protection plan. In October 2020, the complaint was amended to drop one of the two plaintiffs. The remaining plaintiff alleged that we acted as an insurer in Washington without authorization and seeks damages under Washington's Consumer Protection Act and the Uniform Declaratory Judgment Act. We removed the case from state court to federal court. We also moved to dismiss the complaint and/or to compel arbitration. In July 2021, the court ruled that lead plaintiff Helen Cattaneo lacks Article III standing to assert her claims against us in federal court and remanded the case back to King County Superior Court for further proceedings. In October 2021, the litigation was amicably resolved.

The results of any such litigation, investigations, and other legal proceedings are inherently unpredictable and expensive. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, damage our reputation, require significant amounts of management time, and divert significant resources. If any of these legal proceedings are determined adversely to us, or we enter into a settlement arrangement, we could be exposed to monetary damages or limits on our ability to operate our business, which could have an adverse effect on our business, financial condition, and results of operations. In addition, regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs individually and in the aggregate, diversion of management resources, and other factors.

**We are subject to payments-related risks.** 

We accept payments using a variety of methods, including credit and debit cards. As we offer new payment options to hosts and guests, we may be subject to additional regulations, compliance requirements, and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability.

We rely on third-party payment processors to process payments, refunds, and reimbursements made generally by guests and payments made to hosts. Under our commercial agreements with these third parties, they may terminate the relationships with us. If one of these third parties terminates its relationship with us or refuses to renew its agreement with us on commercially reasonable terms, we could incur substantial delays and expense in finding and integrating an alternative payment service provider to process payments from hosts and guests, and the quality and reliability of any such alternative payment service provider may not be comparable. Further, the software and services provided by these third parties may not meet our expectations, may contain errors or vulnerabilities, and could be compromised or experience outages. Additionally, payment processing software is complex and involves automated processes implemented by us and third parties that we engage that can be misinterpreted or susceptible to errors. These risks have caused us, and may in the future cause us, to lose our ability to accept and account for online payments or other payment transactions, make timely payments to hosts, or result in over- or underpayments to hosts, any of which could disrupt our business for an extended period of time, make our platform less convenient and attractive to users, expose user information to unauthorized disclosures and abuse, and adversely affect our ability to attract and retain hosts and guests, or materially adversely affect our business, financial condition, ability to forecast accurately, and results of operations.

If we are unable to maintain our chargeback or refund rates at levels that credit and debit card issuers and payment processors deem acceptable, these entities may increase fees for chargeback transactions or for many or all categories of transactions, may increase the rates of declining transactions, or they may terminate their relationship with us. Any increases in fees could adversely affect our operating results, particularly if we elect not to raise the prices for transactions on our platform to offset the increase. The termination of our ability to process payments on any major credit or debit card or through certain online payment service providers or payment processors could significantly impair our ability to operate our business.

We may also be subject to or voluntarily comply with a number of other laws and regulations relating to money laundering, money transmission, international money transfers, privacy and information security, and electronic fund transfers. If we are found to be in violation of such applicable laws or regulations, we could be subject to

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civil and criminal penalties or forced to cease our payments processing services or otherwise make changes to our business practices.

**Loss or material modification of our credit or debit card acceptance privileges would have an adverse effect on our business, revenue, and results of operations.** 

Substantially all of our transactions are paid for by credit or debit card, or collectively, payment cards, because it simplifies and expedites the payment process and is typically a secure form of payment. The loss of our payment card acceptance privileges would significantly limit the number of reservations accepted and materially adversely affect our business, financial condition, and results of operations.

The card networks, such as Visa, MasterCard, and American Express, have adopted rules and regulations that apply to all merchants who process and accept payment cards, including the Payment Card Industry Data Security Standard, or PCI DSS. While we are not required to be PCI DSS compliant because we do not keep full credit card information for our guests, we engage with a third party to assess our compliance with the PCI DSS on a periodic basis and make necessary improvements to our internal controls. If we fail to comply with the rules and regulations adopted by the card networks that are applicable to us, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments or facilitate other types of online payments, and our business, financial condition, and results of operations could be adversely affected. Such failure to comply may subject us to fines, penalties, damages, and civil liability and could eventually prevent us from processing or accepting payment cards. Further, there is no guarantee that, even if we comply with the rules and regulations adopted by the card networks that are applicable to us, we will be able to maintain our compliance. We also cannot guarantee that such compliance will prevent illegal or improper use of our payments systems or the theft, loss, or misuse of the payment card data of hosts or guests. These types of illegal activities may increase in the event of a macroeconomic downturn, as bad actors may seek to take increasing advantage of us, hosts, or guests. The loss of payment card acceptance privileges, or the significant modification of the terms under which we obtain payment card acceptance privileges, would have an adverse effect on our business, revenue, and operating results.

**We are subject to anti-corruption, anti-bribery, anti-money laundering, and economic sanctions laws and regulations, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition, and results of operations.** 

We are subject to the U.S. Foreign Corrupt Practices Act of 1977, as amended, U.S. domestic bribery laws, the U.K. Bribery Act 2010, the Canadian Corruption of Foreign Public Officials Act, and other anti-bribery and anti-corruption laws in the United States and other countries in which we conduct activities. Anti-bribery and anti-corruption laws are interpreted broadly and generally prohibit companies, their employees, and third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector for the purpose of obtaining or retaining business. We may in the future have operations in and deal with countries that pose a high-risk of corruption. As we expand our operations and business internationally, we may engage with business partners and third-party intermediaries to promote our services and to obtain any necessary permits, licenses, and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners, and agents, even if we do not explicitly authorize such activities.

While we have taken certain precautions and continue to enhance our policies and procedures relating to anti-bribery and anti-corruption compliance, our employees and agents may take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. Violations of anti-corruption laws may result in severe criminal or civil sanctions, prosecution, enforcement actions, fines, damages, reputational harm, adverse media coverage, and suspension or debarment from contracting with certain persons, which could adversely affect our business, financial condition, and results of operations.

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We are also subject to economic and trade sanctions regulations administered by the U.S. Treasury Department's Office of Foreign Assets Controls and governmental authorities in other countries in which we conduct activities. Such regulations prohibit the provision of most products and services to embargoed jurisdictions and sanctioned parties without the required governmental authorizations. Changes in our services or future changes in sanctions regulations may create delays in the introduction of our services in international markets or, in some cases, prevent the provision of our services to certain countries, governments, or persons altogether. Any change in economic sanctions or related legislation or change in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our services by, or in our decreased ability to provide our services to, existing or potential end-customers worldwide. We have taken certain precautions to reduce the risk of our services from being provided in violation of sanctions laws and are in the process of evaluating our policies and procedures in order to make further improvements to our sanctions compliance program. As we grow and expand, both domestically and internationally, and as our risk profile increases, we may need to update or enhance our sanctions compliance policies and procedures. Violations of sanctions regulations can result in significant fines or penalties and possible incarceration for responsible employees and managers.

**Risks related to insurance and protection** 

**The insurance coverage, discretionary risk protection, and other elements of protection plans afforded to hosts and guests may be inadequate, which could adversely affect our business, results of operations, and financial condition.** 

In order to offset our potential losses related to vehicular accidents and to give hosts and guests peace-of-mind to use our platform, protection plans are available to hosts and guests through our platform. The protection plans typically contain some combination of insurance and/or non-insurance elements. One such non-insurance element is physical damage reimbursement for damage or loss of a host's vehicle in the United States and another is the financial risk protection product in Australia that comprises the entire protection plan for hosts and guests. In the United States, third-party automobile liability insurance is provided to Turo by Travelers Excess and Surplus Lines Company. In Canada, insurance is provided by Economical Insurance Company, or one or more of its subsidiaries, for the provinces of Alberta, Newfoundland and Labrador, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, and Quebec and Insurance Corporation of British Columbia for the province of British Columbia. In the United Kingdom, insurance is provided by Aioi Nissay Dowa Insurance UK Ltd., via our broker Aon UK Ltd. Both Aon and Aioi Nissay Dowa are authorized and regulated by the Financial Conduct Authority. In France, insurance is provided by AXA France IARD. In Australia, the discretionary risk protection product, which is not insurance, is provided by Turo Travels Mutual Limited, a non-profit company formed to operate a discretionary mutual fund to provide protection to Turo hosts and guests offering vehicles and taking trips in Australia. These insurance and risk protection providers have in the past, and may in the future, impose restrictions on coverage, including with respect to makes and models of vehicles or the age of guests, which has resulted, and may in the future result, in us refusing certain vehicle listings or trip bookings, which may adversely affect our business, financial condition, and results of operations.

This insurance and protection may not provide coverage for certain types of claims, including those relating to contagious diseases such as COVID-19, under- or uninsured coverage, or medical payments or first-party payments for injuries to guests and their passengers, defective host vehicles and certain other claims, including vehicle accidents involving unauthorized drivers or guests who were visibly intoxicated during pickup, or criminal activity conducted with vehicles booked on our platform. In addition, it is difficult to predict the cost of damage that may be sustained in any vehicle accidents or other situations that are covered by the protection plans, including any trends with respect to riskier driving and increased damages claims. As a result of any of these factors, the insurance we maintain, the funds we anticipate having to expend for physical damage reimbursement, and the financial exposure limitation available to our hosts and guests may be insufficient to fully cover the costs associated with accidents or vehicle damage. Hosts' personal existing insurance coverage is not generally expected to cover damage from guests booking their vehicles on our platform. Hosts may fail to

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appreciate the differences between their personal insurance coverage and the protection plans afforded through our platform. Guests may fail to appreciate the differences between their personal insurance coverage and the protection plans afforded through our platform. Guests may also fail to understand whether their personal automobile insurance, or policies of insurance offered by credit card providers, would cover them in the event of an accident or physical damage during a peer-to-peer car sharing reservation, even if those policies might otherwise cover them during a rental car reservation. If hosts or guests are not satisfied with their protection plans or their experience with the physical damage process for reimbursement for hosts or financial exposure limitation for guests, or if our competitors offer better protection plans, hosts may not list their vehicles on our platform or may fail to maintain their existing listings, or guests may choose other alternatives, which would adversely affect our business, results of operations, and financial condition.

**We rely on third-party insurance policies to insure our operations-related risks. If our insurance coverage is insufficient for the needs of our business or our insurance providers are unable to meet their obligations, we may not be able to mitigate the risks facing our business, which could adversely affect our business, financial condition, and results of operations.** 

We procure third-party insurance policies to cover various operations-related risks, including automobile liability, employment practices liability, workers' compensation, cybersecurity and data breaches, crime, directors' and officers' liability, and general business liability. For certain types of operations-related risks or future risks related to our new and evolving services, we may not be able to, or may choose not to, acquire insurance. In addition, we may not obtain enough insurance to adequately mitigate such operations-related risks or risks related to our new and evolving services, and we may have to pay high premiums, self-insured retentions, or deductibles for the coverage we do obtain. In addition, if any of our insurance providers becomes insolvent, it would be unable to pay any operations-related claims that we make.

Insurance providers have increased premiums and deductibles for many businesses and may do so in the future. As a result, our insurance and claims expense could increase, or we may decide to increase our deductibles or self-insured retentions when our policies are renewed or replaced. Our business, financial condition, and results of operations could be adversely affected if the cost per claim, premiums, or the number of claims significantly exceeds our historical experience or coverage limits, we experience claims in excess of our coverage limits, our insurance providers fail to pay on our insurance claims, we experience claims for which coverage is not provided, or the number of claims under our deductibles or self-insured retentions differs from historical averages.

**Insurance and protection claims reserves and accruals may be inadequate and could adversely affect our business, results of operations, and financial condition.** 

Insurance and protection claims costs cannot be fully predicted, and reserves for expected costs within our deductible retention or under our contractual reimbursement contracts as part of a protection plan may be inadequate for losses. Claims frequency may change, the severity of the claims may be different than expected, and changes in our ability to collect amounts due from guests or insurance companies via subrogation may lead to adverse development of claim reserves or shortfalls in accrued amounts, any of which could adversely affect our business, results of operations, and financial condition.

**We are subject to laws and regulations relating to insurance, and we may become involved in challenges by or disputes with insurance regulators.** 

Our wholly owned subsidiary, Turo Insurance Agency, LLC, or TIA, is a licensed insurance producer, resident in Arizona. TIA is also licensed as a non-resident insurance producer, sometimes referred to as a broker, in several states, and as such is subject to the laws and regulations of each of those states. Insurance regulators have broad authority to restrict or revoke licenses of insurance producers who are found to be in violation of any

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applicable laws and regulations, and any such restriction or revocation may have an adverse effect on our business in the affected state, which could adversely affect our results of operations and financial condition. In addition, insurance regulators in different states have in the past, and may in the future, reject our, or TIA's, position regarding which aspects of the protection plans are insurance or not, whether we, or TIA, need to be licensed to adjust claims, or whether a producer's license is, or is not, necessary in connection with the insurance that is included for all hosts and their guests. Different regulations exist in each jurisdiction involving providing insurance, adjusting claims, and/or producing or brokering insurance, each of which has its own set of regulations, which may result in a complicated patchwork of requirements in the various states and foreign jurisdictions in which trips take place. From time to time, we may become involved in challenges by, or disputes with, insurance regulators. For example, insurance regulators in Maryland, New York, Washington, and Hawaii have instituted various enforcement actions and administrative proceedings against us. In December 2018, we entered into a consent order with the Maryland Insurance Administration as a final resolution to an investigation initiated in 2017. Under the consent order, we maintained that we had not violated any law, but agreed to form TIA and agreed to pay an administrative penalty. In 2014, we entered into a consent order with the New York Department of Financial Services, or NYDFS, following an investigation that was made public in March 2013. NYDFS concluded that making insurance available through our platform was a violation of New York law and we were adjusting claims without a license. Under the consent order, we agreed to pay a civil penalty and to suspend our business operations in the State of New York until we received NYDFS' prior approval. In December 2021, the Governor of the State of New York signed a new bill into law, portions of which went into effect on June 20, 2022 and the remainder on September 1, 2022, and authorizes group insurance policies for peer-to-peer car sharing in the State of New York. In April 2021, following an investigation by the Washington State Office of the Insurance Commissioner, we entered into a consent order levying a fine (OIC Order No. 20-0664) and requiring producer licensure and certain business practice changes. In November 2014, the Hawaii Insurance Division, or the Division, issued a notice of intent to impose fines and cease and desist against us. We and the Division reached a settlement in the matter. Under the settlement agreement, we maintained that we had not violated any law, but agreed that we or our affiliate will seek a license as a surplus lines producer in the State of Hawaii and agreed to pay an administrative penalty.

In addition, to the extent any of our employees sell, solicit, or negotiate insurance, they must be licensed insurance producers, and must fulfill annual continuing education requirements. In certain states in which we operate, insurance claims adjusters may also be required to be licensed and fulfill annual continuing education requirements. If we are not able to comply with applicable requirements, our business may be harmed.

In the future we may need to change the structure of our protection plans for insurance regulatory reasons. For instance, the State of Washington has required us to have a policy of insurance backing the physical damage component of the protection plan. Departments of Insurance in other states have examined this issue and determined a policy of insurance is not required to back the physical damage component of the protection plan.

The McCarran-Ferguson Act of 1945 clarified that states regulate insurance. As a result, each state has its own body of law and regulatory authority with respect to insurance. These rules are subject to change as state legislatures and regulatory agencies update their laws and regulations to address real and perceived issues and concerns. These laws and regulations are also subject to interpretation by courts. Insurance regulatory authorities have broad administrative powers to regulate all aspects of what may be deemed the offering of insurance, including the power to levy fines and monetary penalties, and restrict or revoke licenses for those found to be in violation of applicable laws and regulations. We cannot predict precisely whether or when regulatory inquiries or actions may be taken that could adversely affect us. Interpretations of regulations by regulators may change and statutes, regulations, and interpretations may be applied with retroactive effect. The National Association of Insurance Commissioners and the National Council of Insurance Legislators are the principal organizations tasked with establishing standards and best practices across the various states, the District of Columbia, and five U.S. territories, and from time to time promulgate model rules and regulations that often are the basis for insurance rules and regulations adopted by such jurisdictions. We cannot predict precisely whether or when regulatory actions may be taken that could adversely affect us or the operations of

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our regulated insurance subsidiary. Interpretations of regulations by regulators may change, and statutes, regulations, and interpretations may be applied with retroactive effect, particularly in areas such as accounting or reserve requirements.

Further, under the Statutory Conditions of a Canadian automobile insurance policy, hosts are required to disclose to their personal insurance providers that they are using their vehicle(s) for peer-to-peer car sharing, and if they fail to make such disclosure, their insurance provider may cancel the policy for misrepresentation. A policy cancellation under this circumstance may place hosts in a high-risk category and complicate securing further insurance. While our platform discloses this requirement to hosts in Canada, we cannot be sure that all hosts in Canada are in compliance with this Statutory Condition, and any failure to comply with it or other similar requirements in other jurisdictions in which we may do business in the future may result in negative effects for our hosts, which could cause harm to our brand, reputation, and business.

**If we are not able to maintain our relationship with our insurance providers around the world, our business and results of operations may be adversely affected.** 

The third parties that provide insurance coverage or liability protection to us and hosts and guests do not have an obligation to renew their agreements with us on commercially reasonable terms, or at all. Most of our insurance policies and discretionary risk arrangements are for one-year terms. We may not be able to renew our agreements on the same or better terms. If we are unable to renew our current agreements on commercially reasonable terms or if any of our agreements are prematurely terminated, the cost of insurance coverage or legal liability protection may increase substantially and coverage options available to hosts or guests may decrease substantially or be eliminated entirely, which could adversely affect our ability to attract and retain hosts and guests, or operate the business at all in the relevant jurisdiction. Moreover, if the providers of insurance or liability protection were to increase the cost of their services, we may have to increase the costs of our services for hosts and guests, which may make our services less attractive to our existing or potential hosts and guests. Any increase in costs for services for hosts or guests may only partially offset the total cost of such increases to us, which could adversely affect our results of operations.

**Risks related to taxes** 

**We could be required to collect additional sales taxes or be subject to other indirect tax liabilities in various jurisdictions, which could adversely affect our results of operations.** 

The application of indirect taxes, such as sales and use tax, value-added tax, goods and services tax, business tax, and gross receipts tax, to our business is a complex and evolving issue. Many of the statutes and regulations that impose these taxes were established before the adoption and growth of the internet and e-commerce. Significant judgment is required to evaluate applicable tax obligations, and, as a result, amounts recorded could be subject to adjustments. A number of jurisdictions have proposed or implemented new tax laws or interpreted the applicability of existing laws to businesses like ours. Laws and regulations relating to taxes as applied to our platform, and to our hosts and guests, vary greatly among jurisdictions, and it is difficult or impossible to predict how such laws and regulations will be applied. States, localities, the U.S. federal government, and tax authorities in other jurisdictions may seek to impose additional reporting, recordkeeping, and/or indirect tax collection obligations on marketplaces, including in jurisdictions where we do not have a physical presence. Most U.S. state jurisdictions have enacted laws requiring online marketplaces to collect and remit sales taxes on sales by their third-party sellers. New legislation could require us to incur substantial costs, including costs associated with tax calculation, collection, and remittance, and audit requirements, and could adversely affect our business and results of operations. We may also be subject to additional tax liabilities and related interest and penalties due to changes in indirect and non-income based taxes resulting from changes in U.S. federal, state, local, or international tax laws, administrative interpretations, decisions, policies, and positions, results of tax examinations, settlements, or judicial decisions, changes in accounting principles and

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changes to the business operations, as well as evaluation of new information that results in a change to a tax position taken in prior periods. Further, the U.S. Supreme Court held in South Dakota v. Wayfair that a U.S. state may require an online retailer to collect sales tax imposed by the state for online sales, even if the retailer has no physical presence in that state, thus permitting a wider enforcement of such sales tax collection requirements. A successful assertion by one or more tax authorities requiring us to collect taxes in jurisdictions in which we do not currently do so or to collect additional taxes in a jurisdiction in which we currently collect taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest, and additional administrative expenses, which could materially harm our business. We are under audit by various state tax authorities with regard to sales tax and other indirect tax matters primarily arising from disputes about the tax treatment of transactions performed between hosts and guests on our platform. We establish reserves for indirect tax matters when we determine that the likelihood of a loss is probable, and the loss is reasonably estimable. Accordingly, we have established a reserve for potential issues related to indirect taxes in the amount of $18.9 million as of December 31, 2022 which represents our management's best estimates of our potential liability and includes potential interest and penalties totaling $3.8 million for the year ended December 31, 2022. However, upon examination or audit, such reserves may be insufficient, and our financial condition could be harmed.

New or revised taxes would likely increase the price paid by guests and the cost of doing business for our hosts, discourage hosts and guests from using our platform, and lead to a decline in revenue, and materially adversely affect our business, results of operations, and financial condition. If we are required to disclose personal data pursuant to demands from government agencies for tax reporting purposes, our hosts, guests, and regulators could perceive such disclosure as a failure by us to comply with privacy and data protection policies, notices, and laws and commence proceedings or actions against us. If we do not provide the requested information to government agencies due to a disagreement on the interpretation of the law, we are likely to face enforcement action, engage in litigation, face increased regulatory scrutiny, and experience an adverse impact in our relationships with governments. Any of these events could adversely affect our brand, reputation, business, results of operations, and financial condition.

In addition, various states and other local jurisdictions assess car rental taxes on transactions that are deemed to be car rental transactions. We do not believe we are a car rental company, nor do we believe that current marketplace facilitator laws generally establish an obligation on us to collect and remit these taxes. Accordingly, we do not bill or collect these taxes and have only recorded minimal related reserves. We intend to maintain and defend this position vigorously, but there is no guarantee that an adverse outcome, should these transactions be challenged, would not have a material impact on our financial position, cash flows, and results of operations.

We devote significant resources, including management time, to the application and interpretation of laws and working with various jurisdictions to clarify whether taxes are applicable and the amount of taxes that apply. The application of indirect taxes to our hosts, guests, and our platform significantly increases our operational expenses as we build the infrastructure and tools to capture data and to report, collect, and remit taxes. Even if we are able to build the required infrastructure and tools, we may not be able to complete them in a timely fashion, in particular given the speed at which regulations and their interpretations can change, which could harm our relationship with governments and our reputation, and result in enforcement actions and litigation. The lack of uniformity in the laws and regulations relating to indirect taxes as applied to our platform and to our hosts and guests further increases the operational and financial complexity of our systems and processes, and introduces potential for errors or incorrect tax calculations, all of which are costly to our business and results of operations. Certain regulations may be so complex as to make it infeasible for us to be fully compliant. As our business operations expand or change, including as a result of introducing new or enhanced offerings, tiers or features, or due to acquisitions, the application of indirect taxes to our business and to our hosts and guests will further change and evolve, and could further increase our liability for taxes, discourage hosts and guests from using our platform, and materially adversely affect our business, results of operations, and financial condition.

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**Our ability to use our net operating loss, or NOL, carryforwards and certain other tax attributes may be limited.** 

As of December 31, 2022, we had federal and state NOL carryforwards of approximately $46.3 million and $109.4 million, respectively. The entire $46.3 million of federal NOLs may be carried forward indefinitely but is limited to 80% of taxable income. In addition, as of December 31, 2022, we had federal and state research and development, or R&D, tax credits, excluding uncertain tax position reserves, of approximately $2.5 million and $5.2 million, respectively, available to offset our future taxable income, if any. If not utilized, the federal R&D tax credits will begin to expire in 2041. California state R&D tax credits may be carried forward indefinitely.

It is uncertain whether various states will conform to federal tax laws. For state income tax purposes, there may be periods during which the use of net operating loss carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed.

In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an "ownership change," which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation's ability to use its pre-change NOL carryforwards, R&D credits, and other tax attributes to offset its post-change income or taxes may be limited. The completion of this offering, together with private placements and other transactions that have occurred since our inception, may trigger such ownership changes pursuant to Section 382 of the Code. We may experience ownership changes as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. If an ownership change occurs and our ability to use our NOL carryforwards or R&D credits is materially limited, it would harm our future results of operations by effectively increasing our future tax obligations.

**Changes in global tax laws could increase our worldwide tax rate and could have an adverse effect on our business, cash flow, results of operations, or financial conditions.** 

We are subject to income taxes in the United States, Canada, the United Kingdom, France, and Australia. Our effective tax rate could be adversely affected due to several factors, including but not limited to:

• changes in the relative amounts of income before taxes in the various jurisdictions in which we operate that have
differing statutory rates;

• changes in the U.S. or foreign tax laws, tax treaties, and regulations or the interpretations of them;

• changes to our assessment about our ability to realize our deferred tax assets that are based on estimates of our future
results, the prudence and feasibility of possible tax planning strategies, and the economic and political environments in which we do business;

• the outcome of current and future tax audits, examinations, or administrative appeals; and

• limitations or adverse findings regarding our ability to do business in some jurisdictions.

As we expand the scale of our international business activities, any changes in the U.S. or foreign taxation of such activities may increase our worldwide effective tax rate and harm our business, financial condition, and results of operations.

In addition, new income or other tax laws or regulations could be enacted at any time, which could adversely affect our business operations and financial performance. For example, France and the United Kingdom, among others, have each proposed or enacted taxes applicable to digital services, which includes business activities on digital platforms and would likely apply to our business. Further, existing tax laws and regulations could be interpreted, modified, or applied adversely to us. For example, the Biden administration and Congress have proposed various U.S. federal tax law changes, which if enacted could have a material impact on our business operations and financial performance. In addition, it is uncertain if and to what extent various states will conform to federal tax laws. Future tax reform legislation could have a material impact on the value of our deferred tax assets and could increase our future U.S. tax expense.

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**Risks related to our information technology and intellectual property** 

**Any major disruption or failure of our information technology systems, or our failure to successfully implement new technology effectively, could adversely affect our business and results of operations or the effectiveness of internal controls over financial reporting.** 

We rely on various information technology systems, owned by us and third parties, to manage our operations. Over the last several years, we have been and continue to implement modifications and upgrades to our systems, including making changes to legacy systems, replacing legacy systems with successor systems with new functionality, and acquiring new systems with new functionality. For example, over the next several years, we plan to implement a new enterprise resource planning system across the company. These activities subject us to inherent costs and risks associated with replacing and upgrading these systems, including impairment of our ability to fulfill trip bookings, maintain books and records, potential disruption of our internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled personnel to implement and operate the new systems, demands on management time, and other risks and costs of delays or difficulties in transitioning to new or upgraded systems or of integrating new or upgraded systems into our current systems. Our system implementations may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, the difficulties with implementing new or upgraded technology systems may cause disruptions in our business operations and have an adverse effect on our business and operations, if not anticipated and appropriately mitigated.

**Breaches and other types of security incidents of our networks or systems, or those of our third-party service providers, could negatively impact our ability to conduct our business, our brand and reputation, and our ability to retain existing hosts and guests and attract new hosts and guests, and may cause us to incur significant liabilities and adversely affect our business, results of operations, financial condition, and future prospects.** 

In the regular course of our business, we collect, use, store, transmit, and process data and information about hosts, guests, employees, and others, some of which may be sensitive, personal, or confidential. Any actual or perceived unauthorized access to or use of such data and information, or breach of our security measures or those of our third-party service providers could adversely affect our business, operations, and future prospects. If a third party or employee circumvents any security measures or those of our third-party service providers, they may access, misappropriate, delete, alter, publish, or modify this information, which could cause interruptions in our business and operations, fraud or loss to third parties, regulatory enforcement actions, litigation, indemnity obligations, competitive harm, and other possible liabilities, as well as negative publicity. Widespread negative publicity may also result from real, threatened, or perceived security compromises (or lack of adequate security measures) our industry, competitors, hosts, and guests. Concerns regarding privacy and data security could cause some hosts and guests to stop using our services, and for employees to be less satisfied with their employment with us and potentially leave the company or institute claims against us. This discontinuance in use and the potential failure to acquire new hosts and guests, or personnel issues could substantially harm our business, results of operations, financial condition, and future prospects.

Our internal computer systems, cloud-based computing services, and those of our current and any future third-party service providers are vulnerable to interruption and intrusion. Cyberattacks and other malicious internet-based activity, such as insider threats, computer malware, hacking, and phishing attempts continue to increase. From time to time, we have experienced security incidents or attempted attacks, and in some instances individuals have had their personal information compromised. We have not experienced a security incident of the materiality or significance to require a regulatory notification. We conduct thorough investigations when such incidents and/or attempted attacks occur and have, in each instance, complied with applicable law and provided individual notice when required. In addition to traditional computer "hackers" who may use malicious code (such as viruses, worms, and ransomware), social engineering, cyber extortion, and personnel theft or misuse. We may also be the subject of denial of service attacks, server malfunction, software or hardware failures, loss of data or other computer assets, adware, or other similar issues. Threat actors, nation states, and

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nation state-supported actors engage in cyberattacks, including for geopolitical reasons, continued opportunistic monetary reasons, and in connection with military conflicts and operations. During times of war and other major conflicts, we and our third-party service providers may be vulnerable to these attacks, including cyberattacks that could materially disrupt our systems, operations, and supply chain. While we have security measures in place to protect customer information and prevent data loss, service interruption, and other security breaches, we cannot guarantee that our, or our third-party service providers' security measures will be sufficient to protect against unauthorized access to, or other compromise of, personal information, confidential information, or proprietary information or of disruptions or damage to our systems. The techniques used to sabotage or to obtain unauthorized access to our platform, systems, networks, and/or physical facilities in which data is stored or through which data is transmitted change frequently, and we may be unable to anticipate such techniques or implement adequate preventative measures or stop security breaches that may arise from such techniques. As a result, our safeguards and preventive measures may not be adequate to prevent current or future cyberattacks and security incidents, including security breaches that may remain undetected for extended periods of time, which can substantially increase the potential for a material and adverse impact resulting from the breach.

We are required to comply with laws, rules, industry standards, and regulations that require us to maintain the security of personal information. We may also have contractual and other legal obligations to notify relevant stakeholders of security breaches. Failure to prevent or mitigate cyberattacks could result and has in the past resulted in unauthorized access to such data, including personal information. Most jurisdictions have enacted laws requiring companies to notify individuals, regulatory authorities, and others of security breaches involving certain types of data. In addition, our agreements with certain partners may require us to notify them in the event of a security breach. Such disclosures are and could be costly, could lead to negative publicity, may cause hosts and guests to lose confidence in the effectiveness of our security measures and not use our services, and require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach. In addition, the costs to respond to a cybersecurity event or to mitigate any identified security vulnerabilities could be significant, including costs for remediating the effects of such an event, paying a ransom, restoring data from backups, and conducting data analysis to determine what data may have been affected by the breach. In addition, our efforts to contain or remediate a security breach or any system vulnerability may be unsuccessful, and efforts and any related failures to contain or remediate any breach or vulnerabilities could result in interruptions, delays, loss in customer trust, harm to our reputation, and increases to our insurance premiums.

We may not have adequate insurance coverage for security incidents or breaches, including fines, judgments, settlements, penalties, costs, attorney fees, and other impacts that arise out of incidents or breaches. Although we maintain cyber liability insurance, we cannot assure you that such insurance coverage will adequately cover liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. The successful assertion of one or more large claims against us that exceeds our available insurance coverage, or results in changes to our insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business. Our risks are likely to increase as we continue to expand, grow our customer base, and process, store, and transmit increasingly large amounts of confidential, proprietary, and sensitive data.

**The successful operation of our business depends upon the performance and reliability of internet, mobile, and other infrastructures that are not under our control.** 

Our business depends on the performance and reliability of internet, mobile, and other infrastructures that are not under our control. We may operate in jurisdictions with limited internet connectivity, particularly as we expand internationally. Internet access and access to a mobile device are frequently provided by companies with significant market power that could take actions that degrade, disrupt, or increase the cost of users' ability to access our platform. In addition, the internet infrastructure that we and users of our platform rely on in any particular geographic area may be unable to support the demands placed upon it. Any such failure in internet

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or mobile device or computer accessibility, even for a short period of time, could interfere with the speed and availability of our platform. If our platform is unavailable when users attempt to access it, or if our platform does not load as quickly as users expect, hosts and guests may not return to our platform as often in the future, or at all, and may use our competitors' products or offerings more often. In addition, we have no control over the costs of the services provided by national telecommunications operators. If mobile internet access fees or other charges to internet users increase, consumer traffic may decrease, which may in turn cause our revenue to significantly decrease.

**We rely on mobile operating systems and app marketplaces to make our app available to hosts and guests, and if we do not effectively operate with or receive favorable placements within such app marketplaces and maintain high user reviews, our usage or brand recognition could decline and our business, financial results, and results of operations could be adversely affected.** 

We depend in part on mobile operating systems, such as Android and iOS, and their respective app marketplaces, to make our app available to hosts and guests who utilize our platform. Any changes in such systems and app marketplaces that degrade the functionality of our app or give preferential treatment to our competitors' apps could adversely affect our platform's usage on mobile devices and adversely affect our user ratings and reviews in app marketplaces. If such mobile operating systems or app marketplaces limit or prohibit us from making our app available to hosts and guests, make changes that degrade the functionality of our app, slow the rollout of our app on their app marketplaces, increase the cost of using our app, impose terms of use unsatisfactory to us, require users to opt in to enable marketing or advertising features, or modify their search or ratings algorithms in ways that are detrimental to us, or if our competitors' placement in such mobile operating systems' app marketplace is more prominent than the placement of our app, our user growth could slow. Any of the foregoing risks could adversely affect our business, financial condition, and results of operations.

As new mobile devices and mobile platforms are released, there is no guarantee that app marketplaces will continue to list our app or that certain mobile devices will continue to support our platform or effectively roll out updates to our app. In addition, in order to deliver a high-quality app, we need to ensure that our platform is designed to work effectively with a range of mobile technologies, systems, networks, and standards. We may not be successful in developing or maintaining relationships with key participants in the mobile industry that enhance users' experience. If hosts or guests who utilize our platform encounter any difficulty accessing or using our app on their mobile devices or if we are unable to adapt to changes in popular mobile operating systems, our user growth and user engagement would be adversely affected.

**We currently rely, and may in the future rely, on a small number of third-party service providers to host and deliver a significant portion of our offering, and any interruptions or delays in services from these third parties could impair the delivery of our services and adversely affect our business.** 

We use third-party cloud computing services, including Amazon Web Services and Google Cloud Platform, located in the United States and abroad. Our providers' facilities may be subject to break-ins, sabotage, acts of vandalism, acts of terrorism, and other misconduct. Similarly, their cloud services, and therefore our own cloud infrastructure, may be subject to computer viruses, denial-of-service attacks, unauthorized access or other hacks, breaches, ransomware, or similar threats. These providers are also vulnerable to damage, or interruption from extended outages of critical utilities, power loss, telecommunications failures, fires, floods, earthquakes, hurricanes, blizzards, tsunamis, typhoons, tornadoes, droughts, and similar events. We currently do not have a comprehensive disaster recovery plan or cyber incident response plan in place nor do our systems provide complete redundancy of data storage or processing. As a result, the occurrence of any of these events, a decision by our third-party service providers to shut down or cease providing us their cloud computing services without adequate notice, or other unanticipated problems could result in loss of data as well as a significant interruption in our services and harm to our reputation and brand. In addition, our third-party cloud computing services agreements are of limited durations, and our third-party data cloud computing service providers have

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no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew our agreements with these service providers on commercially reasonable terms, we may experience delays in the provision of our services until an agreement with another service provider can be arranged. Some of our third-party service providers may currently be experiencing delays, disruptions, or closures due to the COVID-19 pandemic, which may result in disruptions to the services they provide to us and our users.

In addition, we rely upon certain third parties to provide software for our platform. For example, we use Google Maps for the mapping function used to locate vehicles available for booking in a specified geographic area, which is critical to the functionality of our platform. Accordingly, we do not control all mapping functions employed by our platform or guests using our platform, and it is possible that such mapping functions may not be reliable. Further, if Google Maps increases the cost to us of using their mapping service, we may not be able to continue to use such service on commercially reasonable terms, or at all, or it could otherwise adversely affect our business, financial condition, and results of operations.

We also rely upon certain third parties to provide roadside assistance to guests. Accordingly, we do not control the quality or provision of such services to guests. Such third parties may fail to provide high-quality roadside assistance, or we may be unable to renew our agreements with these service providers on commercially reasonable terms, either of which could harm our reputation and adversely affect our business, financial condition, and results of operations.

From time to time, we may have disputes with certain of our third-party software providers. If, in connection with such a dispute, a software provider terminates its relationship with us or otherwise limits the provision of their software, data, or services to us, the availability or usage of our platform could be disrupted. If the third parties we rely upon cease to provide access to the third-party software, data, or services that we use, whether in connection with disputes or otherwise, do not provide access to such software, data, or services on terms that we believe to be attractive or reasonable, or do not provide us with the most current version of such software, data, or services, we may be required to seek comparable software, data, or services from other sources, which may be more expensive or inferior, or may not be available at all, any of which would adversely affect our business.

Moreover, we currently offer, and may in the future expand, certain additional offerings that rely on third-party software, hardware, data, or services. For example, vehicles booked through our Turo Go offering can be unlocked remotely through a guest's cellular or Bluetooth connection, which requires integration with third-party software and/or hardware. If such remote unlock technology does not work as desired, has connectivity issues, is exploited, or malfunctions, guests may experience delays or an inability to access the vehicles booked on our platform, or unauthorized persons could access our hosts' vehicles. We are also in the process of rolling out automated identification verification of guests upon pickup of vehicles booked on our platform, which relies on third-party software and services. If such identification verification software and/or services do not work as expected, unauthorized individuals may gain access to hosts' vehicles, which may impact the decision of hosts to use our platform, and also affect the financial exposure we have for damage to the host's vehicle or liability to third parties for bodily injury or property damage. If any such third-party service providers decide to limit or prohibit our ability to integrate such technologies into our platform or increase the price such that we can no longer use the technology, we may experience disruptions in service, harm to our brand and reputation, and adverse effects on our business.

**Our platform is highly complex, and any undetected errors could materially adversely affect our business, results of operations, and financial condition.** 

Our platform is a complex system composed of many interoperating components and software. Our business is dependent upon our ability to prevent system interruption on our platform. Our software, including open source software that is incorporated into our code, may now or in the future contain undetected errors, bugs, or vulnerabilities. Some errors in our software code have not been and may not be discovered until after the code has been released. We have, from time to time, found defects or errors in our system and software limitations

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that have resulted in, and may discover additional issues in the future that could result in, platform unavailability or system disruption. Any errors, bugs, or vulnerabilities discovered in our code or systems released to production or found in third-party software, including open source software, that is incorporated into our code, any misconfigurations of our systems, or any unintended interactions between systems could result in poor system performance, an interruption in the availability of our platform, incorrect payments, negative publicity, damage to our reputation, loss of existing and potential hosts and guests, loss of revenue, liability for damages, a failure to comply with certain legal or tax reporting obligations, and regulatory inquiries or other proceedings, any of which could materially adversely affect our business, results of operations, and financial condition.

**Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets.** 

We believe that our intellectual property is an essential asset of our business and that our domain names, our proprietary software code, and our technology infrastructure currently give us a competitive advantage in the market for platforms that connect hosts with guests. If we do not adequately protect our intellectual property, our brand and reputation could be harmed, hosts and guests could devalue the utility of our platform, and our ability to compete effectively would be impaired.

To establish and protect our intellectual property rights, we rely, or may in the future rely, on a combination of copyright, trademark, trade secret, and other intellectual property laws, domain name registrations, user policies, and other contractual provisions and restrictions. However, the steps we have taken and plan to take may be inadequate to deter infringement, misappropriation, dilution, or other violations of our intellectual property rights. We do not have any issued patents, and there can be no assurance that our pending patent application will result in an issued patent, or that if issued, it would be of sufficient scope to provide meaningful protection or a competitive advantage. Additionally, while we rely on trademark registrations and common law trademark rights and have registered, or have applied to register, select marks in the United States and other jurisdictions around the world, we have not registered all of our trademarks and cannot guarantee that any of our applications will be approved. Our trademarks or other intellectual property rights may be challenged or circumvented by others or invalidated through administrative process or litigation. We also enter into confidentiality agreements with our employees, consultants, service providers, and business partners and seek to control access to and distribution of our proprietary information in a commercially prudent manner. However, no assurance can be given that these steps will be effective in controlling access to our proprietary information or the distribution, use, misuse, misappropriation, reverse engineering, or disclosure of our proprietary information. These agreements may be breached, and we may not have adequate remedies for any such breach. Moreover, policing unauthorized use of our technologies, trade secrets, and intellectual property may be difficult, expensive, and time-consuming. The efforts we have taken to protect our intellectual property may not be sufficient or effective, and it may be possible for other parties to copy or otherwise obtain and use the content of our website or our platform without authorization or independently develop technologies that are substantially equivalent or superior to our platform capabilities. We may be unable to prevent competitors from acquiring domain names or trademarks that are similar to, infringe upon, or diminish the value of our trademarks, domain names, service marks, and our other proprietary rights. If we do detect violations and decide to enforce our intellectual property rights, litigation may be necessary to enforce our rights, and any enforcement efforts we undertake could be time-consuming and expensive, could divert our management's attention, and may result in a court determining that our intellectual property rights are unenforceable. Any failure to protect our intellectual property in a cost-effective and meaningful manner could have an adverse effect on our business and our ability to compete.

**We may be subject to claims that we violated the intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages, limit our ability to operate, or both.** 

We have in the past received, and may in the future receive, notices that claim we have misappropriated or misused other parties' intellectual property rights. Our success depends, in part, on our ability to develop and

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commercialize our website and platform without infringing, misappropriating, or otherwise violating the intellectual property rights of third parties. However, there may be intellectual property rights held by others, including issued or pending patents and trademarks, that cover significant aspects of our technologies, content, branding, or business methods, and we may not be aware that we are infringing, misappropriating, or otherwise violating such third-party intellectual property rights, and such third parties may bring claims alleging such infringement, misappropriation, or violation. Additionally, companies in the internet and technology industries, and other patent holders, including "non-practicing entities," seeking to profit from royalties in connection with grants of licenses or seeking to obtain injunctions, own large numbers of patents and other intellectual property and frequently enter into litigation based on allegations of infringement or other violations of intellectual property rights. Any intellectual property claims against us, regardless of merit, could be time-consuming and expensive to settle or litigate and could divert our management's attention and other resources. These claims could also subject us to significant liability for damages and could result in our having to stop using technology, content, branding, or business methods found to be in violation of another party's rights. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, content, branding, or business methods, which could require significant effort and expense and make us less competitive in the market for platforms that connect hosts with guests. If we cannot license or develop technology, content, branding, or business methods for any allegedly infringing aspect of our business, we may be unable to compete effectively. Any of these results could harm our operating results.

**Our use of open source software could adversely affect our ability to offer our services and subject us to possible litigation.** 

We use open source software in connection with the development of our website and platform. Open source software is generally licensed by its authors or other third parties under open source licenses, which in some instances may subject us to certain unfavorable conditions, including requirements that we offer our products that incorporate the open source software for no cost, that we make publicly available the source code for any modifications or derivative works we create based upon, incorporating, or using the open source software, or that we license such modifications or derivative works under the terms of the particular open source license. From time to time, companies that use open source software have faced claims challenging the use of open source software or compliance with open source license terms. We could be subject to lawsuits by parties claiming ownership of what we believe to be open source software or claiming noncompliance with open source licensing terms. Some open source licenses require users who distribute or make available across a network software and services that include open source software to make available all or part of the source code of such software, which in some circumstances could include valuable proprietary code. While we monitor the use of open source software and try to ensure that none is used in a manner that would require us to disclose our proprietary source code or that would otherwise breach the terms of the open source license, such use could inadvertently occur. Furthermore, there is an increasing number of open-source software license types, almost none of which have been tested in a court of law, resulting in a dearth of guidance regarding the proper legal interpretation of such licenses. If we were to receive a claim of non-compliance with the terms of any of our open source licenses, we may be required to pay damages for breach of contract, publicly release certain portions of our proprietary source code, or expend substantial time and resources to re-engineer some or all of our software. In addition, the use of third-party open source software typically exposes us to greater risks than the use of third-party commercial software because open-source licensors generally do not provide warranties or controls on the functionality or origin of the software. Use of open source software may also present additional security risks because the public availability of such software may make it easier for hackers and other third parties to determine how to compromise our platform. Any of the foregoing could be harmful to our business, results of operations, or financial condition, and could help our competitors develop products and services that are similar to or better than ours.

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**Risks related to this offering and ownership of our common stock** 

**No public market for our common stock currently exists, and an active and liquid trading market for our common stock may not develop or be sustained following this offering.** 

Prior to this offering, there has been no public market for our common stock. We have been approved to list our common stock on the New York Stock Exchange under the symbol "TURO." However, we cannot assure you that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the liquidity of any trading market, your ability to sell your shares of our common stock when desired, or the price that you may obtain for your shares. Further, an inactive market may also impair our ability to raise capital by selling shares of our common stock and may impair our ability to enter into strategic partnerships or acquire companies or technologies by using our common stock as consideration.

**The market price of our common stock may be volatile or may decline regardless of our operating performance, and you could lose all or part of your investment.** 

The initial public offering price of our common stock was determined by negotiations between us and the underwriters and does not purport to be indicative of prices at which our common stock will trade upon completion of this offering. The stock market in general, and the market for stocks of technology companies in particular, has been highly volatile. As a result, the market price of our common stock is likely to be volatile, and investors in our common stock may experience a decrease, which could be substantial, in the value of their common stock or the loss of their entire investment for a number of reasons, including reasons unrelated to our operating performance or prospects. The market price of our common stock could be subject to wide fluctuations in response to a broad and diverse range of factors, including those described elsewhere in this "Risk factors" section and this prospectus and the following:

• actual or anticipated fluctuations in our results of operations;

• our actual or anticipated operating performance and the operating performance of our competitors or companies perceived
to be similar to us;

• changes in the financial projections we provide to the public or our failure to meet these projections;

• failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities
analysts who follow our company, or our failure to meet the estimates or the expectations of investors;

• additions or departures of board members, management, or key personnel;

• rumors and market speculation involving us or other companies in our industry;

• announcements by us or our competitors of significant innovations, new products, services, features, integrations,
capabilities, acquisitions, strategic investments, partnerships, joint ventures, or capital commitments;

• changes in the anticipated future size or growth rate of our addressable markets;

• the legal and regulatory landscape and changes in the application of existing laws or adoption of new laws that impact
our business, hosts, and/or guests, including changes in short-term occupancy and tax laws;

• legal and regulatory claims, litigation, or pre-litigation disputes and other
proceedings;

• health epidemics, such as the COVID-19 pandemic, influenza, and other highly
communicable diseases or viruses;

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• other events or factors, including those resulting from war, incidents of terrorism, or responses to these events;

• sales or expected sales of our common stock by us, our officers, directors, principal stockholders, and employees;

• expiration of market standoff or lock-up agreements; and

• general economic, industry, and market conditions, including inflation.

If the market price of our common stock after this offering does not exceed the initial public offering price, you will not realize any return on your investment in us and will lose some or all of your investment. In addition, stock markets with respect to newly public companies, particularly companies in the technology industry, have experienced significant price and volume fluctuations that have affected and continue to affect the stock prices of these companies. Stock prices of many companies, including technology companies, have fluctuated in a manner often unrelated to the operating performance of those companies. Broad market and industry factors may affect the market price of our common stock, regardless of our actual operating performance. In the past, companies that have experienced volatility in the trading price for their stock have been subject to securities class action litigation. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business, results of operations, and financial condition.

**Following this offering, our principal stockholders will continue to have significant influence over all matters submitted to stockholders for approval, which could limit your ability to affect the outcome of key transactions, including a change of control. Further, many of our current directors were appointed by our principal stockholders.** 

Following the completion of this offering, our executive officers, directors, and greater than 5% stockholders, in the aggregate, will beneficially own approximately % of our outstanding common stock (assuming no exercise of the underwriters' option to purchase additional shares and no exercise of outstanding options or warrants), without giving effect to any purchases that any of these holders may make through our directed share program. Further, many of our current directors were appointed by our principal stockholders. As a result, such persons or their appointees to our board of directors, acting together, will have the ability to control or significantly influence all matters submitted to our board of directors or stockholders for approval, including the appointment of our management, the election and removal of directors, and the approval of any significant transaction, as well as our management and business affairs. In addition, if any of our executive officers, directors, and greater than 5% stockholders purchase shares in this offering, or if any of our other current investors purchase shares in this offering and become greater than 5% stockholders as a result, the ability of such persons, acting together, to control or significantly influence such matters will increase. This concentration of ownership may have the effect of delaying, deferring, or preventing a change in control, impeding a merger, consolidation, takeover, or other business combination involving us, or discouraging a potential acquiror from making a tender offer or otherwise attempting to obtain control of our business, even if such a transaction would benefit other stockholders, and may affect the market price of our common stock.

**We do not anticipate paying any dividends on our common stock and, consequently, our stockholders' ability to achieve a return on their investment will depend on appreciation of the value of our common stock.** 

You should not rely on an investment in our common stock to provide dividend income. We have never declared or paid any cash dividends on our capital stock, and we do not intend to pay any cash dividends in the foreseeable future. We expect to retain future earnings, if any, to maintain our existing operations and fund the development and growth of our business. Any future determination to pay dividends on our capital stock will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments. As a result, investors seeking cash dividends should not purchase our common stock.

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**Future sales of our common stock by our existing stockholders in the public market, including when the lock-up or market standoff period ends, could cause our stock price to fall.** 

If our existing stockholders sell, or indicate an intention to sell, substantial amounts of our common stock in the public market after the lock-up, market standoff period, and other legal restrictions on resale discussed in this prospectus lapse, the trading price of our common stock could decline. In addition, the perception in the market that holders of a large number of shares of our common stock intend to sell their shares could reduce the market price of our common stock.

Based upon the number of shares outstanding as of December 31, 2022, upon the completion of this offering, we will have outstanding a total of approximately million shares of common stock (assuming no exercise of the underwriters' option to purchase additional shares and no exercise of outstanding options or warrants). Of these shares, all of the shares of our common stock sold in this offering, plus any shares sold upon exercise of the underwriters' option to purchase additional shares, will be freely tradable, without restriction, in the public market immediately following this offering.

In connection with this offering, subject to certain customary exceptions, we, all of our directors, executive officers, the selling stockholders, and certain other holders of our common stock have entered into, or will enter into, lock-up agreements with the underwriters. The lock-up agreements pertaining to this offering will expire days from the date of this prospectus. After the lock-up agreements expire, as of December 31, 2022, up to approximately million additional shares of our common stock will be eligible for sale in the public market. Of those additional shares, approximately million shares are held by our directors, executive officers, and other affiliates and will be subject to Rule 144 under the Securities Act of 1933, as amended, or the Securities Act. Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC may, however, in their sole discretion, permit our officers, directors, and the other stockholders who are subject to these lock-up agreements to sell shares prior to the expiration of the lock-up agreements.

Our executive officers, directors, and certain holders of our capital stock and securities convertible into or exchangeable for our capital stock have entered into lock-up agreements with Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, on behalf of the underwriters, under which they have agreed, subject to specific exceptions including early release provisions, to certain restrictions on their ability to transfer any shares of our common stock or securities directly or indirectly convertible into or exchangeable or exercisable for our common stock during the period ending on the date that is 180 days after the date of this prospectus. We refer to such period as the lock-up period. Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC may release certain stockholders from the lock-up agreements prior to the end of the lock-up period. See the section titled "Underwriters" for further information about these agreements, including the provisions related to early release and transfer conditions.

Several stockholders are subject to restrictions contained in a variety of market standoff agreements with us that include restrictions on the sale, short sale, loan, granting of any option to purchase, or other disposition of our securities, and in some cases other restrictions. The forms and specific restrictive provisions within these market standoff provisions vary significantly. For example, some of these market standoff agreements do not specifically restrict hedging transactions and others may be subject to different interpretations between us and stockholders as to whether they restrict hedging. Sales, short sales, or hedging transactions involving our securities, whether before or after this offering and whether or not we believe them to be prohibited, could adversely affect the price of our common stock. In addition, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC may waive the lock-up agreements entered into by certain of our stockholders with the underwriters before they expire.

We intend to file a registration statement on Form S-8 under the Securities Act covering all the shares of common stock subject to outstanding equity awards and shares reserved for issuance under our stock plans. That registration statement will become effective immediately on its filing, and shares covered by that registration statement will be eligible for sale in the public markets, subject to Rule 144 limitations applicable to

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affiliates and any lock-up and market standoff agreements described above. If these additional shares are sold, or if it is perceived that they will be sold in the public market, the trading price of our common stock could decline. For a detailed description of our outstanding equity securities, see the section titled "Capitalization."

After this offering, the holders of up to 188,127,908 shares of our common stock, or approximately % of our total outstanding common stock based upon the number of shares outstanding as of December 31, 2022, will be entitled to rights with respect to the registration of their shares under the Securities Act, including requiring us to file registration statements with the Securities and Exchange Commission, or the SEC, covering their shares or to include their shares in registrations statements that we may file ourselves, subject to vesting schedules and to the lock-up agreements and agreements with market standoff provisions described above. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares purchased by affiliates. Any sales or perceived potential sales of securities by these stockholders could have a material and adverse effect on the trading price of our common stock.

**Purchasers in this offering will experience immediate and substantial dilution in the net tangible book value of their shares.** 

Assuming that the initial public offering price of our common stock is $ per share (the midpoint of the estimated price range appearing on the cover page of this prospectus), the initial public offering price of our common stock will be substantially higher than the net tangible book value per share of our common stock immediately after this offering. Therefore, if you purchase shares of our common stock in this offering, you will suffer an immediate dilution of $ in net tangible book value per share from the assumed initial public offering price, assuming an initial public offering price of our common stock of $ per share (the midpoint of the estimated price range appearing on the cover page of this prospectus). If the underwriters exercise their option to purchase additional shares, or if we issue any other securities or convertible debt in the future, investors will experience further dilution. For more information, including information as to how we compute net tangible book value per share, see the section titled "Dilution."

**Additional issuances of our capital stock could result in significant dilution to our stockholders.** 

We may issue our capital stock or securities convertible into our capital stock from time to time in connection with a financing, acquisition, investment, or otherwise. Additional issuances of our capital stock will result in dilution to existing holders of our capital stock. Also, to the extent outstanding options and warrants to purchase our capital stock are exercised, including the warrant held by IAC Inc., or the IAC Warrant, there will be further dilution. In addition, we rely on equity-based compensation as an important tool in recruiting and retaining employees. The amount of dilution due to equity-based compensation of our employees or other additional issuances could be substantial, depending upon the size of the issuance or exercise. Any such issuances could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.

**Our business and financial performance may differ from any projections that we disclose or any information that may be attributed to us by third parties.** 

From time to time, we may provide guidance via public disclosures regarding our projected business or financial performance. However, any such projections involve risks, assumptions, and uncertainties, and our actual results could differ materially from such projections. Factors that could cause or contribute to such differences include, but are not limited to, those identified in this "Risk factors" section, some or all of which are not predictable or within our control. Other unknown or unpredictable factors also could adversely impact our performance, and we undertake no obligation to update or revise any projections, whether as a result of new information, future events, or otherwise. In addition, various news sources, bloggers, Redditors, and other publishers often make statements regarding our historical or projected business or financial performance, and you should not rely on any such information even if it is attributed directly or indirectly to us.

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**Our trading price and trading volume could decline if securities or industry analysts do not publish research about our business, or if they publish unfavorable research.** 

Equity research analysts do not currently provide coverage of our common stock, and we cannot assure you that any equity research analysts will adequately provide research coverage of our common stock after the listing of our common stock on the New York Stock Exchange. A lack of adequate research coverage may harm the liquidity and trading price of our common stock. To the extent equity research analysts do provide research coverage of our common stock, we will not have any control over the content and opinions included in their reports. The trading price of our common stock could decline if one or more equity research analysts downgrade our stock or publish other unfavorable commentary or research. If one or more equity research analysts cease coverage of our company, or fail to regularly publish reports on us, the demand for our common stock could decrease, which in turn could cause our trading price or trading volume to decline.

**We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.** 

We currently intend to use the net proceeds from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. In addition, we may use a portion of the net proceeds to acquire complementary businesses, products, services, or technologies. We have not yet determined the manner in which we will allocate the net proceeds we receive from this offering and as a result, our management will have broad discretion in the allocation and use of the net proceeds. See the section titled "Use of proceeds."

Our management will have broad discretion in the application of the net proceeds from this offering, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. Accordingly, investors will need to rely on our judgment with respect to the use of these proceeds. The failure by our management to allocate or use these funds effectively could harm our ability to continue maintaining and expanding our business. Pending their use, we may invest the net proceeds we receive from this offering in a manner that does not produce income or that destroys value. Our ultimate use of the net proceeds from this offering may vary substantially from the currently intended use.

**In making your investment decision, you should understand that we and the underwriters have not authorized any other party to provide you with information concerning us or this offering.** 

You should carefully evaluate all of the information in this prospectus before investing in our common stock. We have in the past received, and may continue to receive, a high degree of media coverage, including coverage that is not directly attributable to statements made by our officers and employees, that incorrectly reports on statements made by our officers or employees or that is misleading as a result of omitting information provided by us, our officers, or our employees. We and the underwriters have not authorized any other party to provide you with information concerning us or this offering.

**Certain provisions in our corporate charter documents and under Delaware law may prevent or hinder attempts by our stockholders to change our management or to acquire a controlling interest in us, and the trading price of our common stock may be lower as a result.** 

There are provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as they will be in effect immediately prior to the completion of this offering, that may make it difficult for a third party to acquire, or attempt to acquire, control of our company, even if a change in control were considered favorable by our stockholders. These anti-takeover provisions include:

• the ability of our board of directors to determine the number of directors and to fill any vacancies and newly created
directorships;

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• a provision requiring approval by holders of at least 66 2/3% of our outstanding common stock to remove any of our
directors;

• a prohibition on cumulative voting for directors;

• the requirement of approval by holders of at least 66 2/3% of our outstanding common stock to amend some provisions in
our amended and restated certificate of incorporation and amended and restated bylaws;

• authorization of the issuance of "blank check" preferred stock that our board of directors could use to
implement a stockholder rights plan;

• an inability of our stockholders to call special meetings of stockholders; and

• a prohibition on stockholder actions by written consent, thereby requiring that all stockholder actions be taken at a
meeting of our stockholders.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which prohibit a person who owns 15% or more of our outstanding voting stock from merging or combining with us for a three-year period beginning on the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. Any provision in our amended and restated certificate of incorporation, our amended and restated bylaws, or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.

**Our amended and restated certificate of incorporation will provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.** 

Our amended and restated certificate of incorporation, as will be in effect immediately prior to the completion of this offering, will provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

• any derivative action or proceeding brought on our behalf;

• any action asserting a claim of breach of fiduciary duty;

• any action asserting a claim against us arising under the Delaware General Corporation Law, our amended and restated
certificate of incorporation, or our amended and restated bylaws, as will be in effect immediately prior to the completion of this offering; and

• any action asserting a claim against us that is governed by the internal-affairs doctrine or otherwise related to our
internal affairs.

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doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. While the Delaware courts have determined that such operations choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court when a provision in the certificate of incorporation requires such filing, there is no guarantee that courts of appeal will affirm the enforceability of such provisions or that state trial courts hearing such suits *de novo* will continue to enforce such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions, and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions.

These exclusive forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business, financial condition, results of operations, and prospects. If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, financial condition, results of operations, and prospects.

**We are an emerging growth company, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.** 

We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and, for so long as we continue to qualify as an emerging growth company, we have the option to utilize certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports, registration statements, and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (A) following the fifth anniversary of the completion of this offering, (B) in which we have total annual revenue of at least $1.235 billion, or (C) in which we are deemed to be a large accelerated filer, with at least $700 million of equity securities held by non-affiliates as of the prior June 30th, and (ii) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. While we have not made such an irrevocable election, we have not delayed the adoption of any applicable accounting standards. Further, we may take advantage of some of the other reduced regulatory and reporting requirements that will be available to us so long as we qualify as an emerging growth company.

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Among other things, this means that our independent registered public accounting firm will not be required to provide an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as an emerging growth company, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected. Likewise, so long as we qualify as an emerging growth company, we may elect not to provide you with certain information, including certain financial information and certain information regarding compensation of our executive officers, that we would otherwise have been required to provide in filings we make with the SEC, which may make it more difficult for investors and securities analysts to evaluate our company. As a result, investor confidence in our company and the market price of our common stock may be adversely affected. Further, we cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile.

**The requirements of being a public company may strain our resources, divert management's attention, and affect our ability to attract and retain executive management and qualified board members.** 

As a public company, we will be subject to the reporting requirements of the Exchange Act, the listing standards of the New York Stock Exchange, and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming, and costly, and place significant strain on our personnel, systems, and resources. Further, several members of our management team do not have prior experience in running a public company. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management's attention may be diverted from other business concerns, which could harm our business, results of operations, and financial condition.

Although we are in the process of hiring additional employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants, which will increase our operating expenses. In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure create uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest substantial resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expense and a diversion of management's time and attention from business operations to compliance activities.

If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us, and our business may be harmed. We also expect that being a public company that is subject to these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly members who can serve on our audit committee and compensation committee, and qualified executive officers.

As a result of the disclosure obligations required of a public company, our business and financial condition will become more visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business, results of operations, and

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financial condition would be harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, would divert the resources of our management and harm our business, results of operations, and financial condition.

**As a public reporting company, we will be subject to rules and regulations established from time to time by the SEC and the New York Stock Exchange regarding our internal controls over financial reporting. We may not complete needed improvements to our internal controls over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock and your investment.** 

Upon completion of this offering, we will become a public reporting company subject to the rules and regulations established from time to time by the SEC and the New York Stock Exchange. These rules and regulations will require, among other things, that we establish and periodically evaluate procedures with respect to our internal controls over financial reporting. Reporting obligations as a public company are likely to increase our costs and place a considerable strain on our financial and management systems, processes, and controls, as well as on our personnel. In addition, as a public company we will be required to document and test our internal controls over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal controls over financial reporting by the time our annual report for the year ending December 31, 2024 is due and thereafter, which will require us to document and make significant changes to our internal controls over financial reporting. Likewise, our independent registered public accounting firm will be required to provide an attestation report on the effectiveness of our internal controls over financial reporting. If our management is unable to certify the effectiveness of our internal controls or if our independent registered public accounting firm cannot deliver a report attesting to the effectiveness of our internal controls over financial reporting, or if we identify or fail to remediate any significant deficiencies or material weaknesses in our internal controls such as those described more fully below, we could be subject to regulatory scrutiny and a loss of public confidence, which could seriously harm our reputation and the market price of our common stock. In addition, if we do not maintain adequate financial and management personnel, processes, and controls, we may not be able to manage our business effectively or accurately report our financial performance on a timely basis, which could cause a decline in our common stock price and may seriously harm our business.

**We have previously identified material weaknesses relating to lack of accounting resources and related internal controls. If our remediation efforts over any material weaknesses are not effective, or if we experience additional material weaknesses or otherwise fail to design and maintain effective internal control over financial reporting, our ability to accurately and effectively report our financial condition and results of operations in a timely manner or comply with applicable laws and regulations could be impaired, which may adversely affect investor confidence in us, subject us to litigation or significant financial or other penalties, and, as a result, affect the value of our common stock and our financial condition.** 

As a public company, we will be required to maintain internal control over financial reporting and to report any material weaknesses in those internal controls, subject to any exemptions that we avail ourselves to under the JOBS Act. For example, we will be required to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. We are in the process of designing, implementing, and testing internal control over financial reporting required to comply with this obligation.

In connection with the preparation of our consolidated financial statements for the years ended December 31, 2019, 2020, and 2021, we identified material weaknesses relating to a lack of accounting resources and related internal controls. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

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We did not design or maintain an effective control environment commensurate with our financial reporting requirements. We did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company. This contributed to the following material weaknesses:

• We did not have adequate controls in place to prevent inappropriate segregation of duties in manual journal entries.
Specifically, we did not design and maintain controls to ensure (i) the appropriate segregation of duties between the preparer and reviewer of journal entries in the preparation and review of journal entries and (ii) journal entries were
reviewed at the appropriate level of precision, including a lack of evidence to support that a review had been performed.

• We had limited financial accounting resources and lack of risk assessment procedures, which led to inadequate design of
internal controls that resulted in a material weakness associated with accounting for certain routine and non-routine transactions, inclusive of instances where certain accounts were not appropriately or timely reconciled and errors existed in
certain data sets used by management to reconcile accounts and the impact of certain complex transactions were not completely and appropriately reflected in our consolidated financial statements.

Each of the material weaknesses described above, if not remediated, could result in a misstatement of one or more account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected, and, accordingly, we and our independent public accounting firm determined that these control deficiencies constitute material weaknesses. We have concluded that these material weaknesses arose because, as a private company, we did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.

We have taken measures to address these material weaknesses in our internal controls. During 2020, we completed our remediation efforts related to the inappropriate segregation of duties in manual journal entries control findings and have concluded that this material weakness no longer exists as of December 31, 2020. During 2022, we completed our remediation efforts related to limited financial accounting resources and lack of risk assessment procedures and have concluded that this material weakness no longer exists as of December 31, 2022. Specifically, we took the following actions:

• We increased resources dedicated to our accounting, tax, finance, internal audit, and IT teams, including personnel with
additional knowledge, experience, and training, to ensure we have adequate staff, to segregate key duties, and to comply with company policies and procedures.

• We assessed our internal control environment and performed a comprehensive risk assessment of our internal controls over
financial reporting.

• We implemented and improved systems, policies, and procedures for key processes which impact financial reporting, as well
as enhanced the design of certain existing review controls and implemented new review and process level controls.

• We hired a third party to assist with the implementation of, and to review and provide feedback on, our remediation plan
and advise us on best practices.

Our completion of the remediation of this material weakness does not provide assurance that the remediation or other controls will continue to operate effectively in the future.

We cannot assure you that the remediation measures we have taken to date, will be sufficient to avoid the identification of additional material weaknesses in the future. If we identify new material weaknesses in the future, there could continue to be a reasonable possibility that these control deficiencies or others could result in a material misstatement of our annual or interim consolidated financial statements that would not be prevented or detected on a timely basis.

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The process of designing and implementing internal control over financial reporting required to comply with the disclosure and attestation requirements of Section 404 of the Sarbanes-Oxley Act is time consuming, complicated, and costly. If during the evaluation and testing process we identify additional material weaknesses in our internal control over financial reporting, our management may be unable to assert that our internal control over financial reporting is effective. Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to our internal control over financial reporting. If we are unable to assert that our internal control over financial reporting is effective, or when required in the future, if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected, and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.

**Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.** 

Upon completion of this offering, we will become subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management and recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. In addition, controls can be circumvented by the individual acts of some persons, by collusion of two or more persons or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and may not be detected.

**Our results of operations and financial condition could be materially and adversely affected by changes in accounting principles.** 

The accounting for our business is subject to change based on the evolution of our business model, interpretations of relevant accounting principles, enforcement of existing or new regulations, and changes in policies, rules, regulations, and interpretations of accounting and financial reporting requirements of the SEC or other regulatory agencies. The adoption of a change in accounting principles or interpretations could have a significant effect on our reported results of operations and could affect the reporting of transactions completed before the adoption of such change. It is difficult to predict the impact of future changes to accounting principles and accounting policies over financial reporting, any of which could adversely affect our results of operations and financial condition and could require significant investment in systems and personnel.

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## Special note regarding

## forward-looking statements
This prospectus contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "aim," "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "toward," "will," or "would," or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

• our ability to attract and retain hosts and guests;

• our expectations regarding our financial performance, including net revenue, cost of net revenue, gross profit, or gross
profit as a percentage of net revenue, contribution profit (loss), contribution margin, adjusted EBITDA, operating expenses, key metrics, and other results of operations, and our ability to achieve or maintain future profitability;

• our expectations regarding future operating performance, including Days and Gross Booking Value;

• the effects of seasonal trends on our results of operations;

• the effects of COVID-19 or other public health crises on our business and results
of operations, the travel and transportation industries, travel and transportation trends, and the global economy generally;

• our ability to effectively manage our growth and expand our infrastructure and maintain our corporate culture;

• our estimated market opportunity and anticipated economic, industry, and host, guest, and consumer trends, growth rates,
and challenges in our business and the industries and markets in which we operate, including related to inflation and the rental car shortage;

• our ability to gauge and adapt to industry trends and changing host, guest, and consumer preferences in products,
features, use cases, and sustainability of such products offered on our platform;

• anticipated technology trends and developments and our ability to address those trends and developments with our products
and offerings;

• the effects of increased competition in our markets and our ability to successfully compete with companies that are
currently in, or may in the future enter, the markets in which we operate;

• our ability to continue to grow across all major global markets and manage expansion into international markets;

• our ability to identify and complete acquisitions, investments, or partnerships that complement and expand the
functionality of our platform and products, features, and use cases;

• the availability of capital to grow our business;

• our ability to maintain and expand our relationships with strategic partners;

• our ability to timely and effectively scale and adapt our products, features, and use cases;

• our ability to innovate and enhance existing products, features, and use cases;

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• our ability to develop new products, features, and use cases and bring them to market in a timely manner, and whether our
hosts and guests and prospective hosts and guests will adopt these new products, features, and use cases;

• our reliance on key personnel and our ability to attract, maintain, and retain management and skilled personnel;

• the safety, affordability, and convenience of our platform and our offerings;

• our ability to comply or remain in compliance with laws and regulations that currently apply or become applicable to our
business in the United States and internationally and our expectations regarding various laws and restrictions that relate to our business;

• our ability to successfully defend litigation brought against us and the outcome of any legal or administrative
proceedings;

• our ability to maintain, protect, and enhance our brand and intellectual property;

• our expectations regarding our income tax liabilities;

• our ability to prevent disturbance to our information technology systems;

• the increased expenses associated with being a public company;

• our ability to design, implement, and maintain proper and effective internal control over financial reporting;

• the future trading prices of our common stock; and

• our anticipated use of the net proceeds from this offering.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the sections titled "Prospectus summary — Risk factors summary," "Risk factors," and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this prospectus. While we believe such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information,

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actual results, revised expectations, or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

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## Market, industry, and other data
This prospectus contains statistical data, estimates, forecasts, and other information concerning our industry, including market size and growth of the market in which we participate, that are based on industry publications and reports. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled "Risk factors." These and other factors could cause results to differ materially from those expressed in these publications and reports.

The sources of certain statistical data, estimates, and forecasts contained in this prospectus are the following independent industry sources:

• American Automobile Association (AAA), *Your Driving Costs*, 2022.

• AppFigures, *App Teardown — Turo Wins the Car Rental Game*, June 1, 2021.

• AZ Central, *Top Workplaces in Arizona*, 2021.

• AZ Central, *Top Workplaces in Arizona*, 2022.

• Bay Area News Group, *Bay Area Top Workplaces 2018*, 2018.

• Bay Area News Group, *Bay Area Top Workplaces 2019*, 2019.

• Bay Area News Group, *Bay Area Top Workplaces 2020*, 2020.

• Bay Area News Group, *Bay Area Top Workplaces 2021*, 2021.

• Bay Area News Group, *Bay Area Top Workplaces 2022*, 2022.

• Built In SF, *Best Midsize Companies to Work 2022*, 2022.

• Destination Analysts, *Update on American Travel in the Period of Coronavirus — Week of April 19th*,
April 18, 2021.

• Federal Reserve Economic Data (FRED), *Motor Vehicle Loans Owned and Securitized, Outstanding*, July 2022.

• Fitch Solutions, *Electric Vehicle Share in the US Reaches Record Levels in 2020, According to IHS Markit*,
February 19, 2021.

• Glassdoor, *Top CEOs 2019 — Top Small & Medium*, 2019.

• Glassdoor, *Turo Reviews*, November 22, 2021.

• Great Place to Work, *Best Workplaces for Parents 2022 — Small and Medium*, 2022.

• Great Place to Work and Fortune, *Fortune Best Medium Workplaces 2022*, 2022.

• Great Place to Work and Fortune, *Fortune Best Workplaces in Technology 2022 — Small and Medium*, 2022.

• Great Place to Work and Fortune, *Fortune Best Workplaces in the Bay Area 2021 — Small and Medium*, 2021.

• Great Place to Work and Fortune, *Fortune Best Workplaces in the Bay Area 2022 — Small and Medium*, 2022.

• International Air Transport Association, *2020 Worst Year in History for Air Travel Demand*, February 3, 2021.

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##### [**Table of Contents**](#toc)
• International Road Federation, *2021 IRF World Road Statistics*, 2021.

• Fitch Solutions, *Passenger Car Fleet*, 2022.

• Journal of Planning Education and Research *, The Poverty of the Carless: Toward Universal Auto Access*, February
2019. • Kelley Blue Book, *Average New Car Price Falling; Incentives Making a Comeback*, March 8, 2023.

• Kelley Blue Book, *New-Car Transaction Prices Rise Nearly 3 Percent in January 2016, According To Kelley Blue Book*, February 2, 2016.

• MIT Senseable City Lab (SCL), Singapore — MIT Alliance for Research and Technology (SMART), and Allianz, *Unparking*, August 2018.

• The Mountain-Plains Consortium, *Impacts of Ridesourcing on VMT, Parking Demand, Transportation Equity, and Travel Behavior*, March 2019.

• National Association of City Transportation Officials, *Shared Micromobility in the U.S.: 2019 ,* 2020.

• The Organisation for Economic Co-operation and Development, *Prices and purchasing power parities (PPP)*, 2021.

• Phoenix Business Journal, *2020 Best Places to Work*, 2020.

• Phoenix Business Journal, *2021 Best Places to Work*, 2021.

• Phoenix Business Journal, *2022 Best Places to Work*, 2022.

• San Francisco Business Times, *Best Places to Work in the Bay Area (Midsize)*, April 20, 2018.

• San Francisco Business Times, *Best Places to Work in the Bay Area, Midsize Companies*, April 19, 2019.

• San Francisco Business Times, *Best Places to Work in the Bay Area, Midsize Companies*, May 7, 2021.

• San Francisco Business Times, *Best Places to Work in the Bay Area, Midsize Companies*, May 5, 2022.

• The Stevie Awards for Great Employers, Gold Stevie Award — Transportation, 2021.

• The Stevie Awards for Great Employers, Gold Stevie Award — Transportation, 2022.

• U.S. Bureau of Transportation Statistics, *Household Spending on Transportation: Average Household Spending*, 2021.

• U.S. Department of Transportation, *National Household Travel Survey*, May 2017.

• Wealthfront, *2021 Career-Launching Companies*, 2021.

• Wealthfront, *2022 Career-Launching Companies*, 2022.

• Wealthfront, *Career Launching Companies List — 2018 Edition*, 2018.

• Wealthfront, *Career Launching Companies List — 2019 Edition*, 2019.

• Wealthfront, *Career Launching Companies List — 2020 Edition*, 2020.

• Wealthfront, Wealthfront's *Career Launching Companies List — 2017 Edition*, 2017.

• XM Institute, *Economics of NPS in the Car*  **** ** *Rental Industry*, April 2022.

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Information in this prospectus on our position as the world's largest car sharing marketplace and our unrivaled network and extraordinary selection is from independent market research carried out by Prescient & Strategic Intelligence (P&S Intelligence) in a report titled *Global Peer-to-Peer (P2P) Carsharing Market*, 2020. Our position as the world's largest car sharing marketplace and our unrivaled network and extraordinary selection is based on a number of measures, including market share, the number of hosts, guests, and vehicle listings on our marketplace, and by geographic presence based on the number of cities in which our services are available.

In addition, statements in this prospectus referring to studies conducted by The Center for Growth and Opportunity at Utah State University, the Chaddick Institute for Metropolitan Development at DePaul University, and SCIMA LLC are from the following independent market research reports that we commissioned:

• Chaddick Institute for Metropolitan Development at DePaul University, *An Engine for Earning: Estimating the Financial Benefits of Peer-to-Peer Carsharing to Vehicle Hosts*, April 25, 2019.

• The Center for Growth and Opportunity at Utah State University, *Who Pays When Car Sharing Is Taxed?*, May 2021.

• SCIMA LLC, *Economic Opportunity: Estimating the Economic Benefits of Hosting with Turo*, February 2022.

Certain monetary amounts, percentages, and other figures included elsewhere in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

The cars and testimonials contained in this prospectus are from actual Turo cars, hosts, and guests. The hosts and guests featured in this prospectus have agreed to the use of their testimonials for marketing, advertising, and other purposes. Some of these hosts and guests were compensated nominal amounts for their time and effort associated with providing the testimonials and appearing in pictures or videos. The product screens presented in this prospectus are illustrative examples of actual product screens on our platform.

Throughout this prospectus, we use the terms "booking" and "trip" interchangeably.

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## Use of proceeds
We estimate that we will receive net proceeds from this offering of approximately $ million (or approximately $ million if the underwriters' option to purchase additional shares is exercised in full) based on an assumed initial public offering price of $ per share of common stock, the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders in this offering.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share of common stock would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the assumed initial public offering price of $ per share of common stock remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The principal purposes of this offering are to increase our capitalization and financial flexibility and create a public market for our common stock. We currently intend to use the net proceeds we receive from this offering for general corporate purposes, including working capital, operating expenses, and capital expenditures. We cannot specify with certainty all of the particular uses for the remaining net proceeds to us from this offering. We may also use a portion of the net proceeds for acquisitions of, or strategic investments in, complementary businesses, products, services, or technologies. We will have broad discretion over how we use the net proceeds from this offering. We intend to invest the net proceeds from the offering that are not used as described above in investment-grade, interest-bearing instruments.

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## Dividend policy
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and future earnings, if any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination regarding the declaration and payment of dividends, if any, will be at the discretion of our board of directors, subject to applicable laws, and will depend on then-existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business prospects, and any other factors our board of directors may deem relevant. In addition, the terms of our revolving credit facility restrict our ability to pay dividends or make distributions, and we may enter into credit agreements or other borrowing arrangements in the future that may restrict our ability to declare or pay cash dividends or make distributions.

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## Capitalization
The following table sets forth our cash and our capitalization as of December 31, 2022 as follows:

• on an actual basis;

• on a pro forma basis to reflect (i) the automatic conversion of 169,952,096 shares of our redeemable convertible
preferred stock outstanding as of December 31, 2022 into 183,768,391 shares of common stock immediately prior to the completion of this offering, (ii) the issuance of an aggregate of
 shares of common stock pursuant to the warrant held by IAC Inc. in connection with this offering, based
on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and (iii) the filing of our
amended and restated certificate of incorporation immediately prior to the completion of this offering; and

• on a pro forma as adjusted basis to give effect to (i) the pro forma adjustments set forth above and (ii) our
issuance and sale of shares of common stock in this offering at an assumed
initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the
estimated underwriting discounts and commissions and estimated offering expenses payable by us. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders in this offering.

The pro forma and pro forma as adjusted information below is illustrative only, and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read this information together with our consolidated financial statements and the related notes included in this prospectus and the sections titled "Summary consolidated financial and other data," "Management's discussion and analysis of financial condition and results of operations," and other financial information contained in this prospectus.

---

| | | | |
|:---|:---|:---|:---|
|  | **As of December 31, 2022** | **As of December 31, 2022** | **As of December 31, 2022** |
|  | **Actual** | **Pro forma** | **Pro**<br>**forma as<br>adjusted<sup>(1)</sup>** |
|  | **(in thousands, except share and per<br>share amounts)** | **(in thousands, except share and per<br>share amounts)** | **(in thousands, except share and per<br>share amounts)** |
|  Cash and cash equivalents | $300953 | $| $|
|  Redeemable convertible preferred stock warrant liability | 95247 |  |  |
|  Redeemable non-controlling interest | 33857 |  |  |
|  Redeemable convertible preferred stock, $0.001 par value per share; 170,034,432 shares authorized, 169,952,096 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted | 471264 |  |  |
|  Stockholders' (deficit) equity: |  |  |  |
|  Preferred stock, $0.001 par value per share; no shares authorized, issued, and outstanding, actual; shares authorized, no shares issued and outstanding, pro forma and pro forma as adjusted |  |  |  |
|  Common stock, $0.001 par value per share; 267,000,000 shares authorized, 31,642,548 shares issued and outstanding, actual; shares authorized, shares issued and outstanding, pro forma; shares authorized, shares issued and outstanding, pro forma as adjusted | 32 |  |  |
|  Additional paid-in capital | 61723 |  |  |
|  Accumulated other comprehensive loss | (367) |  |  |
|  Accumulated deficit | (299586) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' (deficit) equity | (238198) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total capitalization | $362170 |  |  |

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(1) Each $1.00 increase (decrease) in the assumed initial public offering price of
$ per share of common stock, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as
adjusted amount of each of cash, total stockholders' (deficit) equity, and total capitalization by approximately
$, assuming that the number of shares offered by us, as set forth on the cover
page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares in the number of shares
offered by us at the assumed initial public offering price per share would increase (decrease) the pro forma as adjusted amount of each of cash, total stockholders' (deficit) equity, and total capitalization by approximately $, assuming the assumed initial public offering price of
$ per share of common stock remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses
payable by us.

If the underwriters exercise their option to purchase additional shares in full, our pro forma as adjusted cash and cash equivalents, additional paid-in capital, total stockholders' (deficit) equity, total capitalization, and shares of common stock issued and outstanding as of December 31, 2022 would be $, $, $, $, and shares, respectively.

The number of shares of our common stock that will be outstanding after this offering is based on 215,410,939 shares of our common stock (including shares of our redeemable convertible preferred stock on an as-converted basis) outstanding as of December 31, 2022, and excludes:

• 26,253,071 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock
outstanding as of December 31, 2022, with a weighted-average exercise price of $3.71 per share;

• 8,401,114 restricted stock units covering shares of our common stock that are issuable upon satisfaction of service-based
and liquidity-based vesting conditions outstanding as of December 31, 2022, for which the liquidity-based vesting condition was not yet satisfied as of December 31, 2022;

• 1,040,291 restricted stock units covering shares of our common stock that are issuable upon satisfaction of service-based
and liquidity-based vesting conditions granted after December 31, 2022, for which the liquidity-based vesting condition was not yet satisfied as of December 31, 2022;

• up to $51.0 million of shares of our common stock issuable upon the exchange of securities issued in connection with our
acquisition of OuiCar and outstanding as of December 31, 2022;

• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares
of our common stock reserved for future issuance under our 2023 Equity Incentive Plan, or 2023 Plan, including
 new shares plus the number of shares (not to exceed
 shares) underlying outstanding stock awards granted under our 2010 Equity Incentive Plan or 2020 Equity Incentive Plan that
expire, or are forfeited, canceled, withheld, or reacquired; and

• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares
of our common stock reserved for future issuance under our 2023 Employee Stock Purchase Plan, or ESPP, which will become effective in connection with this offering.

Our 2023 Plan and ESPP provide for annual automatic increases in the number of shares reserved thereunder. See the section titled "Executive compensation — Employee benefit and stock plans" for additional information.

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## Dilution
If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

Our historical net tangible book value (deficit) as of December 31, 2022 was $283.2 million or $(8.95) per share. Our historical net tangible book value (deficit) per share represents the amount of our total tangible assets less goodwill, intangibles, and deferred offering costs, total liabilities, redeemable non-controlling interests, and redeemable convertible preferred stock, divided by the number of shares of our common stock outstanding as of December 31, 2022.

Our pro forma net tangible book value as of December 31, 2022 was $ million, or $ per share. Pro forma net tangible book value per share represents the amount of our total tangible assets less our deferred offering costs and total liabilities, divided by the number of shares of our common stock outstanding as of December 31, 2022, after giving effect to (i) the automatic conversion of 169,952,096 shares of our redeemable convertible preferred stock outstanding as of December 31, 2022 into 183,768,391 shares of common stock immediately prior to the completion of this offering, (ii) the issuance of an aggregate of shares of common stock pursuant to the warrant held by IAC Inc. in connection with this offering, based on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and (iii) the filing of our amended and restated certificate of incorporation immediately prior to the completion of this offering.

After giving further effect to the sale of shares of common stock that we are offering at an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of December 31, 2022 would have been approximately $ million, or approximately $ per share of common stock. This amount represents an immediate increase in pro forma net tangible book value of $ per share to our existing stockholders and an immediate dilution in pro forma as adjusted net tangible book value of approximately $ per share to new investors purchasing shares of common stock in this offering.

Dilution per share to new investors is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the initial public offering price per share paid by new investors. The following table illustrates this dilution (without giving effect to any exercise by the underwriters of their option to purchase additional shares):

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| | | |
|:---|:---|:---|
|  Assumed initial public offering price per share |  | $|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Historical net tangible book value (deficit) per share as of December 31, 2022 | $(8.95) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase per share attributable to the pro forma adjustments described above |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pro forma net tangible book value per share as of December 31, 2022 | $— |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Increase in pro forma net tangible book value per share attributable to this offering |  |  |
|  Pro forma as adjusted net tangible book value per share after this offering |  |  |
|  Dilution in pro forma as adjusted net tangible book value per share to new investors in this offering |  | $|

---

The dilution information discussed above is illustrative only and may change based on the actual initial public offering price and other terms of this offering. Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value per share after this

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offering by approximately $ per share, and increase (decrease) the dilution in the pro forma as adjusted net tangible book value per share to new investors by approximately $ per share, in each case, assuming that the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. Each increase (decrease) of 1.0 million shares in the number of shares of common stock offered by us would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by approximately $ per share and decrease (increase) the dilution to investors participating in this offering by approximately $ per share, in each case assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters exercise their option to purchase additional shares in full, the pro forma as adjusted net tangible book value after the offering would be $ per share, the increase in pro forma net tangible book value per share to existing stockholders would be $ per share, and the dilution per share to new investors would be $ per share, in each case assuming an initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus.

The following table summarizes, on the pro forma as adjusted basis described above, as of December 31, 2022, the differences between the number of shares of common stock purchased from us by our existing stockholders and by new investors purchasing shares in this offering, the total consideration paid to us in cash and the average price per share paid by existing stockholders for shares of common stock issued prior to this offering, and the price to be paid by new investors for shares of common stock in this offering. The calculation below is based on the assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of the prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Shares purchased** | **Shares purchased** | **Total**<br>**consideration** | **Total**<br>**consideration** | **Average<br>price**<br>**per**<br>**share** |
|  | **Number** | **Percent** | **Percent** | **Percent** | **Average<br>price**<br>**per**<br>**share** |
|  Existing stockholders |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% | $— | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% | $|
|  New investors |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100% | $— | 100% | $|

---

Sales by the selling stockholders in this offering will cause the number of shares held by existing stockholders to be reduced to shares, or % of the total number of shares outstanding following the completion of this offering, and will increase the number of shares held by new investors to shares, or % of the total number of shares outstanding following the completion of this offering.

If the underwriters exercise their option to purchase additional shares in full, our existing stockholders would own % and the investors purchasing shares of our common stock in this offering would own % of the total number of shares of our common stock outstanding immediately after completion of this offering.

The number of shares of our common stock that will be outstanding after this offering is based on 215,410,939 shares of our common stock (including shares of our redeemable convertible preferred stock on an as-converted basis) outstanding as of December 31, 2022, and excludes:

• 26,253,071 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock
outstanding as of December 31, 2022, with a weighted-average exercise price of $3.71 per share;

• 8,401,114 restricted stock units covering shares of our common stock that are issuable upon satisfaction of service-based
and liquidity-based vesting conditions outstanding as of December 31, 2022, for which the liquidity-based vesting condition was not yet satisfied as of December 31, 2022;

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• 1,040,291 restricted stock units covering shares of our common stock that are issuable upon satisfaction of service-based
and liquidity-based vesting conditions granted after December 31, 2022, for which the liquidity-based vesting condition was not yet satisfied as of December 31, 2022;

• up to $51.0 million of shares of our common stock issuable upon the exchange of securities issued in connection with our
acquisition of OuiCar and outstanding as of December 31, 2022;

• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our common
stock reserved for future issuance under our 2023 Equity Incentive Plan, or 2023 Plan, including new shares plus the number of shares (not to exceed
 shares) underlying outstanding stock awards granted under our 2010 Equity Incentive Plan or 2020 Equity Incentive Plan that expire, or are forfeited,
canceled, withheld, or reacquired; and

• &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; shares of our common
stock reserved for future issuance under our 2023 Employee Stock Purchase Plan, or ESPP, which will become effective in connection with this offering.

Our 2023 Plan and ESPP provide for annual automatic increases in the number of shares reserved thereunder. See the section titled "Executive compensation — Employee benefit and stock plans" for additional information.

To the extent any outstanding options are exercised, or new stock options are issued, under our equity incentive plans, or we issue additional equity or convertible debt securities in the future, there will be further dilution to investors participating in this offering.

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23M+ days $1M net revenue Per day $1M net revenue Per week $1M net revenue Per quarter $1M net revenue Per year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Cumulative days ![LOGO](g145731g91c86.jpg)

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Turo over time 2010 Launched in Boston & San Francisco 2011 First trip completed 2012 Launched nationwide in US 2013 Launched Book instantly $1M net revenue per year 2014 Introduced delivery as a feature $1M net revenue per quarter 2015 Rebranded to Turo 2016 First international expansion to Canada 2017 Launched Power Host program $1M net revenue per week 2018 Expanded operations to the United Kingdom Launched Turo Go 2019 1M cumulative active guests 100K cumulative active hosts Launched All-Star Host Program 2020 Implemented Turo Risk Score-based pricing Created the Turo Seed Initiative 2021 2B+ miles driven Launched carbon neutrality initiative Turo returns to New York $1M net revenue per day

Managements discussion and analysis of financial condition and result of operations

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## Management's discussion and

## analysis of financial condition

## and results of operations
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and related notes included elsewhere in the prospectus. The consolidated results of operations for the years ended December 31, 2019, 2020, 2021, and 2022 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. In addition to our historical consolidated financial information, this discussion contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions. Our actual results could differ materially from those described in or implied by these forward-looking statements as a result of various factors, including those set forth under the section titled "Risk factors" and elsewhere in this prospectus.

**Overview** 

Turo is the world's largest car sharing marketplace where guests can book any car they want, wherever they want it, from a vibrant community of trusted hosts. Whether they're flying in from afar or looking for a car down the street, searching for a rugged truck or something smooth and swanky for a once-in-a-lifetime event, guests can take the wheel of the perfect car for any occasion, while hosts can take the wheel of their futures by sharing their underutilized personal vehicles or building an accessible, flexible, and scalable car sharing business from the ground up. Turo is home to a supportive and collaborative community that shares thousands of vehicles across the United States, Canada, the United Kingdom, France, and Australia. As of December 31, 2022, we had over 160,000 active hosts and 2.9 million active guests from around the world participating in our marketplace.

We are pioneering a new category of transportation, advancing the next era of personal mobility by connecting consumers with an unrivaled network of privately owned vehicles. Cars remain the preferred means of transportation for short-, medium-, and long-duration trips across a variety of use cases, but traditional mobility options do not provide adequate and efficient access for consumers to vehicles. The peer-to-peer car sharing opportunity Turo delivers to consumers provides a more convenient, economically efficient, and environmentally and socially responsible way to access an extraordinary selection of vehicles compared to traditional car ownership and car rental.

Our platform unlocks peer-to-peer car sharing through technology — a seamless, simple platform that connects hosts and guests and enables them to transact in a trusted, safe environment. With Turo, hosts can quickly list vehicles, adjust their availability, and dynamically modify prices to access the unique demand patterns in their market. Guests can search by location, type, price, use case, and many other categories to find the perfect vehicle for their needs. Our platform supports a variety of use cases — from the minivan for the family road trip, to the convertible for the long-awaited beach getaway, or a simple vehicle for escaping the city grind. Built-in messaging, payments, fraud detection, the proprietary Turo Risk Score, and host and guest protection plans are designed to deliver a safe transaction and experience for our community.

We have experienced rapid growth since our launch in 2010. Our business model has proven to be resilient throughout fluctuations in travel trends and economic climates as our marketplace dynamically adjusts to the needs of our hosts and guests. We have seen increased demand for bespoke and safe forms of transportation, as well as increased supply from hosts, showing that Turo can uniquely serve and elevate our entire community, both hosts and guests. We generated net revenue of $149.9 million in 2020, representing 6% growth from $141.7 million in 2019, and a net loss of $97.1 million during 2020, down from $98.6 million in 2019. The increase in net revenue for the year ended December 31, 2020 was due to a combination of the introduction of the Turo Risk Score in April 2020, a tool that dynamically adjusts the fees that we charge guests to complete a booking on our marketplace, as well as hosts increasing the prices for vehicles charged to guests. In 2021, we generated net

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revenue of $469.0 million, representing 213% growth from $149.9 million in 2020, and a net loss of $40.4 million, down from $97.1 million in 2020. The increase in net revenue for the year ended December 31, 2021 was due to a combination of the effects of the COVID-19 pandemic on our business, improved optimization of the Turo Risk Score, hosts increasing the prices for vehicles charged to guests, as well as a rental car supply shortage. In 2022, we generated net revenue of $746.6 million, representing 59% growth from $469.0 million in 2021, and a net income of $154.7 million, compared to a net loss of $40.4 million in 2021. The increase in net revenue for the year ended December 31, 2022 was due to an increase in Days (as defined under " — Key business metrics" below), as a result of continued travel demand combined with an increase in our supply and new guests on the platform. We continue to improve the efficiency of our marketplace and generated adjusted EBITDA of $79.7 million, $81.1 million, $(38.1) million, and $(91.6) million in 2022, 2021, 2020, and 2019, respectively. For additional information about adjusted EBITDA, a non-GAAP financial measure, and a reconciliation of adjusted EBITDA to the most directly comparable financial measure stated in accordance with GAAP, see " — Non-GAAP financial measures."

**Our business model** 

We operate a car sharing marketplace. We focus on creating a high-quality marketplace with a vast collection of unique listings to enable guests to book the car they want or need on demand, and empower hosts to generate income from their vehicles. This focus on creating positive host and guest engagement drives strong host cohort net revenue retention and attractive guest cohort contribution margins. We support a broad range of hosts, from those who want to offset the cost of car ownership by generating extra income from a single car to those who have multiple cars and operate their own small business on our platform or use our platform to support a larger business that is often a primary income source. We provide broad geographical coverage and differentiated offerings and have focused on adding new supply and building network density in our existing markets to capture additional market share over time. We have made significant investments in our platform and brand as we continue to drive the growth of our marketplace in the United States, Canada, and the United Kingdom and expand our marketplace to other geographies. In May 2022, we completed the acquisition of OuiCar, a car sharing marketplace headquartered in France, and in November 2022, we launched operations in Australia.

As of December 31, 2022, we had over 160,000 active hosts, 320,000 active vehicle listings, and 2.9 million active guests on our platform. We count the number of active hosts, active vehicle listings, and active guests as hosts, vehicle listings, and guests, respectively, with at least one trip as a host, vehicle listing, or guest, respectively, in the trailing 12-month period. For example, if a host, vehicle listing, or guest, respectively, has at least one trip that starts before or within the trailing 12-month period and ends within or after such 12-month period, we count such host, vehicle listing, or guest, respectively, as active. We measure these metrics on a trailing one-year basis given the episodic nature of travel and the booking patterns we have observed on our platform.

Our platform is designed for entrepreneurs of all sizes. We have three categories of hosts who utilize our platform and value-added services: consumer hosts, who typically share one or two cars with the goal of offsetting the cost of car ownership; small business hosts, who typically share three to nine cars with the goal of generating a secondary source of income; and professional hosts, who typically share 10 or more cars, often as their primary source of income or part of an existing business, and invest in building scalable, accessible, and flexible businesses atop our platform.

Our host acquisition strategy is focused on attracting, onboarding, and empowering hosts through sales, account management, incentives, and performance marketing. We have recently increased our focus on growing consumer hosts into small business and professional hosts in order to grow the supply of vehicles available to guests on our platform by, among other efforts, increasing host incentives to improve host net revenue retention. As of December 31, 2022, approximately 85% of our active hosts were consumer hosts who listed two or fewer vehicles. As hosts become more successful on our platform, we are able to improve retention and grow supply.

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We attract most of our hosts and guests organically, and we supplement organic growth with targeted marketing spend designed to deliver strong returns on investments. We believe that our unique inventory of vehicles, superior user experience, and strong brand affinity power word-of-mouth growth and repeat usage, reducing our reliance on paid marketing. Our guest acquisition strategy is focused on attracting high-intent visitors to our platform through direct traffic, search engine optimization, and performance marketing channels. As we continue to add more supply density and expand to non-U.S. geographies, we expect that will lead to increased bookings from repeat guests, increasing the overall efficiency of our marketplace. Importantly, in 2022, approximately 79% of our site traffic was organic and approximately 48% of Days were generated from bookings by repeat guests. Given the rapid growth we experienced in 2021 and 2022, we anticipate that the share of Days from bookings by repeat guests will increase in future periods.

We measure and compare the value of each booking by monitoring revenue and gross profit per Day. We generate revenue from fees charged to both hosts and guests to complete a booking on our marketplace, or Marketplace Fees, and for value-added services such as protection, or Value-Added Services Fees. These fees enable us to pay for the various services we provide to hosts and guests, such as customer support, marketing and advertising, trust and safety screenings, roadside assistance, payment processing, and reimbursement to hosts for physical damage to their vehicles. We believe our protection plans provide a compelling value proposition that facilitates activity on our marketplace. We are focused on creating a successful and positive host and guest experience — hosts and guests can choose the protection plan that's right for them, and every booking with a host includes third-party liability insurance coverage for hosts and their guests from one of our top-tier insurance providers. Guest protection plans provide guests with choice and flexibility regarding the amount they pay out of their own pocket for damage costs in the event of an accident.

Trust and safety are key to the health of our community. To that end, we developed our Turo Risk Score, a proprietary algorithm that collects data on the large volume of trips, vehicles, and other activities of hosts and guests on our platform. We leverage insights from this data to control for fraud, manage risk, evaluate security deposit requirements, and mitigate unsafe behavior. We also use the Turo Risk Score to dynamically adjust the Marketplace Fees that we charge guests to complete a booking, as further described under " — Anatomy of a booking" below. We believe this contributes to better access to and availability of our platform for guests, expands the economic opportunity for hosts, and garners deeper loyalty from our community, ultimately driving improved contribution margins for our business.

Unlike rental car and fleet-based car sharing providers, as a marketplace platform, we do not own the vehicles that are booked on our platform. As a result, our business model is asset-light and has lower working capital and cash needs compared to non-marketplace providers. Our operating expenses are largely driven by headcount. We also continue to invest in our marketing strategy to grow and retain both hosts and guests on our platform, and in product development to continuously improve and innovate on the experience and safety on our platform.

**Anatomy of a booking** 

We generate revenue from fees charged to both hosts and guests. Fees consist of Marketplace Fees and Value-Added Services Fees, as further described below. The table below shows the components of an illustrative one-day booking.

• **Guests.** For each booking on our platform, the amount we charge the guest consists of the vehicle price (as chosen
by the host, who can choose to utilize our pricing tools), a Marketplace Fee, a Value-Added Services Fee, if any, and any applicable pass through taxes and other fees that are required to be remitted to state or local authorities, which are excluded
from net revenue. Value-Added Services Fees consist primarily of charges for protection services, which we refer to as Protection Plan Services, as well as delivery and other optional Extras, such as prepaid refueling, bike and ski racks, and
camping equipment (which, for simplicity's sake, are not included in the illustrative example below). Marketplace Fees vary based on geography, the Turo Risk Score, which includes information submitted by guests about themselves and their
desired reservation, and parameters set by the host, while fees charged for Protection Plan Services

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vary based on parameters set or offered by the host and the elections made by the guest, including the guest's ability to limit their financial responsibility for damage caused to the host's vehicle. Third-party liability insurance for the guest is included in every booking offered by a host.

• **Hosts.** For each booking on our platform, we charge the host a Marketplace Fee based on a percentage of the vehicle
price chosen by the host. In addition, hosts pay a Value-Added Services Fee for items such as reimbursement for physical damage to their vehicle. Third-party liability insurance for the host is included in every booking.

• **Turo.** We retain a portion of the fees charged to guests, with amounts owed to hosts and local authorities
distributed accordingly.

Gross Booking Value, or GBV, and net revenue in the table below exclude reductions in revenue resulting from incentive and refund payments made to hosts and guests. For illustration purposes, we included a common reimbursement line item for incidental charges (in this case, additional distance driven beyond the miles included), and sales tax (which we collect and remit to local authorities in certain jurisdictions).

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| | |
|:---|:---|
|  **Illustrative booking example** |  |
|  **Guest:** |  |
|  Price for vehicle | $100.00 |
|  Plus: Marketplace Fees (impacted by Turo Risk Score) | 35.00 |
|  Plus: Value-Added Services Fees (includes protection) | 30.00 |
|  Plus: Host reimbursement (e.g., additional mileage reimbursement) | 5.00 |
|  Plus: Taxes & fees (as applicable, pass through and remitted to local authorities) | 10.00 |
|  **Total collected from guest (GBV)** | $**180.00** |

---

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| | |
|:---|:---|
|  **Host:** |  |
|  Price for vehicle | $100.00 |
|  Less: Marketplace Fees | 7.50 |
|  Less: Value-Added Services Fees (includes protection) | 7.50 |
|  Plus: host reimbursement (e.g., additional mileage reimbursement) | 5.00 |
|  **Total paid to host** | $**90.00** |
|  **Turo:** |  |
|  Marketplace Fees | $42.50 |
|  Plus: Value-Added Services Fees (includes protection) | $37.50 |
|  **Net Revenue** | $**80.00** |

---

**Key business metrics** 

In addition to the measures presented in our consolidated financial statements, we use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies that may calculate similarly titled metrics in a different way.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in millions, unless otherwise noted)** | **(in millions, unless otherwise noted)** | **(in millions, unless otherwise noted)** | **(in millions, unless otherwise noted)** |
|  Days<sup>(1)</sup>  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4675 | 3825 | 10917 | 19149 |
|  Gross Booking Value | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;351.6 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;335.9 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1256.4 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2061.0 |

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(1) In thousands.

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**Days** 

**Days (MM)**![LOGO](g145731g23m24.jpg)

1.2 1.2 1.0 0.8 1.1 1.0 1.4 3.1 3.0 3.4 4.3 4.9 5.0 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022

We define Days as total days for a vehicle booked by our guests on our platform in a given period over the period of measurement, net of days canceled in that period. We believe Days is a key business metric to help investors and others understand and evaluate our results of operations in the same manner as our management team, as it represents a unit of transaction volume on our platform. We intend to increase Days over time as we increase our supply of unique inventory, more guests use our platform, and we expand to new markets. We estimate that in 2022, approximately 6.8 million, or 35% of Days were part of bookings seven to 29 days in length, and approximately 1.1 million, or 6%, of Days were part of bookings greater than 30 days in length.

In 2020, our Days declined from prior levels as a result of the COVID-19 pandemic. In the second quarter of 2020, our Days declined by 38% from the prior year period. Our business improved in the third and fourth quarters of 2020 as the markets in which we operate began to reopen their economies, resulting in Days declining by only 11% and 21% as compared to the same periods in 2019, respectively. In the fourth quarter of 2020, our Days declined from the prior quarter as a result of renewed stay-at-home orders and other state and local mandated restrictions in certain markets, including California and Hawaii.

In 2021, our business improved as COVID-19 vaccines became accessible, many travel restrictions lifted, and consumers became more comfortable traveling, compounded by a supply shortage in rental cars. In the first, second, third, and fourth quarters of 2021, our Days increased by 44%, 302%, 174%, and 250%, respectively, from the prior year period. During the first and second quarters of 2021, we saw a higher share of Days booked compared to trips occurring during the same quarter. In the third quarter of 2021, our Days declined slightly from the prior quarter as a result of the advanced bookings accumulated in the first and second quarters. Days increased in the fourth quarter of 2021 as a result of continued travel demand.

In 2022, our Days increased as a result of continued increase travel demand combined with an increase in our supply and new guests on the platform. In the first, second, third, and fourth quarters of 2022, our Days increased by 200%, 59%, 70%, and 44%, respectively, over the same quarters of 2021.

Subject to conditions affecting the travel and mobility market, we expect Days to grow to the extent we increase the number of new guests to our platform, increase the retention rate of existing guests, grow supply in our existing markets and enter new markets, and offer vehicles that can be used in a variety of use cases.

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**Gross Booking Value** 

**Gross Booking Value ($MM)**![LOGO](g145731g25u26.jpg)

$97.6 $95.8 $73.7 $59.9 $107.1 $95.2 $147.1 $388.6 $349.5 $371.2 $458.8 $564.6 $536.2 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022

We define Gross Booking Value, or GBV, as the total value of Days booked on our platform, including reimbursable expenses owed to the host by the guest, applicable pass through taxes, and other fees required to be remitted to local authorities, which are excluded from net revenue. GBV is driven by the number of Days and related pricing. Revenue from bookings is recognized at the time of check-in for the reservation or over the duration of the trip; accordingly, GBV is a leading indicator of revenue. As a result of the COVID-19 pandemic, we saw a decrease in Days in 2020 as described above, as well as an increase in cancellations. GBV decreased by 34% in the second quarter of 2020 compared to the second quarter of 2019, and recovered in the third quarter of 2020 as certain regions reopened their economies and we benefited from an increase in car travel as a result of shifting consumer preference to car-based travel during the pandemic. At the same time, rental car companies that had reduced their fleet sizes during the early days of the COVID-19 pandemic were unable to quickly rebuild their fleets due to constraints in automobile manufacturing capacity that we do not face as a marketplace platform. With the increase in demand for travel, compounded by the rental car supply shortage, we saw an increase in pricing, resulting in an increase in GBV by in each quarter of 2021 compared to the corresponding quarter of 2020. In 2022, we have continued to see an increase in GBV in each quarter compared to the same quarter in 2021, primarily due to the increased Days booked on our platform. As the rental car supply shortage has begun to ease, we observed decreases in pricing in each quarter in 2022 compared to the same quarter in 2021. The effects of the COVID-19 pandemic and supply chain shortages that inflated the prices on our platform in 2021 are not expected to continue in the future, and as a result, we may experience a decrease in our GBV growth rate in future periods.

**Non-GAAP financial measures** 

In addition to our results determined in accordance with U.S. generally accepted accounting principles, or GAAP, we believe the following non-GAAP financial measures help us to evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. We use the following non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. The non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered as a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP financial measures used by other companies. Because of these limitations, we consider, and you should consider, our non-GAAP financial measures alongside other financial performance measures presented in accordance with GAAP. A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP is provided below. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

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The following table summarizes our non-GAAP financial measures, along with the most directly comparable GAAP measure, for each period presented below.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Gross profit | $44091 | $53189 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;269059 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;405082 |
|  Contribution (loss) profit | $(27094) | $17282 | $176188 | $216006 |
|  Gross margin | 31.1% | 35.5% | 57.4% | 54.3% |
|  Contribution margin | (19.1)% | 11.5% | 37.6% | 28.9% |
|  Net (loss) income | $(98559) | $(97083) | $(40382) | $154664 |
|  Adjusted EBITDA | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(91621) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(38050) | $81135 | $79663 |

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**Contribution profit (loss) and contribution margin** 

We define contribution profit (loss) as our gross profit less our (a) operations and support (excluding stock-based compensation expense), (b) sales and marketing expense attributable to customer acquisition, including media spend, sales, headcount costs (excluding stock-based compensation expense), and marketing promotions, and (c) chargebacks, bad debt expense, and trust and safety verifications included in general and administrative expense, plus (i) stock-based compensation expense included in cost of net revenue, and (ii) amortization of internal-use software included in cost of net revenue. We use contribution profit (loss) and contribution margin as indicators of the economic impact of a new booking on our platform as it captures the direct expenses attributable to a new booking on our platform and the cost it takes to generate revenue. While certain contribution profit (loss) adjustments may not be non-recurring, non-cash, non-operating, or unusual, contribution profit (loss) is a metric our management and board of directors find useful, and we believe investors may find useful, in understanding the costs most directly associated with revenue-generating activities.

Our contribution profit (loss) and contribution margin have improved as a result of the greater scale of our business, the introduction of our Turo Risk Score-based fee algorithms in April 2020, our success with organic host and guest acquisition, our ability to drive greater host and guest engagement, as well as improved loyalty and repeat usage of our platform. In the first, second, and third quarters of 2021, our contribution margin improved significantly compared to our historical levels. This performance primarily resulted from the higher revenue per day driven by the rental car supply shortage. As the rental car shortage continues to ease, revenue per day is not expected to remain elevated and may negatively impact our contribution margin in future periods. We will continue to invest in our host and guest acquisition strategy, which may adversely impact our contribution margin from period to period as we make these investments. During 2022, our contribution profit increased each quarter compared to the same quarter in 2021, primarily due to an increase in total Days booked by guests on our platform, however our contribution margin decreased due to a combination of decreasing prices and increased customer acquisition costs.

**Contribution profit (loss) ($MM)**![LOGO](g145731g08k26.jpg)

Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Contribution Profit ((6.12) (11.36) (0.87) (8.74) (5.67) 0 .85 1 1.35 1 0.75 1 7.64 5 8.67 5 9.26 4 0.62 4 1.38 5 4.59 7 6.08 4 3.96% of Revenue (24%) (35%) (2%) (23%) (16%) 4% 23% 26% 31% 47% 39% 29% 29% 29% 34% 24%

Contribution profit (loss) and contribution margin are non-GAAP financial measures with certain limitations regarding their usefulness, should be considered as supplemental in nature, and are not meant as substitutes for

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gross profit and gross margin, which are measures prepared in accordance with GAAP. For purposes of the non-GAAP financial measures, gross profit is defined as net revenue minus cost of revenue, each of which is presented on the consolidated statements of operations. Our definitions of contribution profit (loss) and contribution margin may differ from the definitions used by other companies in our industry and therefore, comparability may be limited. In addition, other companies may not publish these or other similar metrics. Further, our definition of contribution profit (loss) does not include the impact of certain expenses that are reflected in our consolidated statements of operations. Thus, our contribution profit (loss) should be considered in addition to, not as a substitute for or in isolation from, gross profit prepared in accordance with GAAP. The following tables present reconciliations of gross profit to contribution (loss) profit and gross margin to contribution margin for each of the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Gross profit | $44091 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;53189 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;269059 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;405082 |
|  Add: Stock-based compensation included in cost of net revenue | 607 | 205 | 1025 | 590 |
|  Add: Depreciation and amortization included in cost of net revenue | 1320 | 2610 | 3895 | 5969 |
|  Less: Operations and support | 15308 | 12941 | 33436 | 64098 |
|  Less: Customer acquisition costs | 48238 | 14222 | 44502 | 95248 |
|  Less: Verification costs | 4552 | 4136 | 9593 | 13888 |
|  Less: Chargebacks and bad debt expense | 5014 | 7423 | 10260 | 22401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contribution (loss) profit | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27094) | $17282 | $176188 | $216006 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross margin | 31.1% | 35.5% | 57.4% | 54.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contribution margin | (19.1)% | 11.5% | 37.6% | 28.9% |

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**Adjusted EBITDA** 

Adjusted EBITDA is a non-GAAP financial measure that represents our net income or loss adjusted for (i) provision for income taxes; (ii) other income and (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) impairment charges; (vi) certain legal, regulatory, and indirect tax reserves; and (vii) change in fair value of our redeemable convertible preferred stock warrant liability. We use adjusted EBITDA in conjunction with net income or loss, its corresponding GAAP measure, as a performance measure that we use to assess our operating performance and operating leverage in our business. We also measure our adjusted EBITDA as a percentage of net revenue on a trailing 12-month basis in order to provide a longer-term view and account for seasonal fluctuations in our net revenue and associated profitability. The above items are excluded from our adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items is unpredictable, or they are not driven by core results of operations, thereby rendering comparisons with prior periods and competitors less meaningful. We believe adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as provides a useful measure for period-to-period comparisons of our business performance. Moreover, we have included adjusted EBITDA in this prospectus because it is a key measurement used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting.

In 2019, net loss was $98.6 million and adjusted EBITDA was $(91.6) million as we continued to invest in the growth of our marketplace and offerings for both hosts and guests. In 2020, net loss was $97.1 million and adjusted EBITDA was $(38.1) million, reflecting our temporary cost-cutting initiatives in response to the COVID-19 pandemic to streamline our business, as well as the improvements and growth we saw as consumer preferences continued to shift to favor car-based travel. In 2021 and 2022, as a result of significant growth in Days and GBV, we have experienced favorable adjusted EBITDA compared to 2019 and 2020. In 2021, net loss was $40.4 million and adjusted EBITDA was $81.1 million; and in 2022, net income was $154.7 million and adjusted EBITDA

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was $79.7 million. We expect adjusted EBITDA to fluctuate in the near term as we continue to invest in our business, including reversing many of the cost-cutting initiatives we implemented as a result of the COVID-19 pandemic, and improve over the long term as we achieve greater scale in our business and efficiencies in our operating expenses.

**Adjusted EBITDA ($MM)**![LOGO](g145731g97y04.jpg)

% of net revenue ($20.4) ($27.2) ($17.8) ($26.2) ($24.7) ($11.1) $0.3 ($2.6) $0.2 $33.3 $36.2 $11.5 $14.2 $21.3 $40.9 $3.2 Q1 2019 (81.1%) Q2 2019 (84.0%) Q3 2019 (38.8%) Q4 2019 (68.4%) Q1 2020 (70.6%) Q2 2020 (46.4%) Q3 2020 (0.7%) Q4 2020 (6.2%) Q1 2021 (0.4%) Q2 2021 26.8% Q3 2021 24.1% Q4 2021 8.3% Q1 2022 9.9% Q2 2022 11.2% Q3 2022 18.1% Q4 2022 1.7%

Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:

• Adjusted EBITDA does not reflect other income and (expense), net, which includes interest income on cash, cash
equivalents, and restricted cash, net of interest expense, and gains and losses on foreign currency transactions and balances;

• Adjusted EBITDA excludes certain recurring, non-cash charges, such as
depreciation of property and equipment and amortization of intangible assets, and although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and
adjusted EBITDA does not reflect all cash requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA excludes stock-based compensation expense, which has been, and will continue to be for the foreseeable
future, a significant recurring expense in our business and an important part of our compensation strategy;

• Adjusted EBITDA does not reflect impairment charges, which primarily include lease and other asset impairments;

• Adjusted EBITDA excludes certain legal, regulatory, and indirect tax reserve changes and settlements that may reduce cash
available to us; and

• Adjusted EBITDA excludes change in fair value of redeemable convertible preferred stock warrant liability.

Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.

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The following is a reconciliation of adjusted EBITDA to the most comparable GAAP measure, net loss:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Net (loss) income | $(98559) | $(97083) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40382) | $154664 |
|  Add (deduct): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for (benefit from) income taxes | 47 | 86 | 1106 | (64237) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other (income) and expense, net | (1538) | (655) | 594 | (5883) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 1551 | 3023 | 4188 | 9143 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | 8634 | 8673 | 14392 | 18613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment | 539 | 1816 | 48 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legal, regulatory, and indirect tax reserves | 2886 | 4156 | 15951 | 18087 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of redeemable convertible preferred stock warrant liability | (5181) | 41934 | 85238 | (50724) |
|  Adjusted EBITDA | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(91621) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(38050) | $81135 | $79663 |

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**Factors affecting our performance** 

We believe that the growth and future success of our business depends on many factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth, improve our results of operations, and maintain or increase profitability.

**Ability to attract and retain hosts** 

We must maintain and grow a broad, unique selection of host-provided inventory on our platform to continue delivering compelling value and experiences for our guests. Our platform unlocks the potential for hosts to share their vehicles and earn income in a way that was previously not possible. Our ability to maintain and grow inventory depends on our ability to attract new hosts to the platform and help existing hosts grow their active vehicle listings and earnings potential. In addition, a host's active vehicle listings and earning potential depend on a number of factors, such as vehicle availability, demand in the host's area, and economic conditions, including rising interest rates, limited availability of credit, economic uncertainty, and inflation. For example, as interest rates rise, the cost to finance the purchase of a vehicle increases, which negatively impacts a host's earnings potential. We enable hosts of all sizes to earn income by empowering them with the information and tools to share their vehicles, including scheduling, merchandising, integrated payments, community support, host protection programs, pricing recommendations, and reviews. Because of our business model, we succeed when our hosts succeed.

We attract new hosts through a mix of organic channels, sales outreach, and paid marketing initiatives. We are focused on retaining our hosts and increasing the net revenue they generate for us and as a result, their own earnings. We track our hosts' success on our platform and the associated revenue that we earn from their activity. We define "Host Cohort" as the group of hosts who first became active on our platform in a given year, and then measure the revenue they generate over the subsequent one-year period and for each subsequent year, as compared to the first active year. For example, the 2018 Host Cohort includes hosts whose first trip started between January 1, 2018 and December 31, 2018. For a host in the 2018 Host Cohort whose first trip started on August 1, 2018, the first active year, or Year 1, is August 1, 2018 through July 31, 2019, and the subsequent one-year period, or Year 2, is August 1, 2019 through July 31, 2020. We then calculate the revenue associated with those hosts in each subsequent one-year period and compare against their first year.

The table below illustrates the revenue retention of each calendar year Host Cohort and demonstrates our ability to retain and improve our Host Cohorts over time. For example, our 2014 Host Cohort retained 74% of its

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Year 1 net revenue in Year 2, while our 2020 Host Cohort retained 78% of its Year 1 net revenue in Year 2. These improvements are a result of the continued investment in providing our hosts with the tools and technology they need to be successful. In addition, each of our Host Cohorts from 2014 to 2016 demonstrated improved retention relative to Year 1 in subsequent periods, prior to being impacted by the COVID-19 pandemic.

**Host net revenue retention curve** 

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Years from Host Cohort activation** | **Years from Host Cohort activation** | **Years from Host Cohort activation** | **Years from Host Cohort activation** | **Years from Host Cohort activation** |
|  | **Year 1** | **Year 2** | **Year 3** | **Year 4** | **Year 5** |
|  2014 Host Cohort | 100% | 74% | 74% | 78% | 81% |
|  2015 Host Cohort | 100% | 80% | 86% | 87% | 74% \* |
|  2016 Host Cohort | 100% | 90% | 90% | 78% \* | 91% |
|  2017 Host Cohort | 100% | 88% | 71% \* | 77% | 83% |
|  2018 Host Cohort | 100% | 67% \* | 63% | 73% |  |
|  2019 Host Cohort | 100% | 86% | 85% |  |  |
|  2020 Host Cohort | 100% | 78% |  |  |  |
|  2021 Host Cohort | 100% |  |  |  |  |

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Host net revenue retention deteriorated across all applicable Host Cohorts in 2020 due to the decline in revenue resulting from COVID-19, as represented by the "\*" in the chart above. For example, the host net revenue retention for the 2017 Host Cohort deteriorated from 88% in Year 2 to 71% in Year 3, primarily as a result of the COVID-19 pandemic. Subject to conditions affecting the travel and mobility market, we believe the historic strength of our host revenue retention should return as, and to the extent that, the travel industry recovers and the economy recovers.

**Ability to attract and retain guests while improving their gross profit retention** 

In order to grow our business, we must attract and retain guests and drive their profitable usage of our platform. A substantial portion of our guests come to our marketplace organically, though we also use paid marketing to further enhance the growth of our guest base. We focus our paid marketing spend on attracting guests that we expect are going to generate compelling value for us, and we focus on retaining guests that we expect are going to be accretive to our gross profit. We use our Turo Risk Score to assess the potential value of each transaction, and adjust our Marketplace Fees and other add-ons, such as security deposits, to ensure we are appropriately setting fees for transactions on our marketplace. For example, transactions with higher risk scores may require a deposit and lead to a higher trip fee, whereas lower risk scored transactions will generate lower trip fees in comparison.

Our guests have access to an increasingly larger and more diverse selection of vehicles in more locations. The unique vehicle inventory, along with the seamless guest experience, spurs organic word-of-mouth growth and repeat usage. Over time we have demonstrated the ability to both retain and generate repeat bookings from guests on our platform, and to improve the gross profit of the trips of our Guest Cohorts over time, through these risk-based fee strategies. We define "Guest Cohort" as the group of guests who first became active on our platform in a given year, and then measure the revenue they generate over the subsequent one-year period, and for each subsequent year, as compared to the first active year. For example, the 2018 Guest Cohort includes guests whose first trip started between January 1, 2018 and December 31, 2018. For a guest in the 2018 Guest Cohort whose first trip started on August 1, 2018, the first active year, or Year 1, is August 1, 2018 through July 31, 2019, and the subsequent one-year period, or Year 2, is August 1, 2019 through July 31, 2020. We have not included the 2014 and 2015 Guest Cohorts because we do not have accurate data available for those cohorts.

We are actively focused on ensuring the quality of our marketplace and will continue to invest in growing the profitability of our guest community. The table below illustrates the gross profit retention of each calendar year

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Guest Cohort and demonstrates our ability to retain and improve our Guest Cohorts over time. For example, we retained 29% of the gross profit from our 2016 Guest Cohort in Year 2, and this increased to 37% of the gross profit in Year 5. In addition, the 2017-2020 Guest Cohorts have performed better in Year 2 relative to the 2016 Guest Cohort. These improvements are a result of the continued investment in our risk-based fees and platform capabilities, including Turo Risk Score. Guest gross profit retention for all periods has been recast based on our definition of gross profit, which does not include customer support costs.

**Guest gross profit retention curve** 

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Years from Guest Cohort activation** | **Years from Guest Cohort activation** | **Years from Guest Cohort activation** | **Years from Guest Cohort activation** | **Years from Guest Cohort activation** |
|  | **Year 1** | **Year 2** | **Year 3** | **Year 4** | **Year 5** |
|  2016 Guest Cohort | 100% | 29% | 19% | 21% \* | 37% |
|  2017 Guest Cohort | 100% | 32% | 27% \* | 50% | 64% |
|  2018 Guest Cohort | 100% | 34% \* | 38% | 53% |  |
|  2019 Guest Cohort | 100% | 42% | 44% |  |  |
|  2020 Guest Cohort | 100% | 31% |  |  |  |
|  2021 Guest Cohort | 100% |  |  |  |  |

---

Guest gross profit retention was impacted in 2020 due to the COVID-19 pandemic, as represented by the "\*" in the chart above. Despite this negative impact, we were able to improve gross profit retention of our Guest Cohorts. For example, the guest gross profit retention for the 2017 Guest Cohort improved from 32% in Year 2 to 64% in Year 5. As the travel industry and the economy recover from the impact of the COVID-19 pandemic, we believe we will be able to continue the historical trends in our guest gross profit retention. The health of our customer acquisition unit economics further evidenced these efforts to optimize the gross profit of our Guest Cohorts. In 2022, the payback period (time taken to recover the cost of acquiring a new guest) for our U.S. users acquired during that period was three months on average.

**Investments in people and technology** 

We have made, and will continue to make, significant investments to attract and retain employees, particularly engineers, data scientists, designers, and product management personnel to expand the capabilities and scope of our platform and enhance the experience for hosts and guests. The continued improvement of our technology through investment in engineering resources is paramount to enhancing our unique product capabilities, including our proprietary Turo Risk Score. We also plan to invest in sales and marketing activities to drive host and guest acquisition and increase our brand awareness. We expect to incur additional general and administrative expenses to support our growth and our transition to being a publicly traded company. Further, we continue to make investments in our technical and security infrastructure to support user growth, and in our office locations to support employee growth, which will increase expenses.

As cost of net revenue, operating expenses, and capital expenditures fluctuate over time, we may experience short-term, negative impacts to our results of operations and cash flows, but we are undertaking such investments in the belief that they will contribute to long-term growth.

**Turo Risk Score enables us to deliver profitability across risk segments** 

We use the Turo Risk Score to inform trust and safety management practices and the Marketplace Fees and costs associated with each trip based on historical data and the expected costs, and to help ensure the economic viability of each trip booked on our platform. We have made, and will continue to make, significant investments in our technology platform that are intended to decrease the frequency and ultimate costs to us for reimbursement to hosts for damage to vehicles, to reduce the risk of payment fraud or identity theft, and to understand the likelihood that a guest will contribute risk to the marketplace in a manner that could increase our costs. In particular, our Turo Risk Score powers unique product capabilities to set fees for trips effectively.

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The more trips taken, the better we are able to refine our algorithms and continuously improve the accuracy of the Turo Risk Score to drive actionable insights that inform fees, inventory adjustments, trust and safety practices, and more. We expect that improvements in our Turo Risk Score capabilities will allow us to adjust fees to account for risks presented in the marketplace, thus helping to optimize broad based risk-related costs, guide fees to be more cost-effective and efficient, and drive improvements to our contribution margin over time. For illustration purposes, we have included a chart below reflecting how the Turo Risk Score has optimized trip monetization by transaction. Note that underlying data, particularly for recent periods, will change as claims develop over time.

Turo Risk Score has optimized monetization & profitablity Turo Risk Score segments Lower score = lower risk Higher score = higher risk Gross margin % 100% 0% -100% 2018 2019 2020 2021 Segment A Segment B Segment C Segment D Segment E

![LOGO](g145731g07a52.jpg)

Notes: U.S. only.

**Seasonality** 

Our overall business is seasonal, reflecting typical travel behavior patterns over the course of the calendar year. In addition, each city and region where we operate has unique seasonality, events, and weather that can increase or decrease demand for our offering. Certain holidays can also have an impact on demand on the holiday itself or during the preceding and subsequent weekends. Typically, our second and third quarters experience higher revenue as this is the peak travel season in North America, the United Kingdom, and France. Our GBV typically follows the seasonality patterns of revenue. We recognize revenue when the trip occurs, and as a result, our revenue, contribution profit (loss), and adjusted EBITDA tend to be highest in the second and third quarter of the year. Our customer support costs also increase in the second and third quarters as we increase our staffing to handle increased activity on our platform in those periods.

In 2020, 2021, and 2022, we saw the COVID-19 pandemic and resulting macroeconomic effects, including on the travel and rental car industries, overwhelm the historical seasonality pattern in our Days, GBV, contribution profit (loss), contribution margin, and adjusted EBITDA as a result of shelter-in-place orders, government travel restrictions, and changing travel preferences. We expect this impact on typical seasonality to continue if the COVID-19 pandemic, similar public health outbreak, or resulting macroeconomic factors continue to impact travel restrictions and customer preferences globally.

**Impact of COVID-19** 

The COVID-19 pandemic has caused significant fluctuations in our quarterly financial results. Initially, we experienced a period of decreased use of our platform due to shelter-in-place orders and the uncertainty resulting

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from the pandemic, which adversely impacted our revenue, results of operations, and cash flows in the first half of 2020. In response to these impacts, we implemented certain temporary cost-cutting measures in March 2020, such as decreased marketing-related spend, layoffs, furloughs, and salary reductions. We also discontinued our operations in Germany, in part, as a cost-cutting measure in response to the COVID-19 pandemic.

As shelter-in-place orders started to be lifted in the second half of 2020, we began experiencing use of our platform above pre-COVID-19 levels. The conditions related to and arising from the COVID-19 pandemic have incentivized additional individuals to seek entrepreneurial forms of primary and supplementary income, which we believe has led to increases in both the total number of hosts listing vehicles on our platform and the number of small business hosts sharing three or more vehicles on our platform. Further, the COVID-19 pandemic has transformed consumer behaviors by elevating the desire for private transportation options instead of public or shared transportation options. In addition, rental car companies reduced their fleet sizes in the early days of the COVID-19 pandemic and have been unable to quickly rebuild their fleets due to constraints in automobile manufacturing capacity. As a result, they are currently challenged in meeting consumer demand in many markets. In light of these conditions, more consumers have turned to peer-to-peer car sharing for their vehicle needs. We have therefore experienced an increase in the number of guests booking trips on our platform, and an improvement in the risk profile of the trips booked as the severity of the COVID-19 pandemic subsides, which may not continue in the future, particularly as we experience fluctuations in the use of our platform since the emergence of variants of concern. The combination of circumstances that have accelerated the growth and anticipated profitability of our business stemming from the effects of the expectations of the tapering of the COVID-19 pandemic are not expected to continue in the future, and we may experience a decrease in growth rate in future periods after the effects of the pandemic diminish, including as a result of reversing many of the cost-cutting measures we employed.

**Changes to our business model, marketplace fees, and value-added services fees** 

From time to time, we institute changes to our Marketplace and Value-Added Services Fees in order to improve the host and guest experience on our marketplace and drive revenue retention and gross profit retention. For example, in the second quarter of 2021, we reduced the Value-Added Services Fees we charge many hosts and implemented temporary reductions in the Marketplace Fees charged to guests for certain trips. We anticipate that these changes, and any future changes, will impact our future financial results as adjustments flow through our business.

**Components of results of operations** 

**Net revenue** 

Our revenue consists of service fees charged to our customers, net of incentives and refunds. We consider both hosts and guests to be our customers. We generate revenue from enabling guest bookings of vehicles offered by hosts on our platform, which we refer to as the Marketplace Services, as well through offering Protection Plan Services. We offer various incentive programs to hosts, including minimum guaranteed payments and vehicle listing bonus payments.

We experience a difference in timing between when a booking is made and when we recognize revenue. We recognize revenue from Marketplace Services at the time of check-in for the reservation. We charge service fees to our customers as a percentage of the value of the total booking, excluding taxes. We collect both the booking value from the guest on behalf of the host and the applicable guest fees owed to us using the guest's pre-authorized payment method. After the trip is complete, we, or our third-party payment processors, disburse the booking value to the host, less the fees due from the host to us. As we do not establish the prices for vehicles booked nor do we control the right to use the vehicle either before or after completion of the service, we have concluded that for accounting purposes we are acting in an agent capacity and revenue is presented on a net basis to reflect the service fees we receive from Marketplace Services.

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We also offer hosts and their guests Protection Plan Services. Insurance is included for hosts and their guests automatically at no additional cost. Amounts charged for Protection Plan Services for hosts vary based upon the level of contractual reimbursement hosts are entitled to receive in the event of damage to, or loss of, their vehicle during a trip. Amounts charged for Protection Plan Services for guests vary based upon the level of their capped financial responsibility in the event of damage to, or loss of, the host's vehicle. We collect fees for Protection Plan Services from the guest up front at the same time the Marketplace Service fees are collected. We provide Protection Plan Services over the duration of the trip, and therefore revenue is recognized ratably over the trip period. Because we bear the risk of loss or damage to the host's vehicle subject to the provisions and exclusions of our terms of service, we are the principal in the transaction for accounting purposes as it relates to the Protection Plan Services. We expect our revenue to increase in future periods as we grow our business. Over the long term, as our business continues to grow and mature, we expect that our revenue growth rate will decline.

**Cost of net revenue** 

Cost of net revenue primarily consists of costs associated with our host and guest protection programs and our platform costs. Protection program costs include costs of physical damage to host vehicles (offset by amounts subrogated by third parties and collected from hosts and guests), liability insurance premiums paid by us, loss reserves, claims processing, and personnel-related expenses. Platform costs include payment processing fees, costs associated with third-party data centers used to host our platform, and amortization of internally developed and acquired developed technology. Personnel-related expenses generally include salary, bonus, stock-based compensation, and employee benefits. We expect our cost of net revenue will continue to increase on an absolute dollar basis for the foreseeable future to the extent that we continue to see growth on our platform. Cost of net revenue may vary as a percentage of net revenue from year to year based on activity on our marketplace.

**Operations and support** 

Operations and support expense primarily consists of costs associated with third-party service provider fees and personnel-related expenses associated with customer support provided to hosts and guests via phone, email, and chat. Personnel-related expenses generally include salary, bonus, stock-based compensation, and employee benefits. We expect our operations and support costs will continue to increase on an absolute dollar basis for the foreseeable future to the extent that we continue to see growth in Days. Operations and support expense may vary as a percentage of net revenue from year to year based on GBV.

**Product development** 

Product development expense primarily consists of personnel-related compensation expenses as well as expenses associated with the licensing of third-party software and allocated overhead. We expect that our product development expense will increase on an absolute dollar basis and will vary from period to period as a percentage of net revenue for the foreseeable future as we continue to invest in product development activities relating to ongoing improvements to and maintenance of our technology platform, including the potential hiring of personnel to support these efforts.

**Sales and marketing** 

Sales and marketing expense primarily consists of performance marketing, personnel-related compensation expenses, and brand marketing. Sales and marketing expense also includes allocated overhead. We expect that our sales and marketing expense will increase on an absolute dollar basis and will vary from period to period as a percentage of net revenue for the foreseeable future.

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**General and administrative** 

General and administrative expense primarily consists of personnel-related expenses for executive management and administrative functions, including finance and accounting, legal, government relations, and human resources. General and administrative expenses also include certain professional service fees, including legal and lobbying expenses, loss contingencies, allocated overhead, and other expenses such as bad debt expense, chargebacks for fraudulent transactions, and indirect taxes. We expect to incur additional general and administrative expense as a result of operating as a public company, including expenses to comply with Securities and Exchange Commission, or SEC, and stock exchange rules and regulations, as well as increased expenses for corporate insurance, director and officer insurance, investor relations, and professional services. We expect general and administrative expense to increase on an absolute dollar basis, vary as a percentage of net revenue from period to period over the short term, and decrease over the long term.

**Change in fair value of redeemable convertible preferred stock warrant liability** 

The change in the fair value of redeemable convertible preferred stock warrant liability consists of the net changes in the fair value of our outstanding warrants to purchase redeemable convertible preferred stock that are remeasured at the end of each reporting period. We will continue to recognize changes in the fair value of warrants until each respective warrant is exercised, expires, or qualifies for equity classification.

**Other income and (expense), net** 

Other income and (expense), net consists primarily of interest income on cash, cash equivalents, and restricted cash, net of interest expense and gains and losses on foreign currency transactions and balances.

**Provision for (benefit from) income taxes** 

Provision for (benefit from) income taxes consists of U.S. federal and state income and franchise tax, international taxes, as applicable, and net changes to the deferred tax assets, liabilities, and valuation allowances.

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**Results of operations** 

The following table sets forth our results of operations for the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Net revenue | $141689 | $149905 | $469047 | $746592 |
|  Costs and expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of net revenue<sup>(1)</sup> | 97598 | 96716 | 199988 | 341510 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operations and support<sup>(1)</sup> | 15400 | 13082 | 33546 | 64286 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development<sup>(1)</sup> | 26649 | 17749 | 33269 | 55082 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing<sup>(1)</sup> | 57845 | 20037 | 52713 | 111297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative<sup>(1)</sup> | 49428 | 58039 | 102975 | 140597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total costs and expenses | 246920 | 205623 | 422491 | 712772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from operations | (105231) | (55718) | 46556 | 33820 |
|  Other income and (expense), net |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of redeemable convertible preferred stock warrant | 5181 | (41934) | (85238) | 50724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income and (expense), net | 1538 | 655 | (594) | 5883 |
|  Other income and (expense), net | 6719 | (41279) | (85832) | 56607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before provision for income taxes | (98512) | (96997) | (39276) | 90427 |
|  Provision for (benefit from) income taxes | 47 | 86 | 1106 | (64237) |
|  Net (loss) income | $(98559) | $(97083) | $(40382) | $154664 |

---

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(1) Amounts include stock-based compensation expense as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Cost of net revenue | $607 | $204 | $1025 | $590 |
|  Operations and support | 92 | 142 | 110 | 188 |
|  Product development | 3140 | 2281 | 4779 | 4942 |
|  Sales and marketing | 669 | 827 | 983 | 988 |
|  General and administrative | 4126 | 5219 | 7495 | 11905 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8634 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8673 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14392 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18613 |

---

------

##### [**Table of Contents**](#toc)
The following table sets forth our results of operations as a percentage of net revenue:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2019**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2020**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2021**  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2022**  |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Net revenue | 100% | 100% | 100% | 100% |
|  Costs and expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of net revenue | 69 | 64 | 43 | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operations and support | 11 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development | 19 | 12 | 7 | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing | 41 | 13 | 11 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 35 | 39 | 22 | 19 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total costs and expenses | 174 | 137 | 90 | 95 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from operations | (74) | (37) | 10 | 5 |
|  Other income and (expense), net |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of redeemable convertible preferred stock warrant | 4 | (28) | (18) | 7 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income and (expense), net | 1 |  |  | 1 |
|  Other income and (expense), net | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5 | (28) | (18) | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before provision for income taxes | (70) | (65) | (8) | 12 |
|  Provision for (benefit from) income taxes |  |  |  | (9) |
|  Net (loss) income | (70)% | (65)% | (9)% | 21% |

---

**Comparison for the years ended December 31, 2021 and 2022** 

**Net revenue** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2021 to 2022**<br>**$ change** | **2021 to 2022% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Net revenue | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;469047 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;746592 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;277545 | 59% |

---

Net revenue increased $277.5 million, or 59%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. This increase was driven by a 75% increase in Days and a 64% increase in GBV. The increase in Days was driven by strength in travel demand combined with an increase in our supply and new guests on the platform. GBV was impacted by strength in Days partially offset by a decrease in pricing. The increase in Days and GBV was partially offset by an increase in host payments of 71%. We implemented an increase to our hosts' take rate in July 2021 as part of several host initiatives aimed to increase supply on the platform.

**Cost of net revenue** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2021 to 2022**<br>**$ change** | **2021 to 2022% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Cost of net revenue | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;199988 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;341510 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;141522 | 71% |

---

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##### [**Table of Contents**](#toc)
Cost of net revenue increased $141.5 million, or 71%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. There was a $71.7 million increase in host protection costs, a $36.9 million increase in insurance related costs, and a $24.7 million increase in payment processing fees, all driven by the increase in Days. In addition, there was a $2.9 million increase in personnel-related compensation expenses due to increased headcount to support the growth in volume on the platform, a $1.3 million increase in amortization of internal-use software due to new developments and additional enhancements to our platform, and several other individually insignificant increases.

As a percentage of net revenue, cost of net revenue was 46% for the year ended December 31, 2022 compared to 43% the year ended December 31, 2021. The increase in cost of net revenue as a percentage of net revenue was primarily due to consistency in host protection and insurance costs compared to a decrease in pricing.

**Operations and support** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2021 to 2022**<br>**$ change** | **2021 to 2022% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Operations and support | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33546 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;64286 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30740 | 92% |

---

Operations and support expense increased $30.7 million, or 92%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. There was a $23.3 million increase in third-party customer support costs, a $3.6 million increase in roadside assistance costs, and a $1.9 million increase in customer support software fees, all driven by the increase in Days. In addition, there was a $1.2 million increase in personnel-related compensation expenses due to increased headcount to manage third-party support.

As a percentage of net revenue, operations and support expense was 9% for the year ended December 31, 2022 compared to 7% the year ended December 31, 2021. The increase in cost of operations and support expense as a percentage of net revenue was primarily due to higher third-party support levels for increased Days booked on the platform.

**Product Development** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2021 to 2022**<br>**$ change** | **2021 to 2022% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Product Development | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33269 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;55082 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21813 | 66% |

---

Product development expense increased $21.8 million, or 66%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily from a $16.2 million increase in personnel-related expenses, a $1.7 million increase in professional services, a $1.0 million increase in software expenses, and several other individually insignificant increases, all driven by our efforts to continue to develop, improve, and enhance the scalability of our platform.

As a percentage of net revenue, product development expense was 7% for the year ended December 31, 2022 and 2021.

------

##### [**Table of Contents**](#toc)
**Sales and marketing** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2021 to 2022**<br>**$ change** | **2021 to 2022% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Sales and marketing | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52713 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;111297 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58584 | 111% |

---

Sales and marketing expense increased $58.6 million, or 111%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily from a $47.3 million increase for paid search and brand marketing expenses, a $4.7 million increase in personnel-related compensation expenses, a $2.9 million increase for marketing professional services, a $1.2 million increase for software expenses, and several other individually insignificant increases. All sales and marketing expense increases were driven by our focus to increase host supply and efforts to drive more traffic and demand to the platform, which we had paused in 2020 and early 2021 due to the COVID-19 pandemic and related uncertainty and restrictions on travel and business.

As a percentage of net revenue, sales and marketing expense was 15% for the year ended December 31, 2022 compared to 11% the year ended December 31, 2021. The increase in sales and marketing expense as a percentage of net revenue was primarily driven by re-investment in sales and marketing initiatives as the demand for travel remained high.

**General and administrative** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2021 to 2022**<br>**$ change** | **2021 to 2022% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  General and administrative | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;102975 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;140597 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37622 | 37% |

---

General and administrative expense increased $37.6 million, or 37%, for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase was primarily from a $16.6 million increase in personnel-related expenses, a $12.1 million increase in chargeback and bad debt expenses, a $12.1 million increase in indirect taxes, a $4.3 million increase in professional services, a $4.2 million increase in acquisition related amortization and compensation, a $4.0 million increase in verification expenses, a $2.9 million increase in software expenses, and several other individually insignificant increases. Personnel-related expenses, chargeback and bad debt expenses, and professional services all increased due to overall company growth combined with our public company readiness initiatives. Sales and use tax reserves increased due to additional exposure in existing markets or new exposures identified due to growing markets. The increases were partially offset by a decrease of $16.2 million in legal costs related to both settlement and litigation costs compared to 2021 and a $5.0 million decrease in contributions to support peer-to-peer car sharing education and regulation.

As a percentage of net revenue, general and administrative expense was 19% for the year ended December 31, 2022 compared to 22% for the year ended December 31, 2021. The decrease in general and administrative expense as a percentage of net revenue was driven by higher costs in 2021 for legal expenses that are not associated with changes in Days.

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##### [**Table of Contents**](#toc)
**Other income and (expense), net** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2021 to 2022**<br>**$ change** | **2021 to 2022% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Change in fair value of redeemable convertible preferred stock warrant | $(85238) | $50724 | $135962 | 160% |
|  Other income and (expense), net | (594) | 5883 | 6477 | 1090% |
|  Total other income and (expense), net | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(85832) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56607 | $142439 | 166% |

---

The change in fair value of our warrant liability was a gain of $50.7 million for the year ended December 31, 2022 compared to a loss of $85.2 million for the year ended December 31, 2021 due to the increase in the fair value of the underlying convertible preferred stock in 2021 compared to a decrease in 2022. The fair value of our redeemable convertible preferred stock and common stock is dependent upon management's future expectations and numerous objective and subjective inputs into a valuation model, including valuations of comparable companies, market performance of comparable publicly traded companies, the likelihood of achieving a liquidity event, and U.S. and global capital market conditions (see Note 2 to our consolidated financial statements included elsewhere in this prospectus). In 2022, the decrease in the fair value of our redeemable convertible preferred stock and common stock was due primarily to the decrease in valuations and increase in volatility of comparable companies, U.S. and global market conditions, and the decreased likelihood of achieving a liquidity event.

Other income and (expense), net increased $6.5 million, or 1090%, for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to interest income caused by rising interest rates.

**Provision for (benefit from) income taxes** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2021** | **2022** | **2020 to 2021**<br>**$ change** | **2020 to 2021% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Provision for (benefit from) income taxes | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1106 | $(64237) | $(65343) | \* |

---

------

\* Not meaningful.

Income tax expense is comprised of federal income taxes, foreign income taxes, and state minimum income and franchise taxes in the United States. We recorded a benefit from income taxes of $64.2 million for the year ended December 31, 2022 compared to a provision for income taxes of $1.1 million the year ended December 31, 2021. During the year ended December 31, 2022, we determined sufficient positive evidence existed to conclude that our U.S. federal and a majority of our U.S. state deferred tax assets are more likely than not realizable and reduced our valuation allowances accordingly.

**Comparison for the years ended December 31, 2020 and 2021** 

**Net revenue** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Net revenue | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;149905 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;469047 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;319142 | 213% |

---

------

##### [**Table of Contents**](#toc)
Net revenue increased $319.1 million, or 213%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. This increase was driven by a 185% increase in Days combined with a 31% increase in pricing. Days and pricing increased due to surging demand in travel as a result of increased accessibility of COVID-19 vaccines, lifting of travel restrictions, and increased consumer comfort with travel, the effects of which on our net revenue were compounded by a continued rental car supply shortage.

**Cost of net revenue** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Cost of net revenue | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;96716 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;199988 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;103272 | 107% |

---

Cost of net revenue increased $103.3 million, or 107%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. There was a $42.0 million increase in insurance-related costs and a $36.2 million increase in host and guest protection plans, both driven by the increase in Days combined with an increase in estimated loss rates for liability as a result of higher policy deductibles. Payment processing and personnel-related expenses increased $21.1 million and $2.8 million, respectively, due to an increase in Days. In addition, there was a $1.3 million increase in amortization of internally developed software.

As a percentage of net revenue, cost of net revenue was 43% for the year ended December 31, 2021, compared to 65% for the year ended December 31, 2020. Insurance and protection program costs, as a percentage of net revenue, were 33% for the year ended December 31, 2021, compared to 52% for the year ended December 31, 2020. Liability insurance and host protection program costs increased due to the increase in Days, offset by lower loss rates as a result of improved guest risk profiles.

**Operations and support** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Operations and support | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13082 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33546 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20464 | 156% |

---

Operations and support expense increased $20.5 million, or 156%, for the year ended December 31, 2021 compared to the year ended December 31, 2020. There was a $14.6 million increase in third-party call center costs, a $2.0 million increase in help desk software fees, a $1.2 million increase in personnel-related expenses, and a $2.3 million increase in roadside assistance due to an increase in Days.

As a percentage of net revenue, operations and support expense was 7% for the year ended December 31, 2021, compared to 9% for the year ended December 31, 2020. The decrease in operations and support expense as a percentage of net revenue was primarily due to higher revenues during the period due to an increase in travel.

**Product development** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Product development | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17749 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33269 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15520 | 87% |

---

------

##### [**Table of Contents**](#toc)
Product development expense increased $15.5 million, or 87%, for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to a $13.4 million increase in personnel-related compensation expenses, a $1.2 million increase in third-party contractor expenses, and a $0.4 million increase in third-party software expenses all primarily due to our efforts to continue to develop, improve, and enhance the scalability of our platform.

As a percentage of net revenue, product development expense was 7% for the year ended December 31, 2021, compared to 12% for the year ended December 31, 2020. Product development expense decreased as a percentage of net revenue as product development costs represented a lower proportion of higher revenues during the period due to an increase in travel.

**Sales and marketing** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Sales and marketing | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20037 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52713 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;32676 | 163% |

---

Sales and marketing expense increased $32.7 million, or 163%, for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to a $28.5 million increase in performance and brand marketing expenses, a $2.6 million increase in personnel-related compensation expenses, and an increase of $1.1 million in third-party service provider expenses. In March 2020, driven by COVID-19 and related economic uncertainty and restrictions on travel and business, we temporarily paused our sales and marketing investments in new initiatives and our performance marketing spend. In 2021, as the travel industry began to recover, we resumed sales and marketing investments and marketing spend. We also launched our new Find Your Drive television, digital channels, and print campaign focused on increasing brand awareness among both hosts and guests.

As a percentage of net revenue, sales and marketing expense was 11% for the year ended December 31, 2021, compared to 13% for the year ended December 31, 2020. The decrease of sales and marketing expense as a percentage of net revenue was primarily driven by performance and brand marketing expenses representing a lower proportion of higher revenues during the period due to an increase in travel.

**General and administrative** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  General and administrative | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58039 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;102975 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44936 | 77% |

---

General and administrative expense increased $44.9 million, or 77%, for the year ended December 31, 2021 compared to the year ended December 31, 2020, primarily due to a $12.9 million increase in legal reserves and related litigation expenses related to current legal loss contingencies (see Note 5 to our consolidated financial statements included elsewhere in this prospectus), a $12.3 million increase in personnel-related expenses, a $5.0 million increase in contributions to support peer-to-peer car sharing education and regulation, a $5.1 million increase in guest verification expenses, a $4.3 million increase in spend for consultants and service providers, a $2.8 million increase in bad debt expense and chargebacks for fraudulent transactions, a $1.0 million increase in trust and safety expenses, and a $0.9 million increase in reserves for sales and use tax (see Note 5 to our consolidated financial statements included elsewhere in this prospectus). All increases in general and administrative expenses are a result of increased headcount and other services needed to support both increasing Days and operations as a public company.

------

##### [**Table of Contents**](#toc)
As a percentage of net revenue, general and administrative expense was 22% for the year ended December 31, 2021, compared to 39% for the year ended December 31, 2020. The decrease of general and administrative expense as a percentage of net revenue was driven by higher costs in 2020 for legal, facilities, tax, and regulatory expenses that are not associated with changes in Days and higher net revenues in 2021 due to an increase in travel.

**Other income and (expense), net** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Change in fair value of redeemable convertible preferred stock warrant | $(41934) | $(85238) | $(43304) | 103% |
|  Other income and (expense), net | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;655 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(594) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1249) | (191)% |
|  Total other income and (expense), net | $(41279) | $(85832) | $(44553) | 108% |

---

The loss on the change in fair value of our warrant liability increased by $43.3 million due to the increase in the fair value of the redeemable convertible preferred stock underlying our outstanding warrants during the year ended December 31, 2021 as compared to the changes in the fair value of the underlying redeemable convertible preferred stock during the year ended December 31, 2020. The fair value of the redeemable convertible preferred stock is dependent upon unobservable inputs into a valuation model (see Note 2 to our consolidated financial statements included elsewhere in this prospectus) and management's forecast, which has continued to increase based on continued growth in demand for travel.

Other income and (expense), net decreased $1.2 million, or 191% for the year ended December 31, 2021 compared to the year ended December 31, 2020 primarily due to a decrease in interest income from the reduced interest earned on our cash and cash equivalents and restricted cash balances driven by a decline in interest rates.

**Provision for income taxes** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2020 to 2021**<br>**$ change** | **2020 to 2021**<br>**% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Provision for income taxes | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1106 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1020 | 1,186% |

---

Provision for income tax expense is comprised of foreign income taxes, state income taxes, and franchise taxes in the United States. Income tax expense increased $1.0 million or 1,186%, for the year ended December 31, 2021 compared to the year ended December 31, 2020 primarily as a result of California's suspension of the NOL carryforward deduction.

**Comparison for the years ended December 31, 2019 and 2020** 

**Net revenue** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Net revenue | $141689 | $149905 | $8216 | 6% |

---

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##### [**Table of Contents**](#toc)
Net revenue increased $8.2 million, or 6%, for the year ended December 31, 2020 compared to the year ended December 31, 2019. This increase was driven by an increase in our revenue from Marketplace Services and Protection Plan Services of $9.0 million primarily due to an increase in average net revenue per Day, driven in part by the introduction of the Turo Risk Score in April 2020 and a decrease in promotional credits provided to guests. Revenue from Marketplace Services and Protection Plan Services increased despite an 18% decrease in Days and a 4% decrease in GBV due to higher net revenue per Day that was due to the introduction of our Turo Risk Score, which also reflected adverse shifts in the distribution of the risk profiles as a result of riskier driving during the COVID-19 pandemic. This increase was partially offset by a decrease in valet fee revenue of $0.8 million due to the discontinuation of our valet program in January 2020, in which we collected fees from hosts for the facilitation of the pickup and drop off of vehicles at limited locations for guests.

**Cost of net revenue** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Cost of net revenue | $97598 | $96716 | $(882) | (1)% |

---

Cost of net revenue decreased $0.9 million, or 1%, for the year ended December 31, 2020 compared to the year ended December 31, 2019. There was a $5.5 million decrease in insurance-related costs driven by a decline in Days due to the COVID-19 pandemic. In addition, there was a $3.2 million decrease in costs from our valet program, which was discontinued in January 2020. These were partially offset by a $6.7 million increase in costs associated with our host protection program during the COVID-19 pandemic and a $1.4 million increase in amortization costs for internally developed software.

As a percentage of net revenue, cost of net revenue was 65% for the year ended December 31, 2020, compared to 69% for the year ended December 31, 2019. The decrease in cost of net revenue as a percentage of net revenue was driven by the introduction of the Turo Risk Score in April 2020, the discontinuation of our valet program in January 2020, and general increases in operating leverage as a result of scaling our business.

**Operations and support** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Operations and support | $15400 | $13082 | $(2318) | (15)% |

---

Operations and support expense decreased $2.3 million, or 15%, for the year ended December 31, 2020 compared to the year ended December 31, 2019 primarily due to a $2.5 million decrease in third-party call center expenses driven by a decline in Days due to the effects of the COVID-19 pandemic.

As a percentage of net revenue, operations and support expense was 9% for the year ended December 31, 2020, compared to 11% for the year ended December 31, 2019. The decrease in operations and support expense as a percentage of net revenue was primarily driven by temporary cost-cutting measures in response to the COVID-19 pandemic.

------

##### [**Table of Contents**](#toc)
**Product development** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Product development | $26649 | $17749 | $(8900) | (33)% |

---

Product development expense decreased $8.9 million, or 33%, for the year ended December 31, 2020 compared to the year ended December 31, 2019, primarily due to a $7.2 million decrease in personnel-related compensation expenses, a $0.7 million decrease in third-party contractor expenses, a $0.5 million decrease in third-party software expenses, and a $0.5 million decrease in allocated overhead, all primarily due to temporarily lower headcount in 2020 related to the COVID-19 pandemic.

As a percentage of net revenue, product development expense was 12% for the year ended December 31, 2020, compared to 19% for the year ended December 31, 2019. The decrease of product development expense as a percentage of net revenue was driven primarily by headcount decreases as a result of COVID-19, which are expected to be largely temporary.

**Sales and marketing** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Sales and marketing | $57845 | $20037 | $(37808) | (65)% |

---

Sales and marketing expense decreased $37.8 million, or 65%, for the year ended December 31, 2020 compared to the year ended December 31, 2019, primarily due to a $36.0 million decrease in marketing expenses and a $1.8 million decrease in third-party service provider expenses. In March 2020, driven by COVID-19 and related economic uncertainty and restrictions on travel and business, we temporarily paused our sales and marketing investments in new initiatives and our performance marketing spend.

As a percentage of net revenue, sales and marketing expense was 13% for the year ended December 31, 2020, compared to 41% for the year ended December 31, 2019. The decrease of sales and marketing expense as a percentage of net revenue was primarily driven by temporary COVID-19 related cost decreases in marketing activities and general increases in operating leverage as a result of increasing scale in our business.

**General and administrative** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  General and administrative | $49428 | $58039 | $8611 | 17% |

---

General and administrative expense increased $8.6 million, or 17%, for the year ended December 31, 2020 compared to the year ended December 31, 2019, primarily due to a $4.4 million increase in legal, tax, and regulatory expenses, which include litigation and settlement expenses and sales and indirect tax reserves, a $2.4 million increase in bad debt expense and chargebacks for fraudulent transactions, a $1.2 million increase in allocated overhead, and a $1.1 million increase in asset impairment. These increases were partially offset by a $0.7 million decrease in personnel-related compensation expenses. The increase in bad debt, chargebacks and asset impairment and the decrease in third-party service provider expenses primarily related to the impact of COVID-19.

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##### [**Table of Contents**](#toc)
As a percentage of net revenue, general and administrative expense was 39% for the year ended December 31, 2020, compared to 35% for the year ended December 31, 2019. The increase of general and administrative expense as a percentage of net revenue was driven by the increase in legal, tax and regulatory expenses, and by COVID-19 related increases in bad debt, chargebacks, and impairment charges, which are expected to be temporary.

**Other income and (expense), net** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Change in fair value of redeemable convertible preferred stock warrant | $5181 | $(41934) | $(47115) | (909)% |
|  Other income and (expense), net | 1538 | 655 | (883) | (57) |
|  Total other income and (expense), net | $6719 | $(41279) | $(47998) | (714)% |

---

The loss on the change in fair value of our warrant liability increased by $47.1 million due to the increase in the fair value of the redeemable convertible preferred stock underlying our outstanding warrants during the year ended December 31, 2020 as compared to the changes in the fair value of the underlying redeemable convertible preferred stock during the year ended December 31, 2019.

Other income and (expense), net decreased $0.9 million, or 57% for the year ended December 31, 2020 compared to the year ended December 31, 2019 primarily due to a $0.9 million decrease in interest income from the reduced interest earned on our cash and cash equivalents and restricted cash balances.

**Provision for income taxes** 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2019 to 2020<br>$ change** | **2019 to 2020% change** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Provision for income taxes | $47 | $86 | $39 | 83% |

---

Income tax expense is comprised of foreign income taxes and state minimum income and franchise taxes in the United States.

**Quarterly results of operations** 

The following table sets forth our unaudited quarterly consolidated results of operations for the 16 quarterly periods ended December 31, 2022. These unaudited quarterly results of operations have been prepared on the same basis as our audited consolidated financial statements included elsewhere in this prospectus. In the opinion of management, the financial information set forth in the table below reflects all normal recurring adjustments necessary for the fair statement of results of operations for these periods. Our historical results are not necessarily indicative of the results that may be expected in the future, and the results of a particular quarter or other interim period are not necessarily indicative of the results for a full year. The following unaudited quarterly consolidated results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this prospectus.

---

| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,**<br>**2019** | **Jun 30,**<br>**2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,<br>2022** | **Dec 31,<br>2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Net revenue | $25168 | $32393 | $45824 | $38304 | $34963 | $23964 | $48892 | $42086 | $56185 | $123989 | $150309 | $138564 | $142850 | $190206 | $226266 | $187270 |
|  Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of net revenue<sup>(1)</sup> | 17966 | 24215 | 27576 | 27841 | 23708 | 19244 | 29195 | 24569 | 31359 | 45079 | 61230 | 62320 | 69514 | 86845 | 100099 | 85052 |

---

------

##### [**Table of Contents**](#toc)

---

| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,**<br>**2019** | **Jun 30,**<br>**2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,<br>2022** | **Dec 31,<br>2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operations and support<sup>(1)</sup> | 3371 | 3892 | 4076 | 4061 | 3984 | 2190 | 3500 | 3408 | 3587 | 7407 | 11287 | 11265 | 11699 | 16231 | 18156 | 18200 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development<sup>(1)</sup> | 6438 | 6361 | 7053 | 6797 | 5608 | 3612 | 4077 | 4452 | 5335 | 7799 | 8094 | 12041 | 9994 | 13364 | 14323 | 17401 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing<sup>(1)</sup> | 11297 | 16307 | 15487 | 14754 | 12316 | 1810 | 3090 | 2821 | 3442 | 10960 | 16349 | 21962 | 17685 | 27381 | 28713 | 37518 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative<sup>(1)</sup> | 9344 | 11489 | 13967 | 14628 | 16958 | 12118 | 12052 | 16911 | 15951 | 24083 | 32003 | 30938 | 30051 | 33616 | 38537 | 38393 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 48416 | 62264 | 68159 | 68081 | 62574 | 38974 | 51914 | 52161 | 59674 | 95328 | 128963 | 138526 | 138943 | 177437 | 199828 | 196564 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from operations | (23248) | (29871) | (22335) | (29777) | (27611) | (15010) | (3022) | (10075) | (3489) | 28661 | 21346 | 38 | 3907 | 12769 | 26438 | (9294) |
|  Other income and (expense), net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of preferred stock warrants |  |  |  | 5181 | 11152 | (11625) | (6302) | (35159) | (58466) | (117483) | 1197 | 89514 | (10499) | 69743 | (5750) | (2770) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income and (expense), net | 237 | 99 | 577 | 625 | 705 | 122 | (76) | (96) | (63) | (204) | (26) | (301) | (146) | 286 | 1430 | 4313 |
|  Other income and (expense), net | 237 | 99 | 577 | 5806 | 11857 | (11503) | (6378) | (35255) | (58529) | (117687) | 1171 | 89213 | (10645) | 70029 | (4320) | 1543 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before provision for income taxes | (23011) | (29772) | (21758) | (23971) | (15754) | (26513) | (9400) | (45330) | (62018) | (89026) | 22517 | 89251 | (6738) | 82798 | 22118 | (7751) |
|  Provision for (benefit from) income taxes |  | 24 | 15 | 8 |  | 20 | 48 | 18 | 10 | 37 | 700 | 359 | 238 | 1505 | (61380) | (4600) |
|  Net (loss) income | $(23011) | $(29796) | $(21773) | $(23979) | $(15754) | $(26533) | $(9448) | $(45348) | $(62028) | $(89063) | $21817 | $88892 | $(6976) | $81293 | $83498 | (3151) |

---

------

(1) Amounts include stock-based compensation expense as follows:

---

| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,<br>2019** | **Jun 30,<br>2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,<br>2022** | **Dec 31,<br>2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  Cost of net revenue | $152 | $142 | $201 | $112 | $27 | $67 | $64 | $46 | $235 | $237 | $267 | $286 | $157 | $140 | $146 | $147 |
|  Operations and support | 15 | 15 | 41 | 21 | 18 | 47 | 51 | 26 | 25 | 27 | 28 | 30 | 45 | 51 | 48 | 44 |
|  Product development | 851 | 664 | 1093 | 532 | 311 | 569 | 875 | 526 | 814 | 1029 | 1083 | 1853 | 1300 | 1308 | 1189 | 1145 |
|  Sales and marketing | 135 | 140 | 236 | 158 | 148 | 237 | 256 | 186 | 274 | 213 | 210 | 286 | 263 | 256 | 231 | 238 |
|  General and administrative | 828 | 738 | 1836 | 724 | 1350 | 1423 | 1287 | 1159 | 1150 | 1815 | 1995 | 2535 | 2438 | 3114 | 3251 | 3102 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $1981 | $1699 | $3407 | $1547 | $1854 | $2343 | $2533 | $1943 | $2498 | $3321 | $3583 | $4990 | $4203 | $4869 | $4865 | $4676 |

---

The following table sets forth our unaudited quarterly consolidated results of operations as a percentage of net revenue for the applicable quarterly period:

---

| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,<br>2019** | **Jun 30,<br>2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,<br>2022** | **Dec 31,<br>2022** |
|  Net revenue | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100 | 100% | 100% | 100% | 100% | 100% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of net revenue | 71 | 75 | 60 | 73 | 68 | 80 | 60 | 58 | 56 | 36 | 41 | 45 | 49 | 46 | 44 | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operations and support | 13 | 12 | 9 | 11 | 11 | 9 | 7 | 8 | 6 | 6 | 8 | 8 | 8 | 9 | 8 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development | 26 | 20 | 15 | 18 | 16 | 15 | 8 | 11 | 9 | 6 | 5 | 9 | 7 | 7 | 6 | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing | 45 | 50 | 34 | 39 | 35 | 8 | 6 | 7 | 6 | 9 | 11 | 16 | 12 | 14 | 13 | 20 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 37 | 35 | 30 | 38 | 49 | 51 | 25 | 40 | 28 | 19 | 21 | 22 | 21 | 18 | 17 | 21 |

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##### [**Table of Contents**](#toc)

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| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,<br>2019** | **Jun 30,<br>2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,<br>2022** | **Dec 31,<br>2022** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 192 | 192 | 149 | 178 | 179 | 163 | 106 | 124 | 106 | 77 | 86 | 100 | 97 | 93 | 88 | 105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from operations | (92) | (92) | (49) | (78) | (79) | (63) | (6) | (24) | (6) | 23 | 14 |  | 3 | 7 | 12 | (5) |
|  Other income and (expense), net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of preferred stock warrants |  |  |  | 14 | 32 | (49) | (13) | (84) | (104) | (95) | 1 | 65 | (7) | 37 | (3) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income and (expense), net | 1 |  | 1 | 2 | 2 | 1 |  |  |  |  |  |  |  |  | 1 | 2 |
|  Other income and (expense), net | 1 |  | 1 | 15 | 34 | (48) | (13) | (84) | (104) | (95) | 1 | 64 | (7) | 37 | (2) | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before provision for income taxes | (91) | (92) | (47) | (63) | (45) | (111) | (19) | (108) | (110) | (72) | 15 | 64 | (5) | 44 | 10 | (4) |
|  Provision for (benefit from) income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  | 1 | (27) | (2) |
|  Net (loss) income | (91) | (92) | (48) | (63) | (45) | (111) | (19) | (108) | (110) | (72) | 15 | 64 | (5) | $43 | 37 | (2) |

---

**Quarterly trends** 

**Net revenue** 

Net revenue in each of the quarters in 2021 is higher than the net revenue in the same quarter in the prior year primarily from an increase in the number of Days booked on our platform as well as an increase in pricing resulting from increased demand in travel as COVID-19 vaccines have become more accessible, many travel restrictions have been lifted, and consumers have become more comfortable traveling. The increase in demand was compounded by a supply shortage in rental cars. Our quarterly net revenue fluctuations reflect the typical travel patterns for North America, the United Kingdom, and France. Net revenue is historically lower in the first quarter, peaks during the third quarter when summer travel occurs, and remains strong in the fourth quarter due to certain holidays. Net revenue in the second quarter of 2020 decreased as COVID-19 pandemic disrupted travel but started to improve in the third quarter of 2020 as the domestic travel market improved. Net revenue in the fourth quarter of 2021 decreased compared to the third quarter of 2021, primarily due to a small decrease in prices and additional host incentive payments as Days booked increased compared to the third quarter of 2021. Net revenue has increased in each of the first, second, and third quarters of 2022 due to the increase in Days and travel demand combined with an increase in our supply and new guests on the platform. Net revenue in the fourth quarter of 2022 decreased compared to the third quarter of 2022 due to a mix of travel seasonality combined with a decrease in pricing.

**Cost of net revenue** 

On a quarterly basis, cost of net revenue fluctuated with our net revenue seasonal trends, as processing costs vary based on changes in number of Days. Cost of net revenue as a percentage of net revenue also fluctuates between quarters as certain costs associated with the platform remain fixed. Insurance and protection program costs historically fluctuate based on net revenue but are also impacted by guest risk profiles and the frequency and severity of physical damage costs claims. In the second quarter of 2020, cost of net revenue as a percentage of net revenue increased compared to the second quarter of 2019 due to the COVID-19 pandemic. In the third quarter of 2020, cost of net revenue as a percentage of net revenue decreased compared to the second quarter of 2020 as our cost reduction measures were realized and the travel industry began to recover. Starting in the second quarter of 2021 through the first quarter of 2022, cost of net revenue as a percentage of net revenue decreased compared to the same quarters in the prior year, due to higher pricing combined with favorable guest risk profiles and changes in our insurance liability partners. Cost of net revenue as a percentage of net revenue decreased in the second quarter of 2022 due to a decrease in host protection

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program costs. Cost of net revenue as a percentage of net revenue decreased in the third quarter of 2022 and increased in the fourth quarter of 2022 due to changes in estimates for our host protection program and liability insurance costs.

**Operations and support** 

On a quarterly basis, operations and support expense fluctuated with our net revenue seasonal trends, as customer support costs vary based on changes in number of Days. In the second and third quarters of 2020, operations and support expense as a percentage of net revenue decreased as a result of the temporary headcount reduction response to the COVID-19 pandemic. In the second and third quarters of 2021, operations and support expense as a percentage of revenue decreased due to an increase in travel and resulting increase in use of our platform. Operations and support expense increased as a percentage of net revenue in the third quarter of 2021 and has remained consistent through the first, second, and third quarters of 2022 as we continued to increase third-party call center support costs and help desk software license fees to support increased Days. Operations and support expense as a percentage of net revenue increased in the fourth quarter of 2022 as Days booked on the platform increased combined with decreasing prices.

**Product development** 

On a quarterly basis, product development expense has fluctuated with our changes in headcount as a result of the COVID-19 pandemic in 2020. In the second and third quarter of 2020, product development expense as a percentage of net revenue decreased as a result of the headcount reduction response to the COVID-19 pandemic. In the second and third quarters of 2021, product development expense as a percentage of net revenue decreased as product development expenses represented a lower proportion of higher net revenue recorded due to increased demand for travel during the period. In the fourth quarter of 2021 and the first and second quarters of 2022, product development expenses as a percentage of net revenue increased to support our efforts to continue to develop, improve, and enhance the scalability of our platform. In the third and fourth quarter of 2022, product development expense as a percentage of net revenue fluctuated as headcount remained consistent, despite changes in revenue due to seasonality and pricing during the quarters.

**Sales and marketing** 

On a quarterly basis, sales and marketing expense generally fluctuated with the uncertainty of the COVID-19 pandemic. Between the first quarter of 2019 through the first quarter of 2020, sales and marketing expense was between 35% and 50% of our net revenue, because we believe it is necessary to invest in performance and brand marketing to increase Days booked on our platform. During the second quarter of 2020, driven by the COVID-19 pandemic, we paused our sales and marketing investments in new initiatives and our performance marketing spend. During the second quarter of 2021 through the first quarter of 2022, we began reinvesting in our performance marketing spend and launched the new Find Your Drive campaign to increase brand awareness. In the first quarter of 2022, we continued to invest in paid search marketing as the demand for travel remained elevated. In the second and third quarters of 2022, we continued with paid search marketing efforts and increased performance marketing for summer travel and our New York launch. During the fourth quarter of 2022, we added to our marketing campaigns to further drive brand recall and target existing and new audiences including social media and airport traffic.

**General and administrative** 

On a quarterly basis, general and administrative expense fluctuated with the changes in Days, offset by legal, headcount, and facility costs not associated with changes in net revenue. During the second and third quarters of 2020, we implemented headcount and temporary compensation reductions as a result of the impact of the COVID-19 pandemic. During the second and third quarters of 2020, legal expenses associated with ongoing

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litigation decreased as courts closed and legal proceedings were limited due to the COVID-19 pandemic. During the fourth quarter of 2020, the temporary COVID-19 compensation reductions were fully restored and we increased our reserve for indirect taxes in the U.K. and certain U.S. states. During the second quarter of 2021, we increased headcount and approved a one-time company-wide performance bonus. We also made one-time contributions to support peer-to-peer car sharing education and regulation. During the third quarter of 2021, we accrued an additional $10.9 million in legal reserves for legal loss contingencies. During the fourth quarter of 2021 and the first quarter of 2022, we recorded loss contingency reserves for certain state indirect taxes. During the first quarter of 2022, we saw a decrease in legal expenses as no significant settlements occurred. During 2022, we completed settlements and audits in multiple jurisdictions, resulting in a release of an exposure in the second quarter of 2022 and an accrual in the third quarter of 2022. In the fourth quarter of 2022, expenses remained consistent with prior quarters with several individually insignificant offsetting increases and decreases.

**Provision for income taxes** 

From the first quarter of 2019 through the second quarter of 2021, provision for income taxes remained consistent because of our prior and current net losses. During the third quarter of 2021, we recognized tax expense as a result of California's suspension of the NOL carryforward deduction. During the second quarter of 2022, we had federal and state taxable income limited to 80% of previous net operating losses. During the third quarter of 2022, we determined based on historical earnings and future projected earnings that our U.S. federal and a majority of our U.S. state deferred tax assets are more likely than not to be realizable and reduced our valuation allowances accordingly. In the fourth quarter of 2022, we further reduced our valuation allowance in relation to one of our U.S. state deferred tax assets.

**Quarterly non-GAAP financial measures** 

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| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,<br>2019** | **Jun 30,<br>2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,<br>2022** | **Dec 31,<br>2022** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Gross profit | $7202 | $8178 | $18248 | $10463 | $11255 | $4720 | $19697 | $17517 | $24826 | $78910 | $89079 | $76244 | $73336 | $103361 | $126167 | $102218 |
|  Contribution (loss) profit | $(6122) | $(11361) | $(868) | $(8743) | $(5668) | $846 | $11352 | $10752 | $17638 | $58669 | $59264 | $40617 | $41378 | $54586 | $76085 | $43957 |
|  Gross margin | 28.6% | 25.2% | 39.8% | 27.3% | 32.2% | 19.7% | 40.3% | 41.6% | 44.2% | 63.6% | 59.3% | 55.0% | 51.3% | 54.3% | 55.8% | 54.6% |
|  Contribution margin | (24.3)% | (35.1)% | (1.9%) | (22.8%) | (16.2%) | 3.5% | 23.2% | 25.5% | 31.4% | 47.3% | 39.4% | 29.3% | 29.0% | 28.7% | 33.6% | 23.5% |
|  Net (loss)<br>income | $(23011) | $(29796) | $(21773) | $(23979) | $(15754) | $(26533) | $(9448) | $(45348) | $(62028) | $(89063) | $21817 | $88892 | $(6976) | $81293 | $83498 | $(3151) |
|  Adjusted EBITDA | $(20413) | $(27225) | $(17788) | $(26195) | $(24679) | $(11117) | $345 | $(2599) | $197 | $33279 | $36169 | $11490 | $14159 | $21340 | $40919 | $3245 |

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**Quarterly trends in non-GAAP financial measures** 

Our quarterly adjusted contribution margin fluctuated based on the level of investment in customer acquisition and insurance protection costs, as well as seasonality. Our quarterly adjusted EBITDA fluctuated based on growth initiatives and seasonality.

**Quarterly reconciliations of non-GAAP financial measures** 

We use contribution margin and adjusted EBITDA to measure our performance and to identify trends, to formulate financial projections, and to make strategic decisions. The following table presents the reconciliations from the GAAP measure to the non-GAAP measure.

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***Reconciliation of gross profit to contribution (loss) profit and reconciliation of gross margin to contribution margin:***

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| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,<br>2019** | **Jun 30,<br>2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,<br>2022** | **Dec 31,<br>2022** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Gross profit | $7202 | $8178 | $18248 | $10463 | $11255 | $4720 | $19697 | $17517 | $24826 | $78910 | $89079 | $76244 | $73336 | $103361 | $126167 | $102218 |
|  Add: Stock-based compensation included in cost of net revenue | 152 | 142 | 201 | 112 | 27 | 67 | 64 | 47 | 235 | 237 | 267 | 286 | 157 | 140 | 146 | 147 |
|  Add: Depreciation and amortization included in cost of net revenue | 254 | 284 | 346 | 436 | 482 | 643 | 701 | 784 | 866 | 948 | 1027 | 1054 | 1062 | 1340 | 1689 | 1878 |
|  Less: operations and support | 3356 | 3877 | 4035 | 4040 | 3966 | 2143 | 3449 | 3383 | 3562 | 7380 | 11259 | 11235 | 11654 | 16180 | 18108 | 18156 |
|  Less: Customer acquisition costs | 8928 | 14266 | 12882 | 12162 | 10601 | 510 | 1731 | 1380 | 1958 | 9086 | 13830 | 19628 | 14682 | 23810 | 24029 | 37727 |
|  Less: Verification costs | 969 | 1193 | 1265 | 1125 | 1057 | 695 | 1129 | 1255 | 1313 | 2362 | 3080 | 2838 | 2614 | 3586 | 3711 | 3977 |
|  Less: Chargebacks and bad debt expense | 477 | 629 | 1481 | 2427 | 1808 | 1236 | 2801 | 1578 | 1456 | 2598 | 2940 | 3266 | 4227 | 6679 | 6069 | 5426 |
|  Contribution (loss) profit | $(6122) | $(11361) | $(868) | $(8743) | $(5668) | $846 | $11352 | $10752 | $17638 | $58669 | $59264 | $40617 | $41378 | $54586 | $76085 | $43957 |
|  Gross margin | 28.6% | 25.2% | 39.8% | 27.3% | 32.2% | 19.7% | 40.3% | 41.6% | 44.2% | 63.6% | 59.3% | 55.0% | 51.3% | 54.3% | 55.8% | 54.6% |
|  Contribution margin | (24.3)% | (35.1)% | (1.9)% | (22.8)% | (16.2)% | 3.5% | 23.2% | 25.5% | 31.4% | 47.3% | 39.4% | 29.3% | 29.0% | 28.7% | 33.6% | 23.5% |

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***Reconciliation of net loss to adjusted EBITDA:***

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| | | | | | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
|  | **Mar 31,<br>2019** | **Jun 30,<br>2019** | **Sep 30,<br>2019** | **Dec 31,<br>2019** | **Mar 31,<br>2020** | **Jun 30,<br>2020** | **Sep 30,<br>2020** | **Dec 31,<br>2020** | **Mar 31,<br>2021** | **Jun 30,<br>2021** | **Sep 30,<br>2021** | **Dec 31,<br>2021** | **Mar 31,<br>2022** | **Jun 30,<br>2022** | **Sep 30,**<br>**2022** | **Dec 31,<br>2022** |
|  | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** | **(in thousands, except percentages)** |
|  Net (loss) income | $(23011) | $(29796) | $(21773) | $(23979) | $(15754) | $(26533) | $(9448) | $(45348) | $(62028) | $(89063) | $21817 | $88892 | $(6976) | $81293 | $83498 | $(3151) |
|  Add (deduct): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  Provision for (benefit from) income taxes |  | 24 | 15 | 8 |  | 20 | 48 | 18 | 10 | 37 | 700 | 359 | 238 | 1505 | (61380) | (4600) |
|  Other income and (expense), net | (237) | (99) | (577) | (625) | (705) | (122) | 76 | 96 | 63 | 204 | 26 | 301 | 146 | (286) | (1430) | (4313) |
|  Depreciation and amortization | 339 | 325 | 399 | 488 | 587 | 746 | 803 | 887 | 939 | 1021 | 1097 | 1131 | 1142 | 1846 | 2977 | 3178 |
|  Stock-based compensation | 1 ,981 | 1699 | 3407 | 1547 | 1854 | 2343 | 2533 | 1943 | 2498 | 3321 | 3583 | 4990 | 4203 | 4869 | 4865 | 4676 |
|  Impairment | 176 |  |  | 363 | 58 | 26 |  | 1732 | 40 | 8 |  |  |  |  |  |  |
|  Legal , regulatory, and indirect tax reserves | 339 | 622 | 741 | 1184 | 433 | 778 | 31 | 2914 | 209 | 268 | 10143 | 5331 | 4907 | 1856 | 6639 | 4685 |
|  Change in fair value of redeemable convertible preferred stock warrant liability |  |  |  | (5181) | (11152) | 11625 | 6302 | 35159 | 58466 | 117483 | (1197) | (89514) | 10499 | (69743) | 5750 | 2770 |
|  Adjusted EBITDA | $(20413) | $(27225) | $(17788) | $(26195) | $(24679) | $(11117) | $345 | $(2599) | $197 | $33279 | $36169 | $11490 | $14159 | $21340 | $40919 | $3245 |

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**Liquidity and capital resources** 

During the years ended December 31, 2021 and 2022, we generated cash flows from operations of $108.0 million and $41.0 million, respectively, as a result of increased Days and GBV during those periods. During the years ended December 31, 2019 and 2020, we generated negative cash flows from operations of $65.6 million and $41.2 million, respectively. We have financed our operations through revenue generated from sales, debt issuances, and redeemable convertible preferred stock. As of December 31, 2022, our cash and cash equivalents were $301.0 million, which consist of cash on deposit with banks as well as institutional money market funds. This balance excludes $34.9 million of restricted cash, which is pledged as security for letters of credit established by us for certain insurance policies and obligations under our facilities leases as of December 31, 2022. In addition, this balance excludes $2.0 million as of December 31, 2022 that we held for bookings in advance of guests completing trips that we record separately on our balance sheet in funds held for hosts with a corresponding liability in funds payable to hosts.

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We believe that our existing cash and cash equivalents balances are sufficient to fund our working capital needs for at least the next 12 months and beyond. Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to attract and retain hosts and guests, the timing and extent of spending or discounts or promotions to support our efforts to develop our platform, and the expansion of sales and marketing activities. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.

The following table summarizes our cash flows for the periods presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2019** | **2020** | **2021** | **2022** |
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  **Consolidated statements of cash flows data:** |  |  |  |  |
|  Net cash (used in) provided by operating activities | $(65584) | $(41222) | $108007 | $41019 |
|  Net cash (used in) provided by investing activities | (4894) | (4248) | (3704) | 2530 |
|  Net cash provided by (used in) financing activities | 244169 | 6287 | 9563 | (5791) |
|  Effects of exchange rate changes on cash and cash equivalents | (8) | 30 | (38) | (403) |
|  Net increase (decrease) in cash and cash equivalents | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;173683 | $&nbsp;&nbsp;&nbsp;&nbsp;(39153) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;113828 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;37355 |

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**Operating activities** 

During the year ended December 31, 2022, operating activities provided $41.0 million in cash as a result of net income of $154.7 million, adjusted by non-cash charges of $86.3 million and a decrease of $27.3 million from changes in our working capital. The non-cash charges of $86.3 million were primarily comprised of a tax benefit of $68.7 million due to the release of our U.S. federal and a majority of our U.S. stated deferred tax asset valuation allowances, a gain of $50.7 million due to the revaluation of our preferred stock warrant liability, partially offset by $18.6 million due to stock-based compensation, $9.1 million due to depreciation and amortization, and $5.4 million due to the reduction of operating lease right-of-use assets and accretion of operating lease liabilities. The decrease of $27.3 million in our working capital was due to $92.5 million for additional insurance deposits, $33.2 million due to funds held at payment processors due to growth in Days and advanced bookings, $25.4 million in prepaids due to increase in property damage claims receivables, $5.2 million due to payments on operating lease liabilities, $1.3 million due to changes in accounts receivable and other non-current assets, and $1.0 million due to changes in other long-term liabilities. The decreases are partially offset by the increase of $58.2 million in insurance reserves due to growth in Days, $40.2 million in accrued liabilities as a result of host protection costs, $16.1 million funds payable to hosts due to Days and advanced bookings, $10.7 million in accounts payable due to company growth, and $6.0 million in unearned fees due to Days and advanced bookings.

During the year ended December 31, 2021, operating activities provided $108.0 million in cash as a result of a net loss of $40.4 million, adjusted by non-cash charges of $103.9 million and an increase of $44.5 million from changes in our working capital. The non-cash charges of $103.9 million were primarily comprised of $85.2 million due to the revaluation of our preferred stock warrant liability, $14.4 million due to stock-based compensation, and $4.2 million due to depreciation and amortization. The increase of $44.5 million in our working capital was primarily due to an increase in accrued and other liabilities of $53.0 million due to increases in legal settlement and litigation reserves, physical damage, bonus accrual, and marketing accruals, an increase in accounts payable of $3.7 million due to increases in marketing expenses, an increase in insurance reserves of $37.0 million, an increase in funds payable to hosts of $36.8 million, and an increase in unearned fees on increased bookings of $19.3 million. The working capital increases were offset by a decrease in funds held at

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payment processors of $75.0 million due to increased Days, a decrease in non-current assets of $16.5 million for additional insurance deposits, a decrease in prepaid expenses and other current assets of $13.0 million due to an increase in property damage claims receivables and prepaid payment processing fees, and a decrease in accounts receivable of $0.8 million.

During the year ended December 31, 2020, operating activities used $41.2 million in cash as a result of a net loss of $97.1 million, adjusted by non-cash charges of $55.4 million and an increase of $0.4 million from changes in our working capital. The non-cash charges of $55.4 million were primarily comprised of $41.9 million due to the revaluation of our preferred stock warrant liability, $8.7 million due to stock-based compensation, $3.0 million due to depreciation and amortization, and $1.8 million due to the loss on asset impairment and disposals. The increase of $0.4 million in our working capital was primarily due to an increase in accrued and other liabilities of $5.5 million due to physical damage accruals, an increase in insurance reserves of $4.1 million, and an increase in prepaid expenses and other current assets of $3.2 million due to increases in subrogation receivables and insurance premiums. The overall increase was partially offset by a decrease in accounts payable of $4.8 million primarily due to decreases in marketing spend and a decrease in unearned fees of $1.2 million due to reduced trip activity related to COVID-19-related lockdowns.

During the year ended December 31, 2019, operating activities used $65.6 million in cash as a result of a net loss of $98.6 million, adjusted by non-cash charges of $3.7 million and an increase of $29.3 million from our net working capital. The non-cash charges of $3.7 million were primarily comprised of $6.7 million due to stock-based compensation and $1.6 million due to depreciation and amortization, partially offset by a gain of $5.2 million due to the change in fair value of our redeemable convertible preferred stock warrant liability. The increase of $29.3 million from our net working capital was primarily due to an increase in non-current assets of $9.6 million, an increase in accrued and other liabilities of $9.6 million, an increase in insurance reserves of $9.2 million, a decrease in prepaid expenses and other current assets of $4.4 million, an increase in accounts payable of $3.5 million, and an increase in unearned fees of $2.6 million.

**Investing activities** 

During the year ended December 31, 2022, investing activities provided $2.5 million, primarily due to $11.2 million cash received in the business acquisition of OuiCar. The cash received was partially offset by capitalization of costs related to the development of internal-use software to grow and scale our platform of $8.3 million and the purchases of property and equipment of $0.4 million.

During the year ended December 31, 2021, investing activities used $3.7 million due to the capitalization of costs related to the development of internal-use software of $3.5 million and the purchases of property and equipment of $0.2 million.

During the year ended December 31, 2020, investing activities used $4.2 million due to the capitalization of costs related to the development of internal-use software of $4.1 million and the purchases of property and equipment of $0.1 million.

During the year ended December 31, 2019, investing activities used $4.9 million due to the capitalization of costs related to the development of internal-use software of $3.2 million and purchases of property and equipment of $1.7 million.

**Financing activities** 

During the year ended December 31, 2022, financing activities used cash of $5.8 million, primarily due to stock repurchases of $4.3 million, a change in funds payable to hosts of $2.7 million, and payments of $1.2 million for deferred offering costs. The cash used was partially offset by proceeds from exercise of stock options of $2.4 million.

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During the year ended December 31, 2021, financing activities provided $9.6 million in cash, primarily due to a change in funds payable to hosts of $13.9 million and proceeds from exercise of stock options of $6.1 million. The overall increase was partially offset by cash payments of $3.7 million for deferred offering costs and a $6.6 million repayment of a promissory note.

During the year ended December 31, 2020, financing activities provided $6.3 million, primarily due to the issuance of a promissory note of $6.6 million, proceeds from the issuance of redeemable convertible preferred stock of $1.3 million, and proceeds from exercise of stock options of $1.1 million. The overall increase was partially offset by a decrease of $2.8 million due to changes in funds payable to hosts.

During the year ended December 31, 2019, financing activities provided $244.2 million, primarily due to the proceeds from the issuance of Series E and Series E-1 redeemable convertible preferred stock of $279.8 million, an increase in the funds payable to hosts of $2.8 million, and an increase in the proceeds from exercise of stock options of $1.3 million. The overall increase was partially offset by the repurchases of preferred and common shares of $39.6 million.

**Contractual obligations** 

We have entered into various noncancelable operating leases for our facilities with contractual lease periods expiring between 2023 and 2028. As of December 31, 2022, we had fixed lease payment obligations of $27.5 million, with $6.5 million expected to be paid within 12 months and the remainder thereafter. For additional discussion on our operating leases, see Notes 4 and 5 to our consolidated financial statements included elsewhere in this prospectus.

As of December 31, 2022, we have an outstanding balance of $1.1 million on our French State guaranteed loans (PGE) with a fixed year term ending July 2027. Loan repayment obligations of $0.2 million are expected to be paid within 12 months and the remainder thereafter.

**Contingencies** 

We are involved in claims, lawsuits, indirect tax matters, and proceedings arising from the ordinary course of our business. Legal fees and other expenses associated with such actions are expensed as incurred. We record a provision for a liability when we determine that a loss-related matter is both probable and reasonably estimable. We disclose material contingencies when we believe that a loss is not probable but reasonably possible. These claims, suits, and proceedings are inherently unpredictable and subject to significant uncertainties, some of which are beyond our control. Determining both probability and the estimated amount is inherently uncertain and requires making numerous judgments, assumptions, and estimates. Many of these legal and tax contingencies can take years to resolve. Should any of these estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows.

**Quantitative and qualitative disclosures about market risk** 

**Foreign currency exchange risk** 

**Transaction exposure** 

We transact business in U.S. dollars, British pounds, Canadian dollars, and Euros and have revenue and costs denominated in these currencies. This exposes us to the risk of fluctuations in foreign currency exchange rates. Changes in exchange rates are reflected in reported income and loss from our international businesses included in our consolidated statements of operations, which are included elsewhere in this prospectus. A continued strengthening of the U.S. dollar would reduce reported revenue and expenses from our international businesses.

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**Translation exposure** 

We are also exposed to foreign exchange rate fluctuations as we translate the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the translation adjustments resulting from the conversion of the financial statements of our foreign subsidiaries into U.S. dollars would result in a gain or loss recorded as a component of accumulated other comprehensive income (loss), which is part of stockholders' deficit.

**JOBS Act** 

We qualify as an "emerging growth company" pursuant to the provisions of the Jumpstart Our Business Startups Act, or JOBS Act. For as long as we are an "emerging growth company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended; reduced disclosure obligations regarding executive compensation in our periodic reports, registration statements, and proxy statements; and exemptions from the requirements of holding advisory "say-on-pay" votes on executive compensation and shareholder advisory votes on golden parachute compensation.

The JOBS Act also permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to "opt-in" to this extended transition period for complying with new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that comply with such new or revised accounting standards on a non-delayed basis.

**Critical accounting policies and estimates** 

Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our financials are described below.

**Revenue recognition** 

We generate revenue from Marketplace Services and through offering Protection Plan Services. We consider both hosts and guests to be our customers.

Marketplace Services revenue consists of service fees, net of incentives and refunds, charged to our customers. We experience a difference in timing between when a booking is made and when we recognize revenue, which occurs at the time of check-in for the reservation. We charge service fees to our customers as a percentage of the value of the total booking, excluding taxes. We collect both the booking value from the guest on behalf of the host and the applicable guest fees owed to us using the guest's pre-authorized payment method. After the trip is complete, or on a weekly basis if the trip is longer than a week, we, or our third-party payment processors, disburse the booking value to the host, less the fees due from the host to us.

We evaluate the presentation of revenue on a gross versus net basis based on whether or not we are the principal in the transaction (gross) or whether we arrange for other parties to provide the service to guests and are the agent (net) in the transaction. We determined that we do not establish pricing for vehicles listed on our

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platform and do not control the right to use the host's vehicle either before or after completion of a trip booked on our platform. Accordingly, we concluded that for accounting purposes we are acting in an agent capacity and revenue is presented net, reflecting the service fees received from our customers to facilitate bookings of vehicles.

Marketplace Services revenue is presented net of certain payments we make to customers. We offer various incentive programs to hosts, including minimum guaranteed payments and vehicle listing bonus payments. These host incentives are recorded as a reduction to revenue as we do not receive a distinct good or service in exchange for the payment or cannot reasonably estimate the fair value of the good or service received.

We also offer hosts and guests Protection Plan Services. Amounts charged for Protection Plan Services, or Protection Plan Fees, vary based upon the selections made by the host and guest related to the allocation of responsibility for physical damage to the host's vehicle. We collect Protection Plan Fees from the guest up front at the same time the service fees are collected. We provide Protection Plan Services over the duration of the trip, and therefore revenue is recognized ratably over the trip period. Because we generally bear the risk of loss or damage to the host's vehicle subject to the provisions and exclusions of our terms of service, we are the principal in the transaction as it relates to the Protection Plan Services. Accordingly, revenue for Protection Plan Services is presented on a gross basis.

**Stock-based compensation** 

We have granted stock-based awards consisting primarily of stock options and restricted stock units, or RSUs, to employees, members of our board of directors, and non-employees. We estimate the fair value of stock options granted using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires certain subjective inputs and assumptions, including the fair value of our common stock, the expected term, risk-free interest rates, expected stock price volatility, and expected dividend yield of our common stock. The fair value of stock options is recognized as stock-based compensation expense on a straight-line basis over the requisite service period. We estimate forfeitures at the date of grant and revise the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The fair value of RSUs is estimated based on the fair value of our common stock on the date of grant. We grant RSUs that vest upon the satisfaction of both a service-based vesting condition and a liquidity event-related performance vesting condition. The fair value of RSUs is recognized as compensation expense over the requisite service period, using the accelerated attribution method net of forfeitures, once the liquidity event-related performance vesting condition becomes probable of being achieved. We have not recognized stock-based compensation expense for RSUs as the liquidity event-related performance condition has not been met.

These assumptions used in the Black-Scholes option-pricing model, other than the fair value of our common stock (see the section titled " — Valuation of common stock" below), are estimated as follows:

• **Fair value of our common stock.** Because our stock is not publicly traded, we must estimate the fair value of our
common stock as discussed in the section titled " — Valuation of common stock" below.

• **Expected term.** The expected term of our options is estimated using the simplified method permitted under guidance
of the SEC.

• **Expected volatility.** As we do not have a trading history for our common stock, the expected volatility of our
stock price is derived from the average historical volatility for industry peers that we consider to be comparable to us, over a period equivalent to the expected term of our stock option grants.

• **Risk-free rate.** The risk-free interest rate is based on the yields of the U.S. Treasury securities with maturities
similar to the expected term of each of our option awards.

• **Dividend yield.** We have never declared or paid any cash dividends and do not presently plan to pay cash dividends
in the foreseeable future. Consequently, we use an expected dividend yield of zero.

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If any of the assumptions used in the Black-Scholes model changes significantly, stock-based compensation for future awards may differ significantly compared with awards granted previously.

**Valuation of common stock** 

In the absence of a public trading market, the fair value of our common stock was determined by our board of directors, with input from management. The valuations of our common stock were determined in accordance with the guidelines outlined in the American Institute of Certified Public Accountants Practice Aid, *Valuation of Privately-Held-Company Equity Securities Issued as Compensation*. The assumptions we used in the valuation models were based on future expectations combined with management judgment, and considered numerous objective and subjective factors to determine the fair value of our common stock as of the date of each option grant, including the following factors:

• independent third-party valuations of our common stock;

• the prices at which others have purchased our redeemable convertible preferred stock and common stock in arm's-length transactions;

• the prices, rights, preferences, and privileges of our preferred stock relative to our common stock;

• our operating and financial performance;

• current business conditions and projections;

• our stage of development;

• valuations of comparable companies;

• market performance of comparable publicly traded companies;

• the likelihood of achieving a liquidity event for the shares of common stock underlying these stock options, such as an
initial public offering or sale of the company, given prevailing market conditions;

• industry information, such as market growth and volume and macro-economic events; and

• the U.S. and global capital market conditions.

To determine the fair value of our common stock, we first determined our enterprise value and then allocated that enterprise value to our common stock and common stock equivalents. Our enterprise value is typically estimated using a weighted combination of an income approach and a market approach. The income approach estimates enterprise value based on the estimated present value of future cash flows the business is expected to generate over its remaining life. The estimated present value is calculated using a discount rate reflective of the risks associated with an investment in a similar company in a similar industry or having a similar history of revenue growth. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market value multiple is determined and then applied to the subject company's financial forecasts to estimate the value of the subject company. We then apply multiples to our operating data to arrive at a range of indicated values of the company.

For each valuation, we prepared a financial forecast to be used in the computation of the value of invested capital for both the income approach and market approach. The financial forecast considered our past results and expected future financial performance. The risk associated with achieving this forecast was assessed in selecting the appropriate discount rate. There is inherent uncertainty in these estimates, as the assumptions used are highly subjective and subject to changes as a result of new operating data and economic and other conditions that impact our business.

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We use the option pricing model, or OPM, to allocate the enterprise value to outstanding common stock, preferred stock, preferred warrants, and equity awards. For each potential scenario, the expected future value is then discounted to a present value using an appropriate risk-adjusted discount rate.

After the allocation to the various classes of stock, a discount for lack of marketability, or DLOM, is applied to arrive at a fair value of the common stock. A DLOM is meant to account for the lack of marketability of a stock that is not traded on public exchanges. The DLOM is estimated based on consideration of both a protective put option analysis as well as the Finnerty model, consistent with valuation practices. In making the final determination of common stock value, consideration is also given to the recent sales of common stock.

Application of these approaches involves the use of estimates, judgments, and assumptions that are highly complex and subjective, such as those regarding our expected future revenue, expenses and future cash flows, discount rates, market multiples, the selection of comparable companies, and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact our valuations as of each valuation date and may have a material impact on the valuation of our common stock.

**Insurance reserves** 

We use a combination of third-party insurance, self-insured retentions, a captive insurer, and reserves to manage risks arising from trips, including potential liabilities to customers and third parties for personal injury and property damage. Our insurance reserves represent the estimated ultimate cost for claims incurred but not paid and claims that have been incurred but not yet reported and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. These estimates are continually reviewed and adjusted as experience develops and new information becomes known.

Liability insurance claims may take several years to completely resolve, and we have limited historical loss experience. Because of our limited operational history, we make certain assumptions based on currently available information and industry statistics and utilize generally accepted actuarial methods to estimate the reserves. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, economic and healthcare cost trends, and the results of related litigation. Further, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. Accordingly, actual losses may vary significantly from the estimated amounts reported in our financial statements. Reserves are continually reviewed and adjusted as necessary as experience develops or new information becomes known. However, ultimate results may differ materially from our estimates, which could result in losses over our reserved amounts.

**Recent accounting pronouncements** 

For information on recently issued accounting pronouncements, see Note 1 to our consolidated financial statements included elsewhere in this prospectus.

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Business

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## Business
**Mission and vision** 

Our mission is to put the world's 1.5 billion cars to better use. Our vision is that wherever you are, you can book the perfect vehicle for your next adventure from a trusted Turo host.

**Overview** 

Turo is the world's largest car sharing marketplace where guests can book any car they want, wherever they want it, from a vibrant community of trusted hosts. Whether they're flying in from afar or looking for a car down the street, searching for a rugged truck or something smooth and swanky for a once-in-a-lifetime event, guests can take the wheel of the perfect car for any occasion, while hosts can take the wheel of their futures by sharing their underutilized personal vehicles or building an accessible, flexible, and scalable car sharing business from the ground up. Turo is home to a supportive and collaborative community that shares thousands of vehicles across the United States, Canada, the United Kingdom, France, and Australia. As of December 31, 2022, we had over 160,000 active hosts and 2.9 million active guests from around the world participating in our marketplace.

We are pioneering a new category of transportation, advancing the next era of personal mobility by connecting consumers with an unrivaled network of privately owned vehicles. Cars remain the preferred means of transportation for short-, medium-, and long-duration trips across a variety of use cases, but traditional mobility options do not provide adequate and efficient access for consumers to vehicles. The peer-to-peer car sharing opportunity Turo delivers to consumers provides a more convenient, economically efficient, and environmentally and socially responsible way to access an extraordinary selection of vehicles compared to traditional car ownership and car rental.

Our platform unlocks peer-to-peer car sharing through technology — a seamless, simple platform that connects hosts and guests and enables them to transact in a trusted, safe environment. With Turo, hosts can quickly list vehicles, adjust their availability, and dynamically modify prices to access the unique demand patterns in their market. Guests can search by location, type, price, use case, and many other categories to find the perfect vehicle for their needs. Our platform supports a variety of use cases — from the minivan for the family road trip, to the convertible for the long-awaited beach getaway, or a simple vehicle for escaping the city grind. Built-in messaging, payments, fraud detection, the proprietary Turo Risk Score, and host and guest protection plans are designed to deliver a safe transaction and experience for our community.

We have experienced rapid growth since our launch in 2010. Our business model has proven to be resilient throughout fluctuations in travel trends and economic climates as our marketplace dynamically adjusts to the needs of our hosts and guests. We have seen increased demand for bespoke and safe forms of transportation, as well as increased supply from hosts, showing that Turo can uniquely serve and elevate our entire community, both hosts and guests. We generated net revenue of $149.9 million in 2020, representing 6% growth from $141.7 million in 2019, and a net loss of $97.1 million during 2020, down from $98.6 million in 2019. The increase in net revenue for the year ended December 31, 2020 was due to a combination of the introduction of the Turo Risk Score in April 2020, a tool that dynamically adjusts the fees that we charge guests to complete a booking on our marketplace, as well as hosts increasing the prices for vehicles charged to guests. In 2021, we generated net revenue of $469.0 million, representing 213% growth from $149.9 million in 2020, and a net loss of $40.4 million, down from $97.1 million in 2020. The increase in net revenue for the year ended December 31, 2021 was due to a combination of the effects of the COVID-19 pandemic on our business, improved optimization of the Turo Risk Score, hosts increasing the prices for vehicles charged to guests, as well as a rental car supply shortage. In 2022, we generated net revenue of

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$746.6 million, representing 59% growth from $469.0 million in 2021, and a net income of $154.7 million, compared to a net loss of $40.4 million in 2021. The increase in net revenue for the year ended December 31, 2022 was due to an increase in total days booked by our guests on our platform (net of days canceled in that period), or Days, as a result of continued travel demand combined with an increase in our supply and new guests on the platform. We continue to improve the efficiency of our marketplace and generated adjusted EBITDA of $79.7 million, $81.1 million, $(38.1) million, and $(91.6) million in 2022, 2021, 2020, and 2019, respectively. For additional information about adjusted EBITDA, a non-GAAP financial measure, and a reconciliation of adjusted EBITDA to the most directly comparable financial measure stated in accordance with GAAP, see the section titled "Management's discussion and analysis of financial condition and results of operations — Non-GAAP financial measures."

In May 2022, we acquired OuiCar SAS, or OuiCar, a car sharing marketplace headquartered in France. Our key business metrics and the numbers of active guests, active hosts, active vehicle listings, cities, and makes and models available on our platform include the results of OuiCar from the acquisition date through December 31, 2022.

**Industry background** 

We believe there are several seismic shifts in consumer behavior underway that are fueling our long-term opportunity.

**Entrepreneurship is on the rise with a focus on utilizing idle assets and skills** 

Technology has created opportunities for entrepreneurial individuals to start their own businesses by monetizing their own skills, time, and existing assets. For example, vacation rental businesses exist in nearly every vacation market, with individuals sharing their homes and improving the utilization of these assets, while also generating a meaningful additional income stream. In addition, e-commerce platforms enable individuals to sell their one-of-a-kind creations and wares to buyers who value small-batch, small business-empowering product offerings. The adoption of flexible work arrangements and working from home is leading more and more individuals to start businesses and supplement their income by utilizing their skills and providing access to assets they already own.

**On-demand, mobile-first services have changed consumer engagement** 

The proliferation of apps has led consumers to demand convenience and ease of use, with access to services whenever they want and wherever they are. From grocery and food delivery, to meeting with a doctor or healthcare provider remotely through digital channels, consumers increasingly place a premium not just on the ability for their needs to be met instantly, but also on the breadth and depth of choice available to them as part of these on-demand services. Successful modern businesses reach and engage consumers through mobile-first technologies, providing an on-demand, real-time, dynamic experience that adjusts to the consumer's changing needs.

**Consumer preferences are shifting to unique experiences** 

While consumers are increasingly relying on mobile channels and expecting on-demand access, there is a concurrent trend in which consumers favor and seek unique, bespoke products and services. Many consumers favor the exclusive, hard-to-get items over the mass-produced, and choose affordable, customized experiences over commoditized or one-size-fits-most options. For consumers, the joy of discovery is dynamic, and the experiences they are looking for change day to day. This trend extends across many consumer-facing industries, from restaurants to e-commerce to travel. In each of these industries, the result has been new income-generating opportunities for those who can supply these unique products and services.

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**Cars are increasingly expensive underutilized assets** 

Owning a car creates powerful economic advantages for individuals and families. According to an article published in the Journal of Planning Education and Research, owning a car has been among the most powerful economic advantages a family in the United States can have. However, owning a car is expensive. A car's value depreciates rapidly, and automobile insurance and maintenance are costly. Based on data from Kelley Blue Book, between 2016 and 2023, new car values increased 43%. These rising prices have led to increasing consumer debt, further stretching the affordability of these vehicles. For example, the total dollar value of motor vehicle loans outstanding has increased 100% from $698 billion in 2010 to $1.4 trillion as of the third quarter of 2022, according to data from Federal Reserve Economic Data. In addition, consumers are increasingly aware that personally owned vehicles sit idle most of the time — 95% of the time, according to an MIT Senseable City Lab publication in August 2018 — and so today's consumers are more open to alternative modes of transportation. The array of affordable, widely available mobility options born out of on-demand and increasingly ubiquitous mobile services make car ownership a less essential proposition, and also serve to level the economic playing field, increasing access to transportation options for anyone with a mobile device.

**Mobility is changing as consumers today have more options** 

The ability to access services anywhere, anytime, through mobile devices and connectivity, has rapidly expanded the availability of mobility choices for consumers. This new world of mobility is the result of converging forces, defined by personal car ownership being replaced or complemented by services that provide access to transportation on demand. Shared mobility services have now become firmly integrated into urban transportation systems across the globe. Car sharing, scooter sharing, bike sharing, ride sharing/transportation network companies, or TNCs, and other systems now offer urban travelers access to transportation services that had long been only possible through personal vehicle ownership. These new services are helping to facilitate a shift towards mobility solutions that favor access over ownership and enable a paradigm where consumers have even more flexibility to choose how they want to move through the world and can even choose to forego car ownership completely.

![LOGO](g145731g10s27.jpg)

Mobility 1.0 Private ownership supplemented by centralized legacy car rental Mobility 2.0 A variety of highly accessible options on demand

As the leader of the car sharing industry, Turo is positioned to lead as a long distance mobility solution in this new world mobility paradigm.

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![LOGO](g145731g18q57.jpg) <br>Short distance Medium distance Long distance Micro-mobility Ride hailing Car sharing: Turo 10 minutes Duration 2 Miles $3 Average trip value 15 minutes Duration 5-7 Miles $13 Average trip value 4.2 days Duration 259 Miles per day $475 Average trip value

Source: Appfigures, American Automobile Association, National Association of City Transportation Officials.

Long distance figures in the chart above represent average allotted miles per day and average trip value in 2022. We define allotted miles as the mileage included in a trip, rather than the miles actually driven. Allotted miles do not include trips in France.

**Limitations of current mobility solutions** 

As consumer preferences shift towards on-demand access to mobility as a complement to car ownership, the limitations inherent in existing mobility solutions have become more apparent.

**Ride sharing solutions serve limited use cases.** Ride sharing solutions support limited use cases, largely centered around point-to-point mobility. Ride sharing at its core does not scale to accommodate travel behavior or requirements beyond commuting and intra-urban mobility. While an incredibly effective method for urban transportation, eliminating the need for parking, enabling carpooling, and decreasing congestion, ride sharing is expensive, and therefore does not unlock travel-oriented use cases. The cost per mile for ride sharing services varies based on vehicle type and location. For example, in the Denver region, according to The Mountain-Plains Consortium, or MPC, passenger cost per mile is on average $2.50 per mile with a median of $3.19 per mile after considering total fare, tolls, fees, gratuity, and travel distance. As such, ride sharing does not support exploration or other unique experiential needs of consumers and travelers; the economic viability of ride sharing for users diminishes rapidly with longer distance, longer duration trips, family trips, and trips to areas or regions with less passenger demand.

**Car rental services offer commoditized, cumbersome experiences.** While car rental solutions provide more individual flexibility than ride sharing, the existing car rental industry does not adequately solve the ever-changing needs of the consumer. Car rental services do not provide a consumer-friendly approach — they're frequently tethered to airports, long lines, and wait times, with generic and unpredictable inventory. For the urban options offered by car rental companies, the location and timing constraints can be significant limitations for customers. This lack of focus on, and care for, the customer is evidenced by their low net promoter scores

— according to XM Institute's annual net promoter score benchmark study, the car rental industry's average customer net promoter score is 5 (out of a maximum of 100). By contrast, Turo's net promoter score for the 12-month period ended December 31, 2022 was 80.

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In addition, in today's economy, large rental car businesses tend to follow a model that involves purchasing fleets of commodity vehicles, often sales-tax-free and at a wholesale discount from original equipment manufacturers to rent to customers. Rental car companies then sell these fleets once the assets have depreciated; in response to the COVID-19 pandemic, many rental car companies sold fleets to pay off debts without replenishing their inventories, resulting in a shortage of vehicles and high prices as different regions reopened their economies. This creation of high vehicle turnover contributes to significant waste, inefficiency, and pollution, with fleet turnover every 1-2 years. Yet, even with this high turnover, rental car companies are hamstrung when trying to be nimble and meet changes in demand.

**Personal car ownership is costly and inefficient.** The costs associated with car ownership vary greatly based on the usage of the vehicle — according to the American Automobile Association, or AAA, for a medium-sized sedan that is driven 15,000 miles per year, the cost per mile was approximately $0.69 per mile in 2022. This includes all costs, such as license registration and taxes, insurance, maintenance, and financing. For vehicles that are driven fewer than 15,000 miles per year, such as luxury or specialty cars, this cost increases considerably. In addition to these fixed costs, traditional car ownership limits the use cases available to a household to those expressly serviced by their owned vehicle. For example, moving, grocery shopping, commuting, and taking a family trip to the beach or to the mountains all have different optimal solutions, but the traditional car ownership model limits the use cases readily available to a given household. Car owners can benefit from a way to offset the costs of car ownership, make it sustainable, and increase its efficiency, while being empowered to own fewer vehicles.

**Turo — pioneering a new category of transportation** 

We have created the world's largest car sharing marketplace. Our peer-to-peer platform connects hosts and guests through our marketplace and is designed to enable guests to book the perfect vehicle for any occasion from our trusted community of hosts. We are the leader in this new way to access vehicles, with over 160,000 active hosts and 320,000 active vehicle listings in over 11,000 cities as of December 31, 2022. We count the number of active hosts as hosts with at least one trip as a host in the trailing 12-month period, and the number of active vehicle listings as vehicle listings with at least one trip in the trailing 12-month period. For example, if a host or vehicle listing, respectively, has at least one trip that starts before or within the trailing 12-month period and ends within or after such 12-month period, we count such host or vehicle listing, respectively, as active.

We strive to make it easy for our hosts to earn money from their vehicles and for guests to find the perfect vehicle for their next trip. Hosts are our asset owners and deliver differentiated experiences and hospitality to our guests. Our platform avoids the capital intensity and asset-based limitations of the rental car and fleet-based car sharing industries, while providing low-cost access for individual car owners to earn extra income by sharing their vehicles through our marketplace. As a result, our platform is dynamic, as hosts can change the availability, cost, or selection of vehicles to satisfy guest demand. Guests choose from an extraordinary selection of cars. Since the vehicle they choose is provided by a host, the guest can be confident that the specific car that they booked is the exact car they will drive off in, increasing guest satisfaction. Additionally, our hosts can offer various pick-up locations, as well as optional "Extras," such as unlimited mileage, pre-paid refueling, bike and ski racks, camping equipment, and more to make the experience more convenient for the guest.

Guests book cars on our platform for a variety of use cases, and we open up new, longer duration forms of travel. We estimate that in 2022, approximately 6.8 million, or 35%, of Days were part of bookings seven to 29 days in length, and approximately 1.1 million, or 6%, of Days were part of bookings greater than or equal to 30 days in length. We have seen an increase in trip length over the past three years, with Days booked as part of trips three to six days in length having increased from approximately 40% of Days in the year ended December 31, 2019. This highlights the variety of use cases, including longer duration travel, supported by our platform.

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**Our hosts** 

As of December 31, 2022, over 160,000 active hosts use our platform to power over 320,000 active vehicle listings. Our platform is designed for entrepreneurs of all sizes, from individuals looking to offset the cost of car ownership, to professional hosts seizing the opportunity to build scalable, accessible, flexible businesses atop our platform. Our platform enables hosts to utilize their idle vehicles to generate income without being perpetually present in the vehicle to benefit from our platform. Our hosts generally fit into one of the three following categories:

• **Consumer hosts.** Consumer hosts typically share one or two cars with the goal of offsetting car ownership costs.
Hosting on our platform often enables consumer hosts to earn extra income to afford their dream car, or to monetize vehicles they already own.

• **Small business hosts.** Small business hosts typically share three to nine cars with the goal of generating
secondary income to build wealth and pay for life's expenses. They're often car enthusiasts who love cars, and love to share cars with like-minded enthusiasts to be able to afford their dream cars themselves. We give these budding business
builders an entry point to entrepreneurship by providing them with the tools and resources they need to build a small, successful portfolio of cars to share on our marketplace.

• **Professional hosts.** Professional hosts typically share 10 or more cars, often as their primary income source, and
may choose to invest in, and in many cases have invested in, resources like employees and parking to support their operations. Some professional hosts are car dealerships that we empower to tap into our global network of millions of prescreened
guests, thereby increasing their fleets' utilization rates and opening up their services to more audiences.

Many of our small business and professional hosts started their journey with us as consumer hosts and scaled their businesses as they saw success on our platform.

Our hosts can realize compelling economics by sharing cars on our platform. Below is an illustrative example of a host who finances the purchase of a $28,000 vehicle with a 10% down payment and shares it on Turo.

Year 0 1 2 3 Host revenue - $11,288 $11,288 $11,288 Insurance and damage deductibles ($1,056) ($1,056) ($1,056) Maintenance and other costs ($2,153) ($2,571) ($3,094) Profit before vehicle costs $8,079 $7,661 $7,138 Vehicle resale value $19,600 Vehicle payment costs ($2,800) ($6,477) ($6,477) ($18,131) Net profit (pre-tax) ($2,800) $1,602 $1,184 $8,607 Cumulative profit (pre-tax) ($2,800) $1,198 $14 $8,593

In this example, the host is able to realize a cumulative profit of $8,593 over three years, representing a 3.1x return on initial investment and a 78% 3-year internal rate of return. We estimated the vehicle's price per day

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based on average monthly earnings for Turo hosts with two or more active vehicle listings for the 12 months ended June 30, 2022. We calculate that this host would earn $11,288 per year. Factoring in vehicle loan payment costs of $6,477 per year, calculated based on a $28,000 vehicle purchased with a 10% down payment and the remainder financed with a 60-month loan at a 7.5% interest rate, estimated state minimum insurance costs, and damage deductible costs of $1,056 per year, and estimated annual maintenance and other costs such as cleaning, parking, and delivery costs, this host would net a pre-tax profit of $1,602 at the end of the first year of car sharing. In year two, the host would net $1,184 in pre-tax profit. Assuming the host resells the vehicle at the end of the third year at 70% residual value and pays off the remainder of the 60-month loan, the host would net pre-tax profit of $8,607 in year three. The sum of the pre-tax profit over these three years less the initial $2,800 down payment results in a cumulative profit over three years of $8,593. This is an estimate and how much a host may actually earn depends on a number of other factors such as vehicle availability and demand in the host's area. For additional information, see the section titled "Risk factors — Risks related to our business and industry — If we fail to retain existing hosts and guests, increase existing host vehicle listings and guest bookings, or add new hosts and guests, or if hosts fail to provide high-quality, as-advertised vehicles and services, our business, results of operations, reputation, and financial condition would be materially and adversely affected."

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**How our platform supports hosts** 

Our platform provides the software and services to help hosts of all sizes thrive, including easy-to-use desktop and mobile websites and native iOS and Android apps, insurance and protection, and safety and support. We continue to innovate and expand our platform capabilities to better help our hosts throughout the entire hosting lifecycle:<br>

![LOGO](g145731g20c00.jpg)

Onboarding & listing Listing management

**Onboarding and listing.** Our platform is designed to make it simple and intuitive for a host to sign up, verify their account, and create an attractive listing. Insurance comes standard, and protection plans for hosts are bundled into the sign-up flow.

**Listing management.** We provide a suite of software products that enable hosts to easily and intuitively manage their listings, including an availability calendar and settings, messaging, pricing and trip settings, remote and in-person check-in and checkout options, earnings payments, and post-trip incidental payments.

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Pricing optimization

**Pricing optimization.** Our technology platform enables analytics and data-driven decision making, empowering hosts to determine the optimal price for their cars. Our capabilities include dynamic options such as calendar-based pricing and automatic pricing, allowing hosts to improve their monetization. We also provide tools for hosts to customize their promotions, such as discounts for long-duration trips, early bookings, and repeat customers.

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Personalized service

**Personalized service.** Hosts can also offer optional Extras, such as prepaid refueling, unlimited mileage, bike and ski racks, and camping equipment. Hosts can list their vehicle for pickup at their home, office, or popular locations such as hotels and transit hubs, or they can offer their guests the opportunity to designate a convenient location for delivery right to the guest.

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Analytics & scaling resources

**Scaling.** We provide hosts who are interested in scaling their Turo business with business management capabilities that enable them to grow, such as performance tracking analytics, training guides in the Host Tools hub, and earnings estimates via the Turo Carculator. Some hosts also receive access to financing partnerships, multi-car insurance options, and account management.

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Insurance and protection Safety and support

**Insurance and protection.** We make it simple for hosts to select protection plans, which creates peace of mind. All host plans automatically include protection against third-party liability and compensation for vehicle damage, whether as reimbursement for physical damage or physical damage insurance (depending on the jurisdiction), as well as roadside assistance.

**Safety and support.** We offer differentiated, timely support to our hosts, including trust and safety verification of guests, roadside assistance, assistance in the resolution of billing and payment disputes, and hospitality coaching.

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In addition to the above platform capabilities, we reward our top performing hosts by including them in our Power Host program and/or awarding them an All-Star Host badge, which can include benefits such as boosted listing visibility, special access to host marketing promotions, account management, and priority support.

**Benefits to hosts** 

• **Income generation.** With over 2.9 million active guests on our platform as of December 31, 2022, we provide hosts
with access to a highly engaged customer base. We count the number of active guests as guests with at least one trip as a guest in the trailing 12-month period. For example, if a guest has at least one trip
that starts before or within the trailing 12-month period and ends within or after such 12-month period, we count the guest as active. Hosts are empowered to transform their assets into earning engines, dramatically improving the economics of car
ownership, without needing to spend hours behind the wheel in order to monetize their asset. Our platform supports a spectrum of hosts, from individuals to small business operators. Consumer hosts can offset the cost of ownership of their car, or
even stretch and buy their dream car, while entrepreneurs can start their own businesses and share dozens of vehicles. Hosts of all sizes have earned more than $2.4 billion in the aggregate on our platform since inception. A 2019 study by the
Chaddick Institute for Metropolitan Development at DePaul University that we commissioned found that a low-income family in Illinois making $40,000 annually will increase household income by 6% and cash flow
by upwards of 8% by sharing a vehicle 90 days annually on our platform. The study found that the average trip increases the host's net income, resulting in a net profit (margin) to hosts of approximately 66% of the list price per day, an
estimate that excludes non-monetary factors, such as time spent serving guests. Further, according to a Turo survey conducted in February 2022, more than 1 in 5 surveyed Black/African-American hosts and more
than 1 in 6 surveyed Hispanic/Latinx hosts claimed that they would be behind or at risk of defaulting on car payments without their earnings from Turo. A separate 2022 study by SCIMA LLC that we commissioned found that in Hawaii, one peer-to-peer
car sharing transaction per month covers all of a vehicle's registration and insurance costs in the state for a host. The study found that with roughly two weeks of vehicle sharing (15 days), the entire cost of the vehicle is covered, including
the monthly car payment. The study modeled that the cash benefits from sharing a car on Turo provided a 7.7% increase in households obtaining a liveable income (300% of the state's poverty guideline) in Kona, 6.0% increase in Lihue, 5.2% in
Kahului, and 3.7% in Honolulu.

• **Scalability and flexibility.** Our hosts benefit from the ability to build, maintain, or grow a scalable, flexible
business through increasing the utilization of their vehicles while maintaining full ownership. Hosts can choose how often to make their car available and at what price, and value the ability to earn income or offset the cost of car ownership around
their personal needs and interests. Small business and professional hosts with multiple vehicles can choose the size of their portfolio, how much time they are ready to commit, and how much to reinvest their earnings in growing their business.

• **Ease of use.** We make it easy for hosts to manage their entire business. Signing up and onboarding are simple on
our platform. Once set up, hosts can easily access their Host Hub to manage all aspects of their experience. Our user interface is elegant and intuitive and is backed by our powerful technology infrastructure that enables access and functionality on
the go.

• **Trust and safety.** Our platform and community are built on trust and safety. Our robust platform facilitates secure
transactions and interactions with guests. All trips on our platform include protection against third-party liability, providing hosts with peace of mind. In addition, guests are screened at checkout, and our proprietary Turo Risk Score has
influenced fees charged to each trip in the United States since April 2020 in order to mitigate unsafe behavior. We also offer the ability for the community to provide ratings and reviews to increase the trust in using our platform.

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• **Support.** Hosts benefit from the variety of support services we offer. We provide hosts with the tools to grow on
our platform, including advanced analytics and marketing and advertising support. Hosts value the support of the close-knit community of fellow hosts that we foster on our platform. We also offer customer support in the United Kingdom and France,
24/7 customer support in the United States, Canada, and Australia, and access to roadside assistance for hosts and their guests to ease the process when the unexpected happens. We continually invest in product innovation designed to deliver a
seamless experience for hosts.

**Our guests** 

Over 3.0 million guests booked over 19.1 million Days on our platform in 2022. In 2022, our guests traveled approximately 1.8 billion miles on our platform. We serve their unique needs across a broad spectrum of use cases, including:

![LOGO](g145731g45u51.jpg)

Turo use cases Traditional use cases Vacations and local getaways Business travel International travel Moving and running errands in trucks and vans Car replacement New use cases unlocked Hyperlocal, instant access Flexible month-to-month access Try before you buy Upgraded trips with upscale cars Dream drives in luxury, exotic, and classic cars Special events Outdoor adventures in camper and conversion vans

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**How our platform supports guests** 

Our platform provides several capabilities designed to best serve our guests:

![LOGO](g145731g97v38.jpg)

Inspiration and discovery Secure booking

**Inspiration and discovery.** Many guests come to our platform to get inspired. We make it easy to search vehicles based on type, location, availability, ratings and reviews, and even use case, enabling guests to discover the perfect vehicle for any occasion.

**Secure booking.** Guests book and pay for trips directly through our platform. Our booking flow is simple and easy to navigate, providing guests with clarity and visibility into cost, Extras, and "rules of the road." Guests are able to quickly upload their profile photo, driver's license, phone number, and preferred payment method in a secure environment. We accept payment in-app via credit or debit card or digital payment alternatives like Apple Pay, Google Pay, and Revolut. As part of our secure booking, guests can easily select a protection plan for peace of mind. Either way, all guests who book with a host receive insurance coverage whether or not they select a protection plan.

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Trips

**Trips.** Guests can view their upcoming and past trips within our app and can extend a trip or even rebook a favorite vehicle based on past activity. Guests can also check in and out of their trips seamlessly in-app and, for many makes and models, can access and unlock the vehicle right from our app using Turo Go, a feature that leverages remote unlocking technology to enable contactless interactions. For hosts who are delivering their cars to their guests, they have the option to share their location with their guests via our app, so guests know in real time how far away their host is.

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Messaging Support

**Messaging.** Guests can securely and directly message their host within our app. Arranging pick-up, delivery, or other details within the app provides protection to both our guests and our hosts and creates a positive experience for both.

**Support.** We provide access to detailed frequently asked questions, or FAQs, as well as the ability to report damage or request roadside assistance, directly through our website or app. We also provide clear instructions on how to change or cancel a trip and arrange delivery, as well as other policies to enhance the guest experience.

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**Benefits to guests** 

• **Access and availability.** Guests benefit from access to a vehicle when and where they want it, without the need for
ownership. In a Turo survey conducted in February 2022, 12% of surveyed guests reported that they did not own or lease a vehicle. Our hosts offer vehicles in tens of thousands of locations across a broad geographic footprint, and guests have the
option to have vehicles delivered to their doorstep. Without the traditional limitations of a physical retail or parking footprint, vehicles shared by hosts can be found broadly throughout the geographies in which Turo is available — nearly
every block in some neighborhoods — corresponding to thousands of vehicle options that can be accessed wherever guests need them, including in remote destinations. The share of Days from outside our top 50 markets grew 5.5x from January 1, 2017
to December 31, 2022. This access is further enhanced by the robust delivery options that hosts offer to their guests; in 2022, approximately 38% of our trips included delivery to the guest. We offer features that allow guests to access vehicles as
quickly as possible, including "Book instantly" and Turo Go. Guests can find and access vehicles nearby at compelling rates; hosts offer vehicles for a spectrum of budgets. On our platform, guests can access an extraordinary variety of
makes and models, including unique vehicles found on no other platform.

![LOGO](g145731g00a39.jpg)

Turo listings San Francisco Phoenix metro area Miami metro area Car rental locations from leading provider San Francisco Phoenix metro area Miami metro area

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Our hosts' cars are everywhere people are. In San Francisco and the Phoenix and Miami metropolitan areas, we have cars available in every area of the city and surrounding areas, with more reach and density compared to rental car companies.

• **Choice.** Our hosts offer an extraordinary selection of vehicles for guests, with over 1,400 makes and models
available on our platform as of December 31, 2022. The extensive selection of vehicles offered by our hosts far surpasses the selection offered by rental companies. With Turo, the car you book is the car you get, whereas with rental car companies,
the car you get is often whatever car they have in stock within the category you selected when booking. We support a diversity of use cases, ranging from a truck to help on moving day, to a swanky exotic for a luxurious weekend away, to a classic
cruiser for a picture-perfect road trip, or an economical commuter car to help you get where you're going. Guests can choose from myriad variations of makes and models, including the type of trim or an eco-friendly vehicle, to suit their preferences.

• **Trust and safety.** Guests can rely on our trusted platform. We have a secure payments network and a robust
technology suite to coordinate safe interactions with hosts. Insurance is included for all trips with hosts if an accident with a third party does occur. We hold both hosts and guests to high standards of behavior and our experienced trust and
safety team investigates and works to resolve any issues that arise.

• **Personal experience.** Human connection is at the core of the Turo experience. As a peer-to-peer marketplace, we operate on the basic tenets of mutual respect, trust, collaboration, and belonging. For guests, booking with a host is engaging with a real
individual, someone with a shared passion, hobby, or interest in the vehicles they offer. Hosts may offer local restaurant recommendations and must-see destinations to their guests, adding an extraordinary
personal touch that is distinct from other transportation options that offer commodity vehicles owned by big corporations. This authentic, personal experience improves repeat usage and promotes evangelization of our community.

• **Seamless experience.** Guests can access a hassle-free experience through our marketplace. Guests can book a
vehicle, delivery, and Extras in minutes through the elegant user interface on our app or web platform. Search and discovery, booking, and payment are all easy to navigate on our platform. After a trip is booked, ongoing communication and management
of the booking is also seamlessly coordinated using our easy-to-use app and technology tools. Our 24/7 customer support team is always accessible to hosts and their
guests in the United States and Canada to handle their needs; internationally, there is 24/7 roadside assistance, and extended business hours support seven days a week for all other support needs. Our powerful app and technology platform drive the
entire experience from booking to coordination to support.

**Benefits to local communities and the environment** 

• **Economic activity.** Local communities benefit from the economic activity on our marketplace. As members of their
local communities, hosts increase their income and spending power from bookings generated on our platform. By empowering hosts and enabling guests to access vehicles in their local communities, we help to perpetuate cycles of community investment
and growth. According to a Turo survey conducted in February 2022, 85% of guest respondents indicated that they found value in supporting and spending money in local communities. Additionally, a 2021 study we commissioned by The Center for Growth
and Opportunity at Utah State University that evaluated over 1.5 million transactions across eight states plus Washington, D.C. found that Turo is disproportionately used by guests from minority neighborhoods, which benefits those local
communities. Similarly, according to the study we commissioned in 2019 by the Chaddick Institute for Metropolitan Development at DePaul University, the financial benefits of sharing on our platform flow heavily to neighborhoods with above-average
unemployment rates and minority populations, as well as households with more reliance on rental housing and public transit. This is largely due to the fact that peer-to-peer car sharing provides another source of income and can take place in communities with higher population density and opportunities for exchange, and
considerable racial, ethnic, and economic diversity.

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• **Broad access .** Our platform is accessible to a broad range of guests, including those who may have
traditionally struggled to afford a vehicle. The availability of Turo reduces car ownership dependency for these guests, who are better served by access to short-term car sharing rather than by making costly monthly payments to own or lease
vehicles. By providing convenient access at numerous price points, we are growing on-demand vehicle access to an expansive range of guests. Hosts who want to own a car, but might not otherwise be able to
afford one, can offset the costs of car ownership by sharing their vehicle with neighbors in, or travelers to, their community. Our platform also brings vehicles to communities that may lack an abundance of transportation options. These
"mobility deserts" benefit from the increased access to vehicles to meet the needs of hosts and guests in the community.

![LOGO](g145731g93h31.jpg)

Options at many price points Share of Days by daily price Oct 2020 - Sep 2021 % of Total Days 0% 1% 2% 3% 4% 5% 6% 7% 8% $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 $70 $75 $80 $85 $90 $95 $100 $105 $110 $115 $120 $125 $130 $135 $140 $145 $150 $155 $160 $165 $170 $175 $180 $185 $190 $195 $200 $205 $210 $215 $220 $225 $230 $235 $240 $245 $250 $255 $260 $265 $270 $275 $280 $285 $290 $295 $300 >$300

• **Environmental stewardship.** The expansion of our platform is designed to create environmentally friendly growth. We
enable vehicle access on an as-needed basis to avoid the unnecessary environmental impact of every consumer striving to own a vehicle or multiple vehicles. In addition, on Earth Day 2021, we launched a carbon
neutrality initiative to offset 100% of estimated carbon emissions generated by trips booked on the platform, as well as all emissions from our global office footprint. For every trip, we make an investment in projects addressing transportation and
industrial emissions and agriculture forestry initiatives to reduce greenhouse gases worldwide. Also, by offering access to a selection of energy-efficient vehicles, we contribute to sustainable vehicle use in local communities and help drive the
adoption of electric vehicles. Electric vehicle owners are also able to reduce the high cost of entry with their car sharing income. Electric vehicle adoption on our platform is growing faster than electric vehicle adoption in the United States. As
of December 31, 2022, electric vehicles represented 7% of Turo vehicle listings, compared to under 2% of 2020 vehicle registrations in the United States, according to Fitch Solutions. In a March 2022 Turo community survey, survey respondents
who said that they were likely to purchase an electric vehicle in the next five years ranked Turo as their primary means of test driving an electric vehicle before making their purchase decision.

**The Turo flywheel effect** 

Our platform benefits from the self-reinforcing value proposition between hosts and guests. Hosts are engaged with our brand and platform due to the unique income generation opportunity we provide, and they become increasingly engaged as they earn more. As existing hosts grow and new hosts join, our value proposition to guests strengthens as guests have access to a more unique selection of vehicles in more locations. The unique inventory of vehicles not available anywhere else, along with the seamless experience we offer guests, spurs organic, word-of-mouth growth, and repeat behavior. Growth in demand leads to greater income opportunities

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for our hosts, which further strengthens our host value proposition and, in turn, encourages existing hosts to grow and new hosts to join. As we scale and continue improving our offering, our guests book more trips which we leverage to generate data that powers our machine learning algorithms, such as data-driven pricing, search results ranking, and vehicle recommendations. These algorithms improve our host and guest experience and make our business more profitable, resulting in reinvestments to further improve user experience and propel growth.

![LOGO](g145731g20r21.jpg)

Demand Income Experience Supply Income More trips More data, smarter aglorithms Faster profitable growth Renivest in the platform TURO

**Capitalizing on the shift in consumer travel and transportation preferences** 

We believe the effects of the COVID-19 pandemic and supply chain shortages accelerated the adoption of our platform and transition from other transportation services. We enable a variety of trip lengths and trip types, providing a platform customers can rely on for all types of transportation. Our marketplace has proved to be resilient and dynamic as consumer travel and transportation preferences have shifted to favor access to mobility solutions that meet their particular needs. According to research from Destination Analysts, two-thirds of U.S. residents took a road trip during the COVID-19 pandemic, taking 2.5 trips per person on average. The increase in car-based travel turbocharged our growth in awareness and market penetration. A large number of guests were introduced to Turo for the first time, and we believe many will become loyal return guests through their experience on our platform. We believe the dynamic nature of our marketplace will allow us to continue to capitalize on the enduring trends driving the shift in consumer preferences. We have also outperformed the ride sharing, rental car, home sharing, and online travel agency industries in terms of revenue growth in the last two fiscal years.

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Outperformed peers 2020 YoY revenue growth 2021 YoY revenue growth 6% TURO Ride sharing (39%) Rental cars (44%) Home sharing (30%)OTAs (58%)213%TURO Ride sharing 25% Rental cars 56% Home sharing 77% OTAs 63%

Source: Company materials; peer company filings and press releases.

Notes: Home sharing represented by Airbnb; Online Travel Agencies, or OTAs, represented by average of Expedia, Booking Holdings, and Tripadvisor; Ride sharing represented by average of Lyft and Uber's Mobility segment; Rental cars represented by average of Hertz and Avis Budget Group.

**Liability protection included** 

We have pioneered the offering of protection plans for hosts and guests that are seamlessly integrated into the Turo experience. Protection plans provide hosts with peace of mind to offer their vehicles on our platform and allow their guests to drive with the confidence of knowing they have liability protection from third parties through products provided by insurance companies or companies that offer regulated financial risk products. We have made the ability to obtain protection easy, simple, and seamless for both hosts and guests. In the United States, Canada, France, and the United Kingdom, all trips provided by hosts are automatically insured by one of our third-party insurance providers. In Australia, all trips include protection from legal liability through a regulated financial risk product known as discretionary risk protection. For example, all host protection plans in the United States come standard with $750,000 in third-party liability insurance from Travelers, as well as varying levels of contractual reimbursement from us for physical damage and theft — the level of physical damage reimbursement varies with the plan the host chooses. We reimburse the host for eligible repairs up to the actual cash value of the car, or $200,000 (in the United States), whichever is the lesser amount, subject to the terms of each plan. Similarly, all guests in the United States automatically receive at least the state-required financial responsibility limits (sometimes called "state minimum insurance") with trips booked with hosts, regardless of whether they select a protection plan or not. Where peer-to-peer car sharing statutes or permits require greater coverage limits, those are provided on trips as applicable.

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Pre-trip Hosts Personal insurance policy Liability insurance included, eligible physical damage reimbursed. Hosts choose from an array of plans with different deductibles. Personal insurance policy Guests Liability insurance meeting state required levels included. Guests choose from an array of plans with different out of pocket maximums. Trip start On trip Trip complete

**Turo Risk Score** 

Every trip booked on our platform in the United States since April 2020 automatically generates a proprietary Turo Risk Score, which we use to promote responsibility and trust within our community. As of December 31, 2022, we have collected data from over 46 million Days, 13 million transactions, 4 billion miles driven, and over 10 years of claims data since inception to inform our proprietary Turo Risk Score algorithms and use more than 50 data inputs per transaction. We leverage insights from this data to control for fraud, manage risk, and customize marketplace fees. We believe this contributes to better access for all trips, expanding the economic opportunity for hosts, and garnering deeper loyalty from the members of our community. The Turo Risk Score is designed to help ensure the economic viability of each trip booked on our platform. The more trips taken, the better we are able to refine our algorithms and continuously improve the accuracy of the Turo Risk Score to drive actionable insights that inform fees, inventory adjustments, trust and safety practices, and more.

**Large market opportunity** 

Transportation is one of the largest household expenses — in 2021, households in the United States alone spent almost $11,000 per year on their mobility needs, according to the U.S. Bureau of Transportation Statistics. We are the pioneer in peer-to-peer car sharing and we are helping to drive the global transition to a new world of mobility, which will make transportation more convenient, accessible, and economical. We have a substantial market opportunity in the growing car sharing economy. We view our revenue opportunity in terms of a serviceable addressable market, or SAM, which we believe we can address today, and a total addressable market, or TAM, which we believe we can address over the longer term. These market opportunity estimates are based on revenue potential and involve a number of estimates and assumptions, which are discussed in more detail below.

**Serviceable Addressable Market (SAM)** 

We estimate our current SAM to be $124 billion, reflecting the revenue we could earn on our platform by monetizing the 862 billion miles from long-duration trips, which we define as trips of greater than 30 miles, in the United States, Canada, the United Kingdom, France, and Australia, which are the countries in which we operate on a peer-to-peer basis today. To calculate our SAM estimate, we apply the average percentage of our fees per trip to long-duration trip costs. We derive the long-duration trip costs by multiplying annual passenger vehicle miles traveled for long-duration trips by our estimated guest cost per allotted mile of $0.38, $0.30,

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$0.37, $0.37, and $0.37 for the United States, Canada, the United Kingdom, France, and Australia, respectively, based on historical prices, fees, and fuel costs. We define allotted miles as the mileage included in a trip, rather than the miles actually driven. We derive the number of passenger vehicle miles in our SAM by available country-level estimates of passenger vehicle miles traveled per car, based on data included in reports issued in 2021 by the International Road Federation, Geneva Switzerland (<sup>©</sup>IRF, 2021 World Road Statistics). We estimate that guests traveled approximately 1.8 billion miles on our platform in 2022, implying a less than 1% penetration rate of our SAM.

**Total Addressable Market (TAM)** 

We estimate our TAM to be $188 billion, using the same methodology as our SAM, including the potential opportunity from countries in Europe, Latin America, the Middle East, and South Africa as adjusted for the Organisation for Economic Co-operation and Development's estimates of purchasing power parity, which is a given country's purchasing power relative to U.S. purchasing power and utilizes cost adjustments relative to the United States, Canada, the United Kingdom, France, and Australia and exchange rates as of 2022. Over time, we believe that guests may increasingly use our peer-to-peer car sharing platform for trips greater than 30 miles as the cost of such trips, and ultimately the degree to which individuals choose to own their own vehicles, declines. As with SAM, we have excluded short-duration trips from our TAM to provide a more conservative view of our long-term opportunity. We estimate that our $188 billion TAM includes $96 billion in North America, $59 billion in Europe, and $33 billion in the rest of the world (which consists of selected countries in which we believe we have a medium- to long-term opportunity to onboard hosts).

**Key sources and assumptions in our SAM and TAM estimates** 

We primarily address use cases that are fulfilled today by passenger cars for trips over 30 miles, given the cost and range of vehicle options in our marketplace, as demonstrated by historical usage patterns on our platform. We estimate that 27% of passenger vehicle miles are driven on trips that are over 30 miles, as illustrated in the table below, based on available data from the U.S. Department of Transportation collected between April 2016 and May 2017 and assuming the same distribution for countries outside of the United States. Therefore, based on this distribution, we estimate that our current SAM is 862 billion miles of the 3.2 trillion vehicle miles traveled in the five countries in our current SAM, and 1.2 trillion miles of the 4.4 trillion vehicle miles traveled in the countries in our current TAM.

In our SAM and TAM estimates, we have assumed that every trip of greater than 30 miles has the potential to take place on Turo, regardless of whether or not the vehicle is owned by the driver.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **SAM trips breakdown** | **% of trips<br>survey** | **% of<br>miles** | **USA** | **Canada** | **UK** | **France** | **Australia** | **Total** |
|  | **% of trips<br>survey** | **% of<br>miles** | **Estimated billion miles (SAM)** | **Estimated billion miles (SAM)** | **Estimated billion miles (SAM)** | **Estimated billion miles (SAM)** | **Estimated billion miles (SAM)** | **Estimated billion miles (SAM)** |
|  Less than 15 miles | 86% | 47% | 1052 | 103 | 130 | 141 | 54 | 1479 |
|  16 - 20 miles | 5% | 11% | 248 | 24 | 31 | 33 | 13 | 349 |
|  21 - 30 miles | 5% | 15% | 342 | 34 | 42 | 46 | 17 | 481 |
|  **Greater than 30 miles** | **5%** | **27%** | **613** | **60** | **76** | **82** | **31** | **862** |
|  **Total** | 100% | 100% | 2254 | 222 | 278 | 302 | 115 | 3171 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **TAM trips breakdown** | **% of trips<br>survey** | **% of<br>miles** | **North<br>America** | **Europe** | **Rest of<br>the world** | **Total** |
|  | **% of trips<br>survey** | **% of<br>miles** | **Estimated billion miles (TAM)** | **Estimated billion miles (TAM)** | **Estimated billion miles (TAM)** | **Estimated billion miles (TAM)** |
|  Less than 15 miles | 86% | 47% | 1155 | 647 | 255 | 2057 |
|  16 - 20 miles | 5% | 11% | 273 | 153 | 60 | 485 |
|  21 - 30 miles | 5% | 15% | 375 | 210 | 83 | 668 |
|  **Greater than 30 miles** | **5%** | **27%** | **673** | **377** | **148** | **1198** |
|  **Total** | 100% | 100% | 2476 | 1386 | 546 | 4408 |

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**Our competitive strengths** 

• **Unique, exclusive inventory .** As of December 31, 2022, the vast majority of the over 320,000 active vehicle
listings on our platform are available only on our platform, up 67% year over year. Our hosts offer over 1,400 makes and models of vehicles through our platform in tens of thousands of locations across the United States, Canada, the United Kingdom,
France, and Australia. For the 12 months ended December 31, 2022, 24% of GBV came from trips taken with premium and exotic cars, 15% of GBV came from trips with new model year cars manufactured in 2022 and 2023, and 14% of GBV came from trips in
cars fueled by alternative energy sources. The diversity, breadth, and depth of our platform make us highly differentiated from competing offerings. Since the vehicle they choose is provided by a host, the guest can be confident that the specific
car that they booked is the exact car they will drive off in, increasing guest satisfaction.

Extraordinary selection unrivaled in the market Hertz vehicle selection vs. Turo vehicle selection .4% Trucks 10.9% SUVs/4\*4s .7% Performance 4.5$ Minivans 5.6% Luxury SUV 2.6% Luxury Sedans 5.1% Electric 1.3% Convertible 6.8% Car/sedan 62.1% Unique makes/models

Notes: U.S. only. Data represents percentage of GBV from the 12 months ended December 31, 2022 for trips in each vehicle category on the Turo platform. Car rental vehicle categories consist of makes/models that are available from a leading car rental provider.

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• **Marketplace density.** **  The scale and density of vehicles offered by our hosts enhances our guest value
proposition through increased coverage and better service delivery. Hosts offer a wide variety of vehicles in tens of thousands of locations across a broad geographic footprint, and guests have the option to have vehicles delivered to their
doorstep. Without the traditional limitations of a physical retail or parking footprint, vehicles shared by hosts can be found broadly throughout the geographies in which Turo is available, on nearly every block in some neighborhoods, corresponding
to thousands of vehicle options. On our platform, guests can access greater variety and similar or better-quality vehicles as compared to other transportation options. This broad selection enables us to provide extensive choices to guests, and
better allows guests to make informed decisions regarding their booking.

Unrivaled network reach

• **Compelling value.** We offer a better economic value than many other transportation solutions. For example, the cost
per mile of owning a medium-sized sedan in the United States that is driven 15,000 miles per year was approximately $0.69 per mile in 2022, including fuel, license registration and taxes, insurance,
maintenance, and financing costs, according to AAA. These costs do not include the cost of parking, which increases the cost of car ownership, particularly in urban areas. Ride sharing is typically more expensive; for example, in the Denver region,
according to the MPC, passenger cost per mile is on average $2.50 per mile with a median of $3.19 per mile after considering total fare, tolls, fees, gratuity, and travel distance. The same vehicle would cost guests only approximately $0.20 per
mile on Turo, after including incidentals and fees but excluding sales tax, based on 2022 data. Guests on Turo also benefit from the improved flexibility, experience, and the selection our platform provides, which includes premium and specialty
vehicles that are hard to find elsewhere, compared to other transportation solutions.

• **Innovative, custom-built platform .** Our technology platform is designed to serve the unique needs of our key
customers. We have purposely built our technology infrastructure and app to empower hosts and guests with specific features to directly address their needs. For hosts, our robust offering provides an entrepreneurial platform to build their
businesses. Our offering includes listing assistance, pricing tools, integrated payments, community support, reviews and feedback, and multiple support communication channels, among other things. Guests benefit from seamless apps to search,
discover, book, and experience a vehicle when they need it.

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Customer feedback & data inform future product development Gatherfeedback Prioritizeopportunities Analyzeimpact Designproduct Test Launch Measure& control

• **Proprietary data and machine learning driven insights .** Our proprietary data gleaned from well over a
billion driving miles and millions of trips since inception allows us to develop and refine our proprietary Turo Risk Score, continuously improve our offering, provide personalization, and optimize the economics in an intelligent manner. The unique
Turo Risk Score capability, built on machine learning algorithms, enables us to implement real-time, risk-based optimizations of our offering that help ensure the economic viability of each trip.

• **Engaged community and powerful brand .** We have a highly engaged community of hosts and guests that create
dynamic, differentiated experiences for each other. The uniqueness of our offering has created strong brand advocates who are loyal to our platform, drive word-of-mouth growth, and take repeat trips with increasing frequency. In 2022, approximately 79% of our site traffic was organic and approximately 48% of Days were generated from bookings by repeat guests.

• **Culture and team .** We have a world-class team and culture aligned around our mission to put the world's
1.5 billion cars to better use. Our core management team has deep expertise across disciplines and lives the values of the organization that perpetuate our strong culture. For example, our CEO is one of our All-Star Hosts, with a decade of activity on our platform, and many of our employees are also All-Star Hosts. Our culture has received numerous recognitions externally
and contributes to our ability to attract and retain premier talent across functions including product, engineering, marketing, sales, and government relations.

**Our growth strategy** 

Key elements of our growth strategy include:

• **Innovate on our platform .** We are highly focused on removing friction from our marketplace and making it
easier for hosts to earn income from their vehicles and guests to access the perfect vehicle. We intend to continue to invest in our technology platform to make the complicated aspects of engaging with the marketplace dramatically easier. We aim to
offer new and enhanced features to expand the value we provide to both hosts and guests engaging with our platform, as well as improve the efficiency and effectiveness of our operations. As we invest in our platform, we intend to make it easier for
hosts to list their vehicles, automate pricing and onboarding workflows, and even provide assistance with vehicle management and suggested maintenance through our software. As we improve the support we provide to hosts, this will attract more hosts
to our platform and enable them to deliver high-quality experiences to guests.

• **Grow supply and unlock new use cases .** We plan to continue growing our host community, expanding our unique
selection of vehicles, and unlocking new use cases. We intend to invest in research and development to continue introducing new features and services for hosts that make it easier for them to grow their income and operate profitably on our platform.
In addition, we plan to invest in sales and marketing to expand our supply globally and across more vehicle categories and use cases. We primarily exist in four-wheel vehicle categories today, and there is a plethora of vehicle categories we could
expand into that would serve a multitude of additional use cases. Our long-term vision is to drive a profound behavior shift that moves all the underutilized vehicles out of their garages and onto our platform.

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• **Grow and deepen guest engagement .** We aim to increase our guest reach, both domestically and
internationally, and increase their engagement with our platform. As of December 31, 2022, we had over 2.9 million active guests, and we believe that guests are using our platform today for only a fraction of their transportation use cases. We
intend to invest in research and development to continue introducing new features and services for guests that make it easier and more convenient for them to book from the widest selection of vehicles. Our long-term vision is to become guests' go-to platform to book the perfect vehicle for any occasion.

• **Expand internationally .** We plan to enter new international markets with the vision of being a truly global
platform. We have historically operated in North America where we have become the largest peer-to-peer car sharing platform. We entered the United Kingdom on a peer-to-peer basis in 2018, and rapidly became the peer-to-peer market leader. Recently, we
acquired OuiCar, a car sharing marketplace headquartered in France, and launched operations in Australia. Over time, we plan to enter new markets to deliver our value proposition to hosts and guests in more markets worldwide, and further develop the
strength of an interconnected, global network.

• **Pursue additional strategic acquisitions and partnerships .** We aim to pursue strategic acquisitions and
partnerships to offer our hosts and guests services and features that we do not currently offer in-house. We have existing relationships with top-tier insurance
companies and car manufacturers. Our aspiration is to develop innovative financial arrangements with insurance providers to remove barriers and allow us to accelerate the speed of our expansion, both vertically and geographically. We intend to build
on the strong relationships we have developed with many constituents in our ecosystem to expand our market opportunity, enhance our capabilities, and increase the value of our platform.

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Host stories Turo empowers entrepreneurs of all sizes, from individuals looking to offset the cost of car ownership to professionals seizing the opportunity to build scalable businesses.

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Host stories: Consumer host Summers setbacks turn to successes

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Host stories: Consumer host Hosting since 2020 Portfolio size 2 cars When the art school she was attending foreclosed, Summer was left without a degree or transferable class credits and they still wanted her to pay back her students loans. So she started sharing her SUV on Turo, and knew if she could just get a second car, she would be making more than enough to cover her bills. While looking for the funds to purchase that second car, Summer found the opportunity to crowdfund an interest-free loan through the Turo Seeds Initiative, and was able to buy another car and start her journey towards financial independence.

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Host stories: Consumer host Hosting since 2020 Portfolio size 2 cars When the art school she was attending foreclosed, Summer was left without a degree or transferable class credits and they still wanted her to pay back her students loans. So she started sharing her SUV on Turo, and knew if she could just get a second car, she would be making more than enough to cover her bills. While looking for the funds to purchase that second car, Summer found the opportunity to crowdfund an interest-free loan through the Turo Seeds Initiative, and was able to buy another car and start her journey towards financial independence.

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Neal August 2020 Summer was a great host. The car was clean and in great shape! It was perfect for our mountain trip to Colorado! Nitin May 2021 Had a great time in Nissan Rogue. Everything went perfect. Picked up the car from from the Denver Airport parking lot without any issue. Patrick October 2020 Summer made the process easy and enjoyable. We had a great experience and her car was beautiful! Very clean, drove well in the city and mountains. Nick January 2021 Summary was amazing from start to finish. I wouldnt hesitate to book this car again and work with someone so nice when I come back to town!

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Host stories: Small business host Car sharing gives Michael the keys to entrepreneurship

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![LOGO](g145731g02m02.jpg)

Host stories: Small business host Hosting since 2017 Portfolio size 7 cars After Michael jumped into hosting, his experience with Turo soon became hugely influential for the young aspiring entrepreneur. He had ambition and competitiveness from his years as a collegiate sprinter, and found that becoming a Turo host was the perfect way to begin his journey as a business owner. Today, Michael has over 1,000 trips under his belt, and Turo is helping him fulfill his dream of being a full-time entrepreneur while he runs multiple business and enjoys every minute of his hard-earned financial freedom.

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Host stories: Small business host Being your own boss is really freeing. Betting on yourself and being in control of everything is definitely tough, but to me it means everything. It means freedom.

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![LOGO](g145731g95a16.jpg)

Host stories: Small business host Jack May 2018 Absolutely 1st class service from Michael, let me amend my booking without any issues and also had great communication throughout the trip. Great guy. Michael February 2021 Great experience. Amazing car and professional rental experience. Michael runs a great operation. Definitely will be renting from him in the future. John September 2019 Honestly, Michael is the reason Turo works so well. Amazing trip. Will be renting from Michael if I can on my next trip! Jennifer July 2020 Michael is incredibly kind and helpful! The car itself was a perfect addition to a much needed weekend getaway. He was on time and extremely flexible when we had a few changes to our plan. He was responsive and provided assistance with anything we had questions about. Nice to know there are still some good people out there in the world!

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Host stories: Professional host Amy & Jeremy lead the charge in Hawaii

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Host stories: Professional host Hosting since 2019 Portfolio size 16 cars Amy is a do-it-all organizer and community leader and Jeremy is an officer in the U.S. Navy. Together they are parents of two and a car sharing power couple in Honolulu. The couples mission has always been to build something sustainable and not contribute to the waste that pollutes our environment, and the flexibility of the Turo platform has empowered them to make headway on that sustainability mission the majority of their 16-car portfolio is made up of Teslas, plus a couple sports cars for fun. Now that Turo has given them years of experience working around the lack of electric vehicle infrastructure on Oahu, their ultimate goal has become leading electric vehicle adoption and bringing chargers to their island.

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Host stories: Professional host We bring a little Aloha into our business.

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Host stories: Professional host Aubrey October 2020 This was my first Tesla experience and I loved it. Friendly help from the owners with no issues whatsoever, will definitely call on them again before I buy my own. Jeff December 2020 Jeremy and Amy were excellent hosts and provided an awesome C8 Corvette to drive around Oahu with. A highlight of our trip to Hawaii. Mahalo! Daniel November 2019 Amazing car rental experience. Simply the best I ever had& Thanks to Jeremy and Amy for helping me make my first Hawaiian visit unforgettable. David June 2021 Jeremy and Amy saved the day since there were no rentals available on the Island. Their Tesla Model Y is super clean and fun to drive. Thanks!

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Guest Stories Turo empowers guests to find the perfect car for any occasion - from the everyday to the extraordinary.

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A car for any occasion Hyperlocal, instant access Convenient availability in neighborhoods across metro areas Maria Luke Tunde Alexandre Zachary Mazda MX-5 Miata Los Angeles, CA Car was super fun. Loved the convenience of picking up the car with Turo Go just a few hours after I requested it. Sean Lexus CT 200h Long Beach, CA Conveniently located just down the street from my house with smooth communication. Luke Mercedes-Benz GLS-Class Brampton, ON Excellent vehicle and excellent fellow! Lives right down the street too, very convenient,very accommodating! Alexandre Fiat 500 San Francisco, CA Car was great for some city errands and I'll definitely ride again! Tunde Renault Kangoo London, UK Great van, easy to drive and enough space for moving furniture. Zachary Dodge Ram 1500 Classic Pleasanton, CA The truck was perfect for moving a twin bed (fit perfectly flat in the truck bed) and had a surprising amount of pickup (pun intended).Would definitely use it again if I need to move any other big items. Errand day made easy Trucks, vans, and cars when you need them

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A car for any occasion Dream drivers High-performance thrills with a rich selection of luxury, exotic, and classic cars Tom Porsche 718 Boxster " Cape Coral, FL Tremendous machine. My first experience with Porsche PDK. Shifts are unreal quick." Steven Jaguar F-Type R " Orlando, FL Brrrrraaaappp braaapp is all you will hear from this amazing exhaust on this amazing car. Definitely booking again, host was great! Zohaib Acura NSX " Newark, NJ What an absolutely incredible car! This thing is a supercar looks incredible in the sun, drives better than anything else Ive driven...

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A car for any occasion Making memories in a classic Mustang

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A car for any occasion I spotted this 1965 beauty on Turo and just knew I had to do something special. The smile on his face when I pulled up to baggage claim to surprise him was all I needed. For his dads 60th birthday trip to Florida, Jesse went above and beyond normal son duties and secretly booked a classic Mustang for the weekend. Jesses dad, Ron, once had a career in auto repair and was the owner of a 1966 Mustang, which served as the getaway car at Rons wedding with Jesses mom just over 40 years ago. When Jesse pulled up at the curb to pick his parents up at the airport, he got exactly the reaction he was looking for. Ron drove everywhere in the car during the trip, reminiscing on old memories and making new ones. We had an absolute blast. He couldnt stop smiling for three days straight.

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A car for any occasion Try before you buy Take your time in the drivers seat before making a big purchase decision Shanae Land Rover Range Rover Evoque Fort Lauderdale, FL Ive been thinking about purchasing a Range Rover and I went to Florida for my birthday and needed a last minute rental. Perfect time to test drive 5 stars for sure! Dillan Tesla Model Y Scottsdale, AZ If youre considering purchasing a Tesla, this is an awesome option for a pseudo extended test drive. Rubi Jeep Cherokee Cypress, CA Loved using this Jeep! Perfect way to test drive our future car! Terry Tesla Model Y Manchester, NH Great opportunity to test drive a fantastic car. Jonathan was great and answered all my questions. Now I have to save up for my own Tesla.

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A car for any occasion Special events Unforgettable cars, memorable experiences Cortney DeLorean DMC-12 Marina del Rey, CA This was a surprise for my fiances birthday and he a super Back to the future fan was completely blown away! Johnnie BMW 4 Series GranCoupe Charlotte, NC My wife wanted a nice getaway car for our wedding and a cozy ride throughout our weekend. This car knocked it out of the park. Alison Chevrolet Corvette Los Angeles, CA This was the best Mothers Day gift!! ...it was so fun to drive (its my dream car) and upon arrival it was perfectly clean. I definitely did not want to give it back!

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A car for any occasion A Mario-inspired Halloween parade

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A car for any occasion For years we were having our Halloween parties at the house. Well in 2020 we couldnt do that, so instead we brought the Mario Kart parade to the neighborhood. Christophers family goes big every Halloween like big. They decorate the house for a different theme every year and invite the neighborhood over for festivities. But when the COVID-19 pandemic prevented them from celebrating Halloween in person, they instead booked a few karts and held a Mario Kart-inspired parade to keep the tradition going. We rode down and handed out (clean) goodie bags to the kids. The costumes were great, but we couldnt have pulled this off without the Slingshots.

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A car for any occasion Flexible, month-to-month access Long duration reservations when owning isn't an option Car replacement Get behind the wheel, even while yours is in the shop Tashina Mercedes-Benz E-Class " Kansas City, MO "I rented for two consecutive entire months and the owner was SO good to me - he gave me an incredible deal for my long term rental." Rendy Nissan Versa " Kailua, HI "As a travel nurse, I'm used to looking for short-term housing for my three-month work assignments, but I needed to find an affordable month-to-month car, too& the car was clean, great AC, and safely got me back and forth to work." Simon Audi S4 " Dublin, CA "I rented this car for a month while on business in the Bay Area. The car was outstanding." Kerri Leah Nissan Sentra " Gilbert, AZ "Amanda is simply amazing& She knew my car was in the shop and she met me there to help me out!" Audra Mercedes-Benz C-Class " Austin, TX "My car was in the shop and I needed transportation for the holidays. I had to extend my trip and the host was able to make that happen for me."

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A car for any occasion Vacations & local gateways The perfect set of wheels to fit any vacation vibe Nathan Land Rover LR4 " Denver, CO Had an epic trip out west. This was pricedwell and provided for a great adventure! Carla Jeep Gladiator " Fort Lauderdale, FL Best vacation vehicle ever! Lots of room for luggage! Back seat had great space too. Miles Ford Mustang " Goleta, CA Loved having this comfy, stylish, and fun convertible for a weeklong vacation out in the desert. Michael Subaru Outback " Toronto, ON The Outback really fit our camping needs and was a pleasure to drive. Thanks for helping our vacation be fantastically memorable! Alicia Bentley Continental Flying Spur " Las Vegas, NV Rented this car for my birthday while vacationing in Vegas. Heads were turning for sure... very clean... rides so smooth.

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A car for any occasion personalized service for a differentiated experience warm and welcoming local hosts Cierra BMW 5 Series Orlando, FL I made several last minute changes and Nesta was more than accommodating, [she] even helped us unload our luggage from the airport! Lamar Nissan Versa Las Vegas, NV DeAuston was amazing!!! Best experience with car rental Ive had. Joy BMW X3 Kapolei, HI This was our first time [using] Turo and thanks to the ease of renting from a private owner, I would definitely do this again!

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**Our technology** 

We have built a robust and flexible two-sided marketplace that connects hosts and guests, and our platform provides trust, value, selection, and convenience. The core components of this platform include a catalog, search and ranking infrastructure, risk and fraud detection system, pricing engine, payments, rating and review system, and messaging:

• **Catalog.** Our curated catalog of vehicles enables hosts to easily list their vehicles in a structured form while
making it convenient for guests to find them.

source technology, enables our guests to find a vehicle according to their chosen location, time, vehicle category and features, use case, and price point.

• **Risk and fraud detection.** Our machine learning and data science-enabled proprietary risk management
infrastructure, which is the basis for the Turo Risk Score, leverages proprietary data and data from several third-party integrations to help mitigate identity, payment, and revenue risk, building trust on the platform throughout our community.

• **Pricing.** Our pricing engine enables our hosts to estimate a fair price for their vehicle that maximizes their
earnings potential while also retaining the ability to set their own price.

• **Payments.** We utilize third-party secure payment platforms that enable our guests to use a debit or credit card (or
electronic payment method such as Apple Pay, Google Pay, or Revolut) to book a vehicle, and allow our hosts to receive their earnings through direct deposit into their bank accounts.

• **Rating and review.** Our proprietary rating and review system includes a laddered ranking system for hosts, created
by asking their guests to rate their experience and the vehicle they booked. Hosts, too, are prompted to rate their guests after each trip. In addition, hosts and guests are encouraged to write descriptive public reviews, promoting transparency and
accountability via user-generated feedback. Hosts can also publicly respond to reviews, and all participants in the marketplace can privately review the other person in the transaction or send private feedback to us if they choose.

• **Messaging.** Our proprietary messaging platform provides real-time in-app communication. Third-party integrations help support SMS, email, and push notifications based on preferences set by each user.

• **Photos.** As of December 31, 2022, approximately 530,000 photos of vehicles are uploaded by hosts and guests daily
during the check-in and checkout process. Hosts and guests take and upload photos to document the condition of the vehicle before and after each trip, and the photos are stored and utilized to assess damage if
needed.

These components provide valuable services to our hosts and guests with 99.9% availability while keeping their data secure. Our secure platform also enables us to derive critical insights from customer behavior and transactional data to fine-tune the customer experience and closely monitor our business performance metrics.

We also provide hosts in certain markets who own specific car makes and models with the ability to share and grant remote, contactless access to their vehicles through Turo Go, providing both hosts and guests with an additional layer of convenience.

Our platform can also support multiple languages and currencies, as it currently does in Canada, the United Kingdom, France, and Australia. Data science and machine learning power our risk, fraud, pricing, and search capabilities. Data science models leverage a data platform that contains data from many proprietary and third-party sources. Our app integrates with many third-party apps to enable signup, sign in, risk features, payments, marketing, notifications, telematics, and observability.

Our platform is accessible to hosts and guests through apps built for web (desktop and mobile) and mobile native (iOS and Android) platforms using agile software development methodologies. As of March 21, 2023,

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our iOS and Android apps each had a rating of 4.8 or higher in both the Apple App Store and the Google Play Store, respectively. We captured approximately 53% of all long-distance mobility app downloads in 2022.

Turo is the #1 app in its industry #1 rank for "car rental" on the Apple App Store and Google Play Store Number of in-app search sessions per year at ~44% CAGR from LTM 2017 to LTM 2021 #1 rank for "car rental app" on organic Google Search 10M+ LTM 2017 47M+ LTM 2021

![LOGO](g145731g33a42.jpg)

Captured over half of long-distance mobility app downloads TURO 57% Enterprise 17% Hertz 8% Avis 6% Zipcar 6% Getaround 6%

Source: AppFigures.

Notes: Figures represent Apple App Store and Google Play Store downloads in the United States in 2022.

Our platform is fast evolving into a truly distributed architecture for resiliency, availability, performance, and security. Our back-end and web front-end services are hosted on Amazon Web Services, leveraging the security of the platform. Cloudflare secures our traffic, and our bug bounty program helps us leverage the security community on HackerOne to identify and resolve security vulnerabilities. A third-party observability platform helps us monitor our services and apps in real time, enabling us to provide high availability and performance.

**Our support systems** 

We have invested in a global network that offers support to our host and guest communities. Customer support is available 24/7 through various channels where available, including phone, chat, email, self-service, and web in the United States and Canada, and during extended local business hours in the United Kingdom, France, and Australia. Access to roadside assistance is provided 24/7 for all trips. Help in the form of FAQs is available at the Help Center at help.turo.com.

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Internally, we have a team of experts who focus on handling intricate and sensitive situations, and who serve as the subject matter experts supporting our partners and international communities. Our teams directly handling contacts from our community are supported by operational teams that craft and provide policies, training, processes, and tools that enable positive, successful customer interactions and experiences. In addition to our dedicated customer support teams, we have both internal and external teams that process physical damage contractual reimbursement claims under our protection plans.

**Marketing and sales** 

**Marketing** 

Our marketing efforts consist of acquiring and engaging hosts and guests, building brand awareness and advocacy, and generating earned media through our communications team.

Our host marketing programs are designed to set hosts up for success and educate them on how to deliver five-star guest experiences. We equip hosts with a wide array of content and resources, including training guides in the Host Tools hub and earnings estimates via the Turo Carculator. Notably, 95% of trips reviewed by guests in 2022 received a five-star rating. We also offer hosts incentives and promotions based on hitting certain milestones. As hosts are increasingly successful and the hosting value proposition improves, our vehicle supply grows as we further attract new hosts to the platform and existing hosts grow their portfolios.

Our guest marketing programs are focused on driving organic traffic from both new and repeat guests, supplemented with highly efficient performance marketing. Our engaged guest community and powerful word-of-mouth drove approximately 79% organic traffic in 2022. We also focus on acquiring and retaining guests who use our apps via targeted marketing efforts. As a result, approximately 53% of our search sessions in 2022 came via our iOS and Android apps. According to AppFigures' "App Teardown" in June 2021, our app store optimization earned an A+, based on the usability and functionality of our apps.

Our brand marketing and communications programs grow brand awareness and build brand advocates, who further propel word-of-mouth growth and take repeat trips on our platform. By showcasing the unique selection of vehicles and superior experience offered by our hosts, as well as testimonials and stories from our community, we are able to build brand advocacy and garner considerable press coverage.

**Host success** 

Our host success efforts consist primarily of acquiring, onboarding, and supporting hosts. Our host success team converts potential leads into new hosts and supports the onboarding of new hosts. Our account executives are responsible for building relationships with and ensuring the continued success of a select group of our top hosts.

**Our people and places** 

Just as hosts and guests are the center of our community, our people, whom we affectionately refer to as "Turists," are the heart and soul of our company. We pride ourselves on maintaining a diverse, inclusive,

welcoming, and harassment-free workplace where all employees feel they belong, and an environment where they can be themselves and find opportunities to thrive in their careers. We believe that diversity, inclusion, and belonging is more than a corporate responsibility — it is core to who we are and what we value. Through our hiring process, we commit to supporting diversity and eliminating bias. We know that a diverse and inclusive workforce with a variety of knowledge, skills, experiences, and backgrounds is critical to helping us attract and retain the talent necessary to grow our business. We also believe we will be a more successful company if we are inclusive of all voices, and if all Turists have access to the tools, resources, and opportunities to succeed at Turo. Our highly skilled, passionate team of people are our competitive advantage.

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As of December 31, 2022, we had a total of 814 full-time employees across five countries, including 90 employees in operations and support, 175 employees in engineering, and 129 employees in sales and marketing. We also engage contractors and consultants. None of our employees are represented by a labor organization or are a party to any collective bargaining arrangement. In Canada, the United Kingdom, France, and Australia, our employees may be subject to certain national collective bargaining agreements that set minimum salaries, benefits, working conditions, and termination requirements.

As of December 31, 2022, 38% of our global employees identified as women using the gender binary and approximately 51% of our U.S.-based employees self-identify as American Indian/Alaska Native, Asian, Black/African American, Hispanic/Latino, Hawaiian/Other Pacific Islander, or as two or more races. Looking to the future, we are committed to honing our focus on elevating diversity at the senior management and board levels, to better represent and reflect the diversity of our community.

A breakdown of the Turo team Ethnicity Gender Two or more races 4% American Indian or Alaska Native <1% White 27% Chose not to disclose 21% Native Hawailian or other Pacific Islander <1% Latinx 14% Asian 26% Black 8% Women 36% Men 64%

Notes: Reflects full-time company employees as of December 31, 2022; Ethnicity data is for U.S.-based employees only.

**Our culture and values** 

Our Turo culture is an integral part of the employee experience. Not only is our culture one of the main things that attracts people to work at Turo, but it is also a key factor in retaining our employees. Our culture is genuine and transparent. We are an optimistic crew, passionate about our mission of putting the world's 1.5 billion cars

to better use. Our culture is key to our success and we believe that each new Turist adds to the cultural richness of our company.

As a key part of cultivating and growing our Turo culture, we routinely conduct anonymous semi-annual engagement surveys to ask questions, check in with our Turist community, and get a pulse on areas of success and opportunities for improvement. We listen to the feedback provided by our employees and make meaningful strides to take action where needed to improve the employee experience. We are proud to share that in our latest engagement survey that was conducted in October 2022:

• 93% believe that Turo is in a position to really succeed over the next three years;

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• 94% recommend Turo as a great place to work; and

• 89% have confidence in the leaders at Turo.

We take pride in our engagement survey results and believe that they reflect the very special culture that we've cultivated here at Turo.

We unveiled our four fresh "core" values at our seventeenth Turbo Week, our bi-annual all-company conference. These values are true to our past and present, but oriented toward the future. They are:

• **Grounded** — We see the person first.

• **Expressive** — We celebrate uniqueness.

• **Bold** — We push beyond the expected.

• **Driven** — We strive to make it better.

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Recent feedback from Turist new hires Where has this company been all my life? ...everyone is super welcoming. I love how much everyone participates in all the channels. Cool to see how excited people are. Every question Ive ever had, someone has been there to answer it or direct me to the answers. This has got to be the best place in the world to work. From the interview process and every step through, everyone is friendly and helpful. Interview process was like chatting with friends versus doing an interview. Never been through anything like that.

We weave our Turo values throughout the entire employee experience — from candidate interviews to performance reviews to awards and recognition. We expect every Turist to model the four core values on a daily basis in every interaction with one another and with our hosts and guests, and we reward those employees who best exemplify these values with our quarterly "Spirit of Adventure" award.

We take pride in our company culture, and that pride only grows stronger when we receive recognition as a top employer by leading external organizations. On Glassdoor, we have a 4.6 out of 5.0 score and a 99% CEO approval rating. In 2023, we were listed on Glassdoor's Best Places to Work in the US (Small/Medium Businesses) list, and in 2019 our CEO was ranked #16 on the Glassdoor Top CEO list for small and medium companies. For the second year in a row, Great Place to Work and Fortune ranked Turo on their Best Workplaces in the Bay Area (Small and Medium) list. And for the first time, Turo was ranked by Great Place to Work and Fortune on their 2022 Best Medium Workplaces (national) and their 2022 Best Workplaces in Technology (national) lists, as well as Great Place to Work's 2022 Best Workplaces for Parents (Small and Medium). For the fifth consecutive year, Wealthfront has named us on their Career-Launching Companies list. In 2022, 2021, 2019, and 2018, we were ranked on the Best Places to Work Bay Area list by the San Francisco Business Times. For the fifth consecutive year, we were ranked on the Top Workplaces Bay Area list by the Bay Area News Group and San Francisco Chronicle. And for the second year in a row, we were named to the Top Workplaces in Arizona list by AZ Central, in addition to being ranked for the third year in a row as a Best Places to Work in the small sized category by the Phoenix Business Journal. For the second year in a row, we received a Gold Stevie Award for Great Employers (Transportation). And lastly, we were named to Built In's 2022 Best Places to Work Bay Area (midsize companies) list. We believe these awards and accolades validate the quality and authenticity of our culture.

**Our places** 

Our corporate headquarters is located in San Francisco, California, where we lease approximately 39,375 square feet of space under a lease that expires in January 2027. In Phoenix, Arizona, we also lease approximately 30,091 square feet of office space under a lease that expires in August 2027. We also lease office space in Toronto, Canada, London, England, Paris, France, and Sydney, Australia. We believe our facilities are adequate and suitable for our current needs, and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.

**Our commitment to diversity, inclusion, and social action** 

We are committed to promoting diversity, inclusion, belonging, and positive social action through several internal practices and programs, as well as external programs. As part of our internal initiatives, we invite our Turists to participate in inclusion training throughout the employee experience, starting with our new hire, interviewer, and manager training programs. We also survey our employees semi-annually on topics of diversity and inclusion so that we can ensure all voices have an opportunity to be heard. And we are proud to search for and hire talented people with diverse backgrounds via our channels and partnerships with organizations such as the Hispanic Foundation of Silicon Valley, Power to Fly, and The Law & Technology Diversity Collaborative (of which Turo is a founding member), just to name a few examples. We are also proud that our legal department has achieved Mansfield Plus Certification.

Diversity, inclusion, and belonging is core to the DNA of Turo, a peer-to-peer business that relies on trust and collaboration and was founded on the principle of creating economic opportunity for all, regardless of background, ethnicity, gender, age, or any other factors that could make someone feel disenfranchised.

**The Turo Seed Initiative** 

Launched in November of 2020, the Turo Seed Initiative is a program providing up to $1 million in funding and access to interest-free investment opportunities to aspiring entrepreneurs in the United States, especially those from underserved communities, by leveraging the Turo marketplace to help narrow the wealth gap.

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**Carbon offsetting program** 

Starting on Earth Day in 2021, we became the first peer-to-peer car sharing marketplace to offset 100% of our estimated carbon emissions globally based on an estimated total number of miles driven on Turo trips, as well as all emissions from our global office footprint. We've been energized by the observed uptick in electric vehicle adoption on our platform — electric vehicle share has been steadily growing year over year, and as of December 31, 2022, electric vehicles represented 7% of Turo vehicle listings — and we are committed to doubling down on positive, constructive environmental action to make car sharing and car travel more sustainable. Our carbon offsetting program helps fund projects addressing transportation and industrial emissions and agriculture forestry initiatives to reduce greenhouse gases worldwide.

**Partnership with Dream Foundation** 

Since January 2019, we have partnered with Dream Foundation, a non-profit that serves terminally ill adults and their families by fulfilling end-of-life dreams that offer inspiration, comfort, and closure. The partnership empowers our hosts from across the United States to play a part in fulfilling these dreams by providing Dream recipients with cars to travel locally with family and friends. Whether they're yearning for a getaway or a drive in a dream car, we and our host community have helped fuel the adventures of over 140 Dream recipients to bring their dreams to fruition.

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Community Commitments Economic opportunity for all The Turo Seed InitiativeThe Turo Seed Initiative is a program designed to empower historicallydisenfranchised entrepreneurs with access to wealth-building opportunities,so anyone can start building a small business and pave their own pathtowards financial wellness. Turo is proud to provide up to $1 million in funding and access to interest-free investment opportunities to aspiring entrepreneurs across the United States, especially those from underserved communities, and leverage theTuro marketplace to help narrow the wealth gap. Its not all about making money for myself, its also about becoming a big driver of business in my community. <br> ![LOGO](g145731g86k25.jpg) Community Commitments Making car travel more sustainable Offsetting 100% of estimated carbon emissions Smarter, more efficient use of resources is at the very core of the Turo marketplace and our mission to put the worlds cars to better use. Taking Smarter, more efficient use of resources is at the very core of the Turo concrete action to make our platform carbon-neutral is an important continuation of our efforts to make car travel more sustainable. Turo currently offsets 100% of estimated carbon emissions created from our marketplace by investing in verified greenhouse gas-reducing projects. This commitment accounts for emissions based on an estimated total number of miles driven on all Turo trips, as well as all emissions from our global office footprint. number of miles driven on all Turo trips, as well as all emissions from our Connecting people & making memories Turo is honored to partner with Dream Foundation, the only national dream-granting organization for terminally ill adults, to fulfill lifelong dreams together. Since January 2019, Turo hosts have helped provide transportation for dream recipients to embark on memorable end-of-life adventures with family members and friends, offering inspiration, comfort, and closure.

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**Competition** 

We operate in a highly competitive environment. As we seek to expand our community globally, we face competition in attracting and retaining hosts and guests.

**Competition for hosts** 

We compete to attract and retain hosts who share their vehicles on our marketplace, as hosts have other options should they choose to generate income from car sharing, may not be aware of peer-to-peer car sharing, its benefits, or the economic opportunities it provides, or may not be motivated to monetize their vehicles. We compete for motivated hosts based on many factors, including the amount of income they generate, the ease of use of our platform, the marketplace fees we charge, host protection plans, and the strength of our brand. We believe that our marketplace is more valuable to hosts than other peer-to-peer car sharing platforms due to our guest demand, broader geographic footprint in the United States, ease of onboarding, best-in-class host tools and services, strong brand, and our trusted community.

**Competition for guests** 

We compete to attract and retain guests, who have a range of options to find and book vehicles. We compete for guests based on many factors, including the unique selection and availability of vehicles, the value and all-in cost of our offerings relative to other options, the convenience and locations of accessing our vehicles, our brand, the ease of use of our platform, the trust and safety our platform offers, and customer support.

We also compete generally with car ownership, car leasing, car subscription services, and a variety of transportation options that are focused on long-duration and long-distance trips, including public transit, railways, and airlines. While some customers may choose TNCs, taxis, or hourly rentals in lieu of peer-to-peer car sharing, these modes of transportation are better suited for short-term, short-duration trips. Our primary competitors are in the long-distance and long-duration automobile transportation space, including:

• Peer-to-peer car sharing competitors,
such as Getaround, Inc., or Getaround, and ANIHI Newco, LLC (doing business as Avail) in the United States, Hiyacar Limited and Getaround in the United Kingdom and France, and Car Next Door Australia Pty Ltd. (doing business as Uber Carshare) in
Australia; and

• Car rental companies, such as Avis Budget Group, Inc., which operates Avis and Budget; Hertz Global Holdings, Inc., which
operates Hertz, Dollar, and Thrifty; and Enterprise Holdings, Inc., which operates Enterprise Rent-A-Car, National Car Rental, and Alamo Rent A Car; Fox Rent A Car;
HyreCar Inc.; Silvercar, Inc.; Sixt Rent A Car, LLC; and rental options available through TNCs such as Uber Technologies, Inc. and Lyft, Inc. Some of these companies also offer, either directly or through subsidiaries, hourly or fleet-based car
sharing solutions such as Zipcar, Inc., and Enterprise CarShare, AAA's fleet-based car sharing solution Gig Car Share (operated by A3 Mobility LLC) in the United States, Communauto in Canada, and Virtuo Technologies Limited and Enterprise Car
Club in the United Kingdom.

We believe we compare favorably based on multiple factors, including the highly differentiated breadth and depth of our inventory, our seamless booking and payment platform across devices, a wide range of locations and broad geographic footprint, features such as delivery and Turo Go, the strength and loyalty of our host and guest community, our brand, customer support, trust and safety, and protection plans.

**Intellectual property** 

We rely on a combination of trademarks, trade secrets, confidentiality procedures, non-disclosure agreements, employee non-disclosure and invention assignment agreements, and other legal and contractual rights to establish and protect our proprietary rights.

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We have trademark rights in our name and other brand indicia and have trademark registrations for select marks in the United States and other jurisdictions around the world. We also have registered domain names for websites that we use in our business, such as turo.com and similar variations. We have filed one patent application but do not have any issued patents.

We control access to and use of our proprietary technology and other confidential information through the use of internal and external controls, including contractual protections with employees, contractors, customers, and partners. It is our practice to enter into confidentiality and invention assignment agreements (or similar agreements) with our employees, consultants, and contractors involved in the development of intellectual property on our behalf. We also enter into confidentiality agreements with other third parties in order to limit access to, and disclosure and use of, our confidential information and proprietary information. We further control the use of our proprietary technology and intellectual property through provisions in our terms of service.

We intend to pursue additional intellectual property protection to the extent we believe it would be beneficial and cost effective. Despite our efforts to protect our intellectual property rights, they may not be respected in the future or may be invalidated, circumvented, or challenged. For additional information, see the section titled "Risk factors — Risks related to our information technology and intellectual property — Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets."

**Government regulation** 

As the largest peer-to-peer car sharing marketplace in North America, we are working to foster the passage of state laws that set the standards for our industry and enable both hosts and guests to continue to benefit from our marketplace. The peer-to-peer car sharing industry and our business model are relatively nascent and rapidly evolving, and so when we launched our business in 2010, the laws, regulations, or similar mechanisms in place at the time generally did not directly address our industry. We have proactively worked with state and local governments, regulatory bodies, and certain stakeholder groups to ensure that our peer-to-peer car sharing marketplace is available broadly and with ease for our hosts and guests. For example, in 2019, the National Council of Insurance Legislators, or NCOIL, adopted the NCOIL Peer-to-Peer Car Sharing Program Model Act, which was based upon proposed legislation in Colorado that we worked closely with NCOIL on, that was agreed upon with the American Property Casualty Insurance Association. The NCOIL Model for peer-to-peer car sharing serves as the basis for peer-to-peer car sharing legislation enacted in a number of states. The states that have passed peer-to-peer car sharing legislation include Arizona, California, Connecticut, Colorado, Delaware, Florida, Georgia, Hawaii, Indiana, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Nevada, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington, and West Virginia.

We have also opposed legislation that is harmful to peer-to-peer car sharing that has been lobbied for by the rental car industry in dozens of states and in Congress. Thus far, the majority of bills that we have opposed have not been passed into law. Our approach often involves bringing our hosts before lawmakers to share their stories of how peer-to-peer car sharing has had a material and positive impact on their lives. Each story is unique, and each host has been uniquely impacted by the economic opportunity offered by Turo, so we have found that shining the spotlight on the individual constituents that make up our rich community resonates deeply with lawmakers.

The rental car industry has tried to pass legislation that would require peer-to-peer car sharing platforms to collect rental car taxes from its customers in the United States. We believe such taxes are inappropriate due to other related tax exemptions that apply to the rental car industry but not to the overwhelming majority of our hosts. Unlike companies in the rental car industry, our hosts generally pay applicable sales taxes when they purchase their vehicles; therefore, we have successfully advocated that the imposition of identical rental car taxes on peer-to-peer car sharing transactions would be inappropriate and unfair for the hosts and guests that make up the peer-to-peer car sharing industry. Similarly, while rental car taxes are often borne by out-of-state residents, we have been able to advocate to lawmakers that taxes on peer-to-peer car sharing falls

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disproportionately on their own constituents. The Center for Growth and Opportunity at Utah State University found in a 2021 study that we commissioned that "policymakers cannot justify a tax on peer-to-peer car sharing with an assumption that the burden mostly falls on non-resident guests." If Turo transactions were taxed at the same rate as rental car transactions at the state and local level, without receiving the tax subsidies the rental car industry enjoys at the state level, which in the aggregate amounts to billions in tax savings to the rental car industry each year, it could harm Turo's value proposition for hosts and guests and could negatively impact our business, financial condition, results of operations, and prospects.

Our platform is subject to differing, and sometimes conflicting, laws, rules, regulations, or similar mechanisms in the numerous jurisdictions in which we offer services. New laws, rules, regulations, and changes to existing laws and regulations continue to be adopted, implemented, and interpreted in response to our industry in both favorable and unfavorable ways. We are subject to a number of U.S. federal, state, municipal, and local laws and regulations, and foreign and provincial laws and regulations that involve matters central to our business.

Similarly, airports around the country operate by enabling statutes or similar mechanisms that allow airports to require permits for certain activities. Many airports in the United States have sought to require permits for Turo and/or its hosts to deliver their cars to guests on airport property. Turo has volunteered to obtain permits on behalf of its community and has secured permits at certain airports. Turo has previously engaged, and continues to engage, in negotiations with multiple airports about permitting for peer-to-peer car sharing. Each permit is unique, and has different fees, terms, conditions, and requirements. No two permits are identical. In a handful of cases, Turo and various airports have not been able to negotiate mutually agreeable terms, resulting in litigation between Turo and these airports (or those entities or jurisdictions that operate the airports). In other instances, Turo hosts have delivered cars to guests on airport property, and Turo has not been notified of any concerns by the airport.

If airports or airport regulatory authorities continue, or if the federal government begins, to impose restrictions on hosts' ability to deliver their cars to guests at airports, including by requiring permitting or imposing fees, or otherwise burden, restrict, or limit hosts' activities at airports, it may adversely affect hosts' ability or desire to provide vehicle delivery at airports, which has and could continue to result in a reduction in trip bookings and adversely affect our business. In 2022, approximately 63% of GBV was collected from guests for trips that originated from non-airport locations and approximately 37% of GBV was collected from guests for trips that originated at airport locations. The rental car industry has disclosed that it has lobbied the federal government to pass legislation that would prohibit airports that receive federal funding from permitting peer-to-peer car sharing on any terms other than those granted to rental car companies, and we are actively opposing these efforts. Any requirements that force hosts to operate similarly or identically to rental car companies may also negatively impact our value proposition and harm our brand and reputation. If an airport or airport regulatory authority were to prohibit hosts' deliveries at an airport entirely, or impose prohibitively onerous requirements on hosts, it could significantly disrupt our operations and adversely affect our business.

Beyond peer-to-peer car sharing, legislation, the laws and regulations that can impact Turo involve taxation, insurance, intellectual property, competition, consumer protection, payments, export taxation, airport permitting, arbitration agreements and class action waiver provisions, terms of service, money transmittal, background checks, marketplace facilitation, and other matters. Many of the laws and regulations to which we are or may be subject are complex, fragmented, conflicting, subject to varying interpretations, and still evolving and being tested in courts. In addition, as new guidance and interpretations are provided by governing and regulating bodies such as federal, state, and local administrative agencies, they could be interpreted in ways that could harm our business. Some states and foreign jurisdictions have not adopted any laws, rules, or regulations which govern peer-to-peer car sharing specifically, and some foreign jurisdictions may outlaw it entirely. This uncertainty and fragmented regulatory environment can create significant complexities for our business and operating model. For additional information, see the section titled "Risk factors — Risks related to our legal and regulatory environment — Our business is subject to substantial regulation and may be found to be subject to a multitude of potential additional legal and regulatory frameworks, including those related to insurance, that are

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constantly evolving, and any unfavorable changes or negative court interpretations of these regulations or frameworks, failure by us to comply, or incompatibility with these legal and regulatory requirements could have an adverse effect on our business."

**Data protection and privacy** 

Our technology platform and the information we collect, use, store, transmit, and process in the ordinary course of our business are integral to our success. As a result, our compliance with numerous foreign and domestic laws, regulations, and standards regarding the collection, use, storage, transmission, and processing of personal information is core to our strategy for improving our technology platform and building customer trust.

Regulators around the world have adopted or proposed requirements regarding the collection, use, transfer, security, storage, destruction, and other processing of personal information relating to individuals, and these laws are increasing in number, complexity, enforcement, fines, and other penalties. A few such domestic governmental regulations that may have significant implications for our business are the California Consumer Privacy Act of 2018, the California Privacy Rights Act of 2020, the Virginia Consumer Data Protection Act of 2021, the Colorado Privacy Act of 2021, the Connecticut Personal Data Privacy and Online Monitoring Act of 2022, and the Utah Consumer Privacy Act of 2022. Internationally, we are subject to the European General Data Protection Regulation 2016/679, the UK GDPR (which incorporates EU GDPR into UK law with modifications), and the UK Data Protection Act 2018. For additional information, see the section titled "Risk factors — Risks related to our legal and regulatory environment — We are subject to stringent and changing laws, regulations, and standards, and contractual obligations related to privacy and data security. The actual or perceived failure to comply with applicable data protection, privacy, and security laws, regulations, standards, and other requirements could adversely affect our business, results of operations, and financial condition."

**Insurance** 

Protection plans on our platform are an important factor in the success of our business and are intended to protect hosts, their vehicles, and their guests. In the United States, the protection plans are generally composed of two elements. The first element is third-party auto-liability insurance from Travelers. The second element provides hosts with options for contractual reimbursement in the event their vehicle is damaged or not returned, and provides guests with the opportunity to contractually limit or remove their financial responsibility for the amount they pay out of their own pocket for damage or loss-related costs. The reimbursement for damage to the host's vehicle, and the limitation on guest financial responsibility are generally a direct contract and not insurance.

Turo works to comply with the various insurance laws and regulations in all of the jurisdictions where Turo services are available, which represents a substantial set of laws and regulations. For instance, states which have passed peer-to-peer car sharing legislation impose certain requirements on Turo to ensure that hosts and guests are covered by liability insurance in the event of an accident during a trip. Separate from peer-to-peer car sharing laws, all states impose certain minimum financial responsibility requirements on drivers to operate a vehicle in their respective states. Turo works to ensure that trips booked with Turo hosts in the countries in which Turo operates satisfy at least the minimum financial responsibility requirements required by the applicable laws. Likewise, some states require insurance producer licenses in connection with the insurance that is included in protection plans that are available in connection with a Turo trip. Because insurance is regulated at the state level in the United States and provincially in Canada, and because financial responsibility requirements vary among states and in Canada, there is a patchwork of laws and regulations that Turo must navigate.

Turo Insurance Agency, LLC, or TIA, is a licensed insurance producer, resident in Arizona and a wholly owned subsidiary of Turo Inc. TIA maintains non-resident licenses in several states. Insurance regulators have broad authority to restrict or revoke licenses of insurance producers that are found to be in violation of any applicable laws and regulations.

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The McCarran-Ferguson Act of 1945 clarified that states regulate insurance. As a result, each state has its own body of law and regulatory authority with respect to insurance. These rules are subject to change as state legislatures and regulatory agencies update their laws and regulations to address real and perceived issues and concerns. These laws and regulations are also subject to interpretation by state courts. Insurance regulatory authorities have broad administrative powers to regulate all aspects of what may be deemed the offering of insurance, including the power to levy fines and monetary penalties, and restrict or revoke licenses for those found to be in violation of applicable laws and regulations. We cannot predict precisely whether or when regulatory inquiries or actions may be taken that could adversely affect us. Interpretations of regulations by regulators may change and statutes, regulations, and interpretations may be applied with retroactive effect. The National Association of Insurance Commissioners and the National Council of Insurance Legislators are the principal organizations tasked with establishing standards and best practices across the various states, the District of Columbia, and five U.S. territories, and from time to time promulgate model rules and regulations that often are the basis for insurance rules and regulations adopted by such jurisdictions.

In addition, insurance laws in the State of New York historically prohibited the use of insurance policies like those we seek and have had issued to us in order to cover our hosts and guests without an explicit statutory exemption, which prevented us from operating the full scope of our business in the State of New York. However, in December 2021, the Governor of the State of New York signed a new bill into law, portions of which went into effect on June 20, 2022 and the remainder on September 1, 2022, and authorizes group insurance policies for peer-to-peer car sharing in the State of New York. We began peer-to-peer car sharing operations in the State of New York on June 27, 2022.

We cannot predict precisely whether or when regulatory actions may be taken that could adversely affect us or the operations of our regulated insurance subsidiary. Interpretations of regulations by regulators may change, and statutes, regulations, and interpretations may be applied with retroactive effect, particularly in areas such as accounting or reserve requirements.

**Legal proceedings** 

From time to time, we are subject to legal proceedings, including personal injury suits, claims, arbitrations, administrative proceedings, and government investigations or enforcement actions in the ordinary course of business. We have received, and may in the future continue to receive, claims arising from our platform, our technology, and the content published on our website and apps.

We generally dispute any allegations of wrongdoing and intend to vigorously defend against these lawsuits. However, litigation is inherently uncertain, and any judgment or injunctive relief entered against us or any adverse settlement could negatively affect our business, results of operations, and financial condition. While it is not possible to determine the outcome of the legal proceedings, claims, arbitrations, administrative proceedings, and government investigations or enforcement actions brought against us, other than as described herein or elsewhere in this prospectus, there is no such pending or threatened matter that individually, in our opinion, is likely to have a material and adverse impact on our business, financial condition, or results of operations; however, results of litigation and arbitration are inherently unpredictable and legal proceedings related to claims, individually or in the aggregate, could have a material and adverse impact on our business, financial condition, and results of operations. Regardless of the outcome, litigation can have a material and adverse impact on us because of defense and settlement costs, penalties, diversion of management resources, harm to our brand and reputation, and other factors.

For additional information on litigation, see the sections titled "Risk factors — Risks related to our legal and regulatory environment — Our business is subject to substantial regulation and may be found to be subject to a multitude of potential additional legal and regulatory frameworks, including those related to insurance, that are constantly evolving, and any unfavorable changes or negative court interpretations of these regulations or frameworks, failure by us to comply, or incompatibility with these legal and regulatory requirements could have

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an adverse effect on our business" and "Risk factors — Risks related to our legal and regulatory environment — Adverse litigation judgments or settlements resulting from legal proceedings in which we may be involved could expose us to monetary damages or other monetary payments or limit our ability to operate our business."

**Airport litigation** 

***People of the State of California v. Turo Inc.*, Case No. CGC-18-563803, Superior Court of California, County of San Francisco —** In January 2018, the People of the State of California, acting by and through the City Attorney of San Francisco, brought a lawsuit against us alleging that hosts offer vehicles for delivery at San Francisco International Airport, or SFO, while we do not hold a rental car permit and alleging that we violate California's Unfair Competition Law, or UCL. The plaintiff seeks injunctive relief and penalties of up to $2,500 per alleged violation, among other relief. We filed a cross-complaint against the City and County of San Francisco seeking declarations that we are not a rental car company and that the charges and conditions associated with SFO's rental car permit cannot lawfully be imposed on us. We are also seeking injunctive relief, including precluding San Francisco from compelling us to apply for a rental car company permit. In April 2020, the Superior Court granted the plaintiff's and cross-defendant's motions for partial summary adjudication on certain of our cross-claims and affirmative defenses. We filed a petition for writ of mandate in the California Court of Appeal, seeking interlocutory review on the issue of whether we can be classified as a rental car company within the meaning of relevant California statutory law. The Court of Appeal denied our petition. In June 2021, we filed a petition for review in the California Supreme Court. On September 1, 2021, the California Supreme Court granted our petition for review and transferred the matter to the Court of Appeal with directions to vacate its order denying our petition for writ of mandate and to issue an order directing the superior court to show cause why the relief sought in the petition should not be granted. In conformity with the Supreme Court's order, on September 9, 2021, the Court of Appeal vacated its earlier order denying our petition for writ of mandate and issued an order to show cause. The Court of Appeal heard oral arguments on June 22, 2022, and on June 28, 2022 issued a ruling for us, reversing the lower court and holding that we cannot be classified as a rental car company within the meaning of relevant California statutory law. San Francisco did not file a petition for review with the California Supreme Court by the deadline to do so. The litigation has been stayed until April 30, 2023 to facilitate settlement discussions.

***Turo Inc. v. City of Los Angeles*, Case No. 2:18-cv-06055, United States District Court for the Central District of California —** In July 2018, we initiated a lawsuit against the City of Los Angeles alleging that the purported requirement by Los Angeles International Airport, or LAX, that we obtain a rental car company permit in order for hosts to deliver cars to LAX is unlawful and seeking declaratory and injunctive relief. Los Angeles filed counterclaims against us and one or more of our hosts seeking declaratory relief, a permanent injunction, damages, civil penalties of up to $2,500 for each violation under the UCL, and attorneys' fees and costs, among other relief. In June 2020, the District Court entered a preliminary injunction against us, which took effect in August 2020. In March 2021, the United States Court of Appeals for the Ninth Circuit vacated the preliminary injunction and remanded the case back to the District Court. In February 2022, we and the City of Los Angeles reached a settlement in principle to resolve all claims, which was finalized in October 2022. The agreement includes a go-forward car sharing permit at LAX and an immaterial monetary payment. The lawsuit has been dismissed.

***Massachusetts Port Authority v. Turo Inc., et al.*, Case No. 19-1773, Superior Court of Massachusetts, Suffolk County —** In June 2019, the Massachusetts Port Authority, or Massport, filed a complaint against us, and one or more of our hosts, in the Superior Court of the Commonwealth of Massachusetts alleging that Turo user vehicle handoffs at Boston Logan International Airport, or BOS, enabled by the Turo marketplace, constitute a violation of state regulations prohibiting unauthorized commercial activity on airport property, trespass, aiding and abetting trespass, unjust enrichment, and violation of the Massachusetts Consumer Protection Law, as well as a claim seeking a declaratory judgment that we are operating an unauthorized car rental business at BOS and thereby trespassing and aiding and abetting host and guest trespasses. Massport sought declaratory and injunctive relief, as well as damages. We filed counterclaims against Massport seeking declaratory, injunctive, and other relief. In January 2020, the court entered a preliminary injunction against us,

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which took effect in April 2020. Following our interlocutory appeal, the Massachusetts Supreme Judicial Court ruled in April 2021 to affirm the entry of a preliminary injunction, although modifying the injunction's scope. We and Massport reached a settlement in principle to resolve the litigation in December 2021, which was finalized in September 2022. The agreement includes a go-forward car sharing permit at BOS and an immaterial monetary payment. The lawsuit has been dismissed.

***Dallas/Fort Worth International Airport Board v. Turo Inc.,* Case No. 352-329488-21, District Court of Tarrant County, Texas, 352<sup>nd</sup> Judicial District** — In October 2021, the Dallas Fort Worth International Airport Board, or the DFW Board, filed a complaint against us in Texas state court, Fort Worth Division. The Board alleges that Turo user vehicle handoffs at Dallas Fort Worth International Airport violate the DFW Board Code of Rules & Regulations, or the Airport Code, and specifically the provision governing commercial activity on airport property. The Board pleads four causes of action: enforcement of the Airport Code provision governing commercial activity and a permanent injunction enjoining us from unpermitted commercial activity at the airport; declaratory relief that, among other things, the commercial activity provision is enforceable against Turo, Turo can be required to have its users' vehicle handoffs take place at the rental car company facility, and the Board can enforce state and municipal rental car taxes against Turo; unjust enrichment in restitution for all disgorgement of profits obtained from alleged violations; and a demand for accounting. The DFW Board seeks declaratory and injunctive relief, an order for an accounting, attorneys' fees, and costs, among other relief. In December 2021, we filed counterclaims against DFW seeking declaratory relief. The parties are engaged in discovery, with summary judgment briefing due on or before June 28, 2023 and trial set for the week of September 18, 2023.

**Class action litigation** 

***Zhao v. RelayRides, et al,* Case No. 16CIV02362, San Mateo Superior Court —** In November 2016, a putative class action was filed against us in the State of California on behalf of consumers who purchased a protection plan. The court twice denied plaintiffs' motion for class certification. Plaintiffs were given leave to move for class certification a third time, which just one of the plaintiffs filed in December 2021 and then withdrew in January 2022, so that only one plaintiff's individual claims remained. In October 2022, we reached and finalized a settlement agreement with the one remaining plaintiff, and the lawsuit has been dismissed.

***Abicidan v. Turo***, **Case No. 500-06-001026-190, Superior Court, Quebec, District of Montreal —** In November 2019, a putative class action was filed against us in the Superior Court, Quebec, District of Montreal, alleging violations of local consumer protection laws. The suit sought injunctive relief and damages on behalf of the purported class. We and the purported class agreed to a class-wide settlement agreement, which was approved by the Court in April 2022. The case remains open pending final implementation of the settlement terms.

***Cattaneo et al. v. Turo Inc.,* Case No. 20-2-14320-1 SEA, Superior Court, King County, Washington —** In September 2020, two individuals filed a putative class action on behalf of all consumers in the State of Washington who purchased a protection plan. In October 2020, the complaint was amended to drop one of the two plaintiffs. The remaining plaintiff alleged that we acted as an insurer in Washington without authorization and seeks damages under Washington's Consumer Protection Act and the Uniform Declaratory Judgment Act. We removed the case from state court to federal court. We also moved to dismiss the complaint and/or to compel arbitration. In July 2021, the court ruled that lead plaintiff Helen Cattaneo lacks Article III standing to assert her claims against us in federal court and remanded the case back to King County Superior Court for further proceedings. In October 2021, the litigation was amicably resolved.

**Regulatory and administrative investigations, audits, and inquiries** 

We have in the past been, are currently, and may in future be the subject of regulatory and administrative investigations, audits, and inquiries conducted by government bodies, agencies, or quasi-governmental

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agencies or bodies, including but not limited to departments of insurance, departments of revenue, airport authorities, and the like, concerning our business practices, taxation, insurance regulation and licensure, airport permitting schemes, and other matters. Results of investigations, audits, inquiries, and related government action are inherently unpredictable and, as such, there is always the risk of an investigation, audit, or inquiry having a material impact on our business, financial condition, and our ability to operate in a given state or at a specific location, such as an airport, particularly in the event that an investigation, audit, or inquiry results in a lawsuit or unfavorable regulatory enforcement or other action. Regardless of the outcome, these matters can have an adverse impact on us in light of the costs associated with cooperating with, or defending against such matters, and the diversion of management resources and other factors. Administrative actions have been taken against us in Maryland, New York, Hawaii, and Washington and have since been resolved. For additional information, see the section titled "Risk factors — Risks related to insurance — We are subject to laws and regulations relating to insurance, and we may become involved in challenges by or disputes with insurance regulators."

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## Management
**Executive officers, directors, and key employees** 

The following table sets forth information for our executive officers and directors as of February 15, 2023:

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| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position** |
|  **Executive officers** |  |  |
|  Andre Haddad | 51 | Chief Executive Officer and Chairperson of the Board |
|  Alex Benn | 55 | President |
|  Charles Fisher | 53 | Chief Financial Officer |
|  Lorie Canchola Boyd | 50 | Chief People Officer |
|  Michelle Fang | 47 | Chief Legal Officer and Secretary |
|  Avinash Gangadharan | 46 | Chief Technology Officer |
|  Albert Mangahas | 37 | Chief Data Officer |
|  Andrew Mok | 34 | Chief Marketing Officer |
|  Jeff Platt | 56 | Chief Insurance Officer |
|  Tom Wang | 52 | Chief Product Officer |
|  Julie Weingardt | 60 | Chief Operations Officer |
|  **Non-employee directors** |  |  |
|  Howard Hartenbaum<sup>(2)</sup> | 56 | Director |
|  Kimberly Jabal<sup>(1)</sup> | 54 | Director |
|  Bonnie Jonas<sup>(1)</sup> | 53 | Director |
|  Deepak Kamra<sup>(1)</sup> | 66 | Director |
|  Joseph Levin<sup>(3)</sup> | 43 | Director |
|  Shripriya Mahesh<sup>(3)</sup> | 49 | Director |
|  Brook Porter<sup>(3)</sup> | 45 | Director |
|  Mark Stein<sup>(2)</sup> | 55 | Director |

---

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(1) Member of the audit committee.

(2) Member of the compensation committee.

(3) Member of the nominating and corporate governance committee.

**Executive officers** 

**Andre Haddad**. Mr. Haddad has served as our Chief Executive Officer since September 2011 and as the Chairperson and a member of our board of directors since October 2011. From September 2011 to February 2021, he also served as our Secretary. Prior to joining Turo, Mr. Haddad served as Chief Executive Officer at Shopping.com Ltd., an online-comparison shopping network that was acquired in August 2005 by eBay Inc., a global commerce leader. Mr. Haddad holds a Master's degree in Management from HEC Paris.

Mr. Haddad was selected to serve on our board of directors because of the perspective and experience he brings as our Chief Executive Officer and his marketplace operating and management experience.

**Alex Benn**. Mr. Benn has served as our President since September 2016. From June 2016 to December 2016, he also served as our interim Chief Financial Officer, and from January 2013 to September 2016, he served as

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our Chief Operating Officer. Prior to this, Mr. Benn served as our VP, Business Development from January 2012 to June 2012 and as our VP, Business Development and Trust and Safety from June 2012 to January 2013. From 2010 to 2012, Mr. Benn served as VP, Business Development of the Global eCommerce division of Walmart Stores, Inc., a multinational retail corporation. Mr. Benn holds an A.B. in Economics and Psychology from Brown University and a J.D. from Stanford Law School.

**Charles Fisher**. Mr. Fisher has served as our Chief Financial Officer since March 2021. From February 2013 to March 2021, Mr. Fisher served as EVP, Corporate Finance and Development at Charter Communications, Inc., a leading broadband connectivity company and cable operator, where he was responsible for overseeing various finance functions including mergers and acquisitions, strategic investments, investor relations, treasury, and procurement, as well as managing all of Charter's capital markets activities. From 2000 to 2013, Mr. Fisher was an investment banker focused on the media and communications sectors, based in New York and London, at Lehman Brothers, Nomura Securities, and Guggenheim Partners. Mr. Fisher holds a B.A. in History from Queen's University in Ontario and an M.B.A. in Finance from Columbia Business School.

**Lorie Canchola Boyd**. Ms. Boyd has served as our Chief People Officer since October 2019. From January 2018 to September 2019, she served as our Vice President, People. From April 2017 to September 2017, Ms. Boyd served as VP of People at Oto Analytics, Inc., dba Womply, a local commerce platform, where she led all human resources functions across the organization. From January 2015 to April 2017, she served as VP of People at Kahuna Inc., a software company, and was responsible for all human resources functions across the organization. From March 2012 to January 2015, Ms. Boyd served as Director of Recruiting at Zendesk, Inc., a software company, where she was responsible for all global talent acquisition. Ms. Boyd holds a B.A. in Economics from Stanford University.

**Michelle Fang**. Ms. Fang has served as our Chief Legal Officer since June 2015 and our Secretary since February 2021. Prior to joining Turo, Ms. Fang served in multiple roles at eBay Inc., a global commerce leader, most recently as the General Counsel and Corporate Secretary of its StubHub business. Ms. Fang currently serves on the board of directors of PepperLime Health Acquisition Corporation, a blank check company focused on technology and consumer health and wellness. Ms. Fang holds a B.A. in Communication Studies from the University of California, Los Angeles and a J.D. from the University of California, Berkeley School of Law.

**Avinash Gangadharan**. Mr. Gangadharan has served as our Chief Technology Officer since August 2018. From November 2017 to August 2018, Mr. Gangadharan served as Vice President of Engineering, Discovery and Omnichannel at Walmart Labs, the technology arm of Walmart Inc., a multinational retail corporation, where he led the engineering team focused on retail and e-commerce solutions. He also served as Senior Director of Walmart Labs from October 2015 to November 2017. Mr. Gangadharan holds a B.E. in Computer Science from Shri Govindram Seksaria Institute of Technology and Science in India.

**Albert Mangahas**. Mr. Mangahas has served as our Chief Data Officer since January 2022. From January 2021 to January 2022, he served as our Senior Vice President, Data, and from November 2019 to January 2021, he served as our Vice President, Analytics and Insights. From August 2019 to November 2019, Mr. Mangahas served as Head of Analytics (Data Science), Social Impact at Facebook, Inc., a technology company, and as Head of Analytics, Data Transparency at Facebook from June 2018 to August 2019, in which roles he led data analytics functions for both business units. From May 2016 to May 2018, Mr. Mangahas served as our Director, Finance and Analytics, where he oversaw our finance-related data analytics. Mr. Mangahas holds a B.S. in Industrial and Systems Engineering from the University of Southern California.

**Andrew Mok**. Mr. Mok has served as our Chief Marketing Officer since March 2017. From February 2016 to March 2017, he served as Vice President, Growth, where he led marketing and growth initiatives at DogVacay, Inc., a pet boarding platform acquired in March 2017 by A Place for Rover Inc., dba Rover.com, an online marketplace for pet care. From January 2012 to January 2016, Mr. Mok served in multiple roles at Turo, most recently as Vice President, Marketing and Analytics. Mr. Mok holds a B.A. in Computer Science and a B.S. in Business Administration from the University of California, Berkeley.

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**Jeff Platt**. Mr. Platt has served as our Chief Insurance Officer since July 2022. From July 2021 to July 2022, he served as our Senior Vice President, Insurance, from January 2021 to July 2021, he served as our Vice President, Insurance, and from March 2019 to January 2021, he served as our Senior Director of Claims. From March 2015 to October 2018, Mr. Platt served as Vice President, Liability Claims at Zurich North America, a provider of insurance solutions and services, where he led both the field liability and finance and insurance claims operations, managing a variety of insurance claims and products. Mr. Platt holds a B.S. in Finance from Oregon State University, as well as the Chartered Property Casualty Underwriter (CPCU) designation.

**Tom Wang**. Mr. Wang has served as our Chief Product Officer since November 2012. From 2010 to 2012, he served as Head of Product at Formspring, Inc., a question-and-answer based social network. Mr. Wang holds a B.A. in English from the University of Pennsylvania and an M.S.J. in Journalism from Northwestern University.

**Julie Weingardt**. Ms. Weingardt has served as our Chief Operations Officer since January 2022. From July 2021 to January 2022, she served as our Senior Vice President, Operations, from January 2020 to June 2021, she served as our Vice President, Operations, and from January 2019 to January 2020, she served as our Senior Director, Customer Support. From June 2013 to December 2018, Ms. Weingardt served as Senior Vice President of Operations at StarTek, Inc., a global provider of tech-enabled business process management solutions, where she was responsible for the executive overview of global business operations across multiple verticals. Ms. Weingardt attended the University of Northern Colorado and holds a certificate from Cornell University's Johnson Graduate School of Management in Executive Leadership.

**Non-employee directors** 

**Howard Hartenbaum**. Mr. Hartenbaum has served as a member of our board of directors since December 2010. Since May 2008, Mr. Hartenbaum has served as General Partner at August Capital, a venture capital firm. From October 2001 to April 2008, he served as General Partner at Draper Investment Company, LLC and Draper Richards, LP, venture capital firms. Mr. Hartenbaum holds a B.S. in Mechanical Engineering from M.I.T.

Mr. Hartenbaum was selected to serve on our board of directors because of his experience as an advisor to technology companies.

**Kimberly Jabal**. Ms. Jabal has served as a member of our board of directors since June 2021. From March 2019 to May 2021, she served as Chief Financial Officer of Unity Software Inc., a real-time 3D software development company. From November 2015 to December 2018, Ms. Jabal served as Chief Financial Officer of Weebly, Inc., a small business software company that was acquired in May 2018 by Square, Inc., a financial services and digital payments company. Ms. Jabal currently serves on the board of directors of FedEx Corporation, a delivery services company, and she previously served on the board of directors of SVB Financial Group, a financial services company, from April 2018 to April 2020. Ms. Jabal holds a B.S. in Engineering from the University of Illinois at Urbana-Champaign and an M.B.A. from Harvard Business School.

Ms. Jabal was selected to serve on our board of directors because of her extensive financial and information technology operating experience.

**Bonnie Jonas**. Ms. Jonas has served as a member of our board of directors since February 2022. Ms. Jonas co-founded Pallas Global Group, LLC, a company that provides independent monitoring and consulting services to corporations and organizations, and has served as Co-Chief Executive Officer since its inception in 2016. Ms. Jonas has also been a partner with the law firm Jonas & Moller LLP since 2016. From 1997 to 2016, Ms. Jonas served as an Assistant United States Attorney in the Southern District of New York, during which time she held various supervisory roles, including most recently as a Deputy Chief of the Criminal Division. Ms. Jonas currently serves on the boards of directors of Churchill Capital Corp VI and Churchill Capital Corp VII, each a special purpose acquisition company, and previously served on the boards of directors of Churchill Capital Corp III from April 2020 to October 2020 and Churchill Capital Corp IV and from July 2020 to July 2021. Ms. Jonas holds a B.S. in Economics from the Wharton School at the University of Pennsylvania and a J.D. from Columbia Law School.

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Ms. Jonas was selected to serve on our board of directors because of her extensive leadership and legal and consulting experience.

**Deepak Kamra**. Mr. Kamra has served as a member of our board of directors since June 2014. Mr. Kamra has been a General Partner at Canaan Partners, a venture capital firm since 1995 and has worked at Canaan Partners since 1991. Prior to joining Canaan Partners, he served as Vice President of North America Sales and Product Marketing for Aspect Telecommunication Corporation, a business telecommunications company. Mr. Kamra currently serves on the boards of directors of several private companies and previously served on the board of directors of Spark Networks SE from July 2019 to July 2020. Mr. Kamra holds a Bachelor of Commerce from Carleton University and an M.B.A. from Harvard Business School.

Mr. Kamra was selected to serve on our board of directors because of his business and venture capital expertise and focus on marketplaces.

**Joseph Levin**. Mr. Levin has served as a member of our board of directors since July 2019. Since June 2015, Mr. Levin has served as Chief Executive Officer of IAC Inc., or IAC, home to more than 150 digital products and brands used by people all over the world. He also currently serves as Chief Executive Officer and Chairman of the board of directors of Angi Inc., a comprehensive online solution for all home needs, and as Chairman of the board of directors of Vimeo, Inc., the world's leading all-in-one video software solution. He also serves as a member of the boards of directors of IAC and MGM Resorts International, a global hospitality and entertainment company. Mr. Levin previously served as a member of the boards of directors of Match Group, Inc. a leading provider of digital technologies designed to help people make meaningful connections, from January 2019 to September 2022, and Groupon, Inc., a company that operates a global e-commerce marketplace, from March 2017 to July 2019. In his not-for-profit affiliations, he currently serves on the Undergraduate Executive Board of The Wharton School of the University of Pennsylvania. Mr. Levin holds a B.S. in Economics and a B.A.S. in Engineering from the University of Pennsylvania.

Mr. Levin was selected to serve on our board of directors because of his extensive operating and business experience.

**Shripriya Mahesh**. Ms. Mahesh has served as a member of our board of directors since February 2022. Ms. Mahesh co-founded Spero Ventures, a venture capital firm, and has served as General Partner since January 2018. From September 2015 to January 2018, Ms. Mahesh served as Partner at Omidyar Network, a philanthropic investment firm. Ms. Mahesh holds a B.A. in Economics from Stella Maris College, an M.F.A. in Film from New York University Tisch School of the Arts, and an M.B.A. from Harvard Business School.

Ms. Mahesh was selected to serve on our board of directors because of her extensive business and venture capital expertise.

**Brook Porter**. Mr. Porter has served as a member of our board of directors since August 2015. Mr. Porter co-founded G2 Venture Partners, a venture capital firm, and has served as Partner since October 2016. From July 2010 to April 2020, he served as Partner at Kleiner Perkins Caufield & Byers, a venture capital firm. Mr. Porter currently serves on the board of directors of Proterra Inc, a commercial electric vehicle technology company. Mr. Porter holds a B.S. in Chemical Engineering from the University of California, Berkeley.

Mr. Porter was selected to serve on our board of directors because of his business and venture capital expertise.

**Mark Stein**. Mr. Stein has served as a member of our board of directors since January 2020. Since March 2023, Mr. Stein has served as Senior Advisor to IAC, home to more than 150 digital products and brands used by people all over the world. Prior to his service in his current role, Mr. Stein served as Executive Vice President and Chief Strategy Officer from January 2016 to February 2023 and as Senior Vice President of Corporate Development of IAC and in several other operating roles at certain IAC digital products and brands from September 2008 to January 2016. He also currently serves as a member of the board of directors of Angi Inc., a comprehensive online solution for all home needs, and previously served on the board of directors of Match

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Group, Inc., which, through its portfolio companies, is a leading provider of digital technologies designed to help people make meaningful connections, from November 2015 to June 2020. Mr. Stein holds a B.A. in American History and a B.S. in Economics from the University of Pennsylvania.

Mr. Stein was selected to serve on our board of directors because of his extensive operating and business experience.

**Family relationships** 

There are no family relationships among any of our executive officers and directors.

**Composition of our board of directors** 

Our business and affairs are managed under the direction of our board of directors. Pursuant to our current certificate of incorporation and our amended and restated voting agreement, our directors were elected as follows:

• Mr. Haddad was elected by holders of our common stock;

• Mr. Hartenbaum was elected by holders of our Series A preferred stock;

• Mr. Kamra was elected by holders of our Series B preferred stock;

• Ms. Mahesh was elected by holders of our Series D preferred stock;

• Messrs. Levin and Stein were elected by holders of our Series E preferred stock; and

• Mses. Jabal and Jonas and Mr. Porter were elected by holders of our common stock and preferred stock.

In connection with this offering, the provisions of our amended and restated voting agreement relating to the election of our directors will terminate, and our current certificate of incorporation by which our directors were elected, along with our bylaws, will be amended and restated. After the completion of this offering, the number of directors will be fixed by our board of directors, subject to the terms of our amended and restated certificate of incorporation and amended and restated bylaws. Each of our current directors will continue to serve as a director until the election and qualification of his or her successor, or until his or her earlier death, resignation, or removal.

**Director independence** 

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations, our board of directors has determined that each of Mr. Hartenbaum, Ms. Jabal, Ms. Jonas, Mr. Kamra, Mr. Levin, Ms. Mahesh, Mr. Porter, and Mr. Stein does not have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is "independent" as that term is defined under the New York Stock Exchange listing standards. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our shares held by each non-employee director and the transactions described in the section titled "Certain relationships and related party transactions."

**Lead independent director** 

Mr. Haddad currently serves as both our chief executive officer and chairperson of our board of directors. Our corporate governance guidelines will provide that if the chairperson of our board of directors is not an

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independent director, or whenever our independent directors deem it appropriate, our board of directors will designate one of the independent directors to serve as lead independent director. The corporate governance guidelines will provide that if our board of directors elects a lead independent director, such lead independent director will (i) in consultation with the chairperson, establish the agenda for regular board meetings, (ii) preside over meetings at which the chairperson is not present, including executive sessions of our independent directors, (iii) establish the agenda for meetings of the independent directors, (iv) coordinate with the committee chairs regarding meeting agendas and information requirements, (v) preside over any portions of meetings of our board of directors at which the performance of our board of directors is presented or discussed, (vi) act as liaison between our independent directors, our chief executive officer, and our chairperson, and (vii) perform such additional duties as our board of directors may otherwise determine and delegate. Our board of directors has designated Ms. Jabal to serve as lead independent director.

**Committees of our board of directors** 

Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate governance committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

**Audit committee** 

Our audit committee consists of Mses. Jabal and Jonas and Mr. Kamra. Our board of directors has determined that each member of our audit committee satisfies the independence requirements under the listing standards of the New York Stock Exchange and Rule 10A-3(b)(1) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The chair of our audit committee is Ms. Jabal. Our board of directors has determined that Ms. Jabal is an "audit committee financial expert" within the meaning of Securities and Exchange Commission, or the SEC, regulations. Each member of our audit committee can read and understand fundamental financial statements in accordance with applicable requirements. In arriving at these determinations, our board of directors has examined each audit committee member's scope of experience and the nature of their employment.

The primary purpose of our audit committee is to discharge the responsibilities of our board of directors with respect to our corporate accounting and financial reporting processes, systems of internal control and financial statement audits, and to oversee our independent registered public accounting firm. Specific responsibilities of our audit committee include:

• helping our board of directors oversee our corporate accounting and financial reporting processes;

• managing the selection, engagement, qualifications, independence, and performance of a qualified firm to serve as the
independent registered public accounting firm to audit our financial statements and the effectiveness of our internal control over financial reporting, when required;

• discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with
management and the independent accountants, our interim and year end operating results;

• developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

• reviewing related party transactions;

• approving or, as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm; and

• preparing the audit committee report that the SEC requires in our annual proxy statement.

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Our audit committee will operate under a written charter, to be effective in connection with the completion of this offering, that satisfies the applicable listing standards of the New York Stock Exchange.

**Compensation committee** 

Our compensation committee consists of Messrs. Hartenbaum and Stein. The chair of our compensation committee is Mr. Hartenbaum. Our board of directors has determined that each member of our compensation committee is independent under the listing standards of the New York Stock Exchange, and a "non-employee director" as defined in Rule 16b-3 promulgated under the Exchange Act.

The primary purpose of our compensation committee is to discharge the responsibilities of our board of directors in overseeing our compensation policies, plans, and programs, and to review and determine the compensation to be paid to our executive officers, directors, and other senior management, as appropriate. Specific responsibilities of our compensation committee include:

• reviewing and recommending to our board of directors the compensation of our chief executive officer and other executive
officers;

• reviewing and recommending to our board of directors the compensation of our directors;

• administering our equity incentive plans and other benefit programs;

• reviewing, adopting, amending, and terminating incentive compensation and equity plans, severance agreements, profit
sharing plans, bonus plans, change-of-control protections, and any other compensatory arrangements for our executive officers and other senior management; and

• reviewing and establishing general policies relating to compensation and benefits of our employees, including our overall
compensation philosophy.

Our compensation committee will operate under a written charter, to be effective in connection with the completion of this offering, that satisfies the applicable listing standards of the New York Stock Exchange.

**Nominating and corporate governance committee** 

Our nominating and corporate governance committee consists of Messrs. Levin and Porter and Ms. Mahesh. The chair of our nominating and corporate governance committee is Mr. Porter. Our board of directors has determined that each member of our nominating and corporate governance committee is independent under the listing standards of the New York Stock Exchange.

Specific responsibilities of our nominating and corporate governance committee include:

• identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees
recommended by stockholders, to serve on our board of directors;

• considering and making recommendations to our board of directors regarding the composition and leadership of the
committees of our board of directors;

• developing and making recommendations to our board of directors regarding corporate governance guidelines and matters;
and

• overseeing periodic evaluations of the board of directors' performance, including committees of the board of
directors.

Our nominating and corporate governance committee will operate under a written charter, to be effective in connection with the completion of this offering, that satisfies the applicable listing standards of the New York Stock Exchange.

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**Code of business conduct and ethics** 

We have adopted a code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Upon the completion of this offering, our code of business conduct and ethics will be available under the Corporate Governance section of our website. In addition, we intend to post on our website all disclosures that are required by law or the listing standards of the New York Stock Exchange concerning any amendments to, or waivers from, any provision of the code. The reference to our website address does not constitute incorporation by reference of the information contained at or available through our website, and you should not consider it to be a part of this prospectus.

**Compensation committee interlocks and insider participation** 

None of the members of our compensation committee is currently or has been at any time one of our officers or employees. None of our executive officers currently serves, or has served during the last year, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation committee.

**Non-employee director compensation** 

The following table presents all of the compensation awarded to, earned by, or paid to our non-employee directors during the year ended December 31, 2022. During the year ended December 31, 2022, we did not pay any cash compensation to our non-employee directors for their service on our board of directors. We have reimbursed and will continue to reimburse all of our non-employee directors for their reasonable out-of-pocket expenses incurred in attending board of directors and committee meetings.

All compensation paid to Mr. Haddad during the year ended December 31, 2022 was for services rendered as our Chief Executive Officer. See the section titled "Executive compensation" for additional information regarding the compensation earned by Mr. Haddad.

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| | | | |
|:---|:---|:---|:---|
| **Name** | **Option awards ($)<sup>(1)(2)</sup>** | **All other compensation ($)** | **Total ($)** |
|  Susan Athey<sup>(3)</sup> | 241191 |  | 241191 |
|  Howard Hartenbaum |  |  |  |
|  Kimberly Jabal |  |  |  |
|  Bonnie Jonas<sup>(4)</sup> | 949710 |  | 949710 |
|  Deepak Kamra |  |  |  |
|  Joseph Levin |  |  |  |
|  Shripriya Mahesh<sup>(4)</sup> | 949710 |  | 949710 |
|  Brook Porter | 949710 |  | 949710 |
|  Mark Stein |  |  |  |

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(1) The amounts disclosed represent the aggregate grant date fair value of the stock options granted to our non-employee
directors during 2022 under our 2020 Equity Incentive Plan, or 2020 Plan, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the stock options are set forth in Notes 2 and 11 to our audited
consolidated financial statements included elsewhere in this prospectus. These amounts do not reflect the actual economic value that may be realized by the director.

(2) As of December 31, 2022, Mses. Athey, Jabal, Jonas, and Mahesh and Mr. Porter held options to purchase 85,950
shares, 150,000 shares, 150,000 shares, and 150,000 shares, respectively, of our common stock. None of our other non-employee directors held stock options or any other type of equity award as of
December 31, 2022.

(3) Ms. Athey resigned from our board of directors effective July 31, 2022. Her options to purchase 85,950 shares of our
common stock are exercisable through July 2024.

(4) Mses. Jonas and Mahesh were elected to our board of directors effective February 24, 2022.

In March 2022, in connection with their elections to our board of directors and change in designated board seat, as applicable, we granted each of Mses. Jonas and Mahesh and Mr. Porter an option to purchase

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150,000 shares of our common stock pursuant to our 2020 Plan, with a per share exercise price of $10.92, which vests as to 25% of the total shares subject to the option on February 24, 2022, with the remainder of the shares vesting in 36 equal monthly installments thereafter, subject to the director's continuous service to us through each applicable vesting date. Additionally, 100% of the unvested shares subject to each option will vest in full upon the occurrence of a change in control.

Also in March 2022, we granted Ms. Athey an option to purchase 38,200 shares of our common stock pursuant to our 2020 Plan, with a per share exercise price of $10.92, which vests in 48 equal monthly installments beginning on February 1, 2021, subject to Ms. Athey's continuous service to us through each applicable vesting date. Additionally, 100% of the unvested shares subject to each option will vest in full upon the occurrence of a change in control. Upon Ms. Athey's resignation from our board of directors in July 2022, her option to purchase 38,200 shares of our common stock was vested with respect to 28,650 shares, which shares are exercisable through July 2024. The remaining 9,550 shares of our common stock subject to such option were forfeited upon Ms. Athey's resignation.

**Non-employee director compensation policy** 

In anticipation of this offering and the increased responsibilities of our directors as directors of a public company, our board of directors has adopted a non-employee director compensation policy, to become effective following the effective date of the registration statement of which this prospectus forms a part, pursuant to which each of our directors who is not an employee or consultant of our company will be eligible to receive compensation for service on our board of directors and committees of our board of directors.

Each eligible director will receive an annual cash retainer of $ for serving on our board of directors, and the lead independent director of the board of directors will receive an additional annual cash retainer of $ for his or her service. The chairpersons of the audit committee, compensation committee, and nominating and corporate governance committee will be entitled to an additional annual cash retainer of $, $, and $, respectively. Each member of the audit committee, compensation committee, and nominating and corporate governance committee will be entitled to an additional annual cash retainer of $, $, and $, respectively; however, in each case, such cash retainer is payable only to members who are not the chairperson of such committee. All annual cash compensation amounts will be payable in equal quarterly installments in arrears, on the last day of each fiscal quarter in which the service occurred.

Each new eligible director who joins our board of directors after this offering will receive an initial grant of restricted stock units, or RSUs, with an aggregate grant date fair value of $ under our 2023 Equity Incentive Plan, or 2023 Plan. The RSUs subject to the initial grant will vest annually over a three-year period, subject to the director's continuous service with us through each such vesting date. On the date of each annual meeting of our stockholders held after the effective date of the registration statement of which this prospectus forms a part, each eligible director (excluding any eligible director who is first appointed or elected by our board of directors at such meeting or who received an initial grant of RSUs within the six-month period prior to the date of such meeting) who continues to serve as a director of our company following the meeting will receive RSUs with an aggregate grant date fair value of $ under our 2023 Plan. The RSUs shall vest in full on the earlier of the first anniversary of the grant date or the date of the next annual stockholder meeting, subject to the director's continuous service with us through such vesting date. In addition, the RSUs held by eligible directors will vest in full upon a change in control (as defined in our 2023 Plan), subject to the director's continuous service to us through such date.

In addition, we will reimburse eligible directors for ordinary, necessary, and reasonable out-of-pocket travel expenses to cover in-person attendance at and participation in board and committee meetings; provided that the eligible director timely submits appropriate documentation substantiating such expenses and such expenses are ordinary, necessary, and reasonable as determined by our board of directors in its sole discretion.

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## Executive compensation
Our named executive officers for the year ended December 31, 2022, consisting of our principal executive officer and the next two most highly compensated executive officers, were:

• Andre Haddad, our Chief Executive Officer;

• Charles Fisher, our Chief Financial Officer; and

• Albert Mangahas, our Chief Data Officer.

**Summary compensation table** 

The following table presents all of the compensation awarded to, earned by, or paid to our named executive officers during the years ended December 31, 2021 and 2022.

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Year** | **Salary ($)** | **Bonus ($)** | **Stock<br>awards<br>($)<sup>(1)</sup>** | **Option<br>awards<br>($)<sup>(1)</sup>** | **Non-equity<br>incentive plan<br>compensation<br>($)** | **All other<br>compensation<br>($)** | **Total ($)** |
|  Andre Haddad | 2022 | 500000 |  | 3545833 | 568011 | 559300 | 1500 | 5174644 |
| &nbsp;&nbsp;&nbsp;&nbsp; *Chief Executive Officer* | 2021 | 453979 | 32463 |  | 5947642 | 340485 | 2900 | 6777469 |
|  Charles Fisher | 2022 | 450000 |  | 1280698 | 205151 | 348075 | 1500 | 2285424 |
| &nbsp;&nbsp;&nbsp;&nbsp; *Chief Financial Officer* | 2021 | 324480 | 14583 |  | 12951632 | 145645 | 30000 | 13466340 |
|  Albert Mangahas  | 2022 | 344000<sup>(2)</sup> |  | 872879 | 375677 | 204680 | 1500 | 1798736 |
| &nbsp;&nbsp;&nbsp;&nbsp; *Chief Data Officer* |  |  |  |  |  |  |  |  |

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(1) The amounts disclosed represent the aggregate grant date fair value of restricted stock units, or RSUs, and stock
options granted to our named executive officers under our 2020 Equity Incentive Plan, or 2020 Plan, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the RSUs and stock options are set forth
in Notes 2 and 11 to our audited consolidated financial statements included elsewhere in this prospectus. These amounts do not reflect the actual economic value that may be realized by the named executive officer.

(2) The amount disclosed as salary for fiscal year 2022 reflects six months' compensation at the $340,000 salary level
and six months' compensation at the $348,000 salary level.

**Narrative to the summary compensation table** 

**Annual base salary** 

Our named executive officers receive a base salary to compensate them for services rendered to us. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive's skill set, experience, role, and responsibilities. The 2022 base salaries for Messrs. Haddad, Fisher, and Mangahas were $500,000, $450,000, and $340,000, respectively, and Mr. Mangahas' base salary was increased effective July 1, 2022 to $348,000.

**Equity-based incentive awards** 

We have granted RSUs and stock options to our named executive officers pursuant to our 2010 Equity Incentive Plan, or 2010 Plan, and 2020 Plan, the terms of which are described in the section titled " — Employee benefit and stock plans." During 2022, we granted RSUs and stock options to our named executive officers, the vesting terms of which are described in more detail below in the section titled " — Potential payments upon termination or change in control — Accelerated vesting."

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On March 26, 2022, we granted Messrs. Haddad, Fisher, and Mangahas RSUs covering 324,710 shares, 117,280 shares, and 53,640 shares, respectively, of our common stock pursuant to the 2020 Plan, which vest upon the satisfaction of both a service-based vesting condition and a liquidity event-related performance vesting condition. The service-based vesting condition is satisfied in 16 successive equal quarterly installments on each February 20, May 20, August 20, and November 20, beginning on May 20, 2022, subject to the named executive officer's continuous service to us through each applicable vesting date. The liquidity event-related performance vesting condition will be satisfied on the effective date of the registration statement of which this prospectus forms a part.

Also on March 26, 2022, we granted Mr. Mangahas an RSU covering 26,294 shares of our common stock pursuant to the 2020 Plan, which vests upon the satisfaction of both a service-based vesting condition and a liquidity event-related performance vesting condition. The service-based vesting condition is satisfied in 16 successive equal quarterly installments on each February 20, May 20, August 20, and November 20, beginning on February 20, 2022, subject to Mr. Mangahas' continuous service to us through each applicable vesting date. The liquidity event-related performance vesting condition will be satisfied on the effective date of the registration statement of which this prospectus forms a part.

Finally, on March 26, 2022, we granted Messrs. Haddad, Fisher, and Mangahas options to purchase 89,962 shares, 32,492 shares, and 59,500 shares, respectively, of our common stock pursuant to the 2020 Plan, each with a per share exercise price of $10.92, which are early exercisable and vest in 48 equal monthly installments beginning on December 19, 2021, December 19, 2021, and February 1, 2022, respectively, subject to the named executive officer's continuous service to us through each applicable vesting date.

**Non-equity incentive awards** 

In 2022, our named executive officers were eligible to receive annual bonuses pursuant to an executive bonus program approved by the compensation committee of our board of directors. Bonus amounts were based on objective financial performance metrics as determined by the compensation committee. In 2022, Mr. Haddad's target bonus was equal to 94% of his annual base salary, Mr. Fisher's target bonus was equal to 65% of his annual base salary, and Mr. Mangahas' target bonus was equal to 50% of his annual base salary. In February 2023, the compensation committee determined that the 2022 financial performance metrics had been achieved at a level that corresponds to bonus payments equal to 119% of target bonus levels, totaling $559,300, $348,075, and $204,680 for Messrs. Haddad, Fisher, and Mangahas, respectively, which will be paid prior to the effectiveness of the registration statement of which this prospectus forms a part.

**Agreements with our named executive officers** 

We have entered into confirmatory offer letters with each of our named executive officers, setting forth the terms and conditions of such executive's employment with us, as described below. The confirmatory offer letters generally provide for at-will employment and set forth the executive officer's initial base salary, annual bonus opportunity, and eligibility for employee benefits and severance benefits under the terms and conditions of our severance and change in control plan. In addition, each of our named executive officers has executed a form of our standard employee invention assignment and confidentiality agreement. The key terms of the confirmatory offer letters are described below.

**Andre Haddad** 

We entered into a confirmatory offer letter with Mr. Haddad, our Chief Executive Officer, in January 2022 that governs the terms of his employment with us. Pursuant to the offer letter, Mr. Haddad's annual base salary is $500,000, and he is eligible to receive a target bonus equal to 94% of his annual base salary, as determined by our board of directors. Mr. Haddad is also eligible for severance benefits upon an involuntary termination of

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his employment with us, as described in more detail below under the section titled " — Potential payments upon termination or change in control." In addition, Mr. Haddad is eligible to participate in our regular health insurance and other employee benefit plans, as described below as described in more detail below under the section titled " — Other compensation and benefits."

**Charles Fisher** 

We entered into a confirmatory offer letter with Mr. Fisher, our Chief Financial Officer, in January 2022 that governs the terms of his employment with us. Pursuant to the offer letter, Mr. Fisher's annual base salary is $450,000, and he is eligible to receive a target bonus equal to 65% of his annual base salary, as determined by our board of directors. Mr. Fisher is also eligible for severance benefits upon an involuntary termination of his employment with us, as described in more detail below under the section titled "— Potential payments upon termination or change in control." In addition, Mr. Fisher is eligible to participate in our regular health insurance and other employee benefit plans, as described below as described in more detail below under the section titled "— Other compensation and benefits."

**Albert Mangahas** 

We entered into an offer letter with Mr. Mangahas, in connection with his promotion to our Chief Data Officer, in May 2022 that governs the terms of his employment with us. Pursuant to the offer letter, Mr. Mangahas' annual base salary was $340,000, and he is eligible to receive a target annual bonus of 50% of his annual base salary, as determined by our board of directors. Mr. Mangahas is also eligible for severance benefits upon an involuntary termination of his employment with us, as described in more detail below under the section titled "— Potential payments upon termination or change in control." In addition, Mr. Mangahas is eligible to participate in our regular health insurance and other employee benefit plans, as described in more detail below under the section titled "— Other compensation and benefits. "As discussed above under the section titled "— Narrative to the summary compensation table — Annual base salary," Mr. Mangahas' base salary was increased effective July 1, 2022 to $348,000.

**Potential payments upon termination or change in control** 

Regardless of the manner in which a named executive officer's service terminates, each named executive officer is entitled to receive amounts earned during his or her term of service, including unpaid salary and unused vacation. In addition, each of our named executive officers' stock awards are subject to the terms of our 2020 Plan or 2010 Plan (as applicable) and award agreements thereunder. A description of the termination and change in control provisions in the 2020 Plan, 2010 Plan, and awards granted thereunder is provided below under the section titled "— Employee benefit and stock plans."

**Severance benefits** 

Pursuant to Mr. Haddad's original offer letter, if his employment with us is terminated by us without cause or by Mr. Haddad for good reason (as such terms are defined below), Mr. Haddad will receive the following severance payments and benefits if he timely executes and does not revoke a release of claims in our favor: (i) payment of base salary on our regular payroll periods for six months and (ii) provided he elects COBRA coverage, a lump sum payment equal to six times his monthly COBRA premium for him and his dependents. Solely for the purposes of Mr. Haddad's offer letter, "cause" means (a) a good faith determination by our board of directors that he has failed to materially perform his duties and responsibilities as lawfully assigned to him by our board of directors after there has been delivered to him a written demand for performance which describes the specific deficiencies in his performance and the specific manner in which his performance must be improved, and which provides 30 business days from the date of notice to remedy such performance deficiencies; (b) his conviction of or plea of nolo contendere to a felony or a crime involving moral turpitude which our board of directors in good faith believes has had or will have a material detrimental effect on our reputation or business; (c) engaging in an act of gross negligence or willful misconduct in the performance of his employment

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obligations and duties; (d) committing an act of fraud against, material misconduct, or willful misappropriation of property belonging to us; (e) knowing engagement in any other misconduct that has had or will have an adverse effect on our reputation or business; or (f) material breach of his offer letter or other agreement between him and us, or his unauthorized material misuse of our trade secrets or proprietary information (including with respect to the employee invention assignment and confidentiality agreement). Solely for the purposes of Mr. Haddad's offer letter, "good reason" means any of the following taken without Mr. Haddad's written consent, provided that (1) such event or condition has occurred within 90 days preceding his written notice to us, and within 180 days preceding the effective date of his separation from service from us for good reason and (2) we have failed to cure such event or condition within 30 days of receipt of written notice thereof: (A) a material reduction in his title, responsibilities, or duties as our chief executive officer (other than a change by virtue of a deemed liquidation event, so long as he retains substantially the same or greater responsibilities or duties of a division, unit, or subsidiary that constitutes all or substantially all of our business following such deemed liquidation event); (B) a material decrease in his then current annual base salary (other than a reduction in connection with a general decrease in the salary of our executive management); or (C) the relocation of his office to a facility or a location more than 40 miles of our current offices in San Francisco, California.

**Accelerated vesting** 

Pursuant to their offer letters and award agreements under our 2020 Plan and 2010 Plan, as applicable, if there is a change in control (as such term is defined below), within 12 months of which, any of Mr. Haddad's, Mr. Fisher's, or Mr. Mangahas' employment with us is terminated by us other than for cause or by such executive officer for good reason (as such terms are defined below), then, subject to such executive officer timely executing and not revoking a release of claims in our favor, 50% of any then-unvested shares subject to the following options, as applicable, will immediately vest as of the date of such termination: Mr. Haddad's options to purchase 2,525,000 shares, 10,622 shares, 100,000 shares, 622,148 shares, and 89,962 shares of our common stock granted in May 2020, May 2020, February 2021, February 2021, and March 2022, respectively; Mr. Fisher's options to purchase 2,135,712 shares and 32,492 of our common stock granted in March 2021 and March 2022, respectively; and Mr. Mangahas' options to purchase 300,000 shares, 100,000 shares, 7,226 shares, 250,000 shares, and 59,500 shares of our common stock granted in April 2020, April 2020, May 2020, February 2021, and March 2022, respectively.

For purposes of this acceleration the following terms have the following meanings:

• "cause" means (i) the optionee's conviction of or plea of non contendere to a felony or a crime
involving moral turpitude which the board of directors believes has had or will have a detrimental effect on our reputation or business; (ii) the optionee engaging in an act of gross negligence or willful misconduct in the performance of his or
her employment obligations and duties; (iii) the optionee's committing an act of fraud against, material misconduct or willful misappropriation of property belonging to us; (iv) the optionee engaging in any other intentional
misconduct that has had or will have a material adverse effect on our reputation or business; or (v) the optionee's intentional breach of the optionee's employee invention assignment and confidentiality agreement or other unauthorized
misuse of our trade secrets or proprietary information.

• "change in control" means (i) a sale, conveyance, exchange or transfer (excluding any venture-backed or
similar investments in us) in which any person, entity or collective group, other than persons or entities who as of immediately prior to such sale, conveyance, exchange or transfer own securities in us, either directly or indirectly, becomes the
beneficial owner, directly or indirectly, of our securities representing 50% percent of the total voting power of all our then outstanding voting securities; (ii) a merger or consolidation of us in which our voting securities immediately prior
to the merger or consolidation do not represent, or are not converted into securities that represent, a majority of the voting power of all voting securities of the surviving entity immediately after the merger or consolidation; or (iii) a sale
of substantially all of the assets of us or a liquidation or dissolution of us.

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• "good reason" means any of the following taken without the optionee's written consent and provided
(a) we receive, within 30 days following the occurrence of any of the events set forth in clauses (i) through (iv) below, written notice from the optionee specifying the specific basis for the optionee's belief that such optionee is
entitled to terminate employment for good reason, (b) we fail to cure the event constituting good reason within 30 days after receipt of such written notice thereof, and (c) the optionee terminates employment within 30 days following
expiration of such cure period: (i) a material change, adverse to the optionee, in the optionee's position, titles, offices or duties, provided that a change of position, titles, offices, or duties in connection with a change in control
shall not constitute good reason hereunder if the optionee is the most senior management officer for the successor business unit, division or the like for our business following such change in control; (ii) an assignment of any significant
duties to the optionee that are inconsistent with his or her positions or offices held under such optionee's offer letter; (ii) a decrease in the optionee's then current annual base salary by more than 10% (other than in connection
with a general decrease in the salary of all other executive officers); or (iv) the relocation of the optionee to a facility or a location more than 50 miles from the optionee's then current location.

**Severance and change in control plan** 

Our board of directors adopted a severance and change in control plan, or the severance plan, in December 2021, and we have entered into a severance plan participation agreement with each of our executive officers, including our named executive officers. The benefits provided to our executive officers who sign a severance plan participation agreement will supersede and replace any entitlement to change in control or severance benefits to which the executive officer was previously entitled pursuant to any prior offer letter, employment agreement, or similar arrangement, including the provisions described above in the sections titled "— Severance benefits" and " — Accelerated vesting."

Pursuant to the severance plan participation agreements, upon a termination without "cause" or resignation for "good reason" (each as defined below), each of our executive officers will be entitled to continued payment of base salary (12 months for Mr. Haddad and six months for other executive officers) and payment of continued group health benefits (12 months for Mr. Haddad and six months for other executive officers). However, upon a termination without cause or resignation for good reason during the period commencing three months prior to a "change in control" (as defined below) and ending 12 months following a change in control, each of our executive officers will be entitled to extended payment of base salary (18 months for Mr. Haddad and 12 months for other executive officers), payment of continued group health benefits (18 months for Mr. Haddad and 12 months for other executive officers), accelerated vesting in full of all outstanding equity awards, and a prorated target annual performance bonus for the year in which the termination occurs.

For purposes of the severance plan, the following definitions apply:

• "cause" generally has the meaning ascribed to such term in any written employment agreement, offer letter, or
similar agreement between an employee and us defining such term, and in the absence of such agreement means the occurrence of any of the following events, conditions, or actions with respect to the executive: (i) employee's dishonest statements
or acts with respect to the company or any affiliate of the company, or any current or prospective customers, suppliers, vendors, or other third parties with which such entity does business; (ii) employee's commission of (a) a felony or (b) any
misdemeanor involving moral turpitude, deceit, dishonesty, or fraud; (iii) employee's failure to perform his or her assigned duties and responsibilities to the reasonable satisfaction of the company which failure continues, in the reasonable
judgment of the company, after written notice is given to the employee by the company; (iv) employee's gross negligence, willful misconduct, or insubordination with respect to the company or any affiliate of the company; or (v)
employee's material violation of any provision of any agreement(s) between the employee and the company relating to noncompetition, nonsolicitation, nondisclosure, and/or assignment of inventions.

• "good reason" generally has the meaning ascribed to such term in any written employment agreement, offer
letter, or similar agreement between an employee and us defining such term, and in the absence of such

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agreement means the following events, conditions, or actions taken by us with respect to the executive without cause and without the executive's consent: (i) a material reduction of the executive's annual base salary (unless pursuant to a salary reduction program applicable generally to our similarly situated employees); (ii) a material diminution in the executive's authority, duties, or responsibilities; (iii) a relocation of the executive's principal place of employment to a place that increases such executive's one-way commute by more than 50 miles as compared to such executive's then-current principal place of employment immediately prior to such relocation); provided that (a) if such employee's principal place of employment is his or her personal residence, this clause (iii) shall not apply and (b) if the employee works remotely during any period in which such employee's regular principal office location is an office that is closed, then neither the employee's relocation to remote work or back to the office from remote work will be considered a relocation of such employee's principal office location for purposes of this definition; or (iv) a material breach by us of any provision of the severance plan or any other material agreement between such employee and us concerning the terms and conditions of such employee's employment with us. <br>

• "change in control" generally means the following events: (i) a change in ownership of more than 50% of the
combined voting power of our outstanding securities, other than by virtue of a merger, consolidation, or similar transaction; (ii) a merger, consolidation, or similar transaction in which our stockholders do not own more than 50% of the combined
voting power of the surviving entity or its parent; (iii) a sale, lease, exclusive license, or other disposition of all or substantially all of our assets; and (iv) individuals who are members of our board of directors cease to constitute
at least a majority of the members of the board of directors (unless approved or recommended by a majority vote of the members of our board of directors who were members of the board of directors when we adopted our 2023 Plan).

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**Outstanding equity awards at fiscal year end** 

The following table presents the outstanding equity awards held by each named executive officer as of December 31, 2022.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **Option Awards<sup>(1)</sup>** | **Option Awards<sup>(1)</sup>** | **Option Awards<sup>(1)</sup>** | **Option Awards<sup>(1)</sup>** | **Stock Awards<sup>(1)</sup>** | **Stock Awards<sup>(1)</sup>** |
| **Name** |<br>**Grant<br>Date<sup>(1)</sup>** | **Number of<br>Securities<br>Underlying<br>Unexercised<br>Options (#)<br>Exercisable** | **Number of<br>Securities<br>Underlying<br>Unexercised<br>Options (#)<br>Unexercisable** | **Option<br>Exercise<br>Price<br>($)** | **Option<br>Expiration<br>Date** | **Number of<br>Shares or<br>Units of<br>Stock<br>That Have<br>Not<br>Vested (#)** | **Market Value<br>of Shares or<br>Units of<br>Stock That<br>Have Not<br>Vested ($)<sup>(2)</sup>** |
|  Andre Haddad | 3/9/2016 | 260081 |  | 0.30 | 3/8/2026 |  |  |
|  | 2/8/2018<sup>(3)(4)</sup> | 500000 |  | 1.73<sup>(5)</sup> | 2/7/2028 |  |  |
|  | 5/7/2020<sup>(6)</sup> | 2525000 |  | 1.73 | 5/6/2030 |  |  |
|  | 5/7/2020 | 80000 |  | 1.73 | 5/6/2030 |  |  |
|  | 5/7/2020<sup>(7)</sup> | 10622 |  | 1.73 | 5/6/2030 |  |  |
|  | 2/7/2021<sup>(8)</sup> | 100000 |  | 4.87 | 2/6/2031 |  |  |
|  | 2/22/2021<sup>(8)</sup> | 622148 |  | 4.87 | 2/21/2031 |  |  |
|  | 11/19/2021<sup>(9)</sup> | 359850 |  | 15.32 | 11/18/2031 |  |  |
|  | 3/26/2022<sup>(10)</sup> | 89962 |  | 10.92 | 3/25/2032 |  |  |
|  | 3/26/2022<sup>(11)</sup> |  |  |  |  | 324710 | 2649634 |
|  Charles Fisher | 3/29/2021<sup>(12)</sup> | 2135712 |  | 4.87 | 3/28/2031 |  |  |
|  | 11/19/2021<sup>(13)</sup> | 129970 |  | 15.32 | 11/18/2031 |  |  |
|  | 3/26/2022<sup>(10)</sup> | 32492 |  | 10.92 | 3/25/2032 |  |  |
|  | 3/26/2022<sup>(11)</sup> |  |  |  |  | 117280 | 957005 |
|  Albert Mangahas | 4/29/2020<sup>(14)</sup> | 300000 |  | 1.73 | 4/28/2030 |  |  |
|  | 4/29/2020<sup>(15)</sup> | 100000 |  | 1.73 | 4/28/2030 |  |  |
|  | 5/7/2020<sup>(16)</sup> | 7226 |  | 1.73 | 5/6/2030 |  |  |
|  | 2/7/2021<sup>(8)</sup> | 250000 |  | 4.87 | 2/6/2031 |  |  |
|  | 3/26/2022<sup>(17)</sup> | 59500 |  | 10.92 | 3/25/2032 |  |  |
|  | 3/26/2022<sup>(11)</sup> |  |  |  |  | 53640 | 437702 |
|  | 3/26/2022<sup>(18)</sup> |  |  |  |  | 26294 | 214559 |

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(1) All of the option awards were granted under the 2020 Plan or the 2010 Plan, the terms of which are described below
under the section titled "— Employee benefit and stock plans." Upon each named executive officer's execution of the participation agreement under the severance plan that will become effective upon the effectiveness of the
registration statement of which this prospectus forms a part, the vesting acceleration provisions described above under the section titled "— Potential payments upon termination or change in control — Severance and change in control
plan" will apply to all of the option awards and will supersede any vesting acceleration provisions described below.

(2) Amounts reflect the fair value of our common stock of $8.16 per share as of December 31, 2022, as determined by our
board of directors, multiplied by the amount shown in the column for the number of shares that have not vested.

(3) Option is held by Haddad-Delaveau Living Trust, dated October 28, 2015, over which Andre Haddad, our Chief
Executive Officer and Chairperson of our board of directors, is co-trustee and shares voting and dispositive power with his spouse.

(4) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest in 48 equal monthly
installments beginning on February 1, 2018, subject to Mr. Haddad's continuous service to us through each applicable vesting date. In the event of a deemed liquidation event, 25% of any then-unvested shares subject to the option shall
vest. In addition, in the event of Mr. Haddad's separation from service to us without cause or for good reason in connection with or within three months before or 12 months after the closing of a deemed liquidation event, the option will
vest in full as of the date of such separation.

(5) Option was repriced in August 2020.

(6) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest in 48 equal monthly
installments beginning on February 1, 2020, subject to the named executive officer's continuous service through each applicable vesting date. If there is a change in control, within 12 months of which the named executive officer is
terminated by us other than for cause or resigns for good reason, 50% of any then-unvested shares subject to the option shall vest on the date of such termination.

(7) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest as to 12.5% of the
shares subject to the option on October 1, 2020, and the remainder of the shares subject to the option vest in 42 equal monthly installments measured from October 1, 2020, subject to the named executive officer's continuous service
through each applicable vesting date. If there is a change in control, within 12 months of which the named executive officer is terminated by us other than for cause or resigns for good reason, 50% of any then-unvested shares subject to the option
shall vest on the date of such termination.

(8) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest in 48 equal monthly
installments beginning on February 1, 2021, subject to the named executive officer's continuous service through each applicable vesting date. If there is a change in control, within 12 months of which the named executive officer is terminated
by us other than for cause or resigns for good reason, 50% of any then-unvested shares subject to the option shall vest on the date of such termination.

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(9) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest in 48 equal monthly
installments beginning on December 19, 2021, subject to the named executive officer's continuous service through each applicable vesting date.

(10) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest in 48 equal monthly
installments beginning on December 19, 2021, subject to the named executive officer's continuous service through each applicable vesting date.

(11) Shares subject to the RSU vest upon the satisfaction of both a service-based vesting condition and a liquidity
event-related performance vesting condition. The service-based vesting condition is satisfied in 16 successive equal quarterly installments on February 20, May 20, August 20, and November 20, beginning on May 20, 2022, subject to the named executive
officer's continuous service to us through each applicable vesting date. The liquidity event-related performance vesting condition will be satisfied on the effective date of the registration statement of which this prospectus forms a part.

(12) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest as to 25% of the
shares subject to the option on March 29, 2022, and the remainder of the shares subject to the option vest in 36 equal monthly installments measured from March 29, 2022, subject to Mr. Fisher's continuous service to us through each applicable
vesting date. If there is a change in control, within 12 months of which, Mr. Fisher is terminated other than for cause or resigns for good reason, 50% of any then-unvested shares subject to the option shall vest on the date of such termination.

(13) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest as to 25% of the
shares subject to the option on August 21, 2019, and the remainder of the shares subject to the option vest in 36 equal monthly installments measured from August 21, 2019, subject to Mr. Gangadharan's continuous service to us
through each applicable vesting date. If there is a change in control, within 12 months of which, Mr. Gangadharan is terminated other than for cause or resigns for good reason, 50% of any then-unvested shares subject to the option shall vest on
the date of such termination.

(14) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest as to 25% of the
shares subject to the option on November 25, 2020, and the remainder of the shares subject to the option vest in 36 equal monthly installments measured from November 25, 2020, subject to Mr. Mangahas' continuous service to us through each
applicable vesting date.

(15) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest as to 20.833% of the
shares subject to the option on November 25, 2020, and the remainder of the shares subject to the option vest in 38 equal monthly installments measured from November 25, 2020, subject to Mr. Mangahas' continuous service to us through each
applicable vesting date.

(16) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest as to 16.666% of the
shares subject to the option on December 1, 2020, and the remainder of the shares subject to the option vest in 40 equal monthly installments measured from December 1, 2020, subject to Mr. Mangahas' continuous service to us through each
applicable vesting date. If there is a change in control, within 12 months of which Mr. Mangahas is terminated by us other than for cause or resigns for good reason, 50% of any then-unvested shares subject to the option shall vest on the date of
such termination.

(17) Shares subject to the option are early exercisable, subject to our right of repurchase, and vest in 48 equal monthly
installments beginning on February 1, 2022, subject to Mr. Mangahas' continuous service through each applicable vesting date

(18) Shares subject to the RSU vest upon the satisfaction of both a service-based vesting condition and a liquidity
event-related performance vesting condition. The service-based vesting condition is satisfied in 16 successive equal quarterly installments on February 20, May 20, August 20, and November 20, beginning on February 20, 2022, subject to Mr.
Mangahas' continuous service to us through each applicable vesting date. The liquidity event-related performance vesting condition will be satisfied on the effective date of the registration statement of which this prospectus forms a part.

**Other compensation and benefits** 

All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, vision, life insurance, long-term disability, short-term disability, and accidental death and dismemberment plans, in each case, on the same basis as all of our other employees. We pay the premiums for medical, dental, and vision insurance for all of our employees, including our named executive officers. We also pay 65% of dependent premiums for medical, dental, and vision plans.

Our named executive officers did not participate in, or earn any benefits under, a nonqualified deferred compensation plan sponsored by us during 2022. Our board of directors may elect to provide our officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interests.

We maintain a 401(k) plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees are able to defer compensation up to certain limits imposed by the Internal Revenue Code of 1986, as amended, or the Code. Starting in January 2021, we have made matching and discretionary contributions to the 401(k) plan and may continue to do so. The 401(k) plan is intended to be qualified under Section 401(a) of the Code, with the related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, and contributions and earnings on those amounts are generally not taxable to a participating employee until withdrawn or distributed from the 401(k) plan.

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**Employee benefit and stock plans** 

Our board of directors intends to adopt our 2023 Equity Incentive Plan, or 2023 Plan, and 2023 Employee Stock Purchase Plan, or ESPP, each of which will become effective upon the execution and delivery of the underwriting agreement related to this offering. The 2023 Plan will supersede and replace our 2020 Plan. The description below reflects the 2020 Plan, as currently in effect. After the 2023 Plan becomes effective, no further stock awards will be granted under our 2020 Plan.

**2023 Equity Incentive Plan** 

Our board of directors adopted the 2023 Plan in 2023, and our stockholders approved the 2023 Plan in 2023. The 2023 Plan will become effective upon the execution of the underwriting agreement for this offering. Once the 2023 Plan becomes effective, no further grants will be made under our 2020 Plan.

**Types of awards.** Our 2023 Plan provides for the grant of incentive stock options, or ISOs, nonstatutory stock options, or NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based awards, and other awards, or collectively, awards. ISOs may be granted only to our employees, including our officers, and the employees of our affiliates. All other awards may be granted to our employees, including our officers, our non-employee directors, consultants, and the employees and consultants of our affiliates.

**Authorized shares.** The maximum number of shares of common stock that may be issued under our 2023 Plan is shares, which is the sum of (i) new shares, plus (ii) the number of returning shares, if any, as such shares become available from time to time. In addition, the number of shares of common stock reserved for issuance under our 2023 Plan will automatically increase on January 1 of each year, beginning on January 1, 2024, and continuing through and including January 1, 2033, by % of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by our board of directors prior to the applicable January 1. The maximum number of shares that may be issued upon the exercise of ISOs under our 2023 Plan is shares.

Shares issued under our 2023 Plan will be authorized but unissued or reacquired shares of common stock. Shares subject to awards granted under our 2023 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under our 2023 Plan. In addition, shares issued pursuant to awards under our 2023 Plan that we repurchase or that are forfeited, as well as shares used to pay the exercise price of an award or to satisfy the tax withholding obligations to an award, will become available for future grant under our 2023 Plan.

The maximum number of shares of common stock subject to stock awards granted under the 2023 Plan or otherwise during any calendar year to any non-employee director, taken together with any cash fees paid by us to such non-employee director during such calendar year for service on the board of directors, will not exceed $ in total value (calculating the value of any such stock awards based on the grant date fair value of such stock awards for financial reporting purposes), or, with respect to the calendar year in which a non-employee director is first appointed or elected to our board of directors, $.

**Plan administration.** Our board of directors, or a duly authorized committee of our board, may administer our 2023 Plan. Our board of directors has delegated concurrent authority to administer our 2023 Plan to the compensation committee under the terms of the compensation committee's charter. We sometimes refer to the board of directors, or the applicable committee with the power to administer our equity incentive plans, as the administrator. The administrator may also delegate to one or more of our officers the authority to (1) designate employees (other than officers) to receive specified awards, and (2) determine the number of shares subject to such awards.

The administrator has the authority to determine the terms of awards, including recipients, the exercise, purchase or strike price of awards, if any, the number of shares subject to each award, the fair market value of a

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share of common stock, the vesting schedule applicable to the awards, together with any vesting acceleration, and the form of consideration, if any, payable upon exercise or settlement of the award and the terms of the award agreements for use under our 2023 Plan.

In addition, subject to the terms of the 2023 Plan, the administrator also has the power to modify outstanding awards under our 2023 Plan, including the authority to reprice any outstanding option or stock appreciation right, cancel and re-grant any outstanding option or stock appreciation right in exchange for new stock awards, cash, or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any materially adversely affected participant.

**Stock options.** ISOs and NSOs are granted pursuant to stock option agreements adopted by the administrator. The administrator determines the exercise price for a stock option, within the terms and conditions of the 2023 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2023 Plan vest at the rate specified in the stock option agreement as specified in the stock option agreement by the administrator.

The administrator determines the term of stock options granted under the 2023 Plan, up to a maximum of ten years. Unless the terms of an optionholder's stock option agreement provide otherwise, if an optionholder's service relationship with us, or any of our affiliates, ceases for any reason other than disability, death, or cause, the optionholder may generally exercise any vested options for a period of three months following the cessation of service. The option term may be extended in the event that either an exercise of the option or an immediate sale of shares acquired upon exercise of the option following such a termination of service is prohibited by applicable securities laws or our insider trading policy. If an optionholder's service relationship with us or any of our affiliates ceases due to disability or death, or an optionholder dies within a certain period following cessation of service, the optionholder or a beneficiary may generally exercise any vested options for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, options generally terminate immediately upon the termination of the individual for cause. In no event may an option be exercised beyond the expiration of its term.

Acceptable consideration for the purchase of common stock issued upon the exercise of a stock option will be determined by the administrator and may include (1) cash, check, bank draft, or money order, (2) a broker-assisted cashless exercise, (3) the tender of shares of common stock previously owned by the optionholder, (4) a net exercise of the option if it is an NSO, and (5) other legal consideration approved by the administrator.

Options may not be transferred to third-party financial institutions for value. Unless the administrator provides otherwise, options generally are not transferable except by will, the laws of descent and distribution, or pursuant to a domestic relations order. An optionholder may designate a beneficiary, however, who may exercise the option following the optionholder's death.

**Tax limitations on ISOs.** The aggregate fair market value, determined at the time of grant, of common stock with respect to ISOs that are exercisable for the first time by an optionholder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will be treated as NSOs. No ISOs may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our parent or subsidiary corporations, unless (1) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant and (2) the term of the ISO does not exceed five years from the date of grant.

**Restricted stock awards.** Restricted stock awards are granted pursuant to restricted stock award agreements adopted by the administrator. Restricted stock awards may be granted in consideration for cash, check, bank draft or money order, services rendered to us or our affiliates, or any other form of legal consideration. Common stock acquired under a restricted stock award may, but need not, be subject to a share repurchase option in our favor in accordance with a vesting schedule to be determined by the administrator. A restricted stock award may be transferred only upon such terms and conditions as set by the administrator. Except as otherwise provided in the applicable award agreement, restricted stock awards that have not vested may be forfeited or repurchased by us upon the participant's cessation of continuous service for any reason.

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**Restricted stock unit awards.** Restricted stock unit awards are granted pursuant to restricted stock unit award agreements adopted by the administrator. Restricted stock unit awards may be granted in consideration for any form of legal consideration. A restricted stock unit award may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the administrator, or in any other form of consideration set forth in the restricted stock unit award agreement. In addition, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. Except as otherwise provided in the applicable award agreement, restricted stock units that have not vested will be forfeited upon the participant's cessation of continuous service for any reason.

**Stock appreciation rights.** Stock appreciation rights are granted pursuant to stock appreciation right grant agreements adopted by the administrator. The administrator determines the strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of common stock on the date of grant. Upon the exercise of a stock appreciation right, we will pay the participant an amount equal to the product of (1) the excess of the per share fair market value of common stock on the date of exercise over the strike price, multiplied by (2) the number of shares of common stock with respect to which the stock appreciation right is exercised. A stock appreciation right granted under the 2023 Plan vests at the rate specified in the stock appreciation right agreement as determined by the administrator.

The administrator determines the term of stock appreciation rights granted under the 2023 Plan, up to a maximum of ten years. Unless the terms of a participant's stock appreciation right agreement provide otherwise, if a participant's service relationship with us or any of our affiliates ceases for any reason other than cause, disability, or death, the participant may generally exercise any vested stock appreciation right for a period of three months following the cessation of service. The stock appreciation right term may be further extended in the event that exercise of the stock appreciation right following such a termination of service is prohibited by applicable securities laws. If a participant's service relationship with us, or any of our affiliates, ceases due to disability or death, or a participant dies within a certain period following cessation of service, the participant or a beneficiary may generally exercise any vested stock appreciation right for a period of 12 months in the event of disability and 18 months in the event of death. In the event of a termination for cause, stock appreciation rights generally terminate immediately upon the occurrence of the event giving rise to the termination of the individual for cause. In no event may a stock appreciation right be exercised beyond the expiration of its term.

**Performance awards.** Our 2023 Plan permits the grant of performance-based stock and cash awards. The compensation committee can structure such awards so that the stock or cash will be issued or paid pursuant to such award only following the achievement of certain pre-established performance goals during a designated performance period. Performance awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, the common stock.

The performance goals may be based on any measure of performance selected by the board of directors. The compensation committee may establish performance goals on a company-wide basis, with respect to one or more business units, divisions, affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise (i) in the award agreement at the time the award is granted or (ii) in such other document setting forth the performance goals at the time the goals are established, the compensation committee will appropriately make adjustments in the method of calculating the attainment of the performance goals as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are "unusual" in nature or occur "infrequently" as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by us achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular

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cash dividends; (9) to exclude the effects of stock-based compensation and the award of bonuses under our bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles.

**Other awards.** The administrator may grant other awards based in whole or in part by reference to common stock. The administrator will set the number of shares under the award and all other terms and conditions of such awards.

**Changes to capital structure.** In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split, or recapitalization, appropriate adjustments will be made to (1) the class and maximum number of shares reserved for issuance under the 2023 Plan; (2) the class and maximum number of shares by which the share reserve may increase automatically each year; (3) the class and maximum number of shares that may be issued upon the exercise of ISOs; and (4) the class and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding awards.

**Corporate transactions.** The following applies to stock awards under the 2023 Plan in the event of a corporate transaction, unless otherwise provided in a participant's stock award agreement or other written agreement with us or one of our affiliates or unless otherwise expressly provided by the administrator at the time of grant. Under the 2023 Plan, a corporate transaction is generally the consummation of (1) a sale or other disposition of all or substantially all of our assets, (2) a sale or other disposition of at least 50% of our outstanding securities, (3) a merger, consolidation or similar transaction following which we are not the surviving corporation, or (4) a merger, consolidation, or similar transaction following which we are the surviving corporation but the shares of common stock outstanding immediately prior to such transaction are converted or exchanged into other property by virtue of the transaction.

In the event of a corporate transaction, any stock awards outstanding under the 2023 Plan may be assumed, continued, or substituted for by any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by us with respect to the stock award may be assigned to the successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue, or substitute for such stock awards, then (i) with respect to any such stock awards that are held by participants whose continuous service has not terminated prior to the effective time of the corporate transaction, or current participants, the vesting (and exercisability, if applicable) of such stock awards will be accelerated in full to a date prior to the effective time of the corporate transaction (contingent upon the effectiveness of the corporate transaction), and such stock awards will terminate if not exercised (if applicable) at or prior to the effective time of the corporate transaction, and any reacquisition or repurchase rights held by us with respect to such stock awards will lapse (contingent upon the effectiveness of the corporate transaction), and (ii) any such stock awards that are held by persons other than current participants will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction, except that any reacquisition or repurchase rights held by us with respect to such stock awards will not terminate and may continue to be exercised notwithstanding the corporate transaction. In addition, the plan administrator may also provide, in its sole discretion, that the holder of a stock award that will terminate upon the occurrence of a corporate transaction if not previously exercised will receive a payment, if any, equal to the excess of the value of the property the participant would have received upon exercise of the stock award over the exercise price otherwise payable in connection with the stock award.

A stock award may be subject to additional acceleration of vesting and exercisability upon or after a change in control as may be provided in an applicable award agreement or other written agreement, but in the absence of such provision, no such acceleration will occur.

**Transferability.** A participant may not transfer awards under our 2023 Plan other than by will, the laws of descent and distribution, or as otherwise provided under our 2023 Plan.

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**Plan amendment or termination.** Our board has the authority to amend, suspend, or terminate our 2023 Plan, provided that such action does not materially impair the existing rights of any participant without such participant's written consent. Certain material amendments also require the approval of our stockholders. No ISOs may be granted after the tenth anniversary of the date our board adopted our 2023 Plan. No awards may be granted under our 2023 Plan while it is suspended or after it is terminated.

**2023 Employee Stock Purchase Plan** 

Our board of directors adopted the ESPP in 2023, and our stockholders adopted the ESPP in 2023. The ESPP will become effective upon the execution of the underwriting agreement for this offering. The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward our success and that of our affiliates. The ESPP includes two components. One component is designed to allow our eligible U.S. employees to purchase common stock in a manner that may qualify for favorable tax treatment under Section 423 of the Internal Revenue Code. In addition, purchase rights may be granted under a component that does not qualify for such favorable tax treatment when necessary or appropriate to permit participation by our eligible employees who are foreign nationals or employed outside of the United States while complying with applicable foreign laws.

**Authorized shares.** The maximum aggregate number of shares of common stock that may be issued under our ESPP is shares. The number of shares of common stock reserved for issuance under our ESPP will automatically increase on January 1 of each calendar year, beginning on January 1, 2024 and continuing through and including January 1, 2033, by the lesser of (1) % of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, (2) shares, and (3) a number of shares determined by our board. Shares subject to purchase rights granted under our ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under our ESPP.

**Plan administration.** Our board, or a duly authorized committee thereof, will administer our ESPP. Our board has delegated concurrent authority to administer our ESPP to the compensation committee under the terms of the compensation committee's charter. The ESPP is implemented through a series of offerings with specific terms approved by the administrator and under which eligible employees are granted purchase rights to purchase shares of common stock on specified dates during such offerings. Under the ESPP, we may specify offerings with durations of not more than 27 months and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of common stock will be purchased for our eligible employees participating in the offering. An offering under the ESPP may be terminated under certain circumstances.

**Payroll deductions.** Generally, all regular employees, including executive officers, employed by us or by any of our designated affiliates, may participate in the ESPP and may contribute, normally through payroll deductions, with a maximum dollar amount as designated by the board. Unless otherwise determined by the administrator, common stock will be purchased for the accounts of employees participating in the ESPP at a price per share equal to the lower of (a) 85% of the fair market value of a share of common stock on the first date of an offering or (b) 85% of the fair market value of a share of common stock on the date of purchase. For the initial offering, which we expect will commence upon the execution and delivery of the underwriting agreement relating to this offering, the fair market value on the first day of the initial offering will be the price at which shares are first sold to the public.

**Limitations.** Our employees, including executive officers, or any of our designated affiliates may have to satisfy one or more of the following service requirements before participating in our ESPP, as determined by the administrator: (1) customary employment with us or one of our affiliates for more than 20 hours per week and more than five months per calendar year, or (2) continuous employment with us or one of our affiliates for a minimum period of time, not to exceed two years, prior to the first date of an offering. An employee may not be granted rights to purchase stock under our ESPP if such employee (1) immediately after the grant would own

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stock possessing 5% or more of the total combined voting power or value of common stock, or (2) holds rights to purchase stock under our ESPP that would accrue at a rate that exceeds $25,000 worth of our stock for each calendar year that the rights remain outstanding.

**Changes to capital structure.** In the event that there occurs a change in our capital structure through such actions as a stock split, merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or similar transaction, the board of directors will make appropriate adjustments to (1) the number of shares reserved under the ESPP, (2) the maximum number of shares by which the share reserve may increase automatically each year, (3) the number of shares and purchase price of all outstanding purchase rights, and (4) the number of shares that are subject to purchase limits under ongoing offerings.

**Corporate transactions.** In the event of certain corporate transactions, including: (1) a sale of all or substantially all of our assets, (2) the sale or disposition of 50% of our outstanding securities, (3) the consummation of a merger or consolidation where we do not survive the transaction, and (4) the consummation of a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding immediately before such transaction are converted or exchanged into other property by virtue of the transaction, any then-outstanding rights to purchase our stock under the ESPP may be assumed, continued, or substituted for by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue, or substitute for such purchase rights, then the participants' accumulated payroll contributions will be used to purchase shares of common stock within 10 business days (or such other period specified by the board) prior to such corporate transaction and such purchase rights will terminate immediately.

Under the ESPP, a corporate transaction is generally the consummation of: (1) a sale of all or substantially all of our assets, (2) the sale or disposition of more than 50% of our outstanding securities, (3) a merger or consolidation where we do not survive the transaction, and (4) a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding immediately before such transaction are converted or exchanged into other property by virtue of the transaction.

**ESPP amendment or termination.** The administrator has the authority to amend or terminate our ESPP, provided that except in certain circumstances such amendment or termination may not materially impair any outstanding purchase rights without the holder's consent. We will obtain stockholder approval of any amendment to our ESPP as required by applicable law or listing requirements.

**2020 Equity Incentive Plan** 

Our board of directors adopted and our stockholders approved our 2020 Plan in December 2020. As of December 31, 2022, there were 1,164,916 shares of common stock remaining available for the future grant of stock awards under our 2020 Plan. As of December 31, 2022, options to purchase an aggregate of 9,946,155 shares of our common stock and restricted stock units covering an aggregate of 8,401,114 shares of our common stock were outstanding under the 2020 Plan.

Upon the effective date of the 2023 Plan, no additional awards will be granted under the 2020 Plan, which will be terminated on such date. However, any outstanding awards granted under the 2020 Plan will remain outstanding, subject to the terms of the 2020 Plan and the applicable award agreements, until such outstanding options are exercised or until any awards terminate or expire by their terms.

**Stock awards.** Our 2020 Plan provides for the grant of ISOs within the meaning of Section 422 of the Code to employees (including officers and directors who are also employees) of us or any parent or subsidiary, and for the grant of NSOs, stock appreciation rights, restricted stock awards, and restricted stock unit awards to employees, officers, directors, and consultants of us or any parents or subsidiary.

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**Authorized shares.** Subject to certain capitalization adjustments, the total number of shares of common stock that may be issued pursuant to stock awards under the 2020 Plan is 6,407,447 shares plus (a) any authorized shares not issued or subject to outstanding grants under the 2010 Plan on the effective date of the 2020 Plan; (b) shares that are subject to issuance under the 2010 Plan but cease to be subject to an award for any reason other than exercise of an option after the effective date of the 2020 Plan; and (c) shares that were issued under the 2010 Plan which are repurchased by us or which are forfeited or used to pay withholding obligations or pay the exercise price of a stock option.

Shares subject to stock awards granted under our 2020 Plan that expire or are canceled, forfeited, or terminated without being exercised in full or that are paid out in cash rather than in shares do not reduce the number of shares available for issuance under our 2020 Plan. If any shares of common stock issued pursuant to a stock award are forfeited back to or repurchased or reacquired by us for any reason, the shares that are forfeited or repurchased or reacquired will revert to and again become available for issuance under the 2020 Plan. Any shares reacquired in satisfaction of tax withholding obligations or as consideration for the exercise or purchase price of a stock award will again become available for issuance under the 2020 Plan.

**Plan administration.** Our board of directors administers and interprets the provisions of the 2020 Plan. The board of directors may delegate its authority to a committee of the board and has delegated authority to the compensation committee of the board, referred to as the "committee." The committee may additionally delegate limited authority to specified directors or executive officers to execute any instrument required to effect an award previously granted by the committee. Under our 2020 Plan, the committee has the authority to, among other things, approve award recipients, determine the numbers and types of stock awards to be granted, determine the applicable fair market value and the provisions of each stock award, including the period of their exercisability and the vesting schedule applicable to a stock award, construe and interpret the 2020 Plan and awards granted thereunder, and prescribe, amend, modify, and rescind or terminate rules and regulations for the administration of the 2020 Plan.

Under the 2020 Plan, the committee may, with the consent of the respective participants, issue new awards in exchange for the surrender and cancellation of any or all outstanding awards. Without prior stockholder approval the committee may reprice options or stock appreciation rights (and where such repricing is a reduction in the exercise price of outstanding options or stock appreciation rights, the consent of the affected participants is not required provided written notice is provided to them). The committee may buy from a participant an award previously granted with payment in cash, shares, or other consideration, based on such terms and conditions as the committee and the participant may agree.

**Stock options.** ISOs and NSOs are granted under stock option agreements in such form and containing such provisions as approved by the committee. The committee determines the exercise price for stock options, within the terms and conditions of the 2020 Plan, provided that the exercise price of a stock option generally will not be less than 100% of the fair market value of our common stock on the date of grant (or 110% of the fair market value for 10% stockholders as required by the Code). Options granted under the 2020 Plan vest at the rate specified in the share option agreements and option rules as determined by the committee.

The committee determines the term of stock options granted under the 2020 Plan, up to a maximum of 10 years (or five years for 10% stockholders as required by the Code). If an optionholder's service relationship with us or any of our affiliates ceases for any reason other than disability, death, or cause the optionholder may generally exercise any vested options for a period of up to three months following the cessation of service, or such other period of time set forth in the share option agreement. If an optionholder's service relationship with us or any of our affiliates ceases due to death or disability (or the participant dies within three months after a termination other than for Cause), then options vested as of the termination date may generally be exercised within 12 months following the date of termination, or such other period of time set forth in the share option agreement. In no event may an option be exercised beyond the expiration of its term. If an optionholder's service relationship with us or any of our affiliates ceases due to termination for cause, the optionholder's vested options shall expire on the optionholder's termination date, or such later time as determined by the committee.

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The exercise price for shares issued under the 2020 Plan are generally payable in cash equivalents or other forms of consideration determined by the committee, including, but not limited to, a broker-assisted cashless exercise or a net exercise.

Unless the committee provides otherwise, options generally are not transferable except by will, the laws of descent and distribution, or, with respect to NSOs for participants in the United States, by gift to a family member.

**Restricted stock units.** Restricted stock unit awards are granted pursuant to restricted stock unit award agreements adopted by the committee. A restricted stock unit award may be settled in cash, shares, or by a combination of cash and shares. In addition, dividend equivalents may be credited in respect of shares covered by a restricted stock unit award. The committee will determine the terms of restricted stock unit awards including, without limitation: (a) the number of shares subject to the restricted stock unit award, (b) the time or times during which the restricted stock unit award may be settled, (c) the consideration to be distributed on settlement, and (d) the effect of the participant's termination on each restricted stock unit award.

**Restricted stock.** The committee determines to whom an offer of restricted stock will be made, the number of shares the person may purchase, the purchase price, the restrictions to which the shares will be subject, and other terms and conditions. If a participant's service relationship with us ends for any reason, we may receive any or all of the shares of common stock held by the participant that have not vested as of the date the participant terminates service with us through, but not limited to, a repurchase right.

**Changes to capital structure.** In the event of any stock dividend, recapitalization, stock split, reverse stock split, subdivision, combination, reclassification, or other change in the capital structure of us affecting shares without consideration, then in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the 2020 Plan, the committee will (i) adjust the number and class of shares reserved for issuance under the 2020 Plan, (ii) adjust the exercise price of, number, and class of shares subject to outstanding options or stock appreciation rights, and (iii) the purchase price of and/or number and class of shares subject to other outstanding awards will (to the extent appropriate) be proportionately adjusted.

**Corporate transactions.** In the event of an acquisition or other combination, outstanding awards acquired under the 2020 Plan shall be subject to the agreement evidencing the acquisition or other combination, which need not treat all outstanding awards in an identical manner. Such agreement, without the participant's consent, shall provide for one or more of the following with respect to all outstanding awards:

• awards will be assumed or substituted by the acquiring or succeeding corporation with appropriate adjustments;

• the continuation of outstanding awards by us (if the company is the successor entity);

• the participant's unexercised awards will terminate upon or immediately prior to the consummation of such
transactions contemplated by the acquisition or other combination;

• outstanding awards will vest and become fully or partially exercisable or vest with accelerated expiration of outstanding
awards;

• an award will terminate in exchange for an amount of cash, cash equivalents, or securities of the successor entity, if
any, equal to fair market value of such award; or

• any one or more of the foregoing.

Under the 2020 Plan, an acquisition is generally defined as the occurrence of any of the following events: (i) any consolidation or merger in which the voting stock and other voting securities of us that are outstanding immediately prior to the consummation of such consolidation or merger are converted into securities of the surviving entity of such consolidation or merger that together possess less than fifty percent of the total voting

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power of all voting securities of such surviving entity that are outstanding immediately after the consummation of such consolidation or merger; (ii) a sale or other transfer by the holders of outstanding voting stock and/or other voting securities of us possessing more than fifty percent of the total voting power of all outstanding voting securities of us; or (iii) the sale, lease, transfer, or other disposition by us of all or substantially all the assets of us.

The following do not constitute an acquisition: (i) the closing of our first public offering pursuant to an effective registration statement filed under the Securities Act of 1933, as amended, or the Securities Act, or (ii) any transaction the sole purpose of which is to change the state of incorporation of us or to create a holding company that will be owned in substantially the same proportions by the persons who held our securities immediately before such transaction.

**Plan amendment or termination.** The board may at any time terminate or amend the 2020 Plan and all outstanding options, stock appreciation rights, or restricted stock unit awards upon a dissolution or liquidation of us, followed by the payment of creditors and the distribution of any remaining funds to our stockholders; provided, however, that certain amendments may require the approval of our stockholders. Unless sooner terminated, the 2020 Plan terminates in ten years from the effective date.

**U.K. sub-plan.** The board adopted a U.K. sub-plan to the 2020 Plan to provide incentives for U.K. participants through the grant of stock awards under similar terms to those under the 2020 Plan.

**French sub-plan.** The compensation committee adopted a French sub-plan to the 2020 Plan to provide incentives for French participants through the grant of stock awards under similar terms to those under the 2020 Plan.

**2010 Equity Incentive Plan** 

**General.** Our board of directors adopted, and our stockholders approved our 2010 Plan, in December 2010. Our 2010 Plan was terminated in connection with our adoption of our 2020 Plan; however, awards outstanding under our 2010 Plan continue in full effect in accordance with their existing terms. As of December 31, 2022, options to purchase an aggregate of 16,306,916 shares of our common stock were outstanding under our 2010 Plan.

**Administration.** Our board of directors has full authority and discretion to take any actions it deems necessary or advisable for the administration of our 2010 Plan. Our board of directors may modify, extend, or renew outstanding options or may accept the cancellation of outstanding options (whether granted by us or another issuer) in return for the grant of new options for the same or a different number of shares and at the same or a different exercise price.

**Types of awards.** Our 2010 Plan provides for the grant of ISOs and NSOs to purchase shares of our common stock, equity appreciation rights awards, restricted stock awards, and restricted stock units to employees, members of our board of directors, and consultants. ISOs may be granted only to employees.

**Options.** The exercise price of options granted under our 2010 Plan may not be less than 100% of the fair market value of our common stock on the grant date. Options expire at the time determined by the administrator, but in no event more than ten years after they are granted, and generally expire earlier if the optionholder's service terminates.

**Restricted stock units.** Restricted stock unit awards are granted pursuant to restricted stock unit award agreements adopted by the committee.

**Restricted stock.** The committee determines to whom an offer of restricted stock will be made, the number of shares the person may purchase, the purchase price, the restrictions to which the shares will be subject, and other terms and conditions.

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**Other stock awards.** The board of directors may grant other awards based in whole or in part by reference to, or otherwise based on, our common stock. The committee will set the number of shares under the stock award and all other terms and conditions of such awards.

**Changes in capitalization.** If we at any time change the number of shares of common stock issued without new consideration (such as by stock dividend or stock split), the total number of shares of common stock reserved for issuance under the 2010 Plan and the exercise price, number, and class of shares of common stock covered by each then outstanding award will (to the extent appropriate) be proportionally adjusted and the aggregate consideration payable to us, if any, will not be changed.

**Corporate transaction.** Unless otherwise expressly provided in the applicable award agreement governing an award, upon an acquisition, our board of directors (or a committee thereof) may:

• provide for the assumption, conversion, replacement, or substitution of any or all outstanding awards by the successor or
acquiring entity;

• substitute by issuing, in place of any award of outstanding shares, substantially similar shares of stock or other
property;

• substitute or assume outstanding awards granted by another entity by either (i) granting an award under the 2010
Plan in substitution of such other entity's award, or (ii) assuming and/or converting such award as if it had been granted under the 2010 Plan if the terms of such assumed award could be applied to an award granted under the 2010 Plan;
and/or

• terminate outstanding awards that are not assumed, converted, or replaced without providing accelerated vesting.

The treatment of awards upon an acquisition may vary among the award types and participants in the sole discretion of our board of directors.

In general, an "acquisition" means either (i) any consolidation or merger of us by another entity by means of any transaction or series of related transactions, unless our stockholders of record immediately prior to such transaction or series of related transactions hold, immediately after such transaction or series of related transactions, at least 50% of the voting power of the surviving or acquiring entity or (ii) a sale of all or substantially all of our assets, subject to certain exceptions.

**Transferability.** A participant may not transfer stock awards under our 2010 Plan other than by will, the laws of descent and distribution, or with respect to NSOs for participants in the United States, by gift to a family member, or as otherwise provided under our 2010 Plan.

**Plan amendment or termination.** Our board of directors has the authority to amend or terminate our 2010 Plan, provided that such action is approved by our stockholders to the extent stockholder approval is necessary. As described above, our 2010 Plan terminated upon the effective date of our 2020 Plan.

**U.K. sub-plan.** The board adopted a U.K. sub-plan to the 2010 Plan to provide incentives for U.K. participants through the grant of options under similar terms to those under the 2010 Plan.

**Limitations of liability and indemnification matters** 

On the completion of this offering, our amended and restated certificate of incorporation will contain provisions that limit the liability of our current and former directors for monetary damages to the fullest extent permitted by Delaware law. Delaware law allows a corporation to provide that its directors will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for:

• any breach of the director's duty of loyalty to the corporation or its stockholders;

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• any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;

• unlawful payments of dividends or unlawful stock repurchases or redemptions; or

• any transaction from which the director derived an improper personal benefit.

Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.

Our amended and restated certificate of incorporation that will be in effect upon the completion of this offering will authorize us to indemnify our directors, officers, employees, and other agents to the fullest extent permitted by Delaware law. Our amended and restated bylaws that will be in effect upon the completion of this offering will provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our amended and restated bylaws that will be in effect upon the completion of this offering will also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee, or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered into agreements to indemnify our directors and executive officers. With certain exceptions, these agreements provide for indemnification for related expenses, including attorneys' fees, judgments, fines, and settlement amounts incurred by any of these individuals in connection with any action, proceeding, or investigation. We believe that this amended and restated certificate of incorporation and these amended and restated bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors' and officers' liability insurance. In addition, Mr. Hartenbaum is indemnified, subject to certain limitations, against liabilities incurred in his capacity as our director pursuant to an agreement with August Capital, and Mr. Kamra is insured, subject to certain limitations, against liabilities incurred in his capacity as our director pursuant to an agreement with Canaan Partners.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder's investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, executive officers, or persons controlling us, we have been informed that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

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## Certain relationships and

## related party transactions
Other than compensation arrangements for our directors and executive officers, which are described elsewhere in this prospectus, below we describe transactions since January 1, 2020 and each currently proposed transaction in which:

• we have been or are to be a participant;

• the amounts involved exceeded or will exceed $120,000; and

• any of our directors, executive officers, or holders of more than 5% of our outstanding capital stock, or any immediate
family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest.

We believe the terms obtained or consideration that we paid or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that would be paid or received, as applicable, in arm's-length transactions.

**Turo Seed Initiative** 

Launched in November of 2020, the Turo Seed Initiative is a program providing up to $1 million in funding and access to interest-free investment opportunities to aspiring entrepreneurs in the United States, especially those from underserved communities, by leveraging the Turo marketplace to help narrow the wealth gap. Mr. Haddad, our Chief Executive Officer and Chairperson of our board of directors, is a member of the board of directors of Kiva Microfunds, or Kiva. We contributed an aggregate of $165,000 in matching payments to Kiva through the Turo Seed Initiative. See the section titled "Business — Our people and places — The Turo Seed Initiative" for more information about this program.

**Share repurchase** 

In March 2023, we repurchased 50,000 shares of our common stock from Michelle Fang, our Chief Legal Officer, at a purchase price of $9.00 per share, for an aggregate purchase price of $450,000.

**Directed share program** 

At our request, the underwriters have reserved up to % of the shares offered by this prospectus for sale at the initial public offering price through a directed share program to eligible hosts and guests on our platform and certain individuals identified by our officers and directors. Eligible hosts consist of hosts who have met the performance criteria to become All-Star Hosts, reside in the United States or United Kingdom, had, between and , completed a trip as a host, and as of , had at least 95% of rated trips earn five stars. Eligible guests consist of guests who have met the criteria for our Insider Rewards program, reside in the United States, and had, between and , completed a trip as a guest. See the section titled "Underwriters — Directed share program."

**Investors' rights agreement** 

We are party to an amended and restated investors' rights agreement, dated July 23, 2019, or the investors' rights agreement, with certain holders of our capital stock, including IAC, a holder of greater than 5% of our outstanding capital stock and where Messrs. Levin and Stein, two members of our board of directors, serve as executive officers, and Mr. Levin also serves as a director; August Capital V, L.P., a holder of greater than 5% of our outstanding capital stock and affiliate of Mr. Hartenbaum, a member of our board of directors; Canaan IX

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L.P., a holder of greater than 5% of our outstanding capital stock and affiliate of Mr. Kamra, a member of our board of directors; Shasta Ventures II, L.P. and GV, each a holder of greater than 5% of our outstanding capital stock; and entities affiliated with Mr. Porter, a member of our board of directors. The investors' rights agreement provides certain holders of our capital stock with certain registration rights, including the right to demand that we file a registration statement or request that their shares be covered by a registration statement that we are otherwise filing. The investors' rights agreement also provides certain of these stockholders with information rights, which will terminate upon the completion of this offering, and a right of first refusal with regard to certain issuances of our capital stock, which will not apply to, and will terminate on, the completion of, this offering. For a description of these registration rights, see the section titled "Description of capital stock — Registration rights."

**Voting agreement** 

We are party to an amended and restated voting agreement, dated July 23, 2019, under which certain holders of our capital stock, including entities affiliated with Andre Haddad, our Chief Executive Officer and Chairperson of our board of directors; Alex Benn, our President; IAC, a holder of greater than 5% of our outstanding capital stock and where Messrs. Levin and Stein, two members of our board of directors, serve as executive officers, and Mr. Levin also serves as a director; August Capital V, L.P., a holder of greater than 5% of our outstanding capital stock and affiliate of Mr. Hartenbaum, a member of our board of directors; Canaan IX L.P., a holder of greater than 5% of our outstanding capital stock and affiliate of Mr. Kamra, a member of our board of directors; Shasta Ventures II, L.P. and GV, each a holder of greater than 5% of our outstanding capital stock; and entities affiliated with Mr. Porter, a member of our board of directors, have agreed as to the manner in which they will vote their shares of our capital stock on certain matters, including with respect to the election of directors. This agreement will terminate upon the completion of this offering, and thereafter none of our stockholders will have any special rights regarding the election or designation of members of our board of directors.

**Right of first refusal** 

Pursuant to our equity compensation plan and certain agreements with our stockholders, including an amended and restated right of first refusal and co-sale agreement, dated July 23, 2019 with certain holders of our capital stock, including entities affiliated with Andre Haddad, our Chief Executive Officer and Chairperson of our board of directors; Alex Benn, our President; IAC, a holder of greater than 5% of our outstanding capital stock and where Messrs. Levin and Stein, two members of our board of directors, serve as executive officers, and Mr. Levin also serves as a director; August Capital V, L.P., a holder of greater than 5% of our outstanding capital stock and affiliate of Mr. Hartenbaum, a member of our board of directors; Canaan IX L.P., a holder of greater than 5% of our outstanding capital stock and affiliate of Mr. Kamra, a member of our board of directors; Shasta Ventures II, L.P. and GV, each a holder of greater than 5% of our outstanding capital stock; and entities affiliated with Mr. Porter, a member of our board of directors, we or our assignees have a right to purchase shares of our capital stock which stockholders propose to sell in certain circumstances to other parties. We have waived our right of first refusal in connection with the sale of certain shares of our capital stock, including sales by certain of our executive officers, resulting in the purchase of such shares by certain of our stockholders, including related persons. We have assigned our right of first refusal to IAC pursuant to (i) our 2010 Equity Incentive Plan, (ii) our certain Amended and Restated Right of First Refusal and Co-Sale Agreement, dated July 23, 2019, by and among us and the stockholders named therein, or (iii) any other agreement containing an assignable right of first refusal with respect to our securities in our favor. All rights of first refusal will terminate upon the completion of this offering.

**Indemnification agreements** 

Our amended and restated certificate of incorporation that will be in effect upon the completion of this offering will contain provisions limiting the liability of directors, and our amended and restated bylaws that will be in effect upon the completion of this offering will provide that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and

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amended and restated bylaws that will be in effect upon the completion of this offering will also provide our board of directors with discretion to indemnify our employees and other agents when determined appropriate by the board. In addition, we have entered or will enter into an indemnification agreement with each of our directors and executive officers, which requires us to indemnify them in certain circumstances. For more information regarding these agreements, see the section titled "Executive compensation — Limitations of liability and indemnification matters."

**Policies and procedures for related person transactions** 

Prior to the completion of this offering, our board of directors will adopt a related person transaction policy setting forth the policies and procedures for the identification, review, and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act of 1933, as amended, any transaction, arrangement, or relationship, or any series of similar transactions, arrangements, or relationships, in which we and a related person were or will be participants and the amount involved exceeds $120,000 (or, if less, 1% of the average of our total assets at year-end for the last two completed fiscal years) including purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, and guarantees of indebtedness. In reviewing and approving any such transactions, our audit committee will consider all relevant facts and circumstances as appropriate, such as the purpose of the transaction, the availability of other sources of comparable products or services, whether the transaction is on terms comparable to those that could be obtained in an arm's length transaction, management's recommendation with respect to the proposed related person transaction, and the extent of the related person's interest in the transaction.

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## Principal and selling stockholders
The following table sets forth information with respect to the beneficial ownership of our capital stock as of February 15, 2023, and as adjusted to reflect the sale of our common stock offered by us and the selling stockholders in this offering assuming no exercise of the underwriters' option to purchase additional shares, for:

• each of our named executive officers;

• each of our directors;

• all of our executive officers and directors as a group;

• each person or group of affiliated persons known by us to beneficially own more than 5% of our common stock; and

• each of the selling stockholders.

We have determined beneficial ownership in accordance with the rules and regulations of the Securities and Exchange Commission, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community property laws.

Applicable percentage ownership before the offering is based on shares of common stock outstanding as of February 15, 2023, assuming (i) the automatic conversion of 169,952,096 shares of our redeemable convertible preferred stock outstanding as of February 15, 2023 into 183,768,391 shares of our common stock and (ii) the issuance of an aggregate of shares of common stock pursuant to the warrant held by IAC Inc., or the IAC Warrant, in connection with this offering, based on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus. Applicable percentage ownership after the offering is based on shares of common stock outstanding immediately after the completion of this offering, assuming no exercise by the underwriters of their option to purchase additional shares. In addition, the following table does not reflect any shares of our common stock that may be purchased in this offering or pursuant to our directed share program described in the section titled "Underwriters — Directed share program." In computing the number of shares beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares subject to options held by the person that are currently exercisable, or exercisable within 60 days of February 15, 2023. However, except as described above, we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person.

Unless otherwise indicated, the address of each beneficial owner listed below is c/o Turo Inc., 111 Sutter Street, Floor 12, San Francisco, California 94104.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Shares beneficially<br>owned before<br>the offering** | **Shares beneficially<br>owned before<br>the offering** | **Shares being<br>offered** | **Shares beneficially<br>owned after<br>the offering** | **Shares beneficially<br>owned after<br>the offering** |
| **Name of beneficial owner** | **Shares** | **%** | **Shares being<br>offered** | **Shares** | **%** |
|  **5% stockholders:** |  |  |  |  |  |
|  IAC Inc.<sup>(1)</sup> | 67523796 |  |  |  |  |
|  Entities affiliated with August Capital<sup>(2)</sup> | 20529239 |  |  |  |  |
|  Canaan IX L.P.<sup>(3)</sup> | 18954956 |  |  |  |  |
|  Entities affiliated with G Squared<sup>(4)</sup> | 17800352 |  |  |  |  |
|  Shasta Ventures II, L.P.<sup>(5)</sup> | 11651064 |  |  |  |  |
|  Entities affiliated with GV<sup>(6)</sup> | 11115783 |  |  |  |  |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Shares beneficially<br>owned before<br>the offering** | **Shares beneficially<br>owned before<br>the offering** | **Shares being<br>offered** | **Shares beneficially<br>owned after<br>the offering** | **Shares beneficially<br>owned after<br>the offering** |
| **Name of beneficial owner** | **Shares** | **%** | **Shares being<br>offered** | **Shares** | **%** |
|  **Directors and named executive officers:** |  |  |  |  |  |
|  Andre Haddad<sup>(7)</sup> | 10127657 |  |  |  |  |
|  Charles Fisher<sup>(8)</sup> | 2298174 |  |  |  |  |
|  Albert Mangahas<sup>(9)</sup> | 751726 |  |  |  |  |
|  Howard Hartenbaum<sup>(2)</sup> | 20529239 |  |  |  |  |
|  Kimberly Jabal<sup>(10)</sup> | 65625 |  |  |  |  |
|  Bonnie Jonas<sup>(11)</sup> | 40625 |  |  |  |  |
|  Deepak Kamra |  |  |  |  |  |
|  Joseph Levin |  |  |  |  |  |
|  Shripriya Mahesh<sup>(12)</sup> | 64400 |  |  |  |  |
|  Brook Porter<sup>(13)</sup> | 40625 |  |  |  |  |
|  Mark Stein |  |  |  |  |  |
|  All directors and executive officers as a<br>group (19 persons)<sup>(14)</sup> | 42975436 |  |  |  |  |
|  **Other selling stockholders:** |  |  |  |  |  |

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\* Represents beneficial ownership of less than 1%. 

(1) Consists of (a) 67,523,796 shares of common stock and
(b) shares of common stock issuable pursuant to the IAC Warrant in connection with this offering. The address of IAC Inc. is 555 West 18<sup>th</sup> Street, New York, New York 10011.

(2) Consists of (a) 19,458,346 shares of common stock held by August Capital V, L.P. for itself and as nominee for August
Capital Strategic Partners V, L.P. and related individuals and (b) 1,070,893 shares of common stock held by August Capital V Special Opportunities, L.P. for itself and as nominee for August Capital Strategic Partners V, L.P. and related individuals,
or collectively, the August V Entities. August Capital Management V, L.L.C. is the general partner of the August V Entities and may be deemed to have sole voting and investment power over the shares held by the August V Entities. Howard Hartenbaum,
a member of our board of directors, and David Hornik are members of August Capital Management V, L.L.C. and may be deemed to have shared voting and investment power with respect to the shares held by the August V Entities. The address of each of
these entities is 445 Sherman Avenue, Suite 230, Palo Alto, California 94306.

(3) Canaan Partners IX LLC, or Canaan Partners IX, is the general partner of Canaan IX L.P., or Canaan IX, and may be
deemed to have sole voting and investment power over the shares held by Canaan IX. Brenton K. Ahrens, Stephen M. Bloch, Wende S. Hutton, Maha S. Ibrahim, Deepak Kamra, and Guy M. Russo are the managers of Canaan Partners IX. Voting and investment
decisions with respect to the shares held by Canaan IX are made by the managers, collectively. The address of Canaan Partners IX and Canaan IX is 285 Riverside Avenue, Suite 250, Westport, Connecticut 06880.

(4) Consists of (a) 4,128,996 shares of common stock held by G Squared IV, SCSp, (b) 3,682,631 shares of common stock held
by G Squared IV, LP, (c) 2,771,079 shares of common stock held by G Squared V, SCSp, (d) 2,402,922 shares of common stock held by G Squared Opportunities ICAV, (e) 2,088,280 shares of common stock held by G Squared Opportunities Fund IV, LLC,
(f) 1,914,132 shares of common stock held by G Squared V, LP, (g) 679,481 shares of common stock held by G Squared Opportunities Fund V LLC, and (g) 132,831 shares of common stock held by G Squared Special Situations Fund LLC. Larry Aschebrook is
the Managing Partner of G Squared Equity Management LP, the investment adviser to each of the aforementioned G Squared funds, and has sole voting and dispositive control over the shares held by such funds. The principal business address of G Squared
is 205 North Michigan Avenue, Suite 3770, Chicago, Illinois 60601.

(5) Shasta Ventures II GP, LLC, or Shasta GP, is the general partner of Shasta Ventures II, L.P., or Shasta LP. Shasta LP
and Shasta GP share voting and investment power with respect to the shares held by Shasta LP. Voting and dispositive decisions with respect to the shares held by Shasta LP are made collectively by the managing members of Shasta GP: Jason Pressman,
Robert Coneybeer, and Tod Francis. The address of Shasta GP and Shasta LP is c/o Shasta Ventures, 2440 Sand Hill Road, Suite 300, Menlo Park, California 94025.

(6) Consists of (a) 10,900,215 shares of common stock held by GV 2010, L.P., or GV 2010, and (b) 215,568 shares of common
stock held by GV 2012, L.P., or GV 2012. GV 2010 GP, L.L.C., or GV 2010 GP, the general partner of GV 2010, Alphabet Holdings LLC, or Alphabet Holdings, the sole member of GV 2010 GP, XXVI Holdings Inc., or XXVI Holdings, the sole member of Alphabet
Holdings, and Alphabet Inc., or Alphabet, the controlling stockholder of XXVI Holdings, may each be deemed to share voting and investment power over the shares held by GV 2010. GV 2012 GP, L.L.C., or GV 2012 GP, the general partner of GV 2012,
Alphabet Holdings, the sole member of GV 2012 GP, XXVI Holdings, the sole member of Alphabet Holdings, and Alphabet, the controlling stockholder of XXVI Holdings, may each be deemed to share voting and investment power over the shares held by GV
2012. The principal business address of GV 2010, GV 2010 GP, GV 2012, GV 2012 GP, Alphabet Holdings, XXVI Holdings, and Alphabet is 1600 Amphitheatre Parkway, Mountain View, California 94043.

(7) Consists of (a) 247,057 shares of common stock held by the Haddad-Delaveau Irrevocable Trust fbo Alexandre
Haddad-Delaveau, or the Alexandre Trust, (b) 247,057 shares of common stock held by the Haddad-Delaveau Irrevocable Trust fbo Alice Haddad-Delaveau, or the Alice Trust, (c) 247,057 shares of common stock held by the Haddad-Delaveau Irrevocable Trust
fbo Laurice Haddad-Delaveau, or the Laurice Trust, (d) 3,338,823 shares of common stock held by the Haddad-Delaveau Living Trust, dated October 28, 2015, or the Haddad-Delaveau Trust, (e) 250,000 shares of common stock held by the Delaveau
Family ALEH-D Trust dated March 9, 2021, or the Delaveau Family ALEH-D Trust, (f) 250,000 shares of common stock held by the Delaveau Family ALIH-D Trust dated March 9, 2021, or the

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Delaveau Family ALIH-D Trust, (g) 250,000 shares of common stock held by the Delaveau Family LH-D Trust dated March 9, 2021, or the Delaveau Family LH-D Trust, (h) 250,000 shares of common stock held by the Haddad Family ALEH-D Trust dated March 9, 2021, or the Haddad Family ALEH Trust, (i) 250,000 shares of common stock held by the Haddad Family ALIH-D Trust dated March 9, 2021, or the Haddad Family ALIH-D Trust, (j) 250,000 shares of common stock held by the Haddad Family LH-D Trust dated March 9, 2021, or the Haddad Family LH-D Trust, (k) 500,000 shares of common stock issuable upon the exercise of stock options held by the Haddad-Delaveau Trust that are exercisable within 60 days of February 15, 2023, all of which are vested as of such date, and (l) 4,047,663 shares of common stock issuable upon the exercise of stock options held by Mr. Haddad that are exercisable within 60 days of February 15, 2023, 2,955,754 of which are vested as of such date. Mr. Haddad is the co-trustee of the Alexandre Trust, the Alice Trust, the Laurice Trust, and the Haddad-Delaveau Trust, or collectively, the Haddad-Delaveau Trusts, and shares voting and dispositive power with respect to the shares held by the Haddad-Delaveau Trusts with his spouse. Mr. Haddad is the trustee of the Delaveau Family ALEH-D Trust, the Delaveau Family ALIH-D Trust, and the Delaveau Family LH-D Trust, or collectively, the Delaveau Family Trusts, and has sole voting and dispositive power with respect to the shares held by the Delaveau Family Trusts. Mr. Haddad may be deemed to have voting and dispositive power with respect to the shares held by the Haddad Family ALEH-D Trust, the Haddad Family ALIH-D Trust, and the Haddad Family LH-D Trust, over which Mr. Haddad's spouse is trustee. <br>

(8) Consists of 2,298,174 shares of common stock issuable upon the exercise of stock options that are exercisable within 60
days of February 15, 2023, 1,122,009 of which are vested as of such date.

(9) Consists of (a) 35,000 shares of common stock and (b) 716,726 shares of common stock issuable upon the exercise of
stock options that are exercisable within 60 days of February 15, 2023, 495,887 of which are vested as of such date.

(10) Consists of 65,625 shares of common stock issuable upon the exercise of stock options that are exercisable within 60
days of February 15, 2023 , all of which are vested as of such date.

(11) Consists of 40,625 shares of common stock issuable upon the exercise of stock options that are exercisable within 60
days of February 15, 2023, all of which are vested as of such date.

(12) Consists of (a) 23,775 shares of common stock held by Tatvam LLC and (b) 40,625 shares of common stock issuable upon
the exercise of stock options that are exercisable within 60 days of February 15, 2023, all of which are vested as of such date. Ms. Mahesh is the co-manager of Tatvam LLC and shares voting and dispositive power with respect to the shares held by
Tatvam LLC.

(13) Consists of 40,625 shares of common stock issuable upon the exercise of stock options that are exercisable within 60
days of February 15, 2023, all of which are vested as of such date.

(14) Consists of (a) 28,538,150 shares of common stock and (b) 14,437,286 shares of common stock issuable upon the exercise
of options that are exercisable within 60 days of February 15, 2023, 10,825,817 of which are vested as of such date.

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## Description of capital stock
**General** 

The following is a summary of the rights of our capital stock and some of the provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which will each become effective immediately prior to the completion of this offering, the investors' rights agreement, and relevant provisions of the Delaware General Corporation Law. The descriptions herein are qualified in their entirety by our amended and restated certificate of incorporation, amended and restated bylaws, and investors' rights agreement, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part, as well as the relevant provisions of the Delaware General Corporation Law.

Upon the completion of this offering, our authorized capital stock will consist of 2,200,000,000 shares, all with a par value of $0.001 per share, of which:

• 2,000,000,000 shares are designated as common stock; and

• 200,000,000 shares are designated as preferred stock.

As of December 31, 2022, we had 31,642,548 shares of common stock and 169,952,096 shares of redeemable convertible preferred stock outstanding. After giving effect to (i) the automatic conversion of all outstanding shares of redeemable convertible preferred stock outstanding as of December 31, 2022 into 183,768,391 shares of our common stock and (ii) the issuance of an aggregate of shares of common stock pursuant to the warrant held by IAC Inc. in connection with this offering, based on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, there would have been shares of common stock outstanding as of December 31, 2022 held by 561 stockholders of record.

**Common stock** 

**Voting rights** 

The common stock is entitled to one vote per share on any matter that is submitted to a vote of our stockholders. The affirmative vote of holders of at least 66 2/3% of the voting power of all of the then-outstanding shares of capital stock, voting as a single class, will be required to amend our amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation, including provisions relating to the size of our board of directors, removal of directors, director liability, vacancies on our board of directors, special meetings, stockholder notices, actions by written consent, and exclusive jurisdiction.

Our amended and restated certificate of incorporation that will be in effect immediately prior to the completion of this offering will not provide for cumulative voting for the election of directors.

**Dividends and distributions** 

Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock will be entitled to share equally, identically, and ratably, on a per share basis, with respect to any dividend or distribution of cash or property paid or distributed by us. See the section titled "Dividend policy" for additional information.

**Liquidation rights** 

On our liquidation, dissolution, or winding-up, the holders of common stock will be entitled to share equally, identically, and ratably in all assets remaining after the payment of any liabilities, liquidation preferences and

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accrued or declared but unpaid dividends, if any, with respect to any outstanding preferred stock, unless a different treatment is approved by the affirmative vote of the holders of a majority of the outstanding shares of such affected class, voting separately as a class.

**No preemptive or similar rights** 

Our common stock is not entitled to preemptive rights, and is not subject to conversion, redemption, or sinking fund provisions.

**Fully paid and non-assessable** 

In connection with this offering, our legal counsel will opine that the shares of our common stock to be issued under this offering will be fully paid and non-assessable.

**Preferred stock** 

As of December 31, 2022, we had 169,952,096 shares of our redeemable convertible preferred stock outstanding, which will automatically convert into 183,768,391 shares of our common stock immediately prior to the completion of this offering. Upon the completion of this offering, our board of directors may, without further action by our stockholders, fix the rights, preferences, privileges, and restrictions of up to an aggregate of 200,000,000 shares of preferred stock in one or more series and authorize their issuance. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of our common stock. The issuance of preferred stock could adversely affect the voting power of holders of our common stock, and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring, or preventing a change of control or other corporate action. Upon the completion of this offering, no shares of preferred stock will be outstanding, and we have no present plan to issue any shares of preferred stock.

**Options** 

As of December 31, 2022, we had outstanding options under our equity compensation plans to purchase an aggregate of 26,253,071 shares of our common stock, with a weighted-average exercise price of $3.71 per share.

**Warrants** 

As of December 31, 2022, we had outstanding a warrant to purchase up to an aggregate of shares of our Series E redeemable convertible preferred stock, based on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus. If not exercised in connection with the completion of this offering, this warrant will remain outstanding and become a warrant to purchase common stock. See the section titled "Certain relationships and related party transactions — Series E preferred stock financing and warrant issuance."

**Exchangeable securities** 

As of December 31, 2022, we had outstanding securities exchangeable for up to $51.0 million of shares of our common stock. At any time on or after the later of March 3, 2023 and the earlier of (i) the date that is 60 days following the closing of this offering and (ii) January 1, 2024, the holders of these exchangeable securities may

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exchange up to €27.0 million of such securities for up to the number of shares of our common stock calculated based on ratio of €451.13514 divided by the volume weighted average closing sale price of our common stock as reported by the New York Stock Exchange for the 60-day period ending on the 61st day following the closing of this offering (or if shorter, the period between the date of the closing of this offering and January 1, 2024). Subject to certain restrictions, at any time on or after the earlier of (i) the date that is 60 days following the closing of this offering and (ii) January 1, 2024, the holders of these exchangeable securities may exchange such securities for up to the number of shares of our common stock calculated based on ratio of €451.13514 divided by the volume weighted average closing sale price of our common stock as reported by the New York Stock Exchange for the 60-day period ending on the 61st day following the closing of this offering (or if shorter, the period between the date of the closing of this offering and January 1, 2024), or if the offering has not been consummated by January 1, 2024, the calculation is based upon a fixed price of our common stock at $15.74 per share.

**Registration rights** 

We are party to an amended and restated investors' rights agreement that provides certain holders of our redeemable convertible preferred stock and common stock with certain registration rights as set forth below. The registration of shares of our common stock by the exercise of registration rights described below would enable the holders to sell these shares without restriction under the Securities Act of 1933, as amended, or the Securities Act, when the applicable registration statement is declared or becomes effective. We will pay the registration expenses, other than underwriting discounts and commissions, of the shares registered by the demand, piggyback, and Form S-3 registrations described below.

Generally, in an underwritten offering, the number of shares such holders may include can be cut back by the managing underwriters (if any) subject to specified conditions. The demand, piggyback, and Form S-3 registration rights described below will expire five years after the completion of this offering, of which this prospectus is a part, or with respect to any particular stockholder, such time after the completion of this offering that such stockholder can sell all of its shares entitled to registration rights under Rule 144 of the Securities Act during any 90-day period.

**Demand registration rights** 

Subject to certain exceptions, upon election by the requisite holders, the holders of an aggregate of 184,844,154 shares of our common stock, based on our shares outstanding and as converted to common stock as of December 31, 2022, will be entitled to certain demand registration rights. At any time beginning 180 days after the effective date of the registration statement of which this prospectus forms a part, certain holders of these shares may request that we register all or a portion of the registrable shares. We are obligated to effect only two such registrations. Such request for registration must cover at least that number of registrable shares as would have an anticipated aggregate offering price, net of selling expenses, of at least $7.5 million.

**Piggyback registration rights** 

In connection with this offering, the holders of an aggregate of 188,127,908 shares of our common stock, based on our shares outstanding and as converted to common stock as of December 31, 2022, were entitled to, and the necessary percentage of holders waived, their rights to notice of this offering and to include their shares of registrable securities in this offering. After this offering, in the event that we propose to register any of our securities under the Securities Act, either for our own account or for the account of other security holders, the holders of these shares will be entitled to certain piggyback registration rights allowing the holder to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to a registration relating to (i) the issuance of securities by us or a subsidiary pursuant to a stock option, stock purchase, or

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similar plan, (ii) an SEC Rule 145 transaction, or (iii) a registration in which the only stock being registered is stock issuable upon conversion of debt securities that are also being registered, the holders of these shares are entitled to notice of the registration, and have the right to include their shares in the registration, subject to limitations that the underwriters may impose on the number of shares included in the offering.

**Form S-3 registration rights** 

The holders of an aggregate of 184,844,154 shares of common stock, based on our shares outstanding and as converted to common stock as of December 31, 2022, will be entitled to certain Form S-3 registration rights. At any time beginning 90 days after the effective date of the registration statement of which this prospectus forms a part, the holders of these shares can make a request that we register their shares on Form S-3 if we are qualified to file a registration statement on Form S-3 and if the anticipated aggregate price of the shares offered would be at least $1.0 million. We will not be required to effect more than two registrations on Form S-3 within any 12-month period.

**Anti-takeover effects of Delaware law and our certificate of incorporation and bylaws** 

Some provisions of Delaware law, our amended and restated certificate of incorporation, and our amended and restated bylaws contain or will contain provisions that could make the following transactions more difficult: an acquisition of us by means of a tender offer, a proxy contest or otherwise, or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interest or in our best interests, including transactions which provide for payment of a premium over the market price for our shares.

These provisions, summarized below, are intended to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of the increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.

**Preferred stock** 

Our board of directors will have the authority, without further action by our stockholders, to issue up to 200,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock would enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest, or other means.

**Stockholder meetings** 

Our amended and restated bylaws will provide that a special meeting of stockholders may be called only by our chairperson, chief executive officer, or by a resolution adopted by a majority of our board of directors.

**Requirements for advance notification of stockholder nominations and proposals** 

Our amended and restated bylaws will establish advance notice procedures with respect to stockholder proposals to be brought before a stockholder meeting and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.

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**Elimination of stockholder action by written consent** 

Our amended and restated certificate of incorporation and amended and restated bylaws will eliminate the right of stockholders to act by written consent without a meeting.

**Removal of directors** 

Our amended and restated certificate of incorporation will provide that members of our board of directors may be removed from office by our stockholders with or without cause and, in addition to any other vote required by law, upon the approval of the holders of at least 66 2/3% of the total voting power of all of our outstanding voting stock then entitled to vote in the election of directors.

**Stockholders not entitled to cumulative voting** 

Our amended and restated certificate of incorporation will not permit stockholders to cumulate their votes in the election of directors. Accordingly, the holders of a majority of the outstanding shares of our common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they choose, other than any directors that holders of our preferred stock (if any) may be entitled to elect.

**Delaware anti-takeover statute** 

We are subject to Section 203 of the Delaware General Corporation Law, which prohibits persons deemed to be "interested stockholders" from engaging in a "business combination" with a publicly held Delaware corporation for three years following the date these persons become interested stockholders unless the business combination is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies. Generally, an "interested stockholder" is a person who, together with affiliates and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation's voting stock. Generally, a "business combination" includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by the board of directors.

**Choice of forum** 

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**Amendment of charter provisions** 

The amendment of any of the above provisions, except for the provision making it possible for our board of directors to issue preferred stock, would require approval by holders of at least 66 2/3% of the total voting power of all of our outstanding voting stock.

The provisions of Delaware law, our amended and restated certificate of incorporation, and our amended and restated bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the composition of our board and management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

**Limitations of liability and indemnification** 

See the section titled "Executive compensation — Limitations of liability and indemnification matters."

**Transfer agent and registrar** 

The transfer agent and registrar for our common stock will be Computershare Trust Company, N.A. The transfer agent's address is 150 Royall Street, Canton, MA 02021.

**Exchange listing** 

Our common stock is currently not listed on any securities exchange. We have been approved to list our common stock on the New York Stock Exchange under the symbol "TURO."

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## Shares eligible for future sale
Prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of common stock in the public market, or the perception that such sales may occur, could adversely affect the market price of our common stock. Although we have been approved to list our common stock on the New York Stock Exchange, we cannot assure you that there will be an active public market for our common stock or that an active public market, if established, would be sustained.

Following the completion of this offering, based on the number of shares of our common stock outstanding as of December 31, 2022 and assuming (i) the automatic conversion of 169,952,096 shares of our redeemable convertible preferred stock outstanding as of December 31, 2022 into 183,768,391 shares of common stock immediately prior to the completion of this offering, (ii) the issuance of an aggregate of shares of common stock pursuant to the warrant held by IAC Inc. in connection with this offering, based on an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, (iii) the filing of our amended and restated certificate of incorporation immediately prior to the completion of this offering, and (iv) no exercise of the underwriters' option to purchase additional shares, we will have outstanding an aggregate of approximately shares of common stock.

Of these shares, all shares of common stock sold by us or the selling stockholders in this offering, including any shares sold upon exercise, if any, of the underwriters' option to purchase additional shares of common stock, will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares of common stock purchased by our "affiliates," as that term is defined in Rule 144 under the Securities Act. Shares purchased by our affiliates would be subject to the Rule 144 resale restrictions described below, other than the holding period requirement.

The remaining outstanding shares of our common stock will be, and shares subject to stock options will be upon issuance, deemed "restricted securities" as defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rule 144 or 701 under the Securities Act, each of which is summarized below. We expect that of these shares will be subject to a -day lock-up period under the lock-up agreements and market standoff agreements described below.

As a result of the lock-up agreements and market standoff provisions described below and the provisions of our amended and restated investors' rights agreement described in the section titled "Description of capital stock," and subject to the provisions of Rule 144 or Rule 701 under the Securities Act, shares of our common stock will be available for sale in the public market as follows:

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|:---|:---|
| **Earliest date available for sale in the public market** | **Number of shares of common stock<sup>(1)</sup>** |
| Beginning on the second trading day after the earlier of the date we furnish an earnings release or file a quarterly or annual report for the first quarter after the most recent period for which financial statements are included in this prospectus, or the first release. | Up to million shares held by or issuable to our current and former employees, consultants, and contractors (but excluding our current executive officers and directors), or the employee stockholders, or trusts for the direct or indirect benefit of employee stockholders or immediate family members of employee stockholders, or collectively, estate planning transferees. Excludes securities held by our current executive officers and directors. |

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|:---|:---|
| For employee stockholders and estate planning transferees, beginning on the second trading day after the earlier of the date we furnish an earnings release or file a quarterly or annual report for the second quarter following the most recent period for which financial statements are included in this prospectus, or the second post-offering earnings announcement. | Up to million additional shares held by or issuable to employee stockholders and estate planning transferees, plus any first release eligible shares held by such holders not sold during the first release, provided the date of any sale is at least 90 days after the date of this prospectus and the sale is in accordance with our insider trading policy.  |
| For our current executive officers and directors and any other of our stockholders that are not employee stockholders or estate planning transferees, on or after the commencement of trading on the second trading day after the second post-offering earnings announcement, the earliest date on which, for 10 trading days out of any 15-consecutive full trading day period ending on such date, the last reported closing price of our common stock on the New York Stock Exchange is at least 25% greater than the initial public offering price per share set forth on the cover page of this prospectus. | Up to million shares held by or issuable to our current executive officers and directors and any other of our stockholders that are not employee stockholders or estate planning transferees, provided the date of any sale is at least 90 days after the date of this prospectus and the sale is in accordance with our insider trading policy. |
| The earlier of (i) the close of trading on the first trading day immediately after we furnish an earnings release or file a quarterly report or annual report for the third quarter following the most recent period for which financial statements are included in this prospectus and (ii) the commencement of trading on the 181<sup>st</sup> day after the date of this prospectus. | All remaining shares held by our stockholders not previously eligible for sale, subject to volume limitations applicable to "affiliates" under Rule 144 as described below. |

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(1) Amounts shown do not include additional shares that may be eligible for sale in the public market during the lock-up period in order to satisfy tax obligations in connection with a vesting event of our securities, the settlement of restricted stock units, or RSUs, or the payment due for the exercise of options (including a
transfer to us for the "net" or "cashless" exercise of options) or other rights to purchase our securities, in all such cases pursuant to equity awards granted under a stock incentive plan or other equity award plan. On the
settlement dates of the RSUs that are scheduled to vest after the closing of this offering, we must withhold income taxes at applicable minimum statutory rates based on the then-current value of the common stock underlying the portions of such RSUs
that vest on such dates. The lock-up agreements described below in the sections titled "— Lock-up agreements and market standoff provisions" and
"Underwriters" allow holders of our equity awards, including our officers subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, to sell shares of our common stock
in the open market to cover any taxes owed, provided, that, if required, any public report or filing under Section 16 of the Exchange Act will clearly indicate in the footnotes thereto that such transfer was solely pursuant to the circumstances
described in the lock-up agreement. The actual number of shares eligible for sale in the public market in connection with tax obligations may differ based on holders' personal tax rates, and if the prices
at which holders of our equity awards are able to sell their shares upon vesting or exercising, as applicable, were to decrease from the assumed initial public offering price of
$ per share, such holders may sell additional shares to satisfy their tax obligations.

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**Lock-up agreements and market standoff provisions** 

We, and all of our directors, executive officers, the selling stockholders, and the holders of substantially all of our common stock and securities exercisable for or convertible into our common stock outstanding upon the completion of this offering, or the lock-up parties, are subject to lock-up agreements or agreements with market standoff provisions pursuant to which they have agreed, or will agree, that, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, on behalf of the underwriters, we and they will not, and will not publicly disclose an intention to, during the 180 days after the date of this prospectus, or the lock-up period:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right, or warrant to purchase, lend, make any short sale, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock and securities directly or indirectly convertible into or exchangeable or
exercisable for our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) enter into any swap, hedging transaction, or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of shares of our common stock or securities directly or indirectly convertible into or exchangeable or exercisable for our common stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) without the prior written consent on the Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, make any
demand for or exercise any right with respect to, the registration of any shares of our common stock or any securities convertible into or exercisable or exchangeable for common stock with the Securities and Exchange Commission,

whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash, or otherwise. Approximately % of our outstanding common stock and securities exercisable for or convertible into our common stock are subject to restrictions imposed by lock-up agreements with the underwriters. The lock-up parties have agreed that the foregoing precludes them from engaging in any hedging or other transactions designed or intended, or which could reasonably be expected to lead to or result in, a sale or disposition of any shares of our common stock or securities directly or indirectly convertible into or exchangeable or exercisable for our common stock, even if any such sale or disposition transaction or transactions would be made or executed by or on behalf of someone other than the lock-up parties.

Notwithstanding the foregoing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) beginning at the commencement of trading on the second trading day after the earlier of the date we furnish an earnings
release or file a quarterly or annual report for the first quarter following the most recent period for which financial statements are included in this prospectus, up to 20% of the shares of our outstanding common stock and securities directly or
indirectly convertible into or exchangeable or exercisable for our common stock held by (i) our current and former employees, consultants, and contractors (but excluding our current executive officers and directors), or the employee
stockholders, or (ii) trusts for the direct or indirect benefit of employee stockholders or immediate family members of employee stockholders, or collectively, estate planning transferees, may be sold, which we refer to as the first release.
For purposes of the first release, the number of shares of common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our common stock that each employee stockholder and estate planning transferee will be
permitted to sell is based on the number of securities held by such person on , or the first measurement date, including all such
securities held by such persons for which all vesting conditions, except a liquidity-based vesting condition, were met as of such date. We refer to the shares that may be sold by employee stockholders during this first release as the first release
eligible shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) (i) beginning at the commencement of trading on the second trading day after we furnish an earnings release or file a
quarterly or annual report for the second quarter following the most recent period for

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which financial statements are included in this prospectus, or such release or report, as applicable, the second post-offering earnings announcement, or (ii) in the case of our current executive officers and directors and any other of our stockholders that are not employee stockholders or estate planning transferees, on or after the commencement of trading on the second trading day after the second post-offering earnings announcement, the earliest date on which, for 10 trading days out of any 15-consecutive full trading day period ending on such date, the last reported closing price of our common stock on the New York Stock Exchange is at least 25% greater than the initial public offering price per share set forth on the cover page of this prospectus, which we refer to as the second release, up to 20% of the shares of our outstanding common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our common stock held by (x) employee stockholders or estate planning transferees, plus any first release eligible shares held by such holders not sold during the first release, and (y) our current executive officers and directors and any other of our stockholders that are not employee stockholders or estate planning transferees, may be sold. During this second release, the number of shares of common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our common stock that each employee stockholder is permitted to sell is based on the number of such securities held by such person on the date of the first measurement date, plus any such securities (and any related, issuable common stock) held by such person that have vested between the first measurement date and the date that is ten days prior to the second post-offering earnings announcement. No sales pursuant to this clause (B) will be permitted unless (1) the date of a contemplated sale is at least 90 days after the date of this prospectus and (2) the sale is in accordance with our insider trading policy. <br>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the lock-up period will terminate commencing on the earlier of (i) the
close of trading on the first trading day after we furnish an earnings release or file a quarterly report or annual report for the third quarter following the most recent period for which financial statements are included in this prospectus and
(ii) the commencement of trading on the 181<sup>st</sup> day after the date of this prospectus.

The lock-up agreements described above are subject to a number of exceptions, including sales of shares on the open market to cover taxes or estimated taxes due as a result of vesting or settlement of restricted stock units during the lock-up period. Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, in their sole discretion, may release the securities subject to the lock-up agreements with the underwriters described above in whole or in part at any time. See the section titled "Underwriters" for information about these exceptions and a further description of these agreements. Upon the expiration of the lock-up period, substantially all of the securities subject to such transfer restrictions will become eligible for sale, subject to the limitations discussed in this section.

The holders of approximately % of our outstanding common stock and securities exercisable for or convertible into our common stock who have not entered into the lock-up agreement with the underwriters have previously entered into agreements that contain market standoff provisions imposing restrictions on the ability of such security holders to offer, sell, or transfer our equity securities for a period of 180 days following the date of this prospectus. The forms and specific restrictive provisions within these market standoff provisions vary significantly. For example, some of these market standoff provisions do not specifically restrict hedging transactions and others may be subject to different interpretations between us and stockholders as to whether they restrict hedging. Sales, short sales, or hedging transactions involving our securities, whether before or after this offering and whether or not we believe them to be prohibited, could adversely affect the price of our common stock.

Certain of our employees, including our executive officers and directors, may from time to time enter into written trading plans that are intended to comply with Rule 10b5-1 under the Exchange Act. Sales under these trading plans would not be permitted except in compliance with, or following the expiration of, the lock-up agreements relating to the offering described above.

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**Rule 144** 

**Affiliate resales of restricted securities** 

In general, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is an affiliate of ours, or who was an affiliate at any time during the 90 days before a sale, who has beneficially owned shares of our capital stock for at least six months would be entitled to sell, upon expiration of the market standoff agreements and lock-up agreements described above, in "broker's transactions" or certain "riskless principal transactions" or to market makers, a number of shares within any three-month period that does not exceed the greater of:

• 1% of the number of shares of our common stock then outstanding, which will equal approximately
 shares immediately after this offering; or

• the average weekly trading volume in our common stock on the New York Stock Exchange during the four calendar weeks
preceding the filing of a notice on Form 144 with respect to such sale.

Affiliate resales under Rule 144 are also subject to the availability of current public information about us. In addition, if the number of shares being sold under Rule 144 by an affiliate during any three-month period exceeds 5,000 shares or has an aggregate sale price in excess of $50,000, the seller must file a notice on Form 144 with the Securities and Exchange Commission and the New York Stock Exchange concurrently with either the placing of a sale order with the broker or the execution of a sale directly with a market maker.

**Non-affiliate resales of restricted securities** 

In general, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who is not an affiliate of ours at the time of sale, and has not been an affiliate at any time during the three months preceding a sale, and who has beneficially owned shares of our capital stock for at least six months but less than a year, is entitled to sell such shares subject only to the availability of current public information about us. If such person has held our shares for at least one year, such person can resell under Rule 144(b)(1) without regard to any Rule 144 restrictions, including the 90-day public company requirement and the current public information requirement.

Non-affiliate resales are not subject to the manner of sale, volume limitation, or notice filing provisions of Rule 144.

**Rule 701** 

In general, under Rule 701, any of our employees, directors, officers, consultants, or advisors who purchases shares from us in connection with a compensatory stock or option plan or other written agreement before the effective date of a registration statement under the Securities Act is entitled to sell such shares 90 days after such effective date in reliance on Rule 144. Securities issued in reliance on Rule 701 are restricted securities and, subject to the contractual restrictions described above, beginning 90 days after the date of this prospectus, may be sold by persons other than "affiliates," as defined in Rule 144, subject only to the manner of sale provisions of Rule 144 and by "affiliates" under Rule 144 without compliance with its one-year minimum holding period requirement. However, substantially all Rule 701 shares are subject to lock-up agreements and/or market standoff as described elsewhere in this prospectus and will become eligible for sale upon the expiration of the restrictions set forth in those agreements.

**Form S-8 registration statement** 

We intend to file one or more registration statements on Form S-8 under the Securities Act to register all shares of common stock subject to outstanding stock options and common stock issued or issuable under our

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2023 Equity Incentive Plan, our 2023 Employee Stock Purchase Plan, our 2020 Equity Incentive Plan, and our 2010 Equity Incentive Plan, as applicable. We expect to file the registration statement covering shares offered pursuant to these stock plans shortly after the date of this prospectus, permitting the resale of such shares by non-affiliates in the public market without restriction under the Securities Act and the sale by affiliates in the public market subject to compliance with the resale provisions of Rule 144, in each case, subject to vesting restrictions and any applicable market standoff agreements and the lock-up agreement.

**Registration rights** 

As of December 31, 2022, holders of up to 188,127,908 shares of our common stock, which includes all of the shares of common stock issuable upon the automatic conversion of our redeemable convertible preferred stock immediately prior to the completion of this offering, or their transferees, will be entitled to various rights with respect to the registration of these shares under the Securities Act upon the completion of this offering and the expiration of lock-up agreements. Registration of these shares under the Securities Act would result in these shares becoming fully tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares purchased by affiliates. See the section titled "Description of capital stock — Registration rights" for additional information. Shares covered by a registration statement will be eligible for sale in the public market upon the expiration or release from the terms of the lock-up agreement, subject to vesting restrictions, and any applicable market standoff agreements.

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## Material U.S. federal income tax consequences to non-U.S. holders of our common stock
The following is a summary of the material U.S. federal income tax consequences to non-U.S. holders (as defined below) of the acquisition, ownership, and disposition of our common stock issued pursuant to this offering. This discussion is not a complete analysis of all potential U.S. federal income tax consequences relating thereto, does not address the potential application of the Medicare contribution tax on net investment income, the alternative minimum tax, or the special tax accounting rules under Section 451(b) of the Internal Revenue Code of 1986, as amended, or the Code, and does not address any estate or gift tax consequences or any tax consequences arising under any state, local, or foreign tax laws, or any other U.S. federal tax laws. This discussion is based on the Code and applicable Treasury Regulations promulgated thereunder, published rulings and administrative pronouncements of the Internal Revenue Service, or IRS, and judicial decisions, all as in effect as of the date hereof. These authorities are subject to differing interpretations and may change, possibly retroactively, resulting in U.S. federal income tax consequences different from those discussed below. We have not requested a ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will agree with such statements and conclusions.

This discussion is limited to non-U.S. holders who purchase our common stock pursuant to this offering and who hold our common stock as a "capital asset" within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all of the U.S. federal income tax consequences that may be relevant to a particular holder in light of such holder's particular circumstances. This discussion also does not consider any specific facts or circumstances that may be relevant to holders subject to special rules under the U.S. federal income tax laws, including:

• certain former citizens or long-term residents of the United States;

• "controlled foreign corporations;"

• "passive foreign investment companies;"

• corporations that accumulate earnings to avoid U.S. federal income tax;

• banks, financial institutions, investment funds, insurance companies, brokers, dealers, or traders in securities;

• tax-exempt organizations and governmental organizations;

• tax-qualified retirement plans;

• "qualified foreign pension funds" as defined in Section 897(l)(2) of the Code and entities all of the
interests of which are held by qualified foreign pension funds;

• persons that own, or have owned, actually or constructively, more than 5% of our common stock at any time;

• persons who have elected to mark securities to market; and

• persons holding our common stock as part of a hedging or conversion transaction or straddle, a constructive sale, or
other risk reduction strategy or integrated investment.

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds our common stock, the U.S. federal income tax treatment of the partnership and the partners thereof generally

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depend on the status of the partner and the activities of the partnership. Partnerships holding our common stock and the partners in such partnerships are urged to consult their tax advisors about the particular U.S. federal income tax consequences to them of holding and disposing of our common stock.

**THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING, AND DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL, OR FOREIGN TAX LAWS AND ANY OTHER U.S. FEDERAL TAX LAWS.** 

**Definition of non-U.S. holder** 

For purposes of this discussion, the term "non-U.S. holder" means any beneficial owner of our common stock that is not a "U.S. person" or a partnership (including any entity or arrangement treated as a partnership) for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:

• an individual who is a citizen or resident of the United States;

• a corporation (or entity treated as a corporation for U.S. federal income tax purposes) created or organized under the
laws of the United States, any state thereof, or the District of Columbia;

• an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

• a trust (1) whose administration is subject to the primary supervision of a U.S. court and which has one or more
U.S. persons who have the authority to control all substantial decisions of the trust or (2) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

**Distributions on our common stock** 

We have not paid dividends on our common stock and do not anticipate paying dividends on our common stock for the foreseeable future. However, if we make cash or other property distributions on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and will first be applied against and reduce a holder's tax basis in our common stock, but not below zero. Any excess will be treated as gain realized on the sale or other disposition of our common stock and will be treated as described under the section titled "— Gain on disposition of our common stock" below.

Subject to the discussions below regarding effectively connected income, backup withholding and Sections 1471 through 1474 of the Code (commonly referred to as FATCA), dividends paid to a non-U.S. holder generally will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends or such lower rate specified by an applicable income tax treaty. To receive the benefit of a reduced treaty rate, a non-U.S. holder must furnish us or our paying agent with a valid IRS Form W-8BEN or IRS Form W-8BEN-E (or applicable successor form) and satisfy applicable certification and other requirements. This certification must be provided to us or our paying agent before the payment of dividends and must be updated periodically. If the non-U.S. holder holds the stock through a financial institution or other agent acting on the non-U.S. holder's behalf, the non-U.S. holder will be required to provide appropriate documentation to the agent, which then will be required to provide certification to us or our paying agent, either directly or through other intermediaries.

If a non-U.S. holder holds our common stock in connection with the conduct of a trade or business in the United States, and dividends paid on our common stock are effectively connected with such holder's U.S. trade or business (and, if required by an applicable tax treaty, are attributable to such holder's permanent

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establishment in the United States), the non-U.S. holder will be exempt from U.S. federal withholding tax. To claim the exemption, the non-U.S. holder must generally furnish a valid IRS Form W-8ECI (or applicable successor form) to us or our paying agent. However, any such effectively connected dividends paid on our common stock generally will be subject to U.S. federal income tax on a net income basis at the regular U.S. federal income tax rates in the same manner as if such holder were a resident of the United States. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.

Non-U.S. holders that do not provide the required certification on a timely basis, but that qualify for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

**Gain on disposition of our common stock** 

Subject to the discussions below regarding backup withholding and FATCA, a non-U.S. holder generally will not be subject to U.S. federal income tax on any gain realized on the sale or other disposition of our common stock, unless:

• the gain is effectively connected with the non-U.S. holder's conduct of a
trade or business in the United States, and if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States;

• the non-U.S. holder is a nonresident alien individual present in the United
States for 183 days or more during the taxable year of the disposition, and certain other requirements are met; or

• our common stock constitutes a "United States real property interest," or USRPI, by reason of our status as a
United States real property holding corporation, or USRPHC, for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the non-U.S. holder's
holding period for our common stock.

The determination of whether we are a USRPHC depends on the fair market value of our USRPIs relative to the fair market value of worldwide real property interests and our other assets used or held for use in a trade or business. We believe that we are not currently and do not anticipate becoming a USRPHC for U.S. federal income tax purposes, although there can be no assurance we will not become a USRPHC in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition of our common stock by a non-U.S. holder will not be subject to U.S. federal income tax if our common stock is "regularly traded" (as defined by applicable Treasury Regulations) on an established securities market, and such non-U.S. holder owned, actually and constructively, 5% or less of our common stock throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the non-U.S. holder's holding period. Prospective investors are encouraged to consult their own tax advisors regarding the possible consequences to them if we are, or were to become, a USRPHC.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular U.S. federal income tax rates in the same manner as if such holder were a resident of the United States. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (unless an applicable income tax treaty provides for different treatment) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Gain described in the second bullet point above will be subject to U.S. federal income tax at a flat 30% rate (or such lower rate specified by an applicable income tax treaty), but may be offset by certain U.S.-source capital losses (even though the individual is not considered a resident of the United States), provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.

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**Information reporting and backup withholding** 

Annual reports are required to be filed with the IRS and provided to each non-U.S. holder indicating the amount of distributions on our common stock paid to such holder and the amount of any tax withheld with respect to those distributions. These information reporting requirements apply regardless of whether such distributions constitute dividends and even if no withholding was required. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. Backup withholding, currently at a 24% rate, generally will not apply to payments to a non-U.S. holder of dividends on or the gross proceeds of a disposition of our common stock provided the non-U.S. holder furnishes the required certification for its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E, or IRS Form W-8ECI, or certain other requirements are met. Backup withholding may apply if the payor has actual knowledge, or reason to know, that the holder is a U.S. person who is not an exempt recipient.

Backup withholding is not an additional tax. If any amount is withheld under the backup withholding rules, the non-U.S. holder should consult with a U.S. tax advisor regarding the possibility of and procedure for obtaining a refund or a credit against the non-U.S. holder's U.S. federal income tax liability, if any.

**FATCA** 

FATCA imposes a U.S. federal withholding tax of 30% on certain payments made to a "foreign financial institution" (as specially defined under these rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding certain U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) or an exemption applies. FATCA also generally will impose a U.S. federal withholding tax of 30% on certain payments made to a non-financial foreign entity unless such entity provides the withholding agent a certification identifying certain direct and indirect U.S. owners of the entity or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes. FATCA currently applies to dividends paid on our common stock. Under applicable Treasury Regulations and administrative guidance, withholding under FATCA would have applied to payments of gross proceeds from the sale or other disposition of stock, but under proposed regulations (the preamble to which specifies that taxpayers are permitted to rely on such proposed regulations pending finalization), no withholding would apply with respect to payments of gross proceeds.

Prospective investors are encouraged to consult with their own tax advisors regarding the possible implications of this legislation on their investment in our common stock.

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## Underwriters
Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC are acting as representatives, have severally agreed to purchase, and we and the selling stockholders have agreed to sell to them, severally, the number of shares indicated below:

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| | |
|:---|:---|
| **Name** | **Number of<br>shares** |
|  Morgan Stanley & Co. LLC |  |
|  J.P. Morgan Securities LLC |  |
|  Allen & Company LLC |  |
|  Citigroup Global Markets Inc. |  |
|  Cowen and Company, LLC |  |
|  D.A. Davidson & Co. |  |
|  WR Securities, LLC |  |
|  Nomura Securities International, Inc. |  |
|  LionTree Advisors LLC |  |
|  Loop Capital Markets LLC |  |
|  Samuel A. Ramirez & Company, Inc. |  |
|  Siebert Williams Shank & Co., LLC |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total: |  |

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The underwriters are offering the shares of common stock subject to their acceptance of the shares from us and the selling stockholders and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the shares of common stock offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriters are obligated to take and pay for all of the shares of common stock offered by this prospectus if any such shares are taken. However, the underwriters are not required to take or pay for the shares covered by the underwriters' option to purchase additional shares described below.

The underwriters initially propose to offer part of the shares of common stock directly to the public at the offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of $ per share less than the public offering price. After the initial offering of the shares of common stock, the offering price and other selling terms may from time to time be varied by the representatives.

We have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to additional shares of common stock at the public offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. The underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of the shares of common stock offered by this prospectus. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional shares of common stock as the number listed next to the underwriter's name in the preceding table bears to the total number of shares of common stock listed next to the names of all underwriters in the preceding table.

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The following table shows the per share and total public offering price, underwriting discounts and commissions, and proceeds before expenses to us and the selling stockholders. These amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase up to an additional shares of common stock.

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| | | | |
|:---|:---|:---|:---|
|  | | **Total** | **Total** |
|  |<br>**Per<br>share** | **No**<br>**exercise** | **Full**<br>**exercise** |
|  Public offering price | $| $| $|
|  Underwriting discounts and commissions to be paid by: | $| $| $|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Us |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The selling stockholders |  |  |  |
|  Proceeds, before expenses, to us | $| $| $|
|  Proceeds, before expenses, to the selling stockholders | $| $| $|

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The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are approximately $. We have agreed to reimburse the underwriters for expenses relating to clearance of this offering with the Financial Industry Regulatory Authority of up to $.

The underwriters have informed us that they do not intend sales to discretionary accounts to exceed 5% of the total number of shares of common stock offered by them.

We have been approved to list our common stock on the New York Stock Exchange under the trading symbol "TURO."

As disclosed above, approximately % of stockholders are subject to lock-up agreements, or such parties, the lock-up parties, and have agreed that, subject to certain exceptions, without the prior written consent of Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, on behalf of the underwriters, we and they will not, and will not publicly disclose an intention to, during the 180 days after the date of this prospectus, or the lock-up period:

(1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right, or warrant to purchase, lend, make any short sale, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock and securities directly or indirectly convertible into or exchangeable or
exercisable for our common stock;

(2) enter into any swap, hedging transaction, or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of shares of our common stock or securities directly or indirectly convertible into or exchangeable or exercisable for our common stock; or

(3) without the prior written consent on the Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, make any demand
for or exercise any right with respect to, the registration of any shares of our common stock or any securities convertible into or exercisable or exchangeable for common stock with the Securities and Exchange Commission,

whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash, or otherwise. The lock-up parties have agreed that the foregoing precludes them from engaging in any hedging or other transactions designed or intended, or which could reasonably be expected to lead to or result in, a sale or disposition of any shares of our common stock or securities directly or indirectly convertible into or exchangeable or exercisable for our common stock, even if any such sale or disposition transaction or transactions would be made or executed by or on behalf of someone other than the lock-up parties.

Notwithstanding the foregoing:

(A) beginning at the commencement of trading on the second trading day after the earlier of the date we furnish an earnings
release or file a quarterly or annual report for the first quarter following the most recent

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period for which financial statements are included in this prospectus, up to 20% of the shares of our outstanding common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our common stock held by (i) our current and former employees, consultants, and contractors (but excluding our current executive officers and directors), or the employee stockholders, or (ii) trusts for the direct or indirect benefit of employee stockholders or immediate family members of employee stockholders, or collectively, estate planning transferees, may be sold, which we refer to as the first release. For purposes of the first release, the number of shares of common stock and securities directly or indirectly convertible into or exchangeable or exercisable for our common stock that each employee stockholder and estate planning transferee will be permitted to sell is based on the number of securities held by such person on , or the first measurement date, including all such securities held by such persons for which all vesting conditions, except a liquidity-based vesting condition, were met as of such date. We refer to the shares that may be sold by employee stockholders during this first release as the first release eligible shares. <br>

(B) (i) beginning at the commencement of trading on the second trading day after we furnish an earnings release or file a
quarterly or annual report for the second quarter following the most recent period for which financial statements are included in this prospectus, or such release or report, as applicable, the second post-offering earnings announcement, or (ii) in
the case of our current executive officers and directors and any other of our stockholders that are not employee stockholders or estate planning transferees, on or after the commencement of trading on the second trading day after the second
post-offering earnings announcement, the earliest date on which, for 10 trading days out of any 15-consecutive full trading day period ending on such date, the last reported closing price of our common stock on the New York Stock Exchange
is at least 25% greater than the initial public offering price per share set forth on the cover page of this prospectus, which we refer to as the second release, up to 20% of the shares of our outstanding common stock and securities directly or
indirectly convertible into or exchangeable or exercisable for our common stock held by (x) employee stockholders or estate planning transferees, plus any first release eligible shares held by such holders not sold during the first release, and (y)
our current executive officers and directors and any other of our stockholders that are not employee stockholders or estate planning transferees, may be sold. During this second release, the number of shares of common stock and securities directly
or indirectly convertible into or exchangeable or exercisable for our common stock that each employee stockholder is permitted to sell is based on the number of such securities held by such person on the date of the first measurement date, plus any
such securities (and any related, issuable common stock) held by such person that have vested between the first measurement date and the date that is ten days prior to the second post-offering earnings announcement. No sales pursuant to this clause
(B) will be permitted unless (1) the date of a contemplated sale is at least 90 days after the date of this prospectus and (2) the sale is in accordance with our insider trading policy.

(C) the lock-up period will terminate commencing on the earlier of (i) the close of trading on the first trading day after
we furnish an earnings release or file a quarterly report or annual report for the third quarter following the most recent period for which financial statements are included in this prospectus and (ii) the commencement of trading on the 181st day
after the date of this prospectus.

See the section titled "Shares eligible for future sale" for information about the number of shares of our common stock, excluding shares sold in this offering, that may be eligible for sale during the first release and the second release.

The restrictions on the lock-up parties set forth above are subject to certain exceptions, including with respect to:

(i) transactions relating to common stock or any securities directly or indirectly convertible into or exchangeable or
exercisable for our common stock acquired in this offering or in open market transactions after the completion of this offering, provided that no filing under Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange
Act, is required or voluntarily made during the lock-up period;

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(ii) transfers of our common stock or any securities directly or indirectly convertible into or exchangeable or exercisable
for our common stock as bona fide gifts, a charitable contribution, or for bona fide estate planning purposes, provided that the transferee enters into a lock-up agreement with the underwriters and no filing under Section 16(a) of the Exchange
Act, reporting a reduction in beneficial ownership of shares of common stock is required or voluntarily made during the lock-up period;

(iii) transfers of our common stock or any securities directly or indirectly convertible or exchangeable or exercisable for
our common stock by will or intestacy upon death of the lock-up party, to any immediate family member of the lock-up party, or to any trust for the direct or indirect benefit of the lock-up party or the immediate family of the lock-up party, or if
the lock-up party is a trust, to a trustor or beneficiary of the trust or to the estate of a beneficiary of the trust, provided that the transferee enters into a lock-up agreement with the underwriters and no filing under Section 16(a) of the
Exchange Act, reporting a reduction in beneficial ownership of shares of common stock is required or voluntarily made during the lock-up period;

(iv) if the lock-up party is a corporation, partnership, limited liability company, trust, or other business entity,
transfers of our common stock or any securities directly or indirectly convertible into or exchangeable or exercisable for our common stock to another corporation, partnership, limited liability company, trust, or other business entity that is an
affiliate (or, in each case, its nominee or custodian), or distributions of our common stock or any securities directly or indirectly convertible into or exchangeable or exercisable for our common stock to the limited partners, limited liability
company members, or shareholders of the lock-up party, provided that the transferee enters into a lock-up agreement with the underwriters and no filing under Section 16(a) of the Exchange Act, reporting a reduction in beneficial ownership of
shares of common stock is required or voluntarily made during the lock-up period;

(v) the establishment or amendment on behalf of one of our stockholders, officers, or directors of trading plans under
Rule 10b5-1 under the Exchange Act, provided that such plans do not provide for the transfer of common stock or any securities directly or indirectly convertible into or exchangeable or exercisable for our common stock during the lock-up period
and to the extent a public announcement or filing under the Exchange Act, if any, is required or voluntarily made regarding the establishment of such plan, such announcement or filing will include a statement to the effect that no transfer of common
stock may be made under such plan during the lock-up period;

(vi) transfers of our common stock or any securities directly or indirectly convertible into or exchangeable or exercisable
for our common stock that occur by operation of law pursuant to a qualified domestic order, or in connection with a divorce settlement or other court order, provided that the transferee enters into a lock-up agreement with the underwriters and any
filing required under Section 16(a) of the Exchange Act during the lock-up period will indicate in the footnotes that the filing relates to the circumstances described in the lock-up agreement;

(vii) transfers or sales of common stock or any securities directly or indirectly convertible into or exchangeable or
exercisable for our common stock to satisfy any tax, including estimated tax, remittance or other payment obligations arising in connection with a vesting event of our securities, the settlement of restricted stock units, or the payment due for the
exercise of options (including a transfer to us for the "net" or "cashless" exercise of options) or other rights to purchase our securities, in all such cases pursuant to equity awards granted under our stock incentive plan or
other equity award plan described in this prospectus, provided that any remaining common stock received upon vesting, settlement, or exercise will be subject to the terms of the lock-up agreement and any filing required under Section 16(a) of
the Exchange Act during the lock-up period will indicate in the footnotes that the filing relates to the circumstances described in the lock-up agreement;

(viii) transfers of our common stock or any securities directly or indirectly convertible into or exchangeable or exercisable
for our common stock to us pursuant to any right to repurchase arising upon termination of the

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lock-up party's employment with us, provided that such repurchase right is pursuant to contractual agreements with us and any filing required under Section 16(a) of the Exchange Act during the lock-up period will indicate in the footnotes that the filing relates to the circumstances described in the lock-up agreement; and <br>

(ix) transfers of our common stock or any securities directly or indirectly convertible into or exchangeable or exercisable
for our common stock in connection with a bona fide third-party tender offer, merger, consolidation, or other similar transaction that is made to all holders of common stock, involves a change of control and is approved by our board of directors,
provided that if such transaction is not completed, all such securities would remain subject to the restrictions set forth above;

The lock-up restrictions described above do not apply to us with respect to certain transactions, including in connection with (1) the sale of our common stock to the underwriters pursuant to the underwriting agreement related to this offering; (2) the issuance of shares of our common stock or securities convertible into or exercisable for our common stock pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants or options (including net exercise), in each case outstanding on the date of the underwriting agreement and described in this prospectus; (3) grants of stock options, stock awards, restricted stock, restricted stock units, or other equity awards and the issuance of shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock (whether upon the exercise of stock options or otherwise) to our employees, officers, directors, advisors, or consultants, in each case pursuant to the terms of an equity compensation plan in effect on the date of the underwriting agreement and described in this prospectus, and provided that each recipient of such grant shall execute and deliver a signed lock-up agreement; (4) our facilitating the establishment of trading plans on behalf of our stockholders, officers, directors, or employees pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of our common stock, provided that (a) such plans do not provide for the transfer of shares of our common stock during the lock-up period (except to the extent otherwise allowed pursuant to the terms of the lock-up agreements described above) and (b) to the extent we are required to or voluntarily make a public announcement or filing under the Exchange Act regarding the establishment or amendment of such plan, such announcement or filing must include a statement to the effect that no transfer of our common stock may be made under such plan during the lock-up period; (5) the filing of any registration statement on Form S-8 relating to securities (i) granted or to be granted pursuant to any equity compensation plan in effect on the date of the underwriting agreement and described in this prospectus or (ii) otherwise eligible to be included on a registration statement on Form S-8 and described in this prospectus or (6) our issuance, sale, or entry into an agreement providing for the issuance or sale of our common stock, or securities convertible into, exercisable for, or which are otherwise exchangeable for or represent the right to receive our common stock in connection with acquisitions or other strategic transactions in an amount not to exceed 5% of the total number of shares of common stock outstanding immediately following the completion of this offering, provided that the recipient of any such shares of our common stock or other securities issued or granted pursuant to clauses (3) and (6) during the lock-up period shall enter into a lock-up agreement with Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, on behalf of the underwriters.

If, prior to the termination of the lock-up period, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC enter into an agreement with any officer, director, or holder of at least one percent of the our then-outstanding shares of common stock and such other agreements waives, terminates, or suspends an existing lock-up restriction, in whole or in part, permanently or for a limited period of time, then the lock-up agreement with such person shall be deemed to be automatically modified without further action, so the lock-up restrictions in the lock-up agreement are also waived, terminated, or suspended on the same terms and for the same percentage of such person's holdings in our common stock. This release shall not apply for releases granted from any lock-up restrictions for an amount less than or equal to our total outstanding shares of common stock or with respect to any primary or secondary underwritten public offering.

In addition, each lock-up party has agreed that, without the prior written consent of Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, on behalf of the underwriters, it will not make any demand for, or exercise any

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right in connection with the offering with respect to, the registration of any shares of common stock or any security convertible into or exercisable or exchangeable for common stock.

Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC, on behalf of the underwriters, may release the securities subject to the lock-up agreements with the underwriters described above in whole or in part at any time.

Approximately % of our outstanding common stock and securities exercisable for or convertible into our common stock are subject to restrictions imposed by lock-up agreements with the underwriters. We have a large number of stockholders and such stockholders have acquired their interests over an extended period of time and pursuant to a number of different agreements containing a variety of terms governing restrictions on the sale, short sale, transfer, hedging, pledging, or other disposition of their interests in our equity. The holders of approximately % of our outstanding common stock and securities exercisable for or convertible into our common stock who have not entered into the lock-up agreement with the underwriters have previously entered into agreements that contain market standoff provisions imposing restrictions on the sale, loan, granting of any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any of our securities, or entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of our securities. Parties to the market standoff agreements are subject to the restrictions and lock-up periods of the lock-up agreements entered into with the underwriters and described elsewhere in this prospectus. The forms and specific restrictive provisions within these market standoff provisions vary significantly. For example, some of these market standoff agreements do not specifically restrict hedging transactions and others may be subject to different interpretations between us and stockholders as to whether they restrict hedging. Sales, short sales, or hedging transactions involving our securities, whether before or after this offering and whether or not we believe them to be prohibited, could adversely affect the price of our common stock. In addition, Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC may waive the lock-up agreements entered into by holders of our securities with the underwriters before they expire.

In order to facilitate the offering of the common stock, the underwriters may engage in transactions that stabilize, maintain, or otherwise affect the price of the common stock. Specifically, the underwriters may sell more shares than they are obligated to purchase under the underwriting agreement, creating a short position. A short sale is covered if the short position is no greater than the number of shares available for purchase by the underwriters under the over-allotment option. The underwriters can close out a covered short sale by exercising the over-allotment option or purchasing shares in the open market. In determining the source of shares to close out a covered short sale, the underwriters will consider, among other things, the open market price of shares compared to the price available under the over-allotment option. The underwriters may also sell shares in excess of the over-allotment option, creating a naked short position. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in this offering. As an additional means of facilitating this offering, the underwriters may bid for, and purchase, shares of common stock in the open market to stabilize the price of the common stock. These activities may raise or maintain the market price of the common stock above independent market levels or prevent or retard a decline in the market price of the common stock. The underwriters are not required to engage in these activities and may end any of these activities at any time. The underwriters may offer and sell the shares of common stock through certain of their affiliates or other registered broker-dealers or selling agents.

We, the selling stockholders, and the underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or the Securities Act.

A prospectus in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in this offering. The representatives may agree to allocate a number of shares of common stock to underwriters for sale to their online brokerage account holders. Internet

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distributions will be allocated by the representatives to underwriters that may make internet distributions on the same basis as other allocations.

"Wolfe \| Nomura Alliance" is the marketing name used by Wolfe Research Securities and Nomura Securities International, Inc. in connection with certain equity capital markets activities conducted jointly by the firms. Both Nomura Securities International, Inc. and WR Securities, LLC are serving as underwriters in the offering described herein. In addition, WR Securities, LLC and certain of its affiliates may provide sales support services, investor feedback, investor education, and/or other independent equity research services in connection with the offering.

**Directed share program** 

At our request, the underwriters have reserved up to % of the shares of common stock offered by this prospectus for sale at the initial public offering price to eligible hosts and guests in good standing on our platform and certain individuals identified by our officers and directors. Eligible hosts consist of hosts who have met the performance criteria to become All-Star Hosts, reside in the United States or United Kingdom, had, between and , completed a trip as a host, and as of , had at least 95% of rated trips earn five stars. Eligible guests consist of guests who have met the criteria for our Insider Rewards program, reside in the United States, and had, between and , completed a trip as a guest. The number of shares of common stock available for sale to the general public will be reduced to the extent these individuals purchase such reserved shares. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered by this prospectus. None of our directors, executive officers, or employees will purchase shares in the directed share program. We have agreed to indemnify Morgan Stanley & Co. LLC and its affiliates against certain liabilities and expenses, including liabilities under the Securities Act, in connection with the sale of such reserved shares. Shares sold through the directed share program will not be subject to lock-up restrictions.

**Other relationships** 

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing, and brokerage activities. Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and expenses.

In addition, in the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve our securities and instruments. The underwriters and their respective affiliates may also make investment recommendations or publish or express independent research views in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long or short positions in such securities and instruments.

**Pricing of the offering** 

Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives. The factors considered in determining the initial public offering price include our future prospects and those of our industry in general, our sales, earnings and certain other financial and operating information in recent periods, and the price-earnings ratios, price-sales ratios, market prices of securities, and certain financial and operating information of companies engaged in activities similar to ours.

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**Selling restrictions** 

**European Economic Area** 

In relation to each Member State of the European Economic Area, or each, a Relevant Member State, an offer to the public of our common stock may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of our common stock may be made at any time:

• to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation;

• to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus
Regulation), subject to obtaining the prior consent of the representatives for any such offer; or

• in any other circumstances falling within Article 1(4) of the Prospectus Regulation,

provided that no such offer of shares of our common stock shall result in a requirement for the publication by us or any placement agent of a prospectus pursuant to Article 3 of the Prospectus Regulation.

For the purposes of this provision, the expression an "offer to public" in relation to our common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our common stock to be offered so as to enable an investor to decide to purchase our common stock, and the expression "Prospectus Regulation" means Regulation (EU) 2017/1129.

This European Economic Area selling restriction is in addition to any other selling restrictions set out below.

**United Kingdom** 

None of our common stock have been offered or will be offered to the public in the United Kingdom except that our common stock may be offered to the public in the United Kingdom at any time:

• to any legal entity which is a qualified investor as defined in as defined under Article 2 of the U.K. Prospectus
Regulation;

• to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the U.K.
Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or

• in any other circumstances falling within Section 86 of the FSMA,

provided that no such offer or shares of our common stock shall result in a requirement for the publication by us or any placement agent of a prospectus pursuant to Section 85 of the FSMA.

For the purposes of this provision, the expression an "offer to public" in relation to our common stock in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our common stock to be offered so as to enable an investor to decide to purchase our common stock, and the expression "U.K. Prospectus Regulation" means Regulation (EU) 2017/1129 as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, and the expression "FSMA" means the Financial Services and Markets Act 2000.

In addition, in the United Kingdom, this prospectus is only addressed to, and directed only at, qualified investors who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, or the Order, or (ii) high net worth entities and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order, with all such persons together being referred to as relevant persons. Any investment or investment activity to which this prospectus relates is available only to relevant persons and will only be engaged with relevant persons. Any person who is not a relevant person should not act or rely on this prospectus or any of its contents.

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**Canada** 

The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions, and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory of these rights or consult with a legal advisor.

Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

**Hong Kong** 

The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong), or the Companies (Winding Up and Miscellaneous Provisions) Ordinance, or which do not constitute an invitation to the public within the meaning of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong), or the Securities and Futures Ordinance, (ii) to "professional investors" as defined in the Securities and Futures Ordinance and any rules made thereunder or (iii) in other circumstances which do not result in the document being a "prospectus" as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance, and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" in Hong Kong as defined in the Securities and Futures Ordinance and any rules made thereunder.

**Singapore** 

Singapore SFA Product Classification — In connection with Section 309B of the Securities and Futures Act of Singapore, or SFA, and the Capital Markets Products, or CMP, Regulations 2018, unless otherwise specified before an offer of shares, we have determined, and hereby notify all relevant persons (as defined in Section 309A(1) of the SFA), that the shares are "prescribed capital markets products" (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or

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indirectly, to persons in Singapore other than (i) to an institutional investor (as defined under Section 4A, Chapter 289 of the SFA), under Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA or any person pursuant to Section 275(1A) of the SFA and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to conditions set forth in the SFA.

Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor, the securities (as defined in Section 239(1) of the SFA) of that corporation shall not be transferable for six months after that corporation has acquired the shares under Section 275 of the SFA except: (i) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA); (ii) where such transfer arises from an offer in that corporation's securities pursuant to Section 275(1A) of the SFA; (iii) where no consideration is or will be given for the transfer; (iv) where the transfer is by operation of law, (v) as specified in Section 276(7) of the SFA; or (vi) as specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore, or Regulation 32.

Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is a trust (where the trustee is not an accredited investor (as defined in Section 4A of the SFA)) whose sole purpose is to hold investments and each beneficiary of the trust is an accredited investor, the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferable for six months after that trust has acquired the shares under Section 275 of the SFA except: (i) to an institutional investor under Section 274 of the SFA or to a relevant person (as defined in Section 275(2) of the SFA); (ii) where such transfer arises from an offer that is made on terms that such rights or interest are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction (whether such amount is to be paid for in cash or by exchange of securities or other assets); (iii) where no consideration is or will be given for the transfer; (iv) where the transfer is by operation of law; (v) as specified in Section 276(7) of the SFA; or (vi) as specified in Regulation 32.

**Japan** 

No registration pursuant to Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended), or the FIEL, has been made or will be made with respect to the solicitation of the application for the acquisition of the shares of common stock.

Accordingly, the shares of common stock have not been, directly or indirectly, offered or sold and will not be, directly or indirectly, offered or sold in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements, and otherwise in compliance with, the FIEL and the other applicable laws and regulations of Japan.

**For Qualified Institutional Investors, or QII** 

Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the FIEL) in relation to the shares of common stock constitutes either a "QII only private placement" or a "QII only secondary distribution" (each as described in Paragraph 1, Article 23-13 of the FIEL). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEL, has not been made in relation to the shares of common stock. The shares of common stock may only be transferred to QIIs.

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**For non-QII investors** 

Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the FIEL) in relation to the shares of common stock constitutes either a "small number private placement" or a "small number private secondary distribution" (each as is described in Paragraph 4, Article 23-13 of the FIEL). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEL, has not been made in relation to the shares of common stock. The shares of common stock may only be transferred en bloc without subdivision to a single investor.

**Australia** 

This prospectus:

• does not constitute a disclosure document or a prospectus under Chapter 6D.2 of the Corporations Act 2001 (Cth), or the
Corporations Act;

• has not been, and will not be, lodged with the Australian Securities and Investments Commission, or the ASIC, as a
disclosure document for the purposes of the Corporations Act and does not purport to include the information required of a disclosure document for the purposes of the Corporations Act; and

• may only be provided in Australia to select investors who are able to demonstrate that they fall within one or more of
the categories of investors, available under section 708 of the Corporations Act (Exempt Investors).

The shares may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for or buy the shares may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any shares may be distributed in Australia, except where disclosure to investors is not required under Chapter 6D of the Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the shares, you represent and warrant to us that you are an Exempt Investor.

As any offer of shares under this document will be made without disclosure in Australia under Chapter 6D.2 of the Corporations Act, the offer of those securities for resale in Australia within 12 months may, under section 707 of the Corporations Act, require disclosure to investors under Chapter 6D.2 if none of the exemptions in section 708 applies to that resale. By applying for the shares you undertake to us that you will not, for a period of 12 months from the date of issue of the shares, offer, transfer, assign or otherwise alienate those shares to investors in Australia except in circumstances where disclosure to investors is not required under Chapter 6D.2 of the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.

**Brazil** 

The offer and sale of our common stock has not been, and will not be, registered (or exempted from registration) with the Brazilian Securities Commission (Comissão de Valores Mobiliários — CVM) and, therefore, will not be carried out by any means that would constitute a public offering in Brazil under Law No. 6,385, of December 7, 1976, as amended, under CVM Rule No. 400, of December 29, 2003, as amended, or under CVM Rule No. 476, of January 16, 2009, as amended. Any representation to the contrary is untruthful and unlawful. As a consequence, our common stock cannot be offered and sold in Brazil or to any investor resident or domiciled in Brazil. Documents relating to the offering of our common stock, as well as information contained therein, may not be supplied to the public in Brazil, nor used in connection with any public offer for subscription or sale of common stock to the public in Brazil.

**China** 

This prospectus will not be circulated or distributed in the PRC and the shares will not be offered or sold and will not be offered or sold to any person for re-offering or resale directly or indirectly to any residents of the

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PRC except pursuant to any applicable laws and regulations of the PRC. Neither this prospectus nor any advertisement or other offering material may be distributed or published in the PRC, except under circumstances that will result in compliance with applicable laws and regulations.

**France** 

Neither this prospectus nor any other offering material relating to the common stock offered by this prospectus has been or will be submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The common stock has not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus nor any other offering material relating to the common stock has been or will be:

(a) released, issued, distributed, or caused to be released, issued, or distributed to the public in France;

(b) used in connection with any offer for subscription or sale of the notes to the public in France.

Such offers, sales and distributions will be made in France only:

(c) to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint
d'investisseurs), in each case acting for their own account, or otherwise in circumstances in which no offer to the public occurs, all as defined in and in accordance with Articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier;

(d) to investment services providers authorized to engage in portfolio management on behalf of third parties; or

(e) in a transaction that, in accordance with Article L.411-2-I-1°-or-2° -or 3° of the French Code monétaire et
financier and Article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (offre au public).

The common stock may not be distributed directly or indirectly to the public except in accordance with Articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier and applicable regulations thereunder.

**Kuwait** 

The common stock has not been authorized or licensed for offering, marketing or sale in the State of Kuwait. The distribution of this prospectus and the offering and sale of the common stock in the State of Kuwait is restricted by law unless a license is obtained from the Kuwait Ministry of Commerce and Industry in accordance with Law 31 of 1990. Persons into whose possession this prospectus comes are required by us and the international underwriters to inform themselves about and to observe such restrictions. Investors in the State of Kuwait who approach us or any of the international underwriters to obtain copies of this prospectus are required by us and the international underwriters to keep such prospectus confidential and not to make copies thereof or distribute the same to any other person and are also required to observe the restrictions provided for in all jurisdictions with respect to offering, marketing and the sale of the common stock.

**Qatar** 

The common stock described in this prospectus have not been, and will not be, offered, sold, or delivered, at any time, directly or indirectly in the State of Qatar in a manner that would constitute a public offering. This prospectus has not been, and will not be, registered with or approved by the Qatar Financial Markets Authority or Qatar Central Bank and may not be publicly distributed. This prospectus is intended for the original recipient only and must not be provided to any other person. It is not for general circulation in the State of Qatar and may not be reproduced or used for any other purpose.

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**Saudi Arabia** 

This document may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Offers of Securities Regulations as issued by the board of the Saudi Arabian Capital Market Authority, or the CMA, pursuant to resolution number 2-11-2004 dated 4 October 2004 as amended by resolution number 1-28-2008, as amended, or the CMA Regulations. The CMA does not make any representation as to the accuracy or completeness of this document and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this document. Prospective purchasers of the securities offered hereby should conduct their own due diligence on the accuracy of the information relating to the securities. If you do not understand the contents of this document, you should consult an authorized financial adviser.

**Switzerland** 

The shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or the SIX, or on any other stock exchange or regulated trading facility in Switzerland. This document does not constitute a prospectus within the meaning of, and has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the offering, us, or the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority, and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or the CISA. The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

**United Arab Emirates** 

The shares have not been and are not being publicly offered, sold, promoted, or advertised in the United Arab Emirates (including the DIFC) other than in compliance with the laws of the United Arab Emirates (and the DIFC) governing the issue, offering and sale of securities. Further, this prospectus does not constitute a public offer of securities in the United Arab Emirates (including the DIFC) and is not intended to be a public offer. This prospectus has not been approved by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority or the DFSA.

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## Legal matters
The validity of the shares of common stock being offered by this prospectus will be passed upon for us by Cooley LLP, San Francisco, California. Freshfields Bruckhaus Deringer US LLP, Redwood City, California, is acting as counsel to the underwriters in connection with this offering.

## Experts
The consolidated financial statements of Turo Inc. and subsidiaries as of December 31, 2021 and 2022 and for each of the years in the three-year period ended December 31, 2022, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

## Where you can find additional information
We have filed with the Securities and Exchange Commission, or the SEC, a registration statement on Form S-1, including exhibits and schedules, under the Securities Act of 1933, as amended, with respect to the shares of common stock being offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information in the registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.

You can read our SEC filings, including the registration statement, over the internet at the SEC's website at www.sec.gov.

Upon the completion of this offering, we will be subject to the information reporting requirements of the Securities Exchange Act of 1934, as amended, and we will file reports, proxy statements, and other information with the SEC. These reports, proxy statements, and other information will be available for inspection and copying at the website of the SEC referred to above. We also maintain a website at turo.com, at which, following the completion of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.

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## Turo Inc.

## Index to consolidated financial statements

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| | |
|:---|:---|
|  | **Page no.** |
|  [Report of independent registered public accounting firm](#fin145731_1) | F-2 |
|  [Consolidated balance sheets](#fin145731_2) | F-3 |
|  [Consolidated statements of operations](#fin145731_3) | F-4 |
|  [Consolidated statements of comprehensive (loss) income](#fin145731_4) | F-5 |
|  [Consolidated statements of redeemable non-controlling interest, redeemable convertible preferred stock, and stockholders' deficit](#fin145731_5) | F-6 |
|  [Consolidated statements of cash flows](#fin145731_6) | F-7 |
|  [Notes to consolidated financial statements](#fin145731_7) | F-8 |

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## Report of independent registered

## public accounting firm
**To the stockholders and board of directors** 

**Turo Inc.:** 

**Opinion on the consolidated financial statements** 

We have audited the accompanying consolidated balance sheets of Turo Inc. and subsidiaries (the Company) as of December 31, 2021 and 2022, the related consolidated statements of operations, comprehensive (loss) income, redeemable non-controlling interest, redeemable convertible preferred stock, and stockholders' deficit, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.

**Change in accounting principle** 

As discussed in Note 1(kk) to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2022 due to the adoption of Accounting Standards Codification (ASC) 842, *Leases*.

**Basis for opinion** 

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company's auditor since 2017.

San Francisco, California

March 23, 2023

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## Turo Inc.

## Consolidated balance sheets
**(in thousands, except share and per share amounts)** 

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| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  **Assets** |  |  |
|  Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | $245343 | $300953 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable, net | 1629 | 3035 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | 29973 | 55689 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance deposits, current |  | 35681 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Funds held at payment processors | 74999 | 108208 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Funds held for hosts |  | 1971 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 351944 | 505537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restricted cash | 55120 | 34894 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property and equipment, net | 7776 | 12369 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goodwill |  | 30942 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangible assets, net |  | 9258 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease right-of-use assets |  | 20824 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance deposits, noncurrent | 18967 | 75817 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income tax assets |  | 67781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term assets | 3785 | 5734 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $437592 | $763156 |
|  **Liabilities, redeemable non-controlling interests, redeemable convertible preferred stock, and stockholders' deficit** |  |  |
|  Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | $6861 | $18407 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Funds payable to hosts | 58692 | 76783 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt, current |  | 190 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance reserves | 65076 | 123359 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued liabilities | 83930 | 125364 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities, current |  | 4292 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unearned fees | 24002 | 31482 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 238561 | 379877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred stock warrant liability | 145971 | 95247 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities, noncurrent |  | 18996 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt, non-current |  | 884 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other liabilities | 1879 | 1229 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | 386411 | 496233 |
|  Commitments and contingencies (Note 5) |  |  |
|  Redeemable non-controlling interests |  | 33857 |
|  Redeemable convertible preferred stock, $0.001 par value; 170,034,432, shares authorized as of December 31, 2021 and 2022, respectively; 170,034,432 and 169,952,096 shares issued and outstanding as of December 31, 2021 and 2022; liquidation preference of $497,563 and $497,516 as of December 31, 2021 and 2022, respectively | 471311 | 471264 |
|  Stockholders' deficit: |  |  |
|  Common stock, $0.001 par value; 267,000,000 shares authorized as of December 31, 2021 and 2022, respectively; 30,795,020 and 31,642,548, shares issued and outstanding as of December 31, 2021 and 2022, respectively | 31 | 32 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | 35038 | 61723 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (79) | (367) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated deficit | (455120) | (299586) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' deficit | (420130) | (238198) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities, redeemable non-controlling interests, convertible preferred stock, and stockholders' deficit | $437592 | $763156 |

---

See accompanying notes to consolidated financial statements

------

##### [**Table of Contents**](#toc)

## Turo Inc.

## Consolidated statements of operations
**(in thousands, except per share amounts)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  Net revenue | $149905 | $469047 | $746592 |
|  Costs and expenses |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cost of net revenue | 96716 | 199988 | 341510 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operations and support | 13082 | 33546 | 64286 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Product development | 17749 | 33269 | 55082 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales and marketing | 20037 | 52713 | 111297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 58039 | 102975 | 140597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total costs and expenses | 205623 | 422491 | 712772 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income from operations | (55718) | 46556 | 33820 |
|  Other income and (expense), net |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of redeemable convertible preferred stock warrant | (41934) | (85238) | 50724 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other income and (expense), net | 655 | (594) | 5883 |
|  Other income and (expense), net | (41279) | (85832) | 56607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before provision for income taxes | (96997) | (39276) | 90427 |
|  Provision for (benefit from) income taxes | 86 | 1106 | (64237) |
|  Net (loss) income | $(97083) | $(40382) | $154664 |
|  Add: net loss attributable to non-controlling interests |  |  | 870 |
|  Net (loss) income for Turo Inc. | $(97083) | $(40382) | $155534 |
|  Deemed dividend attributable to repurchase of preferred stock |  |  | (653) |
|  Adjustments to redemption value for redeemable non-controlling interests |  |  | (22197) |
|  Undistributed earnings attributable to participating securities |  |  | (119184) |
|  Net (loss) income attributable to Turo Inc. common stockholders | $(97083) | $(40382) | $13500 |
|  Net (loss) income per share attributable to Turo Inc. common stockholders |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $(3.80) | $(1.37) | $0.43 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $(3.80) | $(1.37) | $(1.13) |
|  Weighted-average number of shares outstanding attributable to Turo Inc. common stockholders: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | 25555 | 29380 | 31265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 25555 | 29380 | 32875 |

---

See accompanying notes to consolidated financial statements

------

##### [**Table of Contents**](#toc)

## Turo Inc.

## Consolidated statements of comprehensive (loss) income
**(in thousands)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  Net (loss) income | $(97083) | $(40382) | $154664 |
|  Other comprehensive (loss) income: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in foreign currency translation adjustments | 30 | (38) | (288) |
|  Comprehensive (loss) income including non-controlling interests | (97053) | (40420) | 154376 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Comprehensive loss attributable to non-controlling interests |  |  | 870 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in foreign currency translation attributable to non-controlling interest |  |  | 81 |
|  Comprehensive (loss) income to Turo Inc. | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(97053) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40420) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;155327 |

---

See accompanying notes to consolidated financial statements

------

##### [**Table of Contents**](#toc)

## Turo Inc.

## Consolidated statements of redeemable non-controlling interest, redeemable convertible preferred stock, and stockholders' deficit
**(in thousands, except share amounts)** 

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **Redeemable**<br>**convertible preferred**<br>**stock** | **Redeemable**<br>**convertible preferred**<br>**stock** | **Common stock** | **Common stock** | | | | |
|  |<br>**Redeemable<br>non-controlling<br>interest** | **Shares** | **Amount** | **Shares** | **Amount** |<br>**Additional**<br>**paid-in**<br> **capital** |<br>**Accumulated**<br>**other**<br>**comprehensive** <br>**(loss) income** |<br>**Accumulated**<br>**deficit** |<br>**Total**<br>**stockholders'**<br> **deficit** |
|  Balance as of December 31, 2019 | $— | 169763690 | $469977 | 24857012 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3630 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(71) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(317655) | $(314071) |
|  Issuance of Series E redeemable convertible preferred stock, net of issuance costs of $39 |  | 270742 | 1334 |  |  |  |  |  |  |
|  Issuance of common stock upon exercise of stock options |  |  |  | 1781654 | 2 | 1138 |  |  | 1140 |
|  Stock-based compensation |  |  |  |  |  | 9299 |  |  | 9299 |
|  Translation adjustment |  |  |  |  |  |  | 30 |  | 30 |
|  Net loss |  |  |  |  |  |  |  | (97083) | (97083) |
|  Balance as of December 31, 2020 | $— | 170034432 | $471311 | 26638666 | 27 | 14067 | (41) | (414738) | (400685) |
|  Issuance of common stock upon exercise of stock options |  |  |  | 1244735 | 4 | 6101 |  |  | 6105 |
|  Stock-based compensation |  |  |  |  |  | 15095 |  |  | 15095 |
|  Repurchase of common stock |  |  |  | (397207) |  | (225) |  |  | (225) |
|  Translation adjustment |  |  |  |  |  |  | (38) |  | (38) |
|  Net loss |  |  |  |  |  |  |  | (40382) | (40382) |
|  Balance as of December 31, 2021 | $— | 170034432 | $471311 | 30795020 | 31 | 35038 | (79) | (455120) | (420130) |
|  Issuance of common stock upon exercise of stock options |  |  |  | 1244735 | 1 | 2408 |  |  | 2409 |
|  Stock-based compensation |  |  |  |  |  | 19962 |  |  | 19962 |
|  Repurchase of common stock |  |  |  | (397207) |  | (3638) |  |  | (3638) |
|  Repurchase of Series A-2 redeemable convertible preferred stock |  | (82336) | (47) |  |  | (653) |  |  | (653) |
|  Redeemable non-controlling interest in Brie estimated at fair value upon acquisition | 43333 |  |  |  |  |  |  |  |  |
|  Adjustment to redeemable non-controlling interest to contract carrying value | (31183) |  |  |  |  | 31183 |  |  | 31183 |
|  Accretion adjustment to current redemption value for non-controlling interest | 22197 |  |  |  |  | (22197) |  |  | (22197) |
|  Vesting of Brie Class C shares at fair value | 1374 |  |  |  |  | (1374) |  |  | (1374) |
|  Adjustment to contract carrying value of Brie Class C vested shares | (994) |  |  |  |  | 994 |  |  | 994 |
|  Translation adjustment |  |  |  |  |  |  | (288) |  | (288) |
|  Net (loss) Income | (870) |  |  |  |  |  |  | 155534 | 155534 |
|  Balance as of December 31, 2022 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;33857 | 169952096 | $471264 | 31642548 | $32 | $61723 | $(367) | $(299586) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(238198) |

---

See accompanying notes to consolidated financial statements

------

##### [**Table of Contents**](#toc)

## Turo Inc.

## Consolidated statements of cash flows
**(in thousands)** 

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  **Cash flows from operating activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net (loss) income | $(97083) | $(40382) | $154664 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 3023 | 4188 | 9143 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | 8673 | 14392 | 18613 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of preferred stock warrant liability | 41934 | 85238 | (50724) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income taxes |  |  | (68733) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on asset impairment and disposals | 1816 | 48 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reduction of operating lease right-of-use assets and accretion of operating lease liabilities |  |  | 5403 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities, net of business combinations: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable | 208 | (805) | (1176) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | (3155) | (12969) | (25385) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance Deposits | (400) | (16559) | (92531) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-current assets | 76 | 64 | (153) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | (4753) | 3657 | 10733 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Funds held at payment processors |  | (74999) | (33210) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Funds payable to hosts |  | 36775 | 16119 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Insurance reserves | 4092 | 37002 | 58223 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued and other liabilities | 5497 | 53019 | 40152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unearned fees | (1150) | 19338 | 6038 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities |  |  | (1004) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payments for operating lease liabilities |  |  | (5154) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash (used in) provided by operating activities | (41222) | 108007 | 41019 |
|  **Cash flows from investing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash acquired in acquisition |  |  | 11208 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchases of property and equipment | (130) | (170) | (374) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Capitalized internal-use software | (4118) | (3534) | (8304) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash (used in) provided by investing activities | (4248) | (3704) | 2530 |
|  **Cash flows from financing activities:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from issuance of redeemable convertible preferred stock, net | 1334 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repurchases of common stock and redeemable convertible preferred stock |  | (225) | (4338) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from exercise of stock options | 1140 | 6105 | 2409 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred offering costs paid |  | (3669) | (1172) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Proceeds from Promissory Note | 6573 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayments of Promissory Note |  | (6573) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in funds payable to hosts | (2760) | 13925 | (2690) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by (used in) financing activities | 6287 | 9563 | (5791) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Effect of exchange rate changes on cash and cash equivalents | 30 | (38) | (403) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net (decrease) increase in cash and cash equivalents | (39153) | 113828 | 37355 |
|  Cash, cash equivalents and restricted cash at beginning of year | 225788 | 186635 | 300463 |
|  Cash, cash equivalents and restricted cash at end of year | $186635 | $300463 | $337818 |
|  Supplemental disclosure of other cash flow information: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for income taxes | $70 | $56 | $1616 |
|  Supplemental disclosures of certain noncash financing and investing activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation capitalized as internal-use software | $626 | $703 | $1349 |

---

See accompanying notes to consolidated financial statements

------

##### [**Table of Contents**](#toc)

## Notes to Consolidated Financial Statements
**1. Description of business and summary of significant accounting policies** 

**(a) Description of business** 

Turo Inc., a Delaware corporation (together with its subsidiaries collectively referred to as "the Company" or "Turo"), is a privately held company formed in 2009 and is headquartered in San Francisco, California. The Company operates a peer-to-peer car sharing marketplace that connects hosts and guests (collectively referred to as "customers") online or through mobile devices. The Company currently operates primarily in cities across the United States, Canada, the United Kingdom, France, and Australia, allowing guests to choose from a wide selection of nearby vehicles while hosts can earn extra money to offset the costs of vehicle ownership.

**(b) Liquidity** 

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements for the years ended December 31, 2020 and 2021, the Company incurred net losses of $97.1 million and $40.4 million, respectively. During the year ended December 31, 2022, the Company incurred net income of $154.7 million. During the year ended December 31, 2020, the Company's operations used cash of $41.2 million. During the years ended December 31, 2021 and 2022, the Company's operations provided cash of $108.0 million and $41.0 million, respectively. The Company's primary source of operating funds in recent years has been from revenue generated from sales. In addition, as further discussed in Note 5, Commitments and contingencies, the Company has contingencies for which a negative outcome could potentially have a material impact on its cash resources.

Management's forecast of cash flows for the period through March 23, 2024 (12 months after the issuance date of the financial statements) indicates that the Company will be able to meet its obligations as they become due without supplemental financing.

**(c) Principles of consolidation** 

The consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") and include the consolidated accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated on consolidation.

**(d) Changes to presentation and classification** 

Certain amounts previously presented in the consolidated statement of operations for prior periods have been changed to conform to the current presentation. Costs associated with operations and support, previously reported in cost of net revenue, are now presented as a separate line on the statement of operations. In addition, the Company has removed gross profit presentation, which is not a performance metric used by management in managing the operations of the business. The changes to the presentation and classification had no effect on loss from operations, net loss, previously reported assets, or equity.

**(e) Use of estimates** 

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of

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contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the allowance for doubtful accounts, subrogation receivable and allowance, current insurance deposits, capitalization of and estimated useful life of internal use software, legal loss contingencies accrual, the fair value of preferred stock warrants, the valuation of the Company's stock-based awards, including the determination of the fair value of common stock, the valuation of acquired goodwill and intangible assets, the valuation of deferred tax assets, the assessment of useful lives of long-lived assets, the valuation and assessments of non-controlling interests, insurance liabilities, indirect tax liabilities, and other contingencies.

**(f) Segment information** 

Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (the "CODM") in making decisions regarding resource allocation and performance assessment. The Company's CODM is its Chief Executive Officer. The Company has determined it has one operating and reportable segment as the CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

**(g) Foreign currency** 

The functional currency of the Company's foreign subsidiaries is its respective local currency. Accordingly, all assets and liabilities related to these operations are translated into U.S. dollars at the current exchange rates at the end of each period and recorded as part of a separate component of stockholders' deficit and reported in the consolidated statements of comprehensive (loss) income. Revenue and expenses are translated at average exchange rates in effect during the period. Foreign currency transaction (loss) income is included in the results of operations and has not been material to date.

**(h) Cash and cash equivalents** 

Cash includes demand deposits with banks or financial institutions as well as cash in transit from payment processors. Cash equivalents include short-term, highly liquid investments with original maturities of 90 days or less.

**(i) Restricted cash** 

Restricted cash is pledged as security for letters of credit established by the Company for certain insurance policies, obligations under the Company's facilities leases, and various other airport and municipalities. Restricted cash is classified as current and non-current assets based on the contractual or estimated term of the remaining restriction.

The reconciliation of cash, cash equivalents, and restricted cash to amounts presented in the consolidated statements of cash flows are as follows (in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2020** | **2021** | **2022** |
|  Cash and cash equivalents | $145192 | $245343 | $300953 |
|  Restricted cash | 33451 | 55120 | 34894 |
|  Cash and cash equivalents included in funds held for hosts | 7992 |  | 1971 |
|  Total cash, cash equivalents, and restricted cash | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;186635 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;300463 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;337818 |

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**(j) Concentrations of credit risk** 

Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. The Company's cash, cash equivalents, and restricted cash are generally held with large financial institutions. Deposits held with these financial institutions are in excess of the amount of Federal Deposit Insurance Corporation insured limits provided on such deposits.

As of December 31, 2021 and 2022, no single customer represented more than 10% of accounts receivable, and during the years ended December 31, 2020, 2021, and 2022, no single customer represented more than 10% of the Company's total net revenue.

**(k) Fair value of financial instruments** 

The Company records its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observability used in measuring financial instruments at fair value. This hierarchy requires the Company to use observable market data when available and to minimize the use of unobservable inputs when determining fair value. Financial instruments with readily available quoted prices in active markets generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Financial instruments measured and disclosed at fair value are classified and disclosed based on the observability of inputs used in the determination of fair value as follows:

Level 1: Unadjusted, quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The carrying amounts of cash, cash equivalents, funds held for and payable to hosts, funds held at payment processors, restricted cash, accounts receivable, and accounts payable, approximate their fair values due to their short-term nature. The carrying amount of the Company's preferred stock warrant liability is its fair value. The carrying amount of the Company's debt approximates fair value as the stated interest rate approximates market rates currently available to the Company.

**(l) Accounts receivable, net** 

The majority of the Company's guests pay for trip reservations prior to departing on their trip, generally when the reservation is booked. Accounts receivable primarily represents amounts billed to guests post-trip for incremental trip charges, net of an allowance for credit losses. The allowance for credit losses is based on the Company's assessment of the collectability of accounts. The Company regularly reviews the adequacy of the allowance for credit losses by considering the age of each outstanding invoice, collection history, current market conditions, and reasonable and supportable forecasts of future economic conditions to determine the

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appropriate amount of the allowance. Accounts receivable deemed uncollectible are charged against the allowance for doubtful accounts when identified. The allowance for credit losses was zero as of December 31, 2021 and 2022. The Company recorded bad debt expense of $3.8 million, $4.3 million, $13.4 million for the years ended December 31, 2020, 2021 and 2022, respectively.

**(m) Receivables for property damage claims, net** 

The Company pursues recovery of certain property damage amounts paid out to hosts. These amounts are recorded within prepaid expenses and other current assets in the accompanying consolidated balance sheets and represents the amount of damage the Company expects to recover. The Company maintains a reserve against these amounts based on actual historical data with respect to damage expense and collections.

Receivables for property damage are recorded as a contra-expense (a credit to cost of net revenue in the accompanying consolidated statements of operations). See Note 3, Balance sheet components, for details of the balances.

**(n) Funds held at payment processors, funds held for hosts and funds payable to hosts** 

In 2021, the Company began utilizing a third-party payment processor to maintain and hold funds received from guests payable to hosts until trips are completed and are included in funds held at payment processors as of December 31, 2021.

In May 2022, as a result of the Company's acquisition of OuiCar SAS ("OuiCar") (see Note 6, Acquisition), the Company acquired funds held for hosts and funds payable to hosts, which represented cash received from guests via third-party credit card processors, which flows through a Company bank account for payment to hosts. This cash represents the total amount due to hosts, and as such, a liability for the same amount is recorded to funds payable to the Company's hosts.

**(o) Property and equipment, net** 

Property and equipment, net is stated at cost less accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, generally two to three years, or over the shorter of the useful life or related lease term for leasehold improvements. Maintenance and repairs are charged to expenses as incurred.

When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the respective accounts, and any gain or loss on such sale or disposal is reflected in general and administrative expense in the accompanying consolidated statements of operations.

**(p) Internal-use software development costs** 

The Company capitalizes qualifying internal-use software development costs that are incurred during the app development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed, and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

Capitalized software development costs are included in property and equipment, net. These costs are amortized over the estimated useful life of the software, generally three years, on a straight-line basis. The amortization of internal-use software development costs is included in cost of net revenue in the consolidated statements of operations.

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**(q) Goodwill and intangible assets** 

Goodwill represents the future economic benefits arising from other assets acquired in a business combination not individually identified and separately recognized. Goodwill is measured as the excess of the consideration transferred, the fair value of any noncontrolling interest in the acquiree, and the fair value of any previously held equity interests in the acquiree over the net of the acquisition-date values of the identifiable assets acquired and the liabilities assumed. Goodwill has an indefinite useful life and is tested for impairment in the fourth quarter or whenever events or changes in circumstances indicate that goodwill might be impaired.

Finite-lived intangible assets, which includes acquired developed technology, host and guest relationships, and trademarks are recorded at fair value, net of accumulated amortization, and are amortized using the straight-line method. The Company assesses the impairment of long-lived intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

The Company has not recorded impairment charges on goodwill and finite-lived intangible assets for the periods presented in these consolidated financial statements. Goodwill and intangible assets are recorded in the functional currency of the acquired entity.

**(r) Accounting for impairment of property and equipment** 

The Company evaluates property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group, based on discounted cash flows. The asset impairment losses for the years ended December 31, 2020, 2021 and 2022 were immaterial.

**(s) Insurance deposits** 

The Company has entered into insurance agreements with various third-party insurance providers in order to offer the Company's hosts and guests both liability and property damage protection. Pursuant to some of these agreements, the Company is required to provide cash collateral to the insurance providers to secure deductible loss reimbursements, premium payments, and other obligations. Insurance deposits can be utilized to offset future third-party liability claims incurred. Current insurance deposits represent the Company's best estimate of paid losses to be applied in the next twelve months. Insurance deposits on the consolidated balance sheets contain $19.0 million and $111.5 million associated with collateral paid to insurance providers under these arrangements as of December 31, 2021 and 2022, respectively.

The Company is also required by certain of its insurance providers to provide collateral secured by a standby letter of credit. See Note 5, Commitments and contingencies.

**(t) Deferred offering costs** 

Deferred offering costs of $3.7 million and $4.8 million have been recorded as other long-term assets on the consolidated balance sheet as of December 31, 2021 and 2022, respectively, and consists of expenses incurred in connection with the Company's planned initial public offering ("IPO"), including legal, accounting, printing, and other IPO-related costs. Upon completion of the IPO, these deferred offering costs will be reclassified to stockholders' equity and recorded against the proceeds of the offering. If the Company terminates its planned IPO or if there is a significant delay, all of the deferred offering costs will be immediately written off to operating expenses in the consolidated statements of operations.

**(u) Insurance reserves** 

The Company uses a combination of third-party and self-insurance mechanisms to provide for potential liabilities for certain risks including automobile liability, under-insured motorist, and automobile physical

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damage. The insurance reserves represent the estimated ultimate cost for claims incurred but not paid and claims that have been incurred but not yet reported and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. These estimates are continually reviewed and adjusted as experience develops and new information becomes known.

Liability insurance claims may take several years to completely settle, and the Company has limited historical loss experience. Because of the limited operational history, the Company makes certain assumptions based on currently available information and industry statistics and utilizes generally accepted actuarial methods to estimate the reserves. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, economic and healthcare cost trends, and the results of related litigation. Furthermore, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. Accordingly, actual losses may vary significantly from the estimated amounts reported in the financial statements. Reserves are continually reviewed and adjusted as necessary as experience develops or new information becomes known. However, ultimate results may differ materially from the Company's estimates, which could result in losses over the Company's reserved amounts.

**(v) Freestanding preferred stock warrants** 

The Company's warrants to purchase convertible preferred stock are classified as a liability on the consolidated balance sheets and held at fair value because the warrants are exercisable for contingently redeemable preferred stock, which is classified outside of stockholders' deficit. The warrant liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized as a component of other income and (expense), net. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrants or the completion of a liquidation event, including the closing of a qualifying initial public offering. In situations in which a liquidation event does not occur and there is no preferred stock outstanding, the warrants become exercisable into common stock and accordingly reclassified to stockholders' deficit.

**(w) Revenue recognition** 

The Company generates revenue from facilitating guest bookings of vehicles offered by hosts on the Company's platform (referred to as the "Marketplace service") as well as through offering insurance protection products. The Company generates substantially all revenue from trips booked on its platform.

The Company considers both hosts and guests to be its customers. The Company's Terms of Service ("ToS") are initiated by a guest and approved by the host. At such time, the host agrees to provide the use of the vehicle, and the host and the guest also agree upon the applicable booking value as well as host fees and guest fees (collectively "service fees"). The amounts charged for trip fees for the Marketplace service vary based on factors such as the vehicle type, the day of the week, time of the trip, and the duration of the trip. The Company charges service fees in exchange for certain activities, including the use of the Company's platform, customer support, and payment processing activities. These activities are not distinct from each other and are not separate performance obligations. As a result, these services integrate together to form a single performance obligation, which is to facilitate the booking of a vehicle. The Company's service occurs upon the completion of a check-in event (a "check-in") whereby the guest receives possession of the vehicle for personal use over the specified trip length. The Company recognizes revenue upon check-in as its performance obligation is satisfied upon check-in, and the Company has the right to receive payment for the fulfillment of the performance obligation.

The Company charges service fees to its customers as a percentage of the value of the booking, excluding taxes. The Company collects both the booking value from the guest on behalf of the host and the applicable guest fees owed to the Company using the guest's pre-authorized payment method. After the trip is complete, the Company disburses the booking value to the host, less the fees due from the host to the Company.

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The Company also offers guests the option to purchase, and requires substantially all hosts to purchase, insurance protection products ("Protection Plan Services"). Amounts charged for Protection Plan Services ("Protection Plan Fees") vary based upon the level of insurance protection purchased. The provision of protection services by the Company is a distinct performance obligation as the host and guest benefit from this service separately from the booking of a vehicle, and it represents a separate promise in the contract with the customer. The Company collects Protection Plan Fees from the customer upfront at the same time the service fees are collected. The Company provides Protection Plan Services each day over the duration of the trip, and therefore revenue is recognized ratably over the trip period.

The Company's ToS stipulates that a host may cancel a confirmed booking at any time up to check-in. Therefore, the Company determined that for accounting purposes, each booking is a separate contract with the host and guest, and the contracts are not enforceable until check-in. Since an enforceable contract for accounting purposes is not established until check-in, there were no partially satisfied or unsatisfied performance obligations as of December 31, 2021 and 2022. The service fees collected from customers prior to check-in are recorded as unearned fees. Unearned fees are not considered contract balances under ASC 606-10-50-8 because they are subject to refund in the event of a cancellation. Unearned fees also consists of nonrefundable payments from customers related to trips currently in progress at period end. Unearned fees subject to refund totaled $20.2 million and $26.7 million at December 31, 2021 and 2022, respectively. Unearned fees associated with trips in progress totaled $3.8 million and $4.7 million as of December 31, 2021 and 2022, respectively. These amounts are expected to be fully recognized as revenue within 12 months.

The Company evaluates the presentation of revenue on a gross versus net basis based on whether or not it is the principal (gross) or the agent (net) in the transaction. As part of the evaluation for its Marketplace service, the Company considers whether it controls the right to use the vehicle before control is transferred. Indicators of control that the Company considers include whether the Company is primarily responsible for fulfilling the promise associated with the booking of the vehicle, whether it has inventory risk associated with the vehicle, and whether it has discretion in establishing the prices for the vehicles booked. The Company determined that it does not establish pricing for vehicles listed on its platform and does not control the right to use the host's vehicle at any time before, during, or after completion of a trip booked on the Company's platform. Accordingly, the Company has concluded that it is acting in an agent capacity, and revenue is presented net reflecting the service fees received from the Marketplace service.

The Company has determined it bears the risk of loss or damage to the host vehicle, subject to the provisions and exclusions of its ToS, as it relates to the provision of Protection Plan Services and as such, it is the principal in the transaction as it relates to this performance obligation.

**(i) Refunds and credits** 

In certain instances, the Company issues refunds to customers as part of its customer support activities in the form of cash or credits to be applied to future bookings. The Company accounts for refunds as variable consideration, which results in a reduction to revenue.

The Company evaluates whether the cumulative amount of payments made to customers that are not in exchange for a distinct good or service received from customers exceeds the cumulative revenue earned since inception of the customer relationships. Any cumulative payments in excess of cumulative revenue are presented as a reduction of revenue in the Company's consolidated statements of operations.

**(ii) Incentive programs** 

The Company offers incentives to its customers to attract guests and hosts to use the Turo platform. Guests typically receive credits or discounted fees while hosts typically receive cash incentives. Each of the incentives are described below:

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*Guest Promotions* 

The Company's loyalty program provides qualifying Guests with the opportunity to redeem incentive credit received after the Guest has taken at least two trips, totaling five or more travel days, in the past 12 months. The Company records the incentive as a reduction of revenue at the date it records the corresponding revenue transaction, as the Company does not receive a distinct good or service at the time the incentive is earned.

*Host Incentives* 

The Company offers various incentive programs to hosts, including minimum guaranteed payments and vehicle listing bonus payments. These host incentives are recorded as a reduction to revenue as the Company does not receive a distinct good or service in exchange for the payment or cannot reasonably estimate the fair value of the good or service received.

For the years ended December 31, 2020, 2021 and 2022, payments for incentive programs resulted in reductions to revenue of $6.7 million $23.6 million, and $41.3 million, respectively, and charges to sales and marketing expenses of $0.3 million, $0.2 million, and $0.6 million, respectively.

**(x) Cost of net revenue** 

Cost of net revenue primarily consists of costs associated with the Company's host and guest protection programs and platform costs. Protection program costs include costs of physical damage to host vehicles, offset by amounts subrogated from third-parties, liability insurance premiums, loss reserves, and claims processing, and personnel related expenses. Platform costs include payment processing fees, costs associated with third-party data centers used to host the Company's platform, and amortization of internally developed and acquired developed technology.

**(y) Operations and support** 

Operations and support expense primarily consists of third-party service provider fees and personnel-related expenses associated with customer support provided to hosts and guests via phone, email, and chat.

**(z) Product development** 

Product development expense primarily consists of personnel-related compensation expenses related to data analytics and the design and product development of, and improvements to, the Company's platform, as well as expenses associated with the licensing of third-party software and allocated overhead.

**(aa) Sales and marketing** 

Sales and marketing expense primarily consists of performance marketing and brand marketing. Sales and marketing expense also includes personnel-related compensation expenses to support the Company's marketing initiatives and allocated overhead. These costs are expensed as incurred. Advertising expenses, which comprise the majority of performance marketing amounted to $12.4 million, $40.8 million, and $87.9 million for the years ended December 31, 2020, 2021 and 2022, respectively.

**(bb) General and administrative** 

General and administrative expense primarily consists of personnel-related expenses for executive management and administrative functions, including finance and accounting, legal, governmental relations, and

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human resources, as well as general corporate and director and officer insurance. General and administrative expense also includes reserves for legal loss contingencies, certain professional service fees, allocated overhead, and other expenses such as bad debt expense, chargebacks for fraudulent transactions, and indirect taxes.

**(cc) Loss contingencies** 

The Company is involved in various lawsuits, claims, investigations, and proceedings that arise in connection with its business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. The Company records a liability in accrued expenses and other current liabilities on the consolidated balance sheets when the Company believes that it is both probable that a loss has been incurred and the amount or range can be reasonably estimated. The Company discloses material contingencies when it believes that a loss is not probable but reasonably possible. These accruals are adjusted as additional information becomes available or circumstances change. Legal costs incurred in connection with loss contingencies are expensed as incurred.

**(dd) Change in fair value of redeemable convertible preferred stock warrant liability** 

Change in fair value of redeemable convertible preferred stock warrant liability consists of the net changes in the fair value of the Company's outstanding warrants to purchase redeemable convertible preferred stock that are remeasured at the end of each reporting period. The Company will continue to recognize changes in the fair value of warrants until the warrant is fully exercised, expires, or qualifies for equity classification.

**(ee) Income taxes** 

Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established or adjusted where necessary to reduce deferred tax assets to amounts expected to be realized. The Company evaluates uncertain tax positions taken or expected to be taken in the course of preparing its tax return to determine whether the tax positions are more likely than not of being sustained upon challenge by the applicable tax authority. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained upon examination. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits and penalties in other income and (expense), net.

**(ff) Stock-based compensation** 

The Company measures stock-based compensation expense for all stock-based payment awards granted to employees and directors based on the estimated fair value of the awards on the date of grant.

The fair value of each stock option granted is estimated using the Black-Scholes-Merton option valuation model. Stock-based compensation is recognized net of forfeitures on a straight-line basis over the requisite service period of the awards. The Company estimates forfeitures at the date of grant and revises the estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The fair value of restricted stock units ("RSUs") is estimated based on the fair value of the Company's common stock on the date of grant. The Company grants RSUs that vest upon the satisfaction of both a service-based

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vesting condition and a liquidity event-related performance vesting condition. The fair value of RSUs is recognized as compensation expense over the requisite service period, using the accelerated attribution method net of forfeitures, once the liquidity event-related performance vesting condition becomes probable of being achieved. The Company has not recognized stock-based compensation expense for RSUs as the liquidity event-related performance condition has not been met.

The fair value of the shares of common stock underlying the stock options and RSUs has historically been determined by the Company's board of directors (the "Board of Directors"), as there is no public market for the underlying common stock. The Board of Directors determines the fair value of the Company's common stock by considering a number of objective and subjective factors including: contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company's common and redeemable convertible preferred stock to outside investors in arms-length transactions, the Company's operating and financial performance, the lack of marketability, and general and industry specific economic outlook, amongst other factors.

**(gg) Net (loss) income per share attributable to common stockholders** 

The Company follows the two-class method when computing net (loss) income per common share when shares are issued that meet the definition of participating securities. The two-class method determines net income (loss) per common share of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income (loss) for the period had been distributed. The holders of the Company's redeemable convertible preferred stock would be entitled to dividends in preference to common stockholders, at specified rates, if declared. Such dividends are not cumulative. Any remaining earnings would be distributed among the holders of redeemable convertible preferred stock and common stock pro rata on an as-converted basis. The holders of the Company's redeemable convertible preferred stock are not contractually obligated to participate in the Company's losses.

Basic net (loss) income per share is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. The diluted net (loss) income per share is computed by giving effect to all potentially dilutive securities outstanding for the period. For periods in which the Company reports net losses, diluted net loss per common share is the same as basic net loss per common share, because all potentially dilutive securities are anti-dilutive.

**(hh) Comprehensive (loss) income** 

Comprehensive (loss) income consists of net (loss) income and other comprehensive loss, which includes certain changes in equity that are excluded from net (loss) income. The only difference between the Company's net (loss) income and items of comprehensive (loss) income is the effect of foreign exchange rate translation adjustments.

**(ii) Business combinations** 

The Company allocates the purchase consideration of the acquired company to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over those fair values is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. For business combinations where non-controlling interests remain after the acquisition, assets (including goodwill)

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and liabilities of the acquired business are recorded at the full fair value and the portion of the acquisition date fair value attributable to non-controlling interests is recorded as a separate line item within the equity section or, as applicable to redeemable non-controlling interests, between the liabilities and equity sections of the Company's consolidated balance sheets. There are various estimates and judgments related to the valuation of identifiable assets acquired, liabilities assumed, goodwill and non-controlling interests.

**(jj) Redeemable non-controlling interest** 

The Company classifies non-controlling interests as redeemable and classifies them in temporary equity if the redemption or conversion is not within the control of the Company (see Note 10, Redeemable non-controlling interest). The redeemable non-controlling interests are initially recorded at the acquisition-date estimated fair value and subsequently adjusted to carrying value, to reflect the Company's ownership interest, adjusted through retained earnings (or additional paid-in capital ("APIC") in the absence of retained earnings). When the Company determines the redemption is probable, the carrying amount of the redeemable non-controlling interest is adjusted to equal the redemption value at the end of each period using the entire adjustment method, through retained earnings or APIC in the absence of retained earnings. The adjustments to retained earnings or APIC in the absence of retained earnings are included as a component of net income attributable to the Company's common stockholders.

**(kk) Recently adopted accounting standards** 

In October 2021, the FASB issued ASU No. 2021-08, *Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.* The guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured in accordance with Topic 606, Revenue from Contracts with Customers, as if the acquirer had originated the contracts. Under current GAAP, such assets and liabilities are recognized by the acquirer at fair value on the acquisition date. The Company adopted the standard as of January 1, 2022. The adoption of this standard did not have a material impact on the Company's consolidated financial statements and related disclosure.

The Company adopted ASU No. 2016-02, *Leases (ASC 842)* on January 1, 2022, using the modified retrospective transition method. Consequently, financial information is not updated and the disclosures required under ASC 842 are not provided for dates and periods before January 1, 2022. ASC 842 provides several optional practical expedients in transition. The Company elected the: (i) short-term lease recognition exemption; (ii) practical expedient to not separate lease and non-lease components for all of the Company's leases; and (iii) transition package of three expedients, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification, and initial direct costs.

The Company determines if a contract contains a lease at inception. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Right-of-use assets are recognized as the lease liability, adjusted for lease incentives received. Lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company's operating lease liabilities primarily consist of office leases.

The Company's leases do not provide a readily determinable implicit borrowing rate. Therefore, the Company estimated its incremental borrowing rate based on the information available upon ASC 842 adoption and information available at new lease commencement dates.

The Company's lease agreements often contain rent escalations over the lease term. Lease payments include lease and non-lease components, which are both included in the Company's lease liability calculation. Lease costs for the Company's operating leases are recognized on a straight-line basis within operating expenses over the lease term.

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Upon adoption of the new leasing standard, the Company recognized right-of-use assets of $20.0 million and lease liabilities of $22.3 million.

In February 2022, the Company entered into a new lease for a new office facility in Toronto, Ontario with a lease term from March 2022 through April 2027. The Company recognized a right-of-use asset and liability of $1.6 million upon commencement of the new lease.

**(ll) Recently issued accounting standards not yet adopted** 

In June 2016, the FASB issued ASU No. 2016-13, *Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments*. The guidance amends reporting of credit losses for assets held at amortized cost basis and available-for-sale debt securities to require that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down. The measurement of credit losses for newly recognized financial assets and subsequent changes in the allowance for credit losses are recorded in the statements of operations. The guidance is effective for the Company's fiscal year beginning January 1, 2023 due to subsequently issued guidance in November 2019 by FASB, ASU No. 2019-10, *Financial Instruments — Credit Losses (Topic 326)*, *Derivatives and Hedging (Topic 815)*, and *Leases (Topic 842)*. The Company is currently in the process of evaluating the effects of the new guidance on its consolidated financial statements and related disclosures.

**2. Fair value measurements** 

The following tables present information about the Company's financial assets and liabilities measured at fair value on a recurring basis (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|  | **Total carrying**<br>**value** | **Level 1** | **Level 2** | **Level 3** |
|  Cash equivalents and funds held for hosts |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Money market funds | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;138064 | $&nbsp;&nbsp;&nbsp;&nbsp;138064 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $138064 | $138064 |  |  |
|  Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Convertible preferred stock warrant liability | $145971 |  |  | $145971 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | $145971 |  |  | $145971 |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Total carrying**<br>**value** | **Level 1** | **Level 2** | **Level 3** |
|  Cash equivalents and funds held for hosts |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Money market funds | $231426 | $231426 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $231426 | $231426 |  |  |
|  Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Convertible preferred stock warrant liability | $95247 |  |  | $95247 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities | $95247 |  |  | $95247 |

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The Company measures its cash equivalents and certain investments at fair value. The Company classifies its money market funds within Level 1 as their fair values are determined using quoted market prices.

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The Company's Level 3 financial instruments within the Company's fair value hierarchy as of December 31, 2021 and 2022 consist of the Company's convertible preferred stock warrant liability. The fair value of the convertible preferred stock warrant liability is estimated using a Monte Carlo simulation model as the series and number of shares of convertible preferred stock issued upon exercise is contingent upon the outcome of multiple discrete scenarios (see Note 9, Redeemable convertible preferred stock). The fair value of the underlying convertible preferred shares used within the Monte Carlo simulation model was estimated using an option pricing model to estimate the allocation of value to the various classes of securities of the Company. The significant unobservable inputs into the valuation model include the expected warrant term, the fully-diluted stock value, and volatility. A significant increase (decrease) in any of the unobservable inputs in isolation would result in a material increase (decrease) in the Company's estimate of fair value of the convertible preferred stock warrant liability.

The Company used the following assumptions in the model:

---

| | | | |
|:---|:---|:---|:---|
|  | **Issuance date** | **December 31,<br>2021** | **December 31,<br>2022** |
|  Remaining term (years) | 5.00 | 2.56 | 1.56 |
|  Volatility <sup>(1)</sup> | 58.50% | 65.10% | 59.30% |
|  Risk-free rate <sup>(2)</sup> | 1.76% | 0.86% | 4.55% |
|  Current stock value | $3.33 | $11.18 | $9.06 |
|  Estimated exercise price <sup>(3)</sup> | $7.83 | $7.44 | $7.20 |
|  Price at which forced exercise is assumed <sup>(4)</sup> | $15.65 | $14.88 | $14.40 |
|  Number of runs | 100000 | 100000 | 100000 |
|  Calculated fair value per share | $0.938 | $5.430 | $3.428 |
|  Estimated warrant shares | &nbsp;&nbsp;&nbsp;&nbsp;25555561 | 26882341 | 27785014 |

---

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(1) Expected volatility is based upon the historical volatility of a peer group of publicly traded companies.

(2) The risk-free rate for the expected term of the warrant is based on U.S. Treasury constant maturities yield at
measurement date.

(3) Estimated exercise price assumes strike price of $2.0 billion inclusive of warrant strike proceeds.

(4) Assumes that the warrant is automatically exercised if value rises to two times the warrant strike price within 0.5
years.

During the years ended December 31, 2021 and 2022, there was no non-recurring fair value measurement of assets or liabilities subsequent to initial recognition. Additionally, there were no transfers in and out of Level 3 classified financial instruments.

The changes in the fair value of the warrant liability are summarized below (in thousands):

---

| | |
|:---|:---|
|  Balance as of December 31, 2020 | $60733 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of convertible preferred stock warrant | 85238 |
|  Balance as of December 31, 2021 | 145971 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in fair value of convertible preferred stock warrant | (50724) |
|  Balance as of December 31, 2022 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;95247 |

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**3. Balance sheet components** 

**Prepaid expenses and other current assets** 

Prepaid expenses and other current assets consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Receivables for property damage claims (net of allowance of $38,574 and $56,400, respectively) | $18028 | $38269 |
|  Processing fees | 1770 | 2080 |
|  Other | 10175 | 15340 |
|  Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;29973 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;55689 |

---

**Property and equipment, net** 

Property and equipment, net consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Internal-use software | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16052 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25706 |
|  Furniture and fixtures | 1181 | 1434 |
|  Computers and software | 7 | 51 |
|  Leasehold improvements | 417 | 713 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property and equipment, gross | 17657 | 27904 |
|  Accumulated depreciation and amortization | (9881) | (15535) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property and equipment, net | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7776 | $12369 |

---

Depreciation and amortization expense on property and equipment during the years ended December 31, 2020, 2021 and 2022 was $3.0 million, $4.2 million, and $5.5 million, respectively.

The Company capitalized $4.6 million, $4.2 million, and $9.6 million in costs associated with internal-use software during the years ended December 31, 2020, 2021 and 2022, respectively, and recorded amortization expense of $2.6 million, $3.9 million, and $5.1 million during the years ended December 31, 2020, 2021 and 2022, respectively. The carrying value of capitalized internal-use software was $6.8 million and $11.3 million as of December 31, 2021 and 2022, respectively.

**Accrued liabilities** 

Accrued liabilities consisted of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2021** | **2022** |
|  Physical damage claims payable | $24113 | $41118 |
|  Accrued legal | 13148 | 5600 |
|  Indirect tax liabilities | 12970 | 24810 |
|  Income tax liabilities | 1035 | 3669 |
|  Trip-related accruals | 12540 | 14550 |
|  Other | 7134 | 15383 |
|  Accrued marketing | 6639 | 9795 |
|  Accrued compensation and employee benefits | 5011 | 9013 |
|  Insurance-related accruals | 1340 | 1426 |
|  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;83930 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;125364 |

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**4. Leases** 

The Company has entered into various noncancelable operating leases for its office space facilities with contractual lease periods expiring between 2023 and 2028. Certain of these arrangements contain escalating rent payment provisions, free rent, and tenant improvement allowances. Lease expense is recognized on a straight-line basis over the non-cancelable lease term.

The components of lease costs consisted of the following (in thousands):

---

| | |
|:---|:---|
|  | **Year ended<br>December 31, 2022** |
|  Operating lease cost | $5598 |
|  Sublease income | (849) |
|  Total lease costs | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4749 |

---

Lease terms and discount rates for operating leases were as follows:

---

| | |
|:---|:---|
|  | **December 31, 2022** |
|  Weighted-average remaining lease term (in years) | 4.24 |
|  Weighted-average discount rate | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.75% |

---

Supplemental cash flow information related to leases consisted of the following (in thousands):

---

| | |
|:---|:---|
|  | **Year ended<br>December 31, 2022** |
|  Cash paid for operating lease liabilities | $5154 |
|  Right-of-use assets obtained in exchange for new leases liabilities | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4739 |

---

As of December 31, 2022, the future minimum lease payments required under operating leases were as follows (in thousands):

---

| | |
|:---|:---|
|  | **Operating leases** |
| 2023 | $6528 |
| 2024 | 6220 |
| 2025 | 6241 |
| 2026 | 6390 |
| 2027 | 1999 |
|  Thereafter | 106 |
|  Total lease payments | $27484 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Imputed Interest | $(4196) |
|  Present value of lease liabilities | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23288 |

---

In connection with one of the noncancelable operating leases, the Company agreed to a security deposit of $4.1 million in the form of a standby letter of credit, which is included in restricted cash as of December 31, 2021 and 2022.

In December 2020, the Company entered into a sublease with an unrelated third-party to sublet a floor from the Company. The sublease started in March 2021 and ends in February 2025. As the sublease was executed during the COVID-19 pandemic, there was limited demand for office space given the uncertainty of returning to the office. As such, the projected cash inflows from the sublease was insufficient to cover the Company's original lease payments. The Company recorded a loss on this sublease in the amount of $1.7 million for the year ended December 31, 2020. The Company received sublease income of $0.8 million for the year ended December 31, 2022.

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As of December 31, 2022, future minimum annual sublease income is as follows (in thousands):

---

| | |
|:---|:---|
|  | **Sublease income** |
|  Year ending December 31: |  |
| 2023 | $874 |
| 2024 | 900 |
| 2025 | 151 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total sublease income | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1925 |

---

**5. Commitments and contingencies** 

**Collateral** 

The Company has entered into insurance agreements with various third-party insurance providers in order to offer the Company's hosts and guests both liability and property damage protection. Pursuant to these agreements, the Company is required to provide collateral in cash or secured by a standby letter of credit. The amount of collateral required under these agreements is reassessed each policy period.

In 2021 and 2022, the Company processed a series of amendments to its insurance agreement with one of its primary insurance providers to provide for changes in amounts and forms of collateral under its existing insurance agreement. As of December 31, 2021 and 2022, the Company maintained a standby letter of credit in the amount of $50.0 million and $28.0 million, respectively, for collateral, which was included in restricted cash on the accompanying consolidated balance sheets.

During 2022, the Company has processed agreements with multiple airports, municipalities, and a Canadian insurance Company with letter of credit arrangements. As of December 31, 2022, the Company had $2.8 million in various letters of credit included in restricted cash on the accompanying consolidated balance sheets.

**Litigation** 

The Company is involved in various legal proceedings, including the application of existing laws and regulations related to car rental and peer-to-peer car sharing particularly with government entities or airport authorities. The Company intends to vigorously defend the pending lawsuits and complaints. The Company discloses potential exposure resulting from adverse outcomes of current legal proceedings in which it is reasonably possible that a loss or range of reasonably possible loss may be incurred. The Company evaluates and accrues litigation and loss contingencies when and if it is determined that a loss or range of reasonably possible loss related matter is both probable and reasonably estimable. The Company accrues for the known amount or the low end of the potential range, if there is not a better estimate. Due to uncertainties inherent in litigation and other claims, the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability for damages. Furthermore, the outcome of these matters could negatively impact the Company's business, financial condition, and results of operations. Any claims or litigation, regardless of their success, could have an adverse effect on the Company's consolidated results of operations or cash flows in the period the claims or litigation are resolved. Although the results of litigation and claims cannot be predicted with certainty, the Company believes, based on current knowledge, that the ultimate amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the Company's financial position or results of operations. As of December 31, 2021 and 2022, the Company's litigation and loss contingencies reserve for all pending lawsuits and complaints, based on known amounts and management's estimates, were $11.9 million and $5.0 million, respectively. Until final resolution of legal matters, it is reasonably possible that the actual losses may exceed accrued litigation and loss contingencies and the outcome could, individually, or in the aggregate, have a material adverse effect on the Company's financial position or results of operations. In light of the uncertainties involved in such matters, there can be no assurance that the outcome of each case or the costs of litigation, regardless of outcome, will not have a material adverse effect on the Company's business.

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The Company has filed claims with one of its corporate insurance providers to cover losses associated with legal expenses incurred in conjunction with ongoing airport litigation. The policy covers reimbursement of certain legal expenses. The proceeds received from its insurer under this policy are recorded as an offset to legal expenses. The Company recorded $2.5 million, $1.3 million, and $0.3 million as a reduction to legal expenses for the years ended December 31, 2020, 2021 and 2022, respectively. These amounts are included in general and administrative expenses in the Company's consolidated statements of operations.

**(i) Airport litigation** 

In January 2018, the People of the State of California, acting by and through the City Attorney of San Francisco, brought a lawsuit against the Company alleging that hosts offer vehicles for delivery at San Francisco International Airport ("SFO") while the Company does not hold a rental car permit and alleging that the Company violates California's Unfair Competition Law. The plaintiff seeks injunctive relief and penalties of up to $2,500 per alleged violation, among other relief. The Company filed a cross-complaint against the City and County of San Francisco seeking declarations that the Company is not a rental car company and that the charges and conditions associated with SFO's rental car permit cannot lawfully be imposed on the Company. The Company is also seeking injunctive relief, including precluding San Francisco from compelling the Company to apply for a rental car company permit. In April 2020, the Superior Court granted the plaintiff's motions for partial summary adjudication on certain of the Company's cross-claims and affirmative defenses. The Company filed a petition for writ of mandate in the California Court of Appeal, seeking interlocutory review on the issue of whether the Company can be classified as a rental car company within the meaning of relevant California statutory law. The Court of Appeal denied the Company's petition. In June 2021, the Company filed a petition for review in the California Supreme Court. On September 1, 2021, the California Supreme Court granted the Company's petition for review and transferred the matter to the Court of Appeal with directions to vacate its order denying the Company's petition for writ of mandate and issue an order directing the superior court to show cause why the relief sought in the petition should not be granted. In conformity with the Supreme Court's order, on September 9, 2021, the Court of Appeal vacated its earlier order denying the Company's petition for writ of mandate and issued an order to show cause. The court of Appeal heard oral arguments on June 22, 2022, and on June 28, 2022 issued a ruling for the Company, reversing the lower court and holding that the Company cannot be classified as a rental car company within the meaning of relevant California statutory law. San Francisco did not file a petition for review with the California Supreme Court by the deadline to do so. The litigation has been stayed until April 30, 2023 to facilitate settlement discussions. The Company has accrued an immaterial estimated loss, which is included in the litigation and loss contingency reserve as of December 31, 2022.

In July 2018, the Company initiated a similar lawsuit against the City of Los Angeles alleging that the purported requirement by Los Angeles International Airport ("LAX") that the Company obtain a rental car company permit in order for hosts to deliver cars to LAX is unlawful and seeking declaratory and injunctive relief. Los Angeles filed counterclaims against the Company and one or more of its hosts seeking declaratory relief, a permanent injunction, damages, civil penalties of up to $2,500 for each violation under California's Unfair Competition Law, and attorneys' fees and costs, among other relief. In June 2020, the District Court entered a preliminary injunction against Turo, which took effect in August 2020. In March 2021, the United States Court of Appeals for the Ninth Circuit vacated the preliminary injunction and remanded the case back to the District Court. In February 2022, the parties reached a settlement in principle to resolve all claims, which was finalized in October 2022. The agreement includes a go-forward car sharing permit at LAX and an immaterial monetary payment. The loss was included in the litigation and loss contingency reserve as of December 31, 2021 and paid during the year ended December 31, 2022. The lawsuit has been dismissed.

In March 2019, Hillsborough County Aviation Authority ("HCAA") filed a complaint in Florida Circuit Court, alleging that Turo and unnamed Doe defendants who share their cars on the Turo platform violate state laws and federal regulations by delivering or picking up vehicles at Tampa International Airport ("TPA") without an off-airport rental car permit. The Company answered the complaint, filed counterclaims against HCAA, and removed the case to federal court in March 2019. In April 2021, the parties reached a settlement agreement to resolve all claims, which includes a permit allowing for the Company's users to share cars at TPA.

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In June 2019, the Massachusetts Port Authority ("Massport") filed a complaint against the Company, and one or more of the Company's hosts, in the Superior Court of the Commonwealth of Massachusetts, alleging that Turo user vehicle handoffs at Boston Logan International Airport ("BOS"), enabled by the Turo marketplace, constitute a violation of state regulations prohibiting unauthorized commercial activity on airport property, trespass, aiding and abetting trespass, unjust enrichment, and violation of the Massachusetts Consumer Protection Law, as well as a claim seeking a declaratory judgment that the Company is operating an unauthorized car rental business at BOS and thereby trespassing and aiding and abetting host and guest trespasses. Massport sought declaratory and injunctive relief, as well as damages. The Company filed counterclaims against Massport seeking declaratory, injunctive, and other relief. In January 2020, the court entered a preliminary injunction against Turo, which took effect in April 2020. Following the Company's interlocutory appeal, the Massachusetts Supreme Judicial Court ruled in April 2021 to affirm the entry of a preliminary injunction, although modifying the injunction's scope. The Company and Massport reached a settlement in principle to resolve the litigation in December 2021, which was finalized in September 2022. The agreement includes a go-forward car sharing permit at BOS and an immaterial monetary payment. The loss was included in the litigation and loss contingency reserve as of December 31, 2021 and paid during the year ended December 31, 2022. The lawsuit has been dismissed.

In January 2021, the Metropolitan Nashville Airport Authority ("MNAA") filed a complaint in Tennessee Circuit Court, alleging that Turo and unnamed Doe defendants who share their cars on the Turo platform violate state laws by delivering or picking up vehicles at Nashville International Airport ("BNA") without a permit or other agreement. The case was removed to the United States District Court for the Middle District of Tennessee in February 2021. Turo also answered the complaint and filed counterclaims against MNAA in February 2021. In May 2021, parties reached a settlement agreement to resolve all claims. The agreement includes a permit allowing Turo users to share cars at BNA and an immaterial monetary payment made during the year ended December 31, 2021.

In October 2021, the Dallas Fort Worth International Airport Board ("DFW Board") filed a complaint against the Company in Texas state court, Fort Worth Division. The DFW Board alleges that Turo user vehicle handoffs at Dallas Fort Worth International Airport ("DFW") violate the DFW Board Code of Rules & Regulations (the "Airport Code"), and specifically the provision governing commercial activity on airport property. In June 2022, the DFW Board filed an amended complaint naming five of the Company's hosts as additional defendants. The DFW Board pleads four causes of action: enforcement of the Airport Code provision governing commercial activity and a permanent injunction enjoining the Company from unpermitted commercial activity at the airport; declaratory relief that, inter alia, the commercial activity provision is enforceable against Turo, Turo can be required to have its users' vehicle handoffs take place at the rental car company facility, and the DFW Board can enforce state and municipal rental car taxes against Turo; unjust enrichment in restitution for all disgorgement of profits obtained from alleged violations; and a demand for accounting. The DFW Board seeks declaratory and injunctive relief, an order for an accounting, attorneys' fees and costs, and monetary relief. The Company filed counterclaims against DFW seeking declaratory relief. The parties are engaged in discovery, with summary judgment briefing due on or before June 28, 2023 and trial set for the week of September 18, 2023. The Company has accrued an immaterial estimated loss, which is included in the litigation and loss contingency reserve as of December 31, 2022.

**(ii) Class action lawsuits** 

In November 2016, a putative class action was filed against Turo in the State of California on behalf of consumers who purchased a protection plan. The court twice denied plaintiffs' motion for class certification. Plaintiffs were given leave to move for class certification a third time, which just one of the plaintiffs filed in December 2021 and then withdrew in January 2022, so that only one plaintiff's individual claims remained. In October 2022, Turo reached and finalized a settlement agreement with the one remaining plaintiff, which included an immaterial monetary payment made during the year ended December 31, 2022. The lawsuit was dismissed.

In 2018, a lawsuit was filed against Turo and a former insurance carrier, Nautilus Insurance Company ("Nautilus"), in the Superior Court of New Jersey, Middlesex County, by two former users. The plaintiffs alleged claims for

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##### [**Table of Contents**](#toc)
violation of the New Jersey Consumer Fraud Act, unconscionable commercial practices, and false advertising against Turo in connection with Nautilus's denial of a liability insurance claim related to a Turo trip. Turo has finalized an immaterial settlement with the plaintiffs in January 2023, which is included in the litigation and loss contingency reserve as of December 31, 2022.

In November 2019, a putative class action was filed against Turo in the Superior Court, Quebec, District of Montreal, alleging violations of local consumer protection laws. The suit sought injunctive relief and damages on behalf of the purported class. The parties agreed to a class-wide settlement agreement, which was approved by the Court in April 2022. The loss was included in the litigation and loss contingency reserve as of December 31, 2021 and paid during the year ended December 31, 2022. The case remains open pending final implementation of the settlement terms.

In September 2020, two individuals filed a purported class action on behalf of all consumers in the State of Washington who purchased damage protection plans from Turo. In October 2020, the complaint was amended to drop one of the two plaintiffs. The remaining plaintiff alleges that Turo acted as an insurer in Washington without authorization and seeks damages under Washington's Consumer Protection Act and the Uniform Declaratory Judgment Act. Turo has removed the case from state court to federal court. Turo has also moved to dismiss the complaint and/or to compel arbitration. In July 2021, the court ruled that lead plaintiff Helen Cattaneo lacks Article III standing to assert her claims against Turo in federal court and remanded the case back to King County Superior Court for further proceedings. In October 2021, litigation was amicably resolved.

**(iii) Breach of contract arbitration** 

In March 2020, a venture capital firm and a broker-dealer initiated arbitration proceedings against Turo before the Financial Industry Regulatory Authority alleging breach of contract and breach of the covenant of good faith and fair dealing. The claimants alleged they were owed money in connection with Turo's latest round of private financing. In October 2020, the parties settled the matter for an immaterial amount.

Additionally, from time to time, the Company is party to certain claims in the normal course of business. The Company's insurers are currently handling a number of legal claims involving the Company. The majority of these claims are relatively low-dollar value claims, and the relevant insurers sometimes handle lesser disputes without the Company's direct involvement. There are a number of lawsuits and arbitration proceedings handled by the Company's legal department. These cases typically involve a denial of claim for physical damage to the host's vehicle that the Company believes are not eligible for coverage, in accordance with the Company's policies and terms of service.

**Other legal and regulatory matters** 

**(i) Airport matters** 

The Company has received inquiries and demand letters from airports regarding alleged operations, including hosts' alleged commercial activity, at those airports. The Company has resolved many of these inquires and demand letters by signing various permits with multiple airports. To date, there have been no formal actions taken by these airports with respect to the Company's business other than those set forth herein.

**(ii) Insurance matters** 

The Hawaii Insurance Department evaluated the Company's activities in the State of Hawaii and issued a cease and desist order in the 2014-2015 time period. The Company prevailed at summary judgment in December 2016. A further hearing was presided over by the Insurance Commissioner in the spring of 2017 where the insurance department pushed for reconsideration. The Commissioner vacated Turo's summary judgment. In December 2020, the Company entered into a stipulated settlement agreement in which the Company agreed to obtain a surplus lines producer license in Hawaii, pay an immaterial fee, and add a sentence to its platform FAQ page on guest protection plans on the Company's website. The stipulated settlement involved no admission of wrongdoing or liability.

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The Washington Office of the Insurance Commissioner ("WA OIC") evaluated the Company's activities in the state of Washington and communicated to the Company in August 2020 that it believed the Company had violated Washington insurance law. In April 2021, Turo agreed to a consent order with the WA OIC in an effort to resolve the issue and avoid further administrative hearings and legal proceedings, and Turo disputes that it violated any laws. Turo agreed to obtain a surplus lines producer license in the State of Washington and to back the physical damage component of its protection plan with a captive insurance policy. Turo also agreed to a payment of an immaterial penalty to resolve the issue. Other state departments of insurance have from time to time reached out to Turo communicating their belief that Turo needs to obtain insurance licensure in their state in connection with protection plans available on Turo. Turo has complied by filing for producer and/or surplus lines licensure by its subsidiary Turo Insurance Agency.

**(iii) Indirect tax matters** 

The Company is under audit by various domestic tax authorities with regards to indirect tax matters. The subject matter of the audits primarily arises from disputes about the tax treatment of transactions performed between hosts and guests on the Company's marketplace platform. The Company has determined that its activities may be asserted by a number of jurisdictions to fall under marketplace facilitator laws and thus creates an obligation to collect and remit sales taxes. Commencing in June 2020, the Company began collecting and remitting taxes on transactions performed between hosts and guests on its platform in applicable jurisdictions. Prior to June 2020, the Company did not collect sales taxes related to such transactions.

Similarly, the Company is under audit by various local jurisdictions with regards to business gross proceeds taxes. The subject matter of the audits arises from the potential applicability of local laws to companies operating in a particular jurisdiction but with no physical presence in such jurisdiction.

The Company establishes reserves for indirect tax matters when it determines that the likelihood of a loss is probable, and the loss is reasonably estimable. Accordingly, the Company has a reserve for potential issues related to its potential sales tax and related cost exposure and other indirect taxes in the amount of $8.5 million and $18.9 million as of December 31, 2021 and 2022, respectively. This amount represents management's best estimates of its potential liability and includes potential interest and penalties totaling $1.5 million and $3.8 million for the years ended December 31, 2021 and 2022, respectively. The sales tax expenses and related interest and penalties are included in general and administrative expenses in the Company's consolidated statements of operations.

Various states and other local jurisdictions assess car rental taxes on transactions that are deemed to be car rental transactions. The Company does not believe it is a car rental company, nor does it believe that current marketplace facilitator laws establish an obligation on the Company to collect and remit these taxes. Accordingly, it does not bill or collect these taxes and has not recorded any related reserves. Similarly, the Company does not believe it is subject to certain local jurisdictions' business profit taxes. Accordingly, it is not remitting such taxes and has not recorded any related reserves. Although management intends to defend its position vigorously, there is no guarantee that an adverse outcome, should these transactions be challenged, would not have a material impact on its financial position, cash flows, and results of operations.

**Indemnification agreements** 

The Company enters into indemnification provisions under (i) its agreements with other companies in the ordinary course of business, typically with landlords and (ii) its agreements with investors. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company's activities. These indemnification provisions often include indemnifications relating to representations made by the Company with regard to intellectual property rights. These indemnification provisions generally survive termination of the underlying agreement. The

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maximum potential amount of future payments the Company could be required to make under these indemnification provisions is unlimited. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. As a result, the Company believes the estimated fair value of these agreements is minimal. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2021 and 2022.

The Company has obligations under certain circumstances to indemnify each of the Company's directors against judgments, fines, settlements, and expenses related to claims against such directors and otherwise to the fullest extent permitted under Delaware law and the bylaws and certificate of incorporation. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. The Company has no liabilities recorded for these agreements as of December 31, 2021 and 2022.

**6. Acquisition** 

On May 31, 2022, the Company's subsidiary, Brie Holdings, Inc. ("Brie") acquired 100% of the outstanding capital stock held by OuiCar shareholders, a car sharing marketplace headquartered in France, to expand Turo's international presence. Goodwill arising from the business combination consists largely of OuiCar's assembled workforce and synergies expected from combining the operations of the Company and OuiCar. None of the goodwill is expected to be deductible for income tax purposes.

The following table summarizes the consideration transferred for OuiCar, inclusive of measurement period adjustments, and the amounts of the assets acquired and liabilities assumed at the acquisition date (in thousands):

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| | |
|:---|:---|
|  Cash | $6524 |
|  Funds held for hosts | 4947 |
|  Current assets | 1564 |
|  Developed technology | 1394 |
|  Host relationships | 6113 |
|  Guest relationships | 3003 |
|  Trade name | 2574 |
|  Goodwill | 32638 |
|  Right-of-use asset | 3168 |
|  Other assets | 891 |
|  Accounts payable and accrued expenses | (4557) |
|  Funds payable to hosts | (4947) |
|  Unearned fees | (1524) |
|  Deferred tax liabilities | (3270) |
|  Debt | (1075) |
|  Operating lease liabilities | (3168) |
|  Other liabilities | (680) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43595 |

---

In exchange for the assets acquired and liabilities assumed, Brie issued shares of Brie Class B common stock and shares of Brie Class C common stock to the owners of OuiCar. Turo owned 100% and 72% of Brie before and after the acquisition, respectively, and consolidates Brie both before and after the acquisition (see Note 10, Redeemable non-controlling interest, for more information). As such, the Brie Class B and Brie Class C common stock shares represent non-controlling interest in Turo's consolidated financial statements. A portion of the Brie Class C common stock shares are subject to vesting restrictions based on employment service conditions, which represent compensation for post-combination services and therefore are separately accounted for from the acquisition. In addition, a portion of the Brie Class C shares are subject to forfeiture for two years to satisfy general litigation claims, and cannot be converted until the restriction lapses. The indemnification asset and

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liability recognized of $0.7 million is included in other assets and other liabilities of the acquired assets and liabilities.

The results of operations for OuiCar have been included in the consolidated statements of operations for the period subsequent to the acquisition date and have not been material. OuiCar's results of operations for periods prior to this acquisition were not material to the consolidated statements of operations in 2021 and for the period through May 31, 2022.

**7. Intangible assets and goodwill** 

***Intangible Assets***

Identifiable intangible assets consisted of the following (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** |
|  | **Gross carrying<br>amount** | **Accumulated<br>amortization** | **Net carrying<br>value** | **Weighted average<br>remaining useful<br>life in years** |
|  Host relationships | $6111 | $(713) | $5398 | 4.4 |
|  Guest Relationships | 3002 | (584) | 2418 | 2.4 |
|  Trade name | 2573 | (1637) | 936 | 0.3 |
|  Developed technology | 1393 | (887) | 506 | 0.3 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total intangible assets | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13079 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3821) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9258 |  |

---

Amortization expense related to intangible assets for the year ended December 31, 2022 was $3.6 million.

Estimated future amortization expense for intangible assets as of December 31, 2022 is summarized below (in thousands):

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| | |
|:---|:---|
| **Year Ending December 31,** | **Estimated<br>future<br>amortization** |
| 2023 | $3665 |
| 2024 | 2223 |
| 2025 | 1639 |
| 2026 | 1222 |
| 2027 | 509 |
|  Total Future amortization | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9258 |

---

***Goodwill***

The changes in the carrying amount of goodwill for the year ended December 31, 2022 were as follows (in thousands):

---

| | |
|:---|:---|
|  | **Total** |
|  Balance as of December 31, 2022 | $— |
|  Acquisition additions | 32638 |
|  Measurement period adjustments<sup>(1)</sup> | (1691) |
|  Foreign currency translation adjustments | (5) |
|  Balance as of December 31, 2022 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30942 |

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<sup>(1)</sup> The Company recorded a measurement period adjustment that included a decrease to goodwill and net deferred tax liabilities of $1.7 million. This adjustment did not impact the Company's consolidated statements of operations. 

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**8. Promissory note** 

On May 19, 2020, the Company entered into a promissory note with Radius Bank (the "Promissory Note"), which provided for an unsecured loan of $6.6 million pursuant to the PPP under the CARES Act. The Promissory Note has a term of two years with a 1.0% per annum interest rate. Payments are deferred for six months from the date of the Promissory Note, and the Company can apply for forgiveness of the Promissory Note under the terms of the CARES Act. In July 2021, the Company paid off the balance of the loan in full, plus accrued interest.

On May 31, 2022, the Company completed the acquisition of OuiCar and acquired two French State guaranteed loans ("PGE"). The PGE loans have a five year term and bear an interest rate equal to the three-month Euribor increased by 0.25% per year. As of December 31, 2022, the outstanding balance on the loans and accrued interest was $1.1 million.

**9. Redeemable convertible preferred stock** 

At December 31, 2021, the Company's redeemable convertible preferred stock (collectively, the "Preferred Stock") consisted of the following (in thousands, except share amounts):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Shares**<br>**authorized** | **Shares**<br>**outstanding** | **Net carrying**<br>**value** | **Liquidation**<br>**preference** |
|  Series A | 11771489 | 11771489 | $5048 | $5308 |
|  Series A-2 | 23352211 | 23352211 | 13264 | 13264 |
|  Series B | 32525379 | 32525379 | 33994 | 34200 |
|  Series C | 18759750 | 18759750 | 44655 | 44808 |
|  Series D | 24193609 | 24193609 | 112297 | 112960 |
|  Series D-1 | 1070893 | 1070893 | 4933 | 5000 |
|  Series E | 47446080 | 47446080 | 215626 | 240523 |
|  Series E-1 | 10915021 | 10915021 | 41494 | 41500 |
|  | 170034432 | 170034432 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;471311 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;497563 |

---

At December 31, 2022, the Preferred Stock consisted of the following (in thousands, except share amounts):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Shares**<br>**authorized** | **Shares**<br>**outstanding** | **Net carrying**<br>**value** | **Liquidation**<br>**preference** |
|  Series A | 11771489 | 11771489 | $5048 | $5308 |
|  Series A-2 | 23352211 | 23269875 | 13217 | 13217 |
|  Series B | 32525379 | 32525379 | 33994 | 34200 |
|  Series C | 18759750 | 18759750 | 44655 | 44808 |
|  Series D | 24193609 | 24193609 | 112297 | 112960 |
|  Series D-1 | 1070893 | 1070893 | 4933 | 5000 |
|  Series E | 47446080 | 47446080 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;215626 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;240523 |
|  Series E-1 | 10915021 | 10915021 | 41494 | 41500 |
|  | 170034432 | 169952096 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;471264 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;497516 |

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The rights, preferences, and privileges of the Preferred Stock are as follows:

**Dividends** 

The holders of shares of Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend on the common stock,

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in an amount equal to eight percent of the Applicable Original Issue Price (as defined below) for such series of Preferred Stock. Payment of any dividend on the Preferred Stock is in the following order of preference: (i) Series E and E-1, (ii) Series D and D-1, (iii) Series C, (iv) Series B, and (v) Series A and A-2. After payment of such dividends, any additional dividends shall be distributed among the holders of common stock and Preferred Stock on a pari passu basis, based on the number of shares of common stock then held by each holder (assuming conversion of all such Preferred Stock into common stock), calculated on the record date for determination of holders entitled to such dividend. Dividends are payable only when and if declared by the Board of Directors and are not cumulative. No dividends have been declared or paid through December 31, 2022.

The Applicable Original Issue Price shall mean $0.4509 for Series A, $0.5680 for Series A-2, $1.0515 for Series B, $2.3885 for Series C, $4.6690 for Series D, $4.6690 for Series D-1, $5.0694 for Series E, and $3.8021 for Series E-1.

**Liquidation preference** 

In the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or a change of control or sale of all or substantially all the assets of the Company, the holders of the Preferred Stock are entitled to receive, before any payment shall be made to the holders of common stock, an amount per share equal to the greater of (i) the Applicable Original Issue Price of the Preferred Stock, together with any declared but unpaid dividends, or (ii) the as-if converted to common stock value of the Preferred Stock (the "Liquidation Amount"). Payment of any Liquidation Amount is in the following order of preference: (i) Series E and E-1 and (ii) Series A, Series A-2, Series B, Series C, Series D, and Series D-1 (the Series A, Series A-2, Series B, Series C, Series D, and Series D-1, collectively, the "Junior Preferred Stock"). If assets are insufficient to make payment in full to all holders of Series E and Series E-1 Preferred Stock, then the assets or consideration will be distributed ratably to the holders of Series E and Series E-1 in proportion to their respective Liquidation Amount. If assets are insufficient to make payment in full to all holders of Junior Preferred Stock, then the assets or consideration will be distributed ratably to the holders of Junior Preferred Stock in proportion to their respective Liquidation Amount. If assets are sufficient to make payment in full to all holders of Preferred Stock, then remaining assets shall be distributed among the holders of the Company's common stock on a pro rata basis based on the number of shares of common stock held.

A change in control or a sale of all or substantially all of the Company's assets would constitute a redemption event (the "Deemed Liquidation Event") which may be outside of its control. Accordingly, the shares of Preferred Stock are considered contingently redeemable and have been presented outside of permanent equity on the consolidated balance sheets. Because the timing of any such Deemed Liquidation Event is uncertain, the Company elected not to adjust the carrying values of its Preferred Stock to their respective liquidation values until it becomes probable that redemption will occur.

**Conversion** 

At any time following the date of issuance, each share of Series A, Series A-2, Series B, Series C, Series D, Series E and Series E-1 preferred stock is convertible, at the option of its holder, into the number of shares of common stock, which results from dividing the Applicable Original Issue Price, by the then-current conversion price per share for such series. As of December 31, 2020, the conversion price of any series of Preferred Stock equaled the Applicable Original Issue Price. During the year ended December 31, 2021, the Series E conversion price was reduced after finalization of the Series E adjustment event. This adjustment event was dependent upon the achievement of specific financial milestones by the end of fiscal year 2020 and outlined a range of fixed reduced conversion prices. The adjustment to the conversion price was a one-time adjustment timed with the issuance of the Company's 2020 audited financial statements and notification to stockholders of the actual milestones achieved and the resulting conversion price adjustment, which was met in the first quarter of 2021. As of December 31, 2020, the conversion price of each series of Preferred Stock, except for Series E preferred

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stock, was equal to the Applicable Original Issue Price. As of December 31, 2022, the conversion price and Applicable Original Issue Price of the Series E preferred stock was equal to $3.9262 and $5.0694, respectively. As of December 31, 2021 and December 31, 2022, the Series E preferred stock conversion ratio was equal to 1.2912, and the 47,446,080 shares of Series E preferred stock will convert to 61,262,375 shares upon a conversion event.

Each share of Preferred Stock, other than Series D-1 preferred stock, shall be automatically converted into shares of common stock immediately upon the earlier of (i) the completion of a firmly underwritten public offering in which the gross cash proceeds received by the Company are not less than $75.0 million and at an offering price to the public equal or greater than $7.6041 per share (as adjusted for any stock splits, combinations, and dividends) or (ii) the date specified by vote or written consent or agreement of the holders of at least 65% of the then outstanding shares of Series A, Series A-2, Series B, Series C, Series D, Series E, and Series E-1 preferred stock, voting together as a single class, on an as-if converted basis (clauses (i) and (ii), each an "Automatic Conversion Event"). No shares of Series E and Series E-1 preferred stock shall be converted under sub-clause (ii) of the prior sentence until a vote or written consent or agreement of the holders of at least a majority of the outstanding shares of Series E and Series E-1 preferred stock, voting together as a single class, on an as-if converted basis.

Immediately prior to and subject to the consummation of an Automatic Conversion Event, all outstanding shares of Series D-1 preferred stock, shall automatically be converted into the number of shares of common stock, which results from dividing the Series D-1 Original Issue Price, by the conversion price per share for the Series D-1 preferred stock, which is currently equal to the Series D-1 Original Issue Price, if, and only if, such conversion would not result in the Regulated Holder (as defined below) and its transferees owning or controlling, or being deemed to own or control, collectively, greater than (i) 4.99% of the voting power of any class of voting securities of the Company or (ii) 9.99% of the total equity of the Company.

The conversion price of the Preferred Stock is subject to adjustment for certain events, including stock splits, stock combinations, dividends, mergers or consolidations, reclassification and other equivalent adjustments. In addition, if the Company should issue any additional stock without consideration or for a consideration per share less than the effective conversion price for any series of Preferred Stock, then the conversion price for such series of Preferred Stock shall be adjusted in accordance with the terms of the Company's charter.

**Voting** 

Except for certain statutory restrictions applicable to a bank holding company, subject to the provisions of the Bank Holding Company Act of 1956 ("BHCA"), and holding shares of Series D-1 preferred stock (the "Regulated Holder"), the holders of each series of Preferred Stock vote together with the holders of common stock on an as if converted basis and not as separate classes.

For so long as 2,980,000 shares of Series A preferred stock remain outstanding, the holders of the shares of Series A preferred stock, voting as a separate class, shall be entitled to elect one director of the Company. For so long as 4,760,000 shares of Series B preferred stock remain outstanding, the holders of the shares of Series B preferred stock, voting as a separate class, shall be entitled to elect one director of the Company. For so long as 3,900,000 shares of Series C preferred stock remain outstanding, the holders of the shares of series C preferred stock, voting as a separate class, shall be entitled to elect one director of the Company. For so long as 4,300,000 shares of Series D and Series D-1 preferred stock remain outstanding, the holders of the shares of Series D and Series D-1 preferred stock, voting together as a separate class, shall be entitled to elect one director of the Company. For so long as 12,328,875 shares of Series E and Series E-1 preferred stock remain outstanding, the holders of the shares of Series E and Series E-1 preferred stock, voting together as a separate class, shall be entitled to elect two directors of the Company.

The holders of common stock and Preferred Stock, voting together as a single class on an as-if-converted basis, shall be entitled to elect any remaining directors of the Company.

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**Contingent redemption** 

Except upon the occurrence of a Deemed Liquidation Event, the holders of Preferred Stock have no voluntary rights to redeem shares.

**Redeemable convertible preferred stock warrant liability** 

In conjunction with Company's issuance of Series E preferred stock, the Company issued a warrant to the lead investor in such financing to purchase a variable number of shares of the Company's most senior series of preferred stock outstanding at the time of exercise or common stock, if no preferred stock is outstanding at the time of exercise (the "Warrant Stock"). The warrant is exercisable for a price per share of Warrant Stock equal to the quotient obtained by dividing $2.0 billion by the fully diluted capitalization of the Company at the date immediately following the closing of an IPO or the date which is immediately prior to the exercise of the warrant, whichever is earlier (the "Measurement Date"). The warrant is exercisable for that number of shares of Warrant Stock equal to 10% of the fully diluted capitalization of the Company as of the Measurement Date, minus the number of shares previously issued upon exercise of the warrant, if any, or acquired by the investor and/or its affiliates pursuant to the right of first refusal assigned by the Company to the investor. The warrant expires upon the earliest of (a) five years from issuance date, (b) the closing of the sale of shares of the Company's common stock to the public, at an offering price per share to the public (before underwriting discounts and commissions) equal to or greater than two times the warrant price calculated as of the Measurement Date and (c) the closing of a deemed liquidation event.

Upon issuance of the warrant, the Company allocated a portion of the proceeds from the sale of its Series E preferred stock to the warrant based on the deemed fair value of the warrant and recorded a warrant liability in the amount of $24.0 million. The remainder of the proceeds from the sale of Series E preferred stock was allocated to redeemable convertible preferred stock using a residual allocation. The convertible preferred stock warrant liability is subject to remeasurement at the end of each reporting period, and changes in the fair value of the warrant liability are reflected in other income and expense, net in the Company's consolidated statements of operations. See Note 2, Fair value measurements.

**10. Redeemable non-controlling interest** 

As a result of the acquisition of OuiCar (see Note 6, Acquisition), Brie issued shares of Class B common stock and shares of Class C common stock to the owners of OuiCar (the "sellers" or "holders"), which represent a 28% non-controlling interest in Brie in the Company's consolidated financial statements. The Brie Class B and Brie Class C common stock shares have an Applicable Original Issue Price of €451.135 per share and provide the holder and the Company with certain put and call options.

Brie Class B Cash Put Option—at any time on or after January 1, 2023, and prior to March 3, 2023, holders of Brie Class B common stock can elect to exchange all or any portion of their Brie Class B Shares for cash at a fixed price up to €27 million. In January 2023, the holders elected to exchange all of the Brie Class B shares (See Note 16, Subsequent events).

Brie Class B Put Option and Non-IPO Conversion Option—at any time on or after the later of March 3, 2023 or the first exchange date, the holders of Brie Class B common stock that did not elect the cash put option will have an option to exchange all or any portion of their shares into Turo's common stock at the exchange stock price. The "first exchange date" is defined as either the earlier of 60 days following the Company's IPO or January 1, 2024. The "exchange stock price" is defined as either the 60 day volume weighted average closing price of Turo's common stock following an IPO, (or if shorter, the period between the date of the closing of this offering and January 1, 2024), or if the IPO has not been consummated by January 1, 2024, a fixed price of $15.74 per share.

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Brie Class C Put Option and Non-IPO Conversion Option—at any time on or after the first exchange date, holders of Brie Class C shares can exchange all or any portion of the shares into Turo's common stock at the exchange stock price. The first exchange date and exchange stock price are the same for the Brie Class B and Brie Class C put options and non-IPO conversion options.

Sunset Call option and conversion options—at any time on or after January 1, 2025, Brie can call and exchange any remaining outstanding Brie Class B and Brie Class C common stock shares at the exchange stock price.

The Brie Class B and Brie Class C common stock shares held by the sellers as non-controlling interest contain redemption or conversion features not solely within the control of the Company, which require classification outside of permanent equity.

The redeemable non-controlling interest in Brie was initially established at fair value on acquisition date. The Company calculated fair values of $29.1 million and $14.2 million on the Brie Class B and Class C common stock, respectively. The fair value of the consideration paid was estimated by applying the probability weighted expected return method consisting of a non-IPO scenario and an IPO scenario. Each scenario had a probability based on the Company's opinion and unique facts and circumstances as of the valuation dates. In addition, each scenario had unobservable assumptions over the company's discount rate and non-IPO stock price.

The fair value was immediately adjusted to carrying value, to reflect the Company's ownership interest per the contractual agreement, consistent with the requirement to account for a parent's ownership interest in a subsidiary while maintaining controlling financial interest to be accounted for as an equity transaction. The acquisition fair value and contract carrying value adjustments are non-cash transactions.

The Company has determined the Brie Class B redemption feature is probable to be redeemed and adjusted the carrying value to equal the redemption value as of December 31, 2022. The Company has determined the Brie Class C redemption feature is not probable as of December 31, 2022.

The following table presents the changes in the Company's redeemable non-controlling interest as a result of the OuiCar acquisition (in thousands).

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| | |
|:---|:---|
|  | **Total** |
|  Balance as of December 31, 2022 |  |
|  Beginning redeemable non-controlling interest in Brie estimated at fair value | 43333 |
|  Adjustment to carrying value | (31183) |
|  Net loss attributable to non-controlling interests | (870) |
|  Accretion adjustment to current redemption value | 22197 |
|  Vesting of Brie Class C shares at fair value | 1374 |
|  Adjustment to contract carrying value of Brie Class C vested shares | (994) |
|  Balance as of December 31, 2022 | $33857 |

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**11. Stockholders' equity** 

**Common stock** 

Holders of common stock are entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the priority rights of holders of all series of Preferred Stock outstanding. In March 2021, the Board of Directors authorized an amendment to the certificate of incorporation to reduce the number of authorized shares of Preferred Stock from 192,886,513 to 170,034,432 and increase the number of authorized shares of common stock from 265,000,000 to 267,000,000.

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The Company had reserved shares of common stock for future issuance as follows:

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| | | |
|:---|:---|:---|
|  | **December 31, 2021** | **December 31, 2022** |
|  Redeemable convertible preferred stock | 183850727 | 183768391 |
|  Redeemable convertible preferred stock warrant | 26882341 | 27785014 |
|  Stock options outstanding | 27089965 | 26253071 |
|  RSUs outstanding | 247000 | 8401114 |
|  Shares available for future grants | 3206280 | 1164916 |
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;241276313 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;247372506 |

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**Stock compensation plans** 

In December 2010, the Board of Directors approved the 2010 Equity Incentive Plan (the "2010 Plan"). The 2010 Plan provides for the granting of incentive and non-statutory stock options to purchase the Company's common stock, stock appreciation rights, restricted stock, and restricted stock units to employees, directors, and consultants of the Company. In March and July 2019, the Board of Directors authorized increases to the number of shares issuable under the 2010 Plan by an aggregate amount of 2,000,000 and 10,901,557 shares, respectively. The 2010 Plan was terminated in December 2020, and no additional grants were available under the 2010 Plan.

In December 2020, the Company adopted the 2020 Equity Incentive Plan (the "2020 Plan") to replace the 2010 Plan. The 2020 Plan provides for granting of incentive and non-statutory stock options to purchase the Company's common stock, stock appreciation rights, restricted stock, and restricted stock units to employees, directors, and consultants of the Company. Under the terms of the 2020 Plan, stock options and stock appreciation rights may be granted with terms of up to ten years at exercise prices of no less than 100% of the fair market value of the Company's common stock on the grant date. Stock options granted under the 2020 Plan usually vest over four years, with 25% vesting on the one-year anniversary and 1/48th vesting monthly thereafter.

Upon termination of the 2010 Plan, the 5,557,491 shares remaining for issuance thereunder were reserved for issuance and added to the number of shares available under the 2020 Plan. In 2021, the Board of Directors authorized four increases to the number of shares of common stock issuable under the 2020 Plan by an aggregate amount of 6,407,447. The expiration of the 2010 Plan had no impact on the terms of outstanding awards under the 2010 Plan. All unvested equity canceled under the 2010 Plan will be added to the 2020 Plan and made available for future issuance. In February 2022, the shareholders authorized an increase of 6,519,879 of shares of common stock issuable under the 2020 Plan.

A summary of stock option activity is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of**<br>**options**<br>**outstanding** | **Weighted**<br>**average**<br>**exercise price** | **Weighted average**<br>**remaining**<br>**contractual life**<br>**(years)** | **Aggregate**<br>**intrinsic value**<br>**(in thousands)** |
|  Balance December 31, 2021 | 27089965 | $3.38 | 8.49 | $209677 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options granted | 1022153 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.92 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options exercised | (1244735) | 1.91 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Options canceled | (614312) | 4.80 |  |  |
|  Balance December 31, 2022 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26253071 | $3.71 | 7.63 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;128688 |
|  Vested and expected to vest as of December 31, 2022 | 26473250 | $3.46 | 7.13 | $135194 |
|  Exercisable at December 31, 2022 <sup>(1)</sup> | 22930984 | $3.13 | 6.98 | $123889 |

---

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(1) Includes options that are early exercisable

The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the estimated fair value of the Company's common stock. The total intrinsic values of options exercised during the years ended December 31, 2020, 2021 and 2022 were $2.7 million, $18.1 million, and $10.7 million respectively.

The weighted average grant-date fair value per share of options granted during the years ended December 31, 2020, 2021 and 2022 was $1.06, $5.72, and $6.33, respectively. The fair value of options vested during the years ended December 31, 2020, 2021 and 2022 was $7.0 million, $9.8 million, and $23.9 million, respectively. The fair value is being expensed over the vesting period of the options, on a straight-line basis as the services are being provided.

A summary of restricted stock units is as follows:

---

| | | |
|:---|:---|:---|
|  | **Number of**<br>**shares** | **Weighted**<br>**average grant**<br>**date fair**<br>**value** |
|  Unvested units as of December 31, 2021 | 247000 | $14.84 |
|  Granted | 8523672 | 9.98 |
|  Canceled | (369558) | 10.32 |
|  Unvested units as of December 31, 2022 | 8401114 | $10.11 |

---

In September 2021, the Company began granting RSUs that vest upon the satisfaction of both a service-based and a liquidity-event performance-based vesting condition. The service-based vesting condition for these awards generally is satisfied over four years. The liquidity-based vesting condition is satisfied upon the earlier of (i) an IPO or (ii) change in control of the Company as defined in the Company's equity incentive plans. The RSUs vest on the first date upon which both the service-based and liquidity-event performance-based requirements are satisfied. If the RSUs vest, the Company will deliver one share of common stock for each vested RSU on the settlement date. RSUs granted have a maximum life of seven years.

As of December 31, 2022, the Company had concluded that the liquidity-event performance-based vesting condition had not been met nor was it probable of being satisfied. As a result, the Company did not recognize stock-based compensation expense related to RSUs. In the period in which the liquidity-event performance-based condition becomes probable, the Company will record cumulative stock-based compensation expense for those RSUs for which the service-based vesting condition has been satisfied. As of December 31, 2022, the unrecognized stock-based compensation expense relating to these RSUs totals $13.4 million, and represents the expense expected to be recognized had the liquidity-event performance- based and service-based requirements been met on December 31, 2022.

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**Stock-based compensation expense** 

The table below shows stock-based compensation expense recognized in the consolidated statements of operations (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  Cost of net revenue | $204 | $1025 | $590 |
|  Operations and support | 142 | 110 | 188 |
|  Product development | 2281 | 4779 | 4942 |
|  Sales and marketing | 827 | 983 | 988 |
|  General and administrative | 5219 | 7495 | 11905 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8673 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14392 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18613 |

---

As of December 31, 2022, there was approximately $30.4 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested options, which is expected to be recognized over the weighted average period of 2.33 years.

The Company estimates the fair value of each option award on the date of grant using the Black-Scholes-Merton option-pricing model and using the assumptions noted in the table below. Expected volatility is based upon the historical volatility of a peer group of publicly traded companies. The risk-free rate for the expected term of the options is based on U.S. Treasury zero-coupon issues at the time of grant. The expected dividend yield is 0%, as the Company has never paid and has no intention to pay cash dividends on common stock. The expected term of stock options represents the period that the Company's stock options are expected to be outstanding. The Company uses the simplified method to calculate the expected term for employee grants.

The weighted average assumptions used to value options granted were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  Expected volatility | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;49.80% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;57.80% | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;58.00% |
|  Expected term (in years) | 5.85 | 6.01 | 6.03 |
|  Risk-free interest rate | 0.40% | 0.92% | 2.55% |
|  Dividend yield |  |  |  |

---

**Stock transfers** 

During the years ended December 31, 2020 and 2022, the Company and certain of the Company's investors acquired shares of outstanding common stock from current and former employees as well as non-employees at purchase prices in excess of the estimated fair value at the time of the transactions. As a result, the Company viewed the transactions to be compensatory for financial reporting purposes and recorded a total of $1.1 million and $0.3 million for the years ended December 31, 2020 and 2022, respectively, which are included in total stock-based compensation in the table above. During the year ended December 31, 2021, there were no sales in excess of the fair market value.

**Restricted Shares** 

As part of the acquisition of OuiCar, a portion of the Class C common stock shares issued to the sellers are subject to one year and two year vesting restrictions based on employment service conditions, which represent compensation for post-combination services. The fair value of the shares are being expensed over the vesting

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period. During the year ended December 31, 2022, the Company recognized $1.4 million related to the restricted shares. As of December 31, 2022, the remaining unrecognized compensation expense of $1.9 million will be recognized over the weighted average period of 1.0 years.

**12. Income taxes** 

Net (loss) income before provision for income taxes for the years ended December 31, 2020, 2021 and 2022 consisted of the following (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  United States | $(97200) | $(39596) | $93800 |
|  International | 203 | 320 | (3373) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) income before income taxes | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(96997) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(39276) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90427 |

---

The components of the Company's income tax provision (benefit) for the years ended December 31, 2020, 2021 and 2022 are as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  **Current:** |  |  |  |
|  Federal | $— | $73 | $1700 |
|  State | (7) | 913 | 2582 |
|  Foreign | 93 | 120 | 214 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current | $86 | $1106 | $4496 |
|  **Deferred:** |  |  |  |
|  Federal | $— | $— | $(52155) |
|  State |  |  | (15623) |
|  Foreign |  |  | (955) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred | $— | $— | $(68733) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1106 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(64237) |

---

A reconciliation of the U.S. federal statutory tax rate to the Company's provision for income tax for the years ended December 31, 2020, 2021 and 2022 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  Tax computed at the federal statutory rate | 21.00% | 21.00% | 21.00% |
|  State tax, net of fed tax benefit | 1.29% | (5.30)% | 2.76% |
|  Change in fair value of redeemable convertible preferred stock warrants | (9.08)% | (46.37)% | (11.78)% |
|  Stock-based compensation | (1.65)% | 5.30% | 1.21% |
|  Change in valuation allowance | (10.85)% | 15.79% | (80.66)% |
|  Change in statutory rates | (0.03)% | (0.63)% | (0.11)% |
|  Research and development credits | —% | 8.65% | (5.97)% |
|  Other | (0.77)% | (1.24)% | 2.51% |
|  Effective tax rate | (0.09)% | (2.80)% | (71.04)% |

---

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The

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Company's deferred income tax assets and liabilities as of December 31, 2021 and 2022 consisted of the following (in thousands):

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| | | |
|:---|:---|:---|
|  | **2021** | **2022** |
|  **Deferred tax assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net operating assets | $47883 | $24758 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reserves | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20182 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;34775 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tax credits | 2906 | 2511 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | 4557 | 6330 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accruals | 1609 | 2309 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease liabilities |  | 4497 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Research and development |  | 7852 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | 603 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred tax assets | $77740 | $83032 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Intangibles | (1356) | (2803) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating lease right-of-use assets |  | (3927) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other | (528) | (349) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total deferred tax liability | (1884) | (7079) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: Valuation allowance | (75856) | (8732) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net deferred tax assets | $— | $67221 |

---

During the years ended December 31, 2020 and 2021, the Company's net U.S. federal and state deferred tax assets were previously fully offset by a valuation allowance, primarily as a result of the Company's lack of U.S. earnings history and cumulative loss position. During the year ended December 31, 2022, the Company determined sufficient positive evidence existed to conclude that the U.S. federal deferred tax assets are more likely than not realizable and released the valuation allowance $73.0 million. The Company has a remaining valuation allowance of $8.7 million from one U.S. state and foreign deferred tax assets. The determination was based on an analysis of its deferred tax assets which considered positive and negative evidence, including cumulative income (loss) position, revenue growth, continuing and improved profitability, and expectations regarding future profitability. Although the Company believes its estimates are reasonable, the ultimate determination of the appropriate amount of valuation allowance involves judgment.

As of December 31, 2022, the Company had U.S. federal and state net operating loss ("NOL") carryforwards of approximately $46.3 million and $109.4 million, respectively. The entire $46.3 million federal NOLs is carried forward indefinitely but is limited to 80% of taxable income. If not utilized, these carryforward losses will expire in various amounts for state tax purposes beginning in 2030.

In addition, the Company had approximately $2.5 million and $5.2 million of federal and state research and development tax credits, respectively, available to offset future taxes as of December 31, 2022. If not utilized, the federal credits will begin to expire in 2041. California state research and development tax credits may be carried forward indefinitely.

Utilization of the NOL and tax credit carryforwards may be subject to a substantial annual limitation due to the "ownership change" limitations provided by Section 382 and 383 of the Internal Revenue Code of 1986, as amended, and other similar state provisions. Any annual limitation may result in the expiration of NOL and tax credit carryforwards before utilization.

On March 27, 2020, the President signed into law the CARES Act. The CARES Act contains various tax provisions, such as temporarily allowing a five-year NOL carryback, reducing the 163(j) limitation, and removing the 80% NOL limitation. None of the provisions in the CARES Act have a material effect on the Company's income tax expense.

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The Company is required to inventory, evaluate, and measure all uncertain tax positions taken or to be taken on tax returns, and to record liabilities for the amount of such positions that may not be sustained, or may only partially be sustained, upon examination by the relevant taxing authorities. As of December 31, 2021 and 2022, the Company's total gross unrecognized tax benefits were $2.2 million and $5.1 million, respectively, exclusive of interest and penalties.

A reconciliation of the beginning and ending balance of gross unrecognized tax benefits was as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **2020** | **2021** | **2022** |
|  Balance at beginning of year | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;758 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;758 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2169 |
|  Additions based on tax positions related to current year |  | 640 | 1669 |
|  Additions to tax provision of prior years |  | 771 | 1285 |
|  Balance at end of year | $758 | $2169 | $5122 |

---

The Company files tax returns in the U.S. federal, various state, and foreign jurisdictions. Due to the Company's U.S. NOL carryforwards, the income tax returns generally remain subject to examination by federal and most state tax authorities.

**13. Net (loss) income per share** 

Basic net (loss) income per share is computed by using the two-class method as required for periods in which the Company reports net income. The two-class method requires income (loss) available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income (loss) for the period had been distributed. The holders of the Company's redeemable convertible preferred stock would be entitled to dividends in preference to common stockholder. Any remaining earnings would be distributed among the holders of redeemable convertible preferred stock and common stock pro rata on an as-converted basis. Basic net (loss) income is calculated by dividing the net (loss) income attributable to common stockholders, including the adjustments to redemption value for redeemable non-controlling interests, by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture as they are not deemed to be issued for accounting purposes. Diluted net (loss) income per share is computed by giving effect to the numerator and the denominator for all potential shares of common stock, including convertible preferred stock, stock options, RSUs, warrants, and non-controlling interests, to the extent they are dilutive.

The computation of the Company's basic and diluted net loss per share of common stock attributable to common stockholders was as follows (in thousands, except share and per share amounts):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  **Basic net (loss) income per share:** |  |  |  |
|  **Numerator:** |  |  |  |
|  Net (loss) income | $(97083) | $(40382) | $154664 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Add: net loss attributable to non-controlling interests |  |  | 870 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: deemed dividend attributable to repurchase of preferred stock |  |  | (653) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: adjustments to redemption value for redeemable non-controlling interests |  |  | (22197) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Less: undistributed earnings attributable to participating securities |  |  | (119184) |

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| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  **Net (loss) income attributable to Turo Inc. common stockholders** | $(97083) | $(40382) | $13500 |
|  **Denominator:** |  |  |  |
|  Basic weighted-average number of shares outstanding attributable to Turo Inc. common stockholders: | 25554633 | 29379943 | 31264923 |
|  Basic net (loss) income per share attributable to Turo Inc. common stockholders: | $(3.80) | $(1.37) | $0.43 |
|  **Diluted net (loss) income per share:** |  |  |  |
|  **Numerator:** |  |  |  |
|  Net loss (income) attributable to Turo Inc. common stockholders | $(97083) | $(40382) | $13500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Add: change in fair value of redeemable convertible preferred stock warrant, net of tax |  |  | (50724) |
|  Diluted net (loss) income attributable Turo Inc. common stockholders | $(97083) | $(40382) | $(37224) |
|  **Denominator:** |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Number of shares used in basic net (loss) income computation | 25554633 | 29379943 | 31264923 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Warrants |  |  | 1609650 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted weighted-average common stock outstanding | 25554633 | 29379943 | 32874573 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted net (loss) income per share attributable to Turo Inc. common stockholders | $(3.80) | $(1.37) | $(1.13) |

---

The potentially dilutive securities that were excluded from the diluted per share calculation because they would have been anti-dilutive were as follows:

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| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  Redeemable convertible preferred stock | 170034432 | 183850727 | 183768391 |
|  Warrant for redeemable convertible preferred stock | 25876327 | 26882341 |  |
|  Options to purchase common stock | 22398871 | 27089965 | 26253071 |
|  Unvested restricted stock units |  | 247000 | 8401114 |
|  Total anti-dilutive securities | 218309630 | 238070033 | 218422576 |

---

**14. Retirement plans** 

The Company has a 401(k) plan to provide tax-deferred salary deductions for all eligible employees. Participants may make voluntary contributions to the 401(k) plan, limited by certain Internal Revenue Service restrictions. The Company makes discretionary contributions that vest after two years of service. The Company is responsible for the administrative costs of the 401(k) plan. These administrative costs are immaterial. The Company did not match employee contributions during the year ended December 31, 2020. The Company matched employee contributions totaling $1.6 million and $1.0 million for the years ended December 31, 2021 and 2022, respectively.

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**15. Geographic information** 

The following table sets forth the breakdown of net revenue by geography, determined based on the location of the host's listing (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31,** | **Year ended December 31,** | **Year ended December 31,** |
|  | **2020** | **2021** | **2022** |
|  United States | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;140802 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;451879 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;688100 |
|  International<sup>(1)</sup> | 9103 | 17168 | 58492 |
|  Total net revenue | $149905 | $469047 | $746592 |

---

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<sup>(1)</sup> No individual international country represented 10% or more of the Company's total net revenue for the years ended December 31, 2020, 2021 or 2022.. As of December 31, 2021, substantially all of the Company's property and equipment was located in the United States. As of December 31, 2022, the Company had operating lease right-of-use assets in Canada, UK, and France for $4.3 million. 

**16. Subsequent events** 

The Company has evaluated subsequent events from the balance sheets date through March 23, 2023, the date at which the consolidated financial statements were available to be issued.

In January 2023, the Company paid cash of €27 million to the holders of the Brie Class Series B shares after the holders elected to exercise the Series B Cash Put Options. The payment resulted in a reduction of cash and redeemable non-controlling interest.

In February 2023, the Company entered into a $100.0 million, three-year secured revolving credit facility with JPMorgan Chase Bank, N.A., Citibank, N.A., MUFG Bank, Ltd., and Morgan Stanley Senior Funding, Inc. as lenders. The Company may use borrowings for general corporate purposes and working capital needs. Subject to specific conditions, the credit facility allows the Company to increase the aggregate commitment by an additional $125 million. The terms of the revolving credit facility include a number of covenants that limit the Company's and its subsidiaries' ability to, among other things, incur additional indebtedness, grant liens, merge or consolidate with other companies or sell substantially all of their assets, pay dividends, make redemptions and repurchases of stock, make investments, loans and acquisitions, or engage in transactions with affiliates, as well as a $25 million minimum liquidity requirement. The Company had no outstanding borrowings under the credit facility as of the date the financial statements were available to be issued.

In February 2023, the Company granted 1,041,516 RSUs to its employees under the 2020 Plan, which vest upon the satisfaction of both a service-based vesting condition and a liquidity-event performance-based vesting condition. As of the subsequent events review date, the liquidity event-related performance condition has not been met.

In March 2023, the Company repurchased 50,000 shares of its common stock from an executive officer, at a purchase price of $9.00 per share, for an aggregate purchase price of $450,000.

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Find your drive

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## Part II

## Information not required in prospectus
**Item 13. Other expenses of issuance and distribution.** 

The following table indicates the expenses to be incurred in connection with the offering described in this registration statement, other than underwriting discounts and commissions, all of which will be paid by us. All amounts are estimated except the Securities and Exchange Commission, or the SEC, registration fee, the Financial Industry Regulatory Authority, Inc., or FINRA, filing fee, and the exchange listing fee.

---

| | |
|:---|:---|
|  | **Amount** |
|  SEC registration fee | $9270 |
|  FINRA filing fee | 15500 |
|  Exchange listing fee | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* |
|  Accountants' fees and expenses | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* |
|  Legal fees and expenses | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* |
|  Transfer agent's fees and expenses | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* |
|  Printing fees and expenses | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* |
|  Miscellaneous fees and expenses | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* |
|  Total | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;\* |

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\* To be provided by amendment.

**Item 14. Indemnification of directors and officers.** 

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation's board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act. Our amended and restated certificate of incorporation that will be in effect upon the completion of this offering permits indemnification of our directors, officers, employees, and other agents to the maximum extent permitted by the Delaware General Corporation Law, and our amended and restated bylaws that will be in effect upon the completion of this offering provide that we will indemnify our directors and officers and permit us to indemnify our employees and other agents, in each case to the maximum extent permitted by the Delaware General Corporation Law.

We have entered into indemnification agreements with our directors and officers, whereby we have agreed to indemnify our directors and officers to the fullest extent permitted by law, including indemnification against expenses and liabilities incurred in legal proceedings to which the director or officer was, or is threatened to be made, a party by reason of the fact that such director or officer is or was a director, officer, employee, or agent of ours, provided that such director or officer acted in good faith and in a manner that the director or officer reasonably believed to be in, or not opposed to, our best interest.

The indemnification provisions in our amended and restated certificate of incorporation, amended and restated bylaws, and the indemnification agreements that we have entered into or will enter into with our directors and executive officers may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder's investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and executive officers as required by these indemnification

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##### [**Table of Contents**](#toc)
provisions. At present, there is no pending litigation or proceeding involving a director or officer of ours regarding which indemnification is sought, nor is the registrant aware of any threatened litigation that may result in claims for indemnification.

We maintain insurance policies that indemnify our directors and officers against various liabilities arising under the Securities Act and the Securities Exchange Act of 1934, as amended, that might be incurred by any director or officer in his or her capacity as such.

Certain of our non-employee directors may, through their relationships with their employers, be insured and/or indemnified against certain liabilities incurred in their capacity as members of our board of directors.

The underwriting agreement filed as Exhibit 1.1 to this registration statement provides for indemnification by the underwriters of us and our officers and directors for certain liabilities arising under the Securities Act or otherwise.

**Item 15. Recent sales of unregistered securities.** 

Since March 1, 2020, we have issued the following unregistered securities:

**Preferred stock issuances** 

In April 2020, we issued 270,742 shares of our Series E redeemable convertible preferred stock to one accredited investor at a purchase price of $5.0694 per share, for an aggregate purchase price of approximately $1.4 million.

**Plan-related issuances** 

From March 1, 2020 through the filing date of this registration statement, we granted to certain directors, officers, employees, consultants, and other service providers options to purchase an aggregate of 30,340,423 shares of our common stock under our equity incentive plans, at exercise prices ranging from $1.73 to $15.32 per share.

From March 1, 2020 through the filing date of this registration statement, we issued and sold an aggregate of 6,990,564 shares of our common stock upon the exercise of options under our equity incentive plans, at exercise prices ranging from $0.02 to $14.56 per share, for an aggregate exercise price of approximately $9.7 million.

From March 1, 2020 through the filing date of this registration statement, we granted to certain directors, officers, employees, consultants, and other service providers restricted stock units under our equity incentive plans representing an aggregate of 9,812,688 shares of our common stock.

In July and August 2020, we effected a repricing of outstanding and unexercised options to purchase an aggregate of 9,256,082 shares of our common stock, to an exercise price of $1.73 per share. To effect such option repricing, all such outstanding stock options were amended solely to reduce the exercise price to $1.73 per share; the amended options otherwise continued to have all the same terms and conditions under which they were granted, including the number of underlying shares of our common stock and the expiration date.

**Acquisition-related issuance** 

In May 2022, we issued €44.8 million of Brie Holdings, Inc. securities exchangeable for shares of our common stock in connection with our acquisition of a company to the sellers in such acquisition.

None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or any public offering. Unless otherwise stated, the sales of the above securities were deemed to be exempt from

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##### [**Table of Contents**](#toc)
registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D or Regulation S promulgated thereunder) or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed on the share certificates issued in these transactions.

**Item 16. Exhibits and financial statement schedules.** 

(a) Exhibits.

---

| | |
|:---|:---|
| **Exhibit**<br> **number** | **Description of exhibit** |
| &nbsp;&nbsp;&nbsp;&nbsp;1.1\* | Form of Underwriting Agreement. |
| &nbsp;&nbsp;&nbsp;&nbsp;3.1 | [Restated Certificate of Incorporation of the Registrant, as amended, as currently in effect.](d145731dex31.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.2\*\* | [Amended and Restated Bylaws of the Registrant, as currently in effect.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex32.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;3.3\* | Form of Amended and Restated Certificate of Incorporation of the Registrant, to be effective upon the completion of this offering. |
| &nbsp;&nbsp;&nbsp;&nbsp;3.4\* | Form of Amended and Restated Bylaws of the Registrant, to be effective upon the completion of this offering. |
| &nbsp;&nbsp;&nbsp;&nbsp;4.1\*\* | [Specimen common stock certificate of the Registrant.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex41.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;4.2\*\* | [Amended and Restated Investors' Rights Agreement by and among the Registrant and certain of its stockholders, dated July 23, 2019.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex42.htm) |
| &nbsp;&nbsp;&nbsp;&nbsp;5.1\* | Opinion of Cooley LLP. |
| 10.1\*\*+ | [Form of Indemnification Agreement between the Registrant and each of its directors and executive officers.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex101.htm) |
| 10.2\*\*+ | [Turo Inc. 2010 Equity Incentive Plan and related form agreements.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex102.htm) |
| 10.3\*\*+ | [Turo Inc. 2020 Equity Incentive Plan and related form agreements.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex103.htm) |
| 10.4\*+ | Turo Inc. 2023 Equity Incentive Plan and related form agreements. |
| 10.5\*+ | Turo Inc. 2023 Employee Stock Purchase Plan. |
| 10.6\*\*+ | [Turo Inc. Non-Employee Director Compensation Policy.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex106.htm) |
| 10.7\*\*+ | [Turo Inc. Severance and Change in Control Plan and related participation agreement.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex107.htm) |
| 10.8\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Andre Haddad.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex108.htm) |
| 10.9\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Alex Benn.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex109.htm) |
| 10.10\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Charles Fisher.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1010.htm) |
| 10.11\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Lorie Canchola Boyd.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1011.htm) |
| 10.12\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Michelle Fang.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1012.htm) |
| 10.13\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Avinash Gangadharan.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1013.htm) |
| 10.14\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Andrew Mok.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1014.htm) |
| 10.15\*\*+ | [Confirmatory Offer Letter, dated January 21, 2022, by and between the Registrant and Tom Wang.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1015.htm) |
| 10.16\*\*+ | [Confirmatory Offer Letter, dated May 11, 2022, by and between the Registrant and Albert Mangahas.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1016.htm) |

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##### [**Table of Contents**](#toc)

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| | |
|:---|:---|
| **Exhibit**<br> **number** | **Description of exhibit** |
| 10.17\*\*+ | [Confirmatory Offer Letter, dated May 11, 2022, by and between the Registrant and Julie Weingardt.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dex1017.htm) |
| 10.18\*\* | [Office Lease Agreement between the Registrant and 111 Sutter Street Owner LP, dated July 17, 2019.](http://www.sec.gov/Archives/edgar/data/1514587/000119312522005696/d145731dex1017.htm) |
| 10.19\*\*+ | [Confirmatory Offer Letter, dated August 31, 2022, by and between the Registrant and Jeff Platt.](http://www.sec.gov/Archives/edgar/data/1514587/000119312522236530/d145731dex1019.htm) |
| 10.20 | [Credit Agreement, dated February 6, 2023, by and among the Registrant, JPMorgan Chase Bank, N.A., Citibank, N.A., and the lenders party thereto.](d145731dex1020.htm) |
| 21.1\*\* | [List of subsidiaries of the Registrant.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex211.htm) |
| 23.1 | [Consent of KPMG LLP, independent registered public accounting firm.](d145731dex231.htm) |
| 23.2\* | Consent of Cooley LLP (included in Exhibit 5.1). |
| 24.1\*\* | [Power of Attorney.](http://www.sec.gov/Archives/edgar/data/1514587/000119312522005696/d145731ds1.htm#poa) |
| 99.1\*\* | [Consent of Chaddick Institute for Metropolitan Development at DePaul University in Chicago](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex991.htm). |
| 99.2\*\* | [Consent of The Center for Growth and Opportunity at Utah State University.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522005696/d145731dex992.htm) |
| 99.3 | [Consent of SCIMA LLC.](d145731dex993.htm) |
| 107\*\* | [Filing Fee Table.](http://www.sec.gov/Archives/edgar/data/0001514587/000119312522156266/d145731dexfilingfees.htm) |

---

------

\* To be filed by amendment.

\*\* Previously filed.

+ Indicates management contract or compensatory plan.

(b) Financial Statement Schedules.

All financial statement schedules are omitted because the information required to be set forth therein is not applicable or is shown in the consolidated financial statements or the notes thereto.

**Item 17. Undertakings.** 

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the registrant under the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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##### [**Table of Contents**](#toc)

## Signatures
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Francisco, State of California, on the 23rd day of March, 2023.

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| | |
|:---|:---|
| **TURO INC.** | **TURO INC.** |
| By: | /s/ Andre Haddad |
|  | Andre Haddad |
|  | Chief Executive Officer |

---

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Andre Haddad<br> Andre Haddad | Chief Executive Officer and Chairperson <br>(Principal Executive Officer) | March 23, 2023 |
| /s/ Charles Fisher<br> Charles Fisher | Chief Financial Officer <br>(Principal Financial Officer) | March 23, 2023 |
| /s/ Pippa Walker<br> Pippa Walker | Senior Vice President,<br>Chief Accounting Officer<br>(Principal Accounting Officer) | March 23, 2023 |
| \*<br> Howard Hartenbaum | Director | March 23, 2023 |
| \*<br> Kimberly Jabal | Director | March 23, 2023 |
| \*<br> Bonnie Jonas | Director | March 23, 2023 |
| \*<br> Deepak Kamra | Director | March 23, 2023 |
| \*<br> Joseph Levin | Director | March 23, 2023 |
| \*<br> Shripriya Mahesh | Director | March 23, 2023 |
| \*<br> Brook Porter | Director | March 23, 2023 |

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##### [**Table of Contents**](#toc)

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| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| \*<br> Mark Stein | Director | March 23, 2023 |

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| | |
|:---|:---|
| \*By: | /s/ Andre Haddad |
|  | Attorney-in-fact |

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## Exhibit 3.1

**Exhibit 3.1** 

**TURO INC.** 

**RESTATED CERTIFICATE OF INCORPORATION** 

**(Pursuant to Sections 242 and 245 of the** 

**General Corporation Law of the State of Delaware)** 

Turo Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the "***General Corporation Law"), does hereby certify as follows:***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The name of this corporation is Turo Inc. This corporation was originally incorporated pursuant to the General Corporation Law on August 12, 2009 under the name RelayRides, Inc.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The Board of Directors of this corporation duly adopted resolutions proposing to amend and restate the Restated Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows.

RESOLVED, that the Restated Certificate of Incorporation of this corporation be amended and restated in its entirety to read as set forth on <u>Exhibit A</u> attached hereto and incorporated herein by this reference.

<u>Exhibit A</u> referred to in the resolution above is attached hereto as <u>Exhibit A</u> and is hereby incorporated herein by this reference.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. This Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of this corporation in accordance with Section 228 of the General Corporation Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. This Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation's Restated Certificate of Incorporation, has been duly adopted in accordance with Sections 242 and 245 of the General Corporation Law.

**IN WITNESS WHEREOF**, this Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this 23rd day of July, 2019.

---

| | |
|:---|:---|
| By: | /s/ Andre Haddad |
|  | Andre Haddad, Chief Executive Officer |

---

------

**Exhibit A** 

**TURO INC.** 

**RESTATED CERTIFICATE OF INCORPORATION** 

**<u>ARTICLE I</u>: <u>NAME</u>.** 

The name of this corporation is Turo Inc. (the "***Corporation***").

**<u>ARTICLE II</u>: <u>REGISTERED OFFICE</u>.** 

The address of the registered office of the Corporation in the State of Delaware is 3500 South Dupont Highway, City of Dover, County of Kent, Delaware 19901. The name of its registered agent at such address is Incorporating Services, Ltd.

**<u>ARTICLE III</u>: <u>PURPOSE</u>.** 

The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.

**<u>ARTICLE IV</u>: <u>AUTHORIZED SHARES</u>.** 

The total number of shares of all classes of stock which the Corporation shall have authority to issue is (a) 265,000,000 shares of Common Stock, $0.001 par value per share ("***Common Stock***"), and (b) 192,886,513 shares of Preferred Stock, $0.001 par value per share ("***Preferred Stoc*k**"). As of the effective date of this Restated Certificate of Incorporation (this "***Restated Certificate***"), 13,578,372 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series A Preferred Stock***", 25,651,417 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series A-2 Preferred Stock***", 33,444,862 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series B Preferred Stock***", 19,510,152 shares of the authorized Preferred Stock of the Corporation are hereby designated ****"***Series C Preferred Stock***", 36,187,616 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series D Preferred Stock***", 4,283,572 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series D-1 Preferred Stock***", 49,315,501 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series E Preferred Stock***" and 10,915,021 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series E-1 Preferred Stock***." ****

The following is a statement of the designations and the rights, powers and preferences, and the qualifications, limitations or restrictions thereof, in respect of each class of capital stock of the Corporation.

**A.** **COMMON STOCK** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1. <u>General</u>.** The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2. <u>Voting</u>.** The holders of the Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). Unless required by law, there shall be no cumulative voting. The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Restated Certificate) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law (with the Series D-1 Preferred Stock being subject to the Regulatory Voting Restriction (as defined below) for such purpose) and without a separate class vote of the holders of the Common Stock.

**B.** **PREFERRED STOCK** 

The following rights, powers and preferences, and restrictions, qualifications and limitations, shall apply to the Preferred Stock. Unless otherwise indicated, references to "Sections" in this Part B of this Article IV refer to sections of this Part B.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** Dividends.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Non-Cumulative Series E Preferred Stock and Series E-1 Preferred Stock Dividend Preference</u>. The Corporation shall not pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) in any calendar year unless (in addition to the obtaining of any consents required elsewhere in this Restated Certificate or repurchases of Corporation capital stock and other equity securities by the Corporation pursuant to the "Company Tender Offer" (as defined in that certain Series E Preferred Stock Purchase Agreement between the Corporation and the "Purchasers" thereunder dated as of July 16, 2019, as amended from time to time (the "***Series E SPA***"))) the holders of the Series E Preferred Stock and Series E-1 Preferred Stock then outstanding shall first receive, or simultaneously receive, out of funds legally available therefor, a dividend on each outstanding share of Series E Preferred Stock and Series E-1 Preferred Stock in an amount equal to eight percent of the Original Issue Price (as defined below) per share for the Series E Preferred Stock and Series E-1 Preferred Stock. The foregoing dividends shall not be cumulative and shall be paid when, as and if declared by the Board of Directors of the Corporation (the "***Board***"). Payments of any dividends to the holders of Series E Preferred Stock and Series E-1 Preferred Stock under this Section 1.1 shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences as set forth herein. "***Original Issue Price***" shall mean $0.4509 per share for the Series A Preferred Stock, shall mean $0.5680 per share for the Series A-2 Preferred Stock, shall mean $1.0515 per share for the Series B Preferred Stock, shall mean $2.3885 per share for the Series C Preferred Stock, shall mean $4.6690 per share for the Series D Preferred Stock and Series D-1 Preferred Stock, shall mean $5.0694 per share for the Series E Preferred Stock and shall mean $3.8021 per share for the Series E-1 Preferred Stock, each subject to appropriate adjustment in the event of any stock splits and combinations of shares of such series and for dividends paid on the Preferred Stock in shares of such stock. The "***Special Series E Original Issue Price***" and the "***Special Series E Adjustment Event***" shall have the definitions given each such term in Exhibit J of the Series E SPA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2 <u>Non-Cumulative Series D Preferred Stock and Series D-1 Preferred Stock Dividend Preference</u>. Subject to the dividend preference of the Series E Preferred Stock and Series E-1 Preferred Stock set forth in Section 1.1, the Corporation shall not pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock or repurchases of Corporation capital stock and other equity securities by the Corporation pursuant to the Company Tender Offer) in any calendar year unless (in addition to the obtaining of any consents required elsewhere in this Restated Certificate) the holders of the Series D Preferred Stock and Series D-1 Preferred Stock then outstanding shall first receive, or simultaneously receive, out of funds legally available therefor, a dividend on each outstanding share of Series D Preferred Stock and Series D-1 Preferred Stock in an amount equal to eight percent of the Original Issue Price per share for the Series D Preferred Stock and Series D-1 Preferred Stock. The foregoing

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dividends shall not be cumulative and shall be paid when, as and if declared by the Board. Payments of any dividends to the holders of Series D Preferred Stock and Series D-1 Preferred Stock shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences as set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.3 <u>Non-Cumulative Series C Preferred Stock Dividend Preference</u>. Subject to the dividend preference of the Series E Preferred Stock and Series E-1 Preferred Stock set forth in Section 1.1 and the dividend preference of the Series D Preferred Stock and Series D-1 Preferred Stock set forth in Section 1.2, the Corporation shall not pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock or repurchases of Corporation capital stock and other equity securities by the Corporation pursuant to the Company Tender Offer) in any calendar year unless (in addition to the obtaining of any consents required elsewhere in this Restated Certificate) the holders of the Series C Preferred Stock then outstanding shall first receive, or simultaneously receive, out of funds legally available therefor, a dividend on each outstanding share of Series C Preferred Stock in an amount equal to eight percent of the Original Issue Price per share for the Series C Preferred Stock. The foregoing dividends shall not be cumulative and shall be paid when, as and if declared by the Board. Payments of any dividends to the holders of Series C Preferred Stock shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences as set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.4 <u>Non-Cumulative Series B Preferred Stock Dividend Preference</u>. Subject to the dividend preference of the Series E Preferred Stock and Series E-1 Preferred Stock set forth in Section 1.1, the dividend preference of the Series D Preferred Stock and Series D-1 Preferred Stock set forth in Section 1.2 and the dividend preference of the Series C Preferred Stock set forth in Section 1.3, the Corporation shall not pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock or repurchases of Corporation capital stock and other equity securities by the Corporation pursuant to the Company Tender Offer) in any calendar year unless (in addition to the obtaining of any consents required elsewhere in this Restated Certificate) the holders of the Series B Preferred Stock then outstanding shall first receive, or simultaneously receive, out of funds legally available therefor, a dividend on each outstanding share of Series B Preferred Stock in an amount equal to eight percent of the Original Issue Price per share for the Series B Preferred Stock. The foregoing dividends shall not be cumulative and shall be paid when, as and if declared by the Board. Payments of any dividends to the holders of Series B Preferred Stock shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences as set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.5 <u>Non-Cumulative Series A Preferred Stock and Series A-2 Preferred Stock Dividend Preference</u>. Subject to the dividend preference of the Series E Preferred Stock and Series E-1 Preferred Stock set forth in Section 1.1, the dividend preference of the Series D Preferred Stock and Series D-1 Preferred Stock set forth in Section 1.2, the dividend preference of the Series C Preferred Stock set forth in Section 1.3 and the dividend preference of the Series B Preferred Stock set forth in Section 1.4, the Corporation shall not pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock or repurchases of Corporation capital stock and other equity securities by the Corporation pursuant to the Company Tender Offer) in any calendar year unless (in addition to the obtaining of any consents required elsewhere in this Restated Certificate) the holders of the Series A Preferred Stock and Series A-2 Preferred Stock then outstanding shall first receive, or simultaneously receive, out of funds legally available therefor, a dividend on each outstanding share of Series A Preferred Stock and Series A-2 Preferred Stock in an amount equal to eight percent of the applicable Original Issue Price per share for such series of Preferred Stock. The foregoing dividends shall not be cumulative and shall be paid when, as and if declared by the Board. Payments of any dividends to the holders of Series A Preferred Stock and Series A-2 Preferred Stock shall be paid pro rata, on an equal priority, pari passu basis according to their respective dividend preferences as set forth herein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6 <u>Participation</u>. If, after dividends in the full preferential amount specified in Sections 1.1, 1.2, 1.3, 1.4 and 1.5 for the Preferred Stock have been paid or set apart for payment in any calendar year of the Corporation, the Board shall declare additional dividends out of funds legally available therefor in that calendar year (other than repurchases of Corporation capital stock and other equity securities by the Corporation pursuant to the Company Tender Offer), then such additional dividends shall be declared pro rata on the Common Stock and the Preferred Stock on a pari passu basis according to the number of shares of Common Stock held by such holders. For this purpose each holder of shares of Preferred Stock is to be treated as holding the greatest whole number of shares of Common Stock then issuable upon conversion of all shares of Preferred Stock held by such holder pursuant to Sections 4 and 5 (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.7 <u>Non-Cash Dividends</u>. Whenever a dividend provided for in this Section 1 shall be payable in property other than cash, subject to Section B(2) of Article V, the value of such dividend shall be deemed to be the fair market value of such property as determined in good faith by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Payments to Holders of Preferred Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1.1 In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event (as defined below), before any payment shall be made to the holders of Series D-1 Preferred Stock, Series D Preferred Stock, Series C Preferred Stock, Series B Preferred Stock, Series A-2 Preferred Stock, Series A Preferred Stock (the Series D-1 Preferred Stock, Series D Preferred Stock, Series C Preferred Stock, Series B Preferred Stock, Series A-2 Preferred Stock and Series A Preferred Stock are hereinafter collectively referred to as the "***Junior Preferred Stock***") or Common Stock by reason of their ownership thereof, the holders of shares of Series E Preferred Stock and Series E-1 Preferred Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the Original Issue Price for the Series E Preferred Stock and Series E-1 Preferred Stock, respectively, plus any dividends declared but unpaid thereon. If upon any such liquidation, dissolution, winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation shall be insufficient to pay the holders of shares of Series E Preferred Stock and Series E-1 Preferred Stock the full amounts to which they are entitled under this Section 2.1.1, the holders of shares of Series E Preferred Stock and Series E-1 Preferred Stock shall share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Series E Preferred Stock and Series E-1 Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Notwithstanding the above, for purposes of determining the amount each holder of shares of Series E Preferred Stock and Series E-1 Preferred Stock is entitled to receive with respect to a Deemed Liquidation Event, each holder of shares of Series E Preferred Stock and Series E-1 Preferred Stock shall be deemed to have converted (regardless of whether such holder actually converted) such holder's shares of Series E Preferred Stock or Series E-1 Preferred Stock into shares of Common Stock immediately prior to the Deemed Liquidation Event if, as a result of an actual conversion of such Series E Preferred Stock or Series E-1 Preferred Stock, the holders of such Series E Preferred Stock or Series E-1 Preferred Stock would receive in respect of the shares of such Series E Preferred Stock or Series E-1 Preferred Stock, in the aggregate, an amount greater than the amount that would be distributed to such holders if such holders did not convert the shares of such Series E Preferred Stock or Series E-1 Preferred Stock into shares of Common Stock. If any such holder shall be deemed to have converted shares of Series E Preferred Stock or Series E-1 Preferred Stock into Common Stock pursuant to this paragraph, then such holder shall not be entitled to receive any distribution that would otherwise be made to holders of shares of Series E Preferred Stock or Series E-1 Preferred Stock that have not converted into shares of Common Stock.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1.2 In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event, after the payment of all preferential amounts required to be paid to the holders of shares of Series E Preferred Stock and Series E-1 Preferred Stock as provided in Section 2.1.1, and before any payment shall be made to the holders of Common Stock by reason of their ownership thereof, the holders of shares of Junior Preferred Stock then outstanding shall be entitled to be paid out of the funds and assets available for distribution to its stockholders, an amount per share equal to the Original Issue Price for such series of Junior Preferred Stock, plus any dividends declared but unpaid thereon. If upon any such liquidation, dissolution, winding up or Deemed Liquidation Event of the Corporation, the funds and assets available for distribution to the stockholders of the Corporation shall be insufficient to pay the holders of shares of Junior Preferred Stock the full amounts to which they are entitled under this Section 2.1.2, the holders of shares of Junior Preferred Stock shall share ratably in any distribution of the funds and assets available for distribution in proportion to the respective amounts that would otherwise be payable in respect of the shares of Junior Preferred Stock held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. Notwithstanding the above, for purposes of determining the amount each holder of shares of Junior Preferred Stock is entitled to receive with respect to a Deemed Liquidation Event, each holder of shares of a series of Junior Preferred Stock shall be deemed to have converted (regardless of whether such holder actually converted) such holder's shares of such series of Junior Preferred Stock into shares of Common Stock immediately prior to the Deemed Liquidation Event (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) if, as a result of an actual conversion of such series of Junior Preferred Stock, the holders of such series of Junior Preferred Stock would receive in respect of the shares of such series of Junior Preferred Stock, in the aggregate, an amount greater than the amount that would be distributed to such holders if such holders did not convert the shares of such series of Junior Preferred Stock into shares of Common Stock. If any such holder shall be deemed to have converted shares of a series of Junior Preferred Stock into Common Stock pursuant to this paragraph (with the Series D-1 Preferred Stock being treated as convertible (but without actual conversion) into Common Stock for such purpose), then such holder shall not be entitled to receive any distribution that would otherwise be made to holders of shares of such series of Junior Preferred Stock that have not converted (or have not been deemed to have converted) into shares of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Payments to Holders of Common Stock</u>. In the event of any voluntary or involuntary liquidation, dissolution, winding up of the Corporation or any Deemed Liquidation Event, after the payment of all preferential amounts required to be paid to the holders of shares of Series E Preferred Stock and Series E-1 Preferred Stock as provided in Section 2.1.1 and the holders of shares of Junior Preferred Stock as provided in Section 2.1.2, the remaining funds and assets available for distribution to the stockholders of the Corporation shall be distributed solely among the holders of shares of Common Stock, pro rata based on the number of shares of Common Stock held by each such holder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Deemed Liquidation Events</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.1 <u>Definition</u>. Each of the following events shall be considered a "***Deemed Liquidation Event***" unless the holders of at least 65% of the outstanding shares of Preferred Stock (voting together as a single class on an as-converted basis and with the Series D-1 Preferred Stock not being subject to the Regulatory Voting Restriction and being treated as convertible, but without actual conversion, into Common Stock for such purpose) elect otherwise by written notice sent to the Corporation at least five days prior to the effective date of any such event; *<u>provided</u>*, *<u>however</u>*, that with respect to the Series E Preferred Stock and Series E-1 Preferred Stock, treatment of the following events as a Deemed Liquidation Event pursuant to this Section 2.3.1 may be waived only by the holders of a majority of the outstanding shares of Series E Preferred Stock and Series E-1 Preferred Stock, voting together as a separate class on an as-converted basis:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a merger or consolidation (each a "***Combination***") in which (i) the Corporation is a constituent party or (ii) a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such Combination, except any such Combination involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such Combination continue to represent, or are converted into or exchanged for equity securities that represent, immediately following such Combination, at least a majority, by voting power, of the equity securities of (1) the surviving or resulting party or (2) if the surviving or resulting party is a wholly owned subsidiary of another party immediately following such Combination, the parent of such surviving or resulting party; *<u>provided</u>* that, for the purpose of this Section 2.3.1, all shares of Common Stock issuable upon exercise of Options (as defined in Section 5 below) outstanding immediately prior to such Combination or upon conversion of Convertible Securities (as defined in Section 5 below) outstanding immediately prior to such Combination shall be deemed to be outstanding immediately prior to such Combination and, if applicable, deemed to be converted or exchanged in such Combination on the same terms as the actual outstanding shares of Common Stock are converted or exchanged (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, for such purpose);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary or subsidiaries of the Corporation, of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole (or, if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by one or more subsidiaries, the sale or disposition (whether by consolidation, merger, conversion or otherwise) of such subsidiaries of the Corporation), except where such sale, lease, transfer, exclusive license or other disposition is made to the Corporation or one or more wholly owned subsidiaries of the Corporation; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the closing of the transfer (whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated persons (other than an underwriter of the Corporation's securities), of the Corporation's securities if, after such closing, such person or group of affiliated persons would hold 50% or more of the outstanding voting stock of the Corporation (or the surviving or acquiring entity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.2 <u>Effecting a Deemed Liquidation Event</u>. The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in Section 2.3.1(a)(i) unless the agreement or plan of merger or consolidation for such transaction (the "***Merger Agreement***") provides that the consideration payable to the stockholders of the Corporation in such Deemed Liquidation Event shall be paid to the holders of capital stock of the Corporation in accordance with Sections 2.1 and 2.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.3 <u>Amount Deemed Paid or Distributed</u>. Subject to Section B(2) of Article V, the funds and assets deemed paid or distributed to the holders of capital stock of the Corporation upon any such Deemed Liquidation Event shall be the cash or the value of the property, rights or securities paid or distributed to such holders by the Corporation or the acquiring person, firm or other entity. If the amount deemed paid or distributed under this Section 2.3.3 is made in property other than in cash, the value of such distribution shall be, subject to Section B(2) of Article V, the fair market value of such property, as determined in good faith by the Board; *<u>provided</u>*, *<u>however</u>*, that the following shall apply. For securities not subject to investment letters or other similar restrictions on free marketability:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if traded on a securities exchange, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the 30-day period ending three days prior to the closing of such transaction;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if actively traded over-the-counter, the value shall be deemed to be the average of the closing bid prices over the 30-day period ending three days prior to the closing of such transaction; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board.

The method of valuation of securities subject to investment letters or other similar restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder's status as an affiliate or former affiliate) shall take into account an appropriate discount (as determined in good faith by the Board) from the market value as determined pursuant to clause (a) above so as to reflect the approximate fair market value thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3.4 <u>Allocation of Escrow and Contingent Consideration</u>. In the event of a Deemed Liquidation Event pursuant to Section 2.3.1(a)(i), if any portion of the consideration payable to the stockholders of the Corporation is payable only upon satisfaction of contingencies (the "***Additional Consideration***"), the Merger Agreement shall provide that (a) the portion of such consideration that is not Additional Consideration (such portion, the "***Initial Consideration***") shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 2.1 and 2.2 as if the Initial Consideration were the only consideration payable in connection with such Deemed Liquidation Event; and (b) any Additional Consideration which becomes payable to the stockholders of the Corporation upon satisfaction of such contingencies shall be allocated among the holders of capital stock of the Corporation in accordance with Sections 2.1 and 2.2 after taking into account the previous payment of the Initial Consideration as part of the same transaction. For the purposes of this Section 2.3.4, consideration placed into escrow or retained as a holdback to be available for satisfaction of indemnification or similar obligations in connection with such Deemed Liquidation Event shall be deemed to be Additional Consideration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** <u>Voting</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>General</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.1 On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), except as otherwise provided in this Restated Certificate, including the Regulatory Voting Restriction, or as required by law, each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose). Fractional votes shall not be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred stock held by each holder could be converted, with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) shall be rounded to the nearest whole number (with one-half being rounded upward). Except as provided by law or by the other provisions of this Restated Certificate, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class on an as-converted basis (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose), shall have full voting rights and powers equal to the voting rights and powers of the holders of Common Stock, and shall be entitled, notwithstanding any provision hereof, to notice of any stockholders' meeting in accordance with the Bylaws of the Corporation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1.2 <u>Regulatory Voting Restriction</u>. Notwithstanding the stated or statutory voting rights of holders of shares of Series D-1 Preferred Stock, in no event shall a Regulated Holder (as defined below) and its Transferees (as defined below), collectively, be entitled to vote shares representing more than 4.99% of the voting power of all shares of the Corporation entitled to vote on any matter (including matters with respect to which such holders are entitled to provide their consent), including matters with respect to which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the holders of Series D Preferred Stock and the Series D-1 Preferred Stock vote together as a single class;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the holders of Preferred Stock vote together as a single class; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the holders of Preferred Stock vote with shares of Common Stock as a single class on an as-converted basis;

(such voting rights to be allocated pro rata among the Regulated Holder (as defined below) and its Transferees based on the number of shares of Series D-1 Preferred Stock held by each such holder); *<u>provided</u>*, *<u>however</u>*, that, notwithstanding anything herein to the contrary, if there are no shares of Series D Preferred Stock outstanding, the ownership of shares of Series D-1 Preferred Stock will not convey to the holder thereof any right to vote for matters on which shares of Series D Preferred Stock and Series D-1 Preferred Stock are entitled to vote as a single class, and in the event there are no shares of Preferred Stock outstanding other than the Series D-1 Preferred Stock, the ownership of shares of Series D-1 Preferred Stock will not convey to the holder thereof any right to vote for matters on which shares of Preferred Stock are entitled to vote as a single class; *<u>provided</u>*, *<u>further</u>*, that the Regulatory Voting Restriction shall not apply to matters requiring approval of the holders of shares of Series D-1 Preferred Stock pursuant to Section 3.8 below or as otherwise provided expressly herein regarding the approval or consent of the Series D-1 Preferred Stock. The restrictions described in this Section 3.1.2 are referred to herein as the "***Regulatory Voting Restriction***".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2 <u>Election of Directors</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.1 <u>Election</u>. For so long as at least 2,980,000 shares of Series A Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series A Preferred Stock, exclusively and as a separate class, shall be entitled to elect one director of the Corporation (the "***Series A Director***"). For so long as at least 4,760,000 shares of Series B Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series B Preferred Stock, exclusively and as a separate class, shall be entitled to elect one director of the Corporation (the "***Series B Director***"). For so long as at least 3,900,000 shares of Series C Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series C Preferred Stock, exclusively and as a separate class, shall be entitled to elect one director of the Corporation (the "***Series C Director***"). Until December 31, 2019 and for so long as at least 4,300,000 shares of Series D Preferred and Series D-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series D Preferred Stock and Series D-1 Preferred Stock, exclusively and as a separate class and with the Series D-1 Preferred Stock being subject to the Regulatory Voting Restriction for such purpose, shall be entitled to elect two directors of the Corporation (each a "***Series D Director***" and together, the "***Series D Directors***"); *<u>provided</u>* that following December 31, 2019, the second Series D Director seat shall terminate and following such date, for so long as at least 4,300,000 shares of Series D Preferred and Series D-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series D Preferred

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Stock and Series D-1 Preferred Stock, exclusively and as a separate class and with the Series D-1 Preferred Stock being subject to the Regulatory Voting Restriction for such purpose, shall be entitled to elect one Series D Director. For so long as at least 12,328,875 shares of Series E Preferred Stock and Series E-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series E Preferred Stock and Series E-1 Preferred Stock, exclusively and as a separate class, shall be entitled to elect two directors of the Corporation (each, a "***Series E Director***", and collectively, the "***Series E Directors***" and, together with the Series A Director, the Series B Director, the Series C Director and the Series D Director(s), the "***Preferred Directors***"). The holders of record of the shares of Common Stock and of every other class or series of voting stock (including the Preferred Stock), voting together as a single class on an as-converted basis (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose), shall be entitled to elect the remaining number of directors of the Corporation (the "***Remaining Directors***"). Any director elected as provided in this Section 3.2.1 may be removed without cause only by the affirmative vote of the holders of the Specified Stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.2 <u>Vacancies</u>. If any vacancy in the office of any of the Preferred Directors or Remaining Directors exists prior to the date and time the first share of Series E Preferred Stock is issued (the "***First Issuance Time***"), such vacancy may be filled (either contingently or otherwise) by the stockholders as specified in this Section 3.2 or by at least a majority of the members of the Board then in office, although less than a quorum, or by a sole remaining member of the Board then in office, even if such directors or such sole remaining director were not elected by the holders of the class, classes or series that are entitled to elect a director or directors to office under the provisions of Section 3.2.1 (the "***Specified Stock***") and such electing director or directors shall specify at the time of such election the specific vacant directorship being filled. After the First Issuance Time, no vacancy in the office of any director may be filled by the Board or by any director or directors elected by the holders of Specified Stock, but may only be filled by the affirmative vote of the holders of the Specified Stock entitled to elect such director or directors as provided in this Section 3.2, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2.3 <u>Procedure</u>. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the Specified Stock entitled to elect such director shall constitute a quorum for the purpose of electing such director and the candidate or candidates to be elected by such Specified Stock shall be those who receive the highest number of affirmative votes (with each respective class, classes or series voting separately on an as-converted basis, with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into shares of Common Stock for such purpose) of the outstanding shares of such Specified Stock. In the case of an action taken by written consent without a meeting, the candidate or candidates to be elected by such Specified Stock shall be those who are elected by the written consent of the holders of a majority of such Specified Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3 <u>Preferred Stock Protective Provisions</u>. At any time when at least 28,500,000 shares of Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent, or affirmative vote at a meeting and evidenced in writing, of the holders of at least a majority of the then outstanding shares of Preferred Stock, consenting or voting together as a single class on an as-converted basis (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) alter or change the rights, privileges, powers or preferences of the Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease the authorized number of shares of Common Stock or Preferred Stock (or any series thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) authorize, create or issue (by reclassification or otherwise) any new class or series of capital stock having rights, powers or preferences set forth in the certificate of incorporation of the Corporation, as then in effect, that are senior to or on a parity with any series of Preferred Stock in right of redemption, liquidation preference, voting or dividend rights, or authorize, create or issue (by reclassification or otherwise) any security convertible into or exercisable for any such new class or series of capital stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) redeem or repurchase any shares of Common Stock or Preferred Stock (or paying into or setting aside for a sinking fund for such purpose), other than (i) pursuant to an agreement with an employee, consultant, director or other service provider to the Corporation or any of its wholly owned subsidiaries (collectively, "***Service Providers***") giving the Corporation the right to repurchase shares at the original cost thereof upon the termination of services; (ii) an exercise of a right of first refusal in favor of the Corporation pursuant to an agreement with any Service Provider, which exercise has been approved by the Board; (iii) pursuant to the Company Tender Offer; or (iv) as contemplated by this Restated Certificate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) declare or pay any dividend or otherwise make a distribution to holders of Preferred Stock or Common Stock, other than a dividend on the Common Stock payable in shares of Common Stock or pursuant to the Company Tender Offer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) create or amend (including an increase in the number of shares of Common Stock or Preferred Stock subject to issuance thereunder) any stock plan or arrangement for the benefit of Service Providers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) incur any indebtedness, except any trade debt or other unsecured debt incurred in the ordinary course of business, in excess of $5,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) effect any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) consummate the acquisition of another entity by the Corporation (or any subsidiary of the Corporation), by merger or consolidation with, purchase of all or substantially all of the assets of, or purchase of more than fifty percent of the outstanding equity securities of, the other entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) increase or decrease the authorized number of directors constituting the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) establish or invest in any subsidiary (excluding any wholly owned subsidiary), spin-out or joint venture; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) otherwise amend, alter, restate, or repeal any provision of the Restated Certificate or the Bylaws of the Corporation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4 <u>Series A-2 Preferred Stock Protective Provisions</u>. At any time when at least 2,980,000 shares of Series A-2 Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Series A-2 Preferred Stock in shares of such stock), the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, without (in addition to any other vote required by law or the Restated Certificate) the written consent, or affirmative vote at a meeting and evidenced in writing, of the holders of at least 65% of the then outstanding shares of Series A-2 Preferred Stock, consenting or voting together as a single class on an as-converted basis, alter or change the rights, powers or preferences of the Series A-2 Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, *<u>provided</u>*, that the authorization, creation or issuance of any new or existing class or series of equity security (including any other security convertible into or exercisable for any such new or existing class or series of equity security) having any rights, powers or preferences senior to, pari passu with or junior to the Series A-2 Preferred Stock shall not be deemed to alter, amend, terminate, repeal or waive the rights, powers or preferences of the Series A-2 Preferred Stock requiring the affirmative vote or written consent of the holders of the Series A-2 Preferred Stock pursuant to this Section.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5 <u>Series B Preferred Stock Protective Provisions</u>. At any time when at least 4,760,000 shares of Series B Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Series B Preferred Stock in shares of such stock), the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent, or affirmative vote at a meeting and evidenced in writing, of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock, consenting or voting together as a single class on an as-converted basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) alter or change the rights, powers or preferences of the Series B Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, *<u>provided</u>*, that, subject to Section 3.5(b) below, the authorization, creation or issuance of any new or existing class or series of equity security (including any other security convertible into or exercisable for any such new or existing class or series of equity security) having any rights, powers or preferences senior to, pari passu with or junior to the Series B Preferred Stock shall not be deemed to alter, amend, terminate, repeal or waive the rights, powers or preferences of the Series B Preferred Stock requiring the affirmative vote or written consent of the holders of the Series B Preferred Stock pursuant to this Section; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease the authorized number of shares of Series B Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6 <u>Series C Preferred Stock Protective Provisions</u>. At any time when at least 3,900,000 shares of Series C Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Series C Preferred Stock in shares of such stock), the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent, or affirmative vote at a meeting and evidenced in writing, of the holders of at least 65% of the then outstanding shares of Series C Preferred Stock, consenting or voting together as a single class on an as-converted basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) alter or change the rights, powers or preferences of the Series C Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, *<u>provided</u>*, that, subject to Section 3.6(b) below, the authorization, creation or issuance of any new or existing class or series of equity security (including any other security convertible into or exercisable for any such new or existing class or series of equity security) having any rights, powers or preferences senior to, pari passu with or junior to the Series C Preferred Stock shall not be deemed to alter, amend, terminate, repeal or waive the rights, powers or preferences of the Series C Preferred Stock requiring the affirmative vote or written consent of the holders of the Series C Preferred Stock pursuant to this Section; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease the authorized number of shares of Series C Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.7 <u>Series D Preferred Stock Protective Provisions</u>. At any time when at least 4,300,000 shares of Series D Preferred Stock and Series D-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Series D Preferred Stock and Series D-1 Preferred Stock in shares of such stock), the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent, or affirmative vote at a meeting and evidenced in writing, of the holders of at least 60% of the then outstanding shares of Series D Preferred Stock and Series D-1 Preferred Stock, consenting or voting together as a single class on an as-converted basis (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) alter or change the rights, powers or preferences of the Series D Preferred Stock and Series D-1 Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, *<u>provided</u>*, that, subject to Section 3.7(b) below, the authorization, creation or issuance of any new or existing class or series of equity security (including any other security convertible into or exercisable for any such new or existing class or series of equity security) having any rights, powers or preferences senior to, pari passu with or junior to the Series D Preferred Stock and Series D-1 Preferred Stock shall not be deemed to alter, amend, terminate, repeal or waive the rights, powers or preferences of the Series D Preferred Stock and Series D-1 Preferred Stock requiring the affirmative vote or written consent of the holders of the Series D Preferred Stock and Series D-1 Preferred Stock pursuant to this Section; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease the authorized number of shares of Series D Preferred Stock and Series D-1 Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.8 <u>Series D-1 Preferred Stock Protective Provisions</u>. So long as any shares of Series D-1 Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, waive, amend, alter or repeal any provision of this Restated Certificate or the Bylaws of the Corporation without (in addition to any other vote required by law or this Restated Certificate) the written consent or affirmative vote of the holders of a majority of the then outstanding shares of Series D-1 Preferred Stock (with the Series D-1 Preferred Stock not being subject to the Regulatory Voting Restriction for purposes of this specific written consent or affirmative vote), given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increases the number of authorized shares of Series D-1 Preferred Stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) amends, modifies or waives any of the terms set forth in Article V below, the protective provisions set forth in this Section 3.8 or any provision intended to address the regulatory status as a bank holding company under the BHCA (as defined below) of the initial or any subsequent holder of Series D-1 Preferred Stock.

In no event shall the Series D-1 Preferred Stock be entitled to vote, or act by written consent, on any matter as a single "class" of "voting securities" as such terms are interpreted under the BHCA. For the avoidance of doubt, the foregoing provisions in this Section 3.8 shall continue to apply with respect to the Series D-1 Preferred Stock after a Deemed Optional Conversion or Deemed Automatic Conversion (each as defined below).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.9 <u>Series E Preferred Stock Protective Provisions</u>. At any time when at least 12,328,875 shares of Series E Preferred Stock and Series E-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Series E Preferred Stock or Series E-1 Preferred Stock in shares of such stock), the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent, or affirmative vote at a meeting and evidenced in writing, of the holders of a majority of the then outstanding shares of Series E Preferred Stock and Series E-1 Preferred Stock, consenting or voting together as a single class on an as-converted basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) alter or change the rights, powers or preferences of the Series E Preferred Stock or Series E-1 Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, *<u>provided</u>*, that, subject to Section 3.9(b) below, the authorization, creation or issuance of any new or existing class or series of equity security (including any other security convertible into or exercisable for any such new or existing class or series of equity security) having any rights, powers or preferences senior to, pari passu with or junior to the Series E Preferred Stock or Series E-1 Preferred Stock shall not be deemed to alter, amend, terminate, repeal or waive the rights, powers or preferences of the Series E Preferred Stock or Series E-1 Preferred Stock requiring the affirmative vote or written consent of the holders of the Series E Preferred Stock and Series E-1 Preferred Stock pursuant to this Section;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease the authorized number of shares of Series E Preferred Stock or Series E-1 Preferred Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) redeem or repurchase any shares of Common Stock or Preferred Stock (or paying into or setting aside for a sinking fund for such purpose), other than (i) pursuant to an agreement with any Service Provider giving the Corporation the right to repurchase shares at the original cost thereof upon the termination of services; (ii) an exercise of a right of first refusal in favor of the Corporation pursuant to an agreement with any Service Provider, which exercise has been approved by the Board; (iii) pursuant to the Company Tender Offer; or (iv) as contemplated by this Restated Certificate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) declare or pay any dividend or otherwise make a distribution to holders of Preferred Stock or Common Stock, other than a dividend on the Common Stock payable in shares of Common Stock or pursuant to the Company Tender Offer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) effect any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event which results in a per share consideration payable to the holders of Series E Preferred Stock that is less than the lower of (i) three (3) times the Original Issue Price of the Series E Preferred Stock, or (ii) upon the occurrence of a Special Series E Adjustment Event (regardless if there has been an adjustment to the Conversion Price under Section 3 of Exhibit J of the Series E SPA), three (3) times the Special Series E Original Issue Price (subject to appropriate adjustment in the event of any stock splits and combinations of shares and for dividends paid on the Series E Preferred Stock in shares of such stock);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) consummate the acquisition of another entity by the Corporation (or any subsidiary of the Corporation), by merger or consolidation with, purchase of all or substantially all of the assets of, or purchase of more than fifty percent of the outstanding equity securities of, the other entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) increase or decrease the authorized number of directors constituting the Board; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) establish or invest in any subsidiary (excluding any wholly owned subsidiary), spin-out or joint venture.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4. <u>Conversion Rights</u>.** The holders of the Preferred Stock shall have conversion rights, if any, as follows (the "***Conversion Rights***"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Right to Convert</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.1 <u>Non-Regulated Preferred Stock</u>. Each share of a series of Preferred Stock, other than the Series D-1 Preferred Stock (the "***Non-Regulated Preferred Stock***"), shall be convertible, at the option of the holder thereof, at any time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for such series of Non-Regulated Preferred Stock by the Conversion Price (as defined below) for such series of Preferred Stock in effect at the time of conversion. The "***Conversion Price***" for each series of Non-Regulated Preferred Stock shall initially mean the Original Issue Price for such series of Non-Regulated Preferred Stock. Such initial Conversion Price, and the rate at which shares of Non-Regulated Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided in Section 5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.2 <u>Series D-1 Preferred Stock</u>. Shares of Series D-1 Preferred Stock shall not be convertible into Common Stock pursuant to Section 4.1.1 in the hands of a Regulated Holder or its Transferees (unless such conversion is in connection with a Permitted Regulatory Transfer (as defined below) (such restriction, the "***Regulatory Conversion Restriction***"). Instead, upon notice to the Corporation from the holder of Series D-1 Preferred Stock that it intends to exercise the rights granted pursuant to the remainder of this sentence (a "***Deemed Conversion Notice***"), (x) the Series D-1 Preferred Stock shall no longer be entitled to any rights of the Series D-1 Preferred Stock that are not also applicable to shares of Common Stock, including without limitation the right to receive the amounts payable to holders of Series D-1 Preferred Stock pursuant to Sections 1 and 2 and such holder of Series D-1 Preferred Stock shall be deemed to have forever and finally waived all such rights; *<u>provided</u>*, *<u>however</u>*, that the rights set forth in Section 3.8 and Article V, as well as the Regulatory Voting Restriction, shall continue to apply to such shares of Series D-1 Preferred Stock, and (y) such holder of Series D-1 Preferred Stock thereafter shall be entitled to receive, in lieu of any amounts otherwise payable on the Series D-1 Preferred Stock hereunder (including any amounts payable pursuant to Sections 2.1.2 or 2.3), only an amount per share equal to the amounts that may become payable to holders of Common Stock hereunder, as such securities are adjusted from time to time hereunder, including pursuant to Sections 5.4 and 5.5 or any stock split, stock dividend, combination, subdivision, recapitalization or the like with respect to the Common Stock occurring after such Deemed Optional Conversion as if such Series D-1 Preferred Stock had been converted (but without actually converting) into shares of Common Stock at the same time that the Deemed Conversion Notice was given at the then applicable Conversion Price of the Series D-1 Preferred Stock (a "***Deemed Optional Conversion***"); *<u>provided</u>*, *<u>however</u>*, that in lieu of receiving any voting securities (as such term is defined under the BHCA) otherwise payable to the holders of Common Stock, if (i) as a result of accepting such property, each holder of Series D-1 Preferred Stock is deemed to be in control of the Corporation (as "control" is used for purposes of BHCA) or believes in good faith, based on the advice of legal counsel, that it is or would be deemed to be in control of the Corporation (as "control" is used for purposes of the BHCA) or (ii) the holder of Series D-1 Preferred Stock reasonably believes it is not permitted to hold all or part of such property under the BHCA or any other relevant banking laws, regulations and agency interpretations and guidance, then each holder of a share of Series D-1 Preferred Stock shall be entitled to receive, at its election, in lieu of such voting securities, the cash equivalent of the fair market value thereof as determined in good faith by the Board as of such payable date. For the avoidance of doubt, any Deemed Optional Conversion shall be irrevocable and shares of Series D-1 Preferred Stock that have been subject to a Deemed Optional Conversion pursuant to this Section 4.1.2 shall not be entitled to vote on any matters for which shares of Common Stock, and not shares of Series D-1 Preferred Stock, were entitled to vote.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.3 <u>Notice of Conversion</u>. In order for a holder of Non-Regulated Preferred Stock to voluntarily convert shares of Non-Regulated Preferred Stock into shares of Common Stock, such holder shall surrender the certificate or certificates for such shares of Non-Regulated Preferred Stock (or, if such registered holder alleges that any such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Non-Regulated Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent), together with written notice that such holder elects to convert all or any number of the shares of the Non-Regulated Preferred Stock represented by such certificate or certificates and, if applicable, any event on which such conversion is contingent (a "***Contingency Event***"). Such notice shall state such holder's name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or such holder's attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such certificates (or lost certificate affidavit and agreement) and notice (or, if later, the date on which all Contingency Events have occurred) shall be the time of conversion (the "***Conversion Time***"), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such time. The Corporation shall, as soon as practicable after the Conversion Time, (a) issue and deliver to such holder of Non-Regulated Preferred Stock, or to such holder's nominee(s), a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Non-Regulated Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (b) pay in cash such amount as provided in Section 5.7.3 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and (c) pay all declared but unpaid dividends on the shares of Non-Regulated Preferred Stock converted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1.4 <u>Effect of Voluntary Conversion</u>. As of the Conversion Time, all shares of Non-Regulated Preferred Stock that shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Section 5.7.3 and to receive payment of any dividends declared but unpaid thereon. Any shares of Non-Regulated Preferred Stock so converted shall be retired and cancelled and may not be reissued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Mandatory Conversion</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.1 <u>Non-Regulated Preferred Stock.</u> Upon either (a) the closing of the sale of shares of Common Stock to the public in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $75,000,000 of gross proceeds to the Corporation and at an offering price to the public equal to or greater than the lesser of (i) one and one-half (1.5) times the Original Issue Price of the Series E Preferred Stock or (ii) upon the occurrence of a Special Series E Adjustment Event (regardless if there has been an adjustment to the Conversion Price under Section 3 of Exhibit J of the Series E SPA), one and one-half (1.5) times the Special Series E Original Issue Price (subject to appropriate adjustment in the event of any stock splits and combinations of shares and for dividends paid on the Series E Preferred Stock in shares of such stock) (a "***Qualified IPO***") or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 65% of the outstanding shares of Non-Regulated Preferred Stock at the time of such vote or consent, voting together as a single class on an as-converted basis (the "***Conversion Election***", and ****each of the events referred to in (a) and (b) constitute a "***Preferred Stock Automatic Conversion Event***") (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the "***Mandatory Conversion Time***"), (i) all outstanding

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shares of Non-Regulated Preferred Stock shall automatically be converted into shares of Common Stock, at the applicable ratio described in Section 4.1.1 as the same may be adjusted from time to time in accordance with this Section 4, and (ii) such shares may not be reissued by the Corporation. Notwithstanding the foregoing, no shares of Series E Preferred Stock or Series E-1 Preferred Stock shall be converted pursuant to Section 4.2.1(b) until the date and time, or the occurrence of an event, specified by vote or written consent of the holders of a majority of the outstanding shares of Series E Preferred Stock and Series E-1 Preferred Stock at the time of such vote or consent, voting together as a separate class on an as-converted basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.2 <u>Series D-1 Preferred Stock</u>. Notwithstanding anything to the contrary contained herein, no shares of Series D-1 Preferred Stock in the hands of a Regulated Holder or its Transferees shall be convertible into shares of Common Stock pursuant to Section 4.2.1 (unless such conversion is in connection with a Permitted Regulatory Transfer), but instead, upon the occurrence of any of the events described in Section 4.2.1 above, (x) the Series D-1 Preferred Stock shall no longer be entitled to any rights of the Series D-1 Preferred Stock that are not also applicable to shares of Common Stock, including without limitation the right to receive the amounts payable to holders of Series D-1 Preferred Stock pursuant to Sections 1 and 2, and such holder of Series D-1 Preferred Stock shall be deemed to have forever and finally waived all such rights; *<u>provided</u>*, *<u>however</u>*, that the rights set forth in Section 3.8 and Article V, as well as the Regulatory Voting Restriction, shall continue to apply to such shares of Series D-1 Preferred Stock, and (y) each holder of Series D-1 Preferred Stock thereafter shall be entitled to receive, in lieu of any amounts otherwise payable on the Series D-1 Preferred Stock hereunder (pursuant to Sections 2.1.2 or 2.3), only an amount per share equal to the amounts that may become payable to holders of Common Stock hereunder (as such securities are adjusted from time to time hereunder, including pursuant to Sections 5.4 and 5.5 or pursuant to any stock split, stock dividend, combination, subdivision, recapitalization or the like with respect to the Common Stock occurring after such Deemed Automatic Conversion) as if such Series D-1 Preferred Stock had been converted (but without actually converting) into shares of Common Stock at the same time that all shares of Series D Preferred Stock have been automatically converted pursuant to this Section 4.2.2 (a "***Deemed Automatic Conversion***"); *<u>provided</u>*, *<u>however</u>*, that in lieu of receiving any voting securities (as such term is defined under the BHCA) otherwise payable to the holders of Common Stock, if (i) as a result of accepting such property, each holder of Series D-1 Preferred Stock is deemed to be in control of the Corporation (as "control" is used for purposes of BHCA) or believes in good faith, based on the advice of legal counsel, that it is or would be deemed to be in control of the Corporation (as "control" is used for purposes of the BHCA) or (ii) the holder of Series D-1 Preferred Stock reasonably believes it is not permitted to hold all or part of such property under the BHCA or any other relevant banking laws, regulations and agency interpretations and guidance, then each holder of a share of Series D-1 Preferred Stock shall be entitled to receive, at its election, in lieu of such voting securities, the cash equivalent of the fair market value thereof as determined in good faith by the Board as of such payable date. For the avoidance of doubt, shares of Series D-1 Preferred Stock that have been subject to a Deemed Automatic Conversion pursuant to this Section 4.2.2 shall not be entitled to vote on any matters for which shares of Common Stock, and not shares of Series D-1 Preferred Stock, were entitled to vote. Notwithstanding anything to the contrary in this Restated Certificate, immediately prior to and subject to the consummation of a Preferred Stock Automatic Conversion Event pursuant to which all Non-Regulated Preferred Stock are converting into shares of Common Stock, all outstanding shares of Series D-1 Preferred Stock shall automatically be converted into shares of Common Stock at the then applicable Series D-1 Conversion Price (as defined below) if, and only if, such conversion would not result in a Regulated Holder and its Transferees owning or controlling, or being deemed to own or control, collectively, greater than (i) 4.99% of the voting power of any class of voting securities of the Corporation or (ii) 9.99% of the total equity of the Corporation (in each case, as such terms are defined and used, and as such percentages are calculated, under the BHCA) (such automatic conversion, the "***Permitted Automatic Conversion***"); *<u>provided</u>, <u>however</u>*, that if the Series D-1 Preferred Stock would not be able to convert in a manner that is compliant with the Permitted Automatic Conversion threshold, then, prior to the

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Preferred Stock Automatic Conversion Event, the Corporation, at its sole election, may redeem or repurchase the minimum number of shares of Series D-1 Preferred Stock at a price per share equal to the applicable Repurchase Price (as defined below) from such Regulated Holder and/or its Transferees such that a Permitted Automatic Conversion may occur simultaneously with, and contingent upon, the consummation of a Preferred Stock Automatic Conversion Event (such repurchase, the "***Repurchase***"). The "***Repurchase Price***" shall be (1) in the event of a Qualified IPO, the per share price of Common Stock of the Company offered to the public in such Qualified IPO (before deduction of underwriters discounts or commissions), and (2) in the event of a Conversion Election, the fair market value of a share of Series D-1 Preferred Stock as determined in good faith by the Board as of such repurchase date. In the event of a Permitted Automatic Conversion pursuant to this Section 4.2.2, each share of Series D-1 Preferred Stock shall be convertible, without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for the Series D-1 Preferred Stock by the Series D-1 Conversion Price in effect at the time of conversion. The "***Series D-1 Conversion Price***" shall initially mean the Original Issue Price for the Series D-1 Preferred Stock. Such initial Series D-1 Conversion Price, and the rate at which shares of Series D-1 Preferred Stock may be converted into shares of Common Stock, shall be subject to adjustment as provided in Section 5.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2.3 <u>Mandatory Conversion Procedural Requirements</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All holders of record of shares of Non-Regulated Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Non-Regulated Preferred Stock pursuant to Sections 4.2.1 and 10. Upon the occurrence of a Permitted Automatic Conversion, all holders of record of shares of Series D-1 Preferred Stock shall be sent written notice of such Permitted Automatic Conversion and the place designated for mandatory conversion of all such shares of Series D-1 Preferred Stock pursuant to Sections 4.2.2 and 10. Unless otherwise provided in this Restated Certificate, such notices need not be sent in advance of the occurrence of the Mandatory Conversion Time or the Permitted Automatic Conversion, as applicable. Upon receipt of such notice, each holder of shares of Non-Regulated Preferred Stock and/or Series D-1 Preferred Stock, as applicable, shall surrender such holder's certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in the applicable notice, and shall thereafter receive certificates for the number of shares of Common Stock to which such holder is entitled pursuant to Sections 4.2.1 and 4.2.2, as applicable.

If so required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the registered holder or by such holder's attorney duly authorized in writing. All rights with respect to the Non-Regulated Preferred Stock converted pursuant to Section 4.2.1, and the Series D-1 Preferred Stock converted pursuant to Sections 4.2.2, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time and the Permitted Automatic Conversion, respectively (notwithstanding the failure of the holder or holders thereof to surrender the certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of their certificate or certificates (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Section 4.2.3(a). As soon as practicable after the Mandatory Conversion Time and/or the Permitted Automatic Conversion, as applicable, and the surrender of the certificate or certificates (or lost certificate affidavit and agreement) for Non-Regulated Preferred Stock and/or the Series D-1 Preferred Stock, as applicable, the Corporation shall issue and deliver to such holder, or to such holder's nominee(s), a certificate or certificates for the number of full shares of Common

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Stock issuable on such conversion in accordance with the provisions hereof, together with cash as provided in Section 5.7.3 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Non-Regulated Preferred Stock and/or Series D-1 Preferred Stock, as applicable, converted. Such converted shares shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Non-Regulated Preferred Stock (and the applicable series thereof) and/or the Series D-1 Preferred Stock, as applicable, accordingly.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Payment of Taxes</u>. The Corporation will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of shares of Common Stock upon conversion of shares of Preferred Stock, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Preferred Stock so converted were registered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Termination of Conversion Rights</u>. Subject to Section 4.1.3 in the case of a Contingency Event, in the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the third day preceding the date fixed for the first payment of any funds and assets distributable on such event to the holders of Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Permitted Regulatory Transfers; Other Treatment of Series D-1 Preferred Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5.1 Upon completion of a Permitted Regulatory Transfer, each share of Series D-1 Preferred Stock so transferred in such a Permitted Regulatory Transfer shall automatically be converted into (1) one (1) fully paid and nonassessable share of Series D Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization) if such Permitted Regulatory Transfer occurs prior to a Deemed Optional Conversion or Deemed Automatic Conversion, or (2) one (1) fully paid and nonassessable share of Common Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization), if such Permitted Regulatory Transfer occurs on or subsequent to a Deemed Optional Conversion or Deemed Automatic Conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5.2 Any shares of Series D-1 Preferred Stock that are (a) convertible into Common Stock pursuant to this Section 4 or (b) that are treated as convertible (without actual conversion) into Common Stock for purposes of another provision of this Restated Certificate, shall be convertible into such number of fully paid and nonassessable shares of Common Stock as is determined by dividing the Original Issue Price for the Series D-1 Preferred Stock by the then effective Conversion Price for the Series D-1 Preferred Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5. <u>Adjustments to Conversion Price</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1 <u>Adjustments for Diluting Issuances</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.1 <u>Special Definitions</u>. For purposes of this Article IV, the following definitions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) "***Option***" shall mean any right, option or warrant to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities from the Corporation.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) "***Original Issue Date***" for a series of Preferred Stock shall mean the date on which the first share of such series of Preferred Stock was issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) "***Convertible Securities***" shall mean any evidences of indebtedness, shares or other securities issued by the Corporation that are directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options and with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) "***Additional Shares of Common Stock***" with respect to a series of Preferred Stock shall mean all shares of Common Stock issued (or, pursuant to Section 5.1.2 below, deemed to be issued) by the Corporation after the applicable Original Issue Date for such series of Preferred Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock), other than the following shares of Common Stock and shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (collectively as to all such shares and shares deemed issued, "***Exempted Securities***"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on such series of Preferred Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on or subdivision of shares of Common Stock that is covered by Section 5.2, 5.3, 5.4, 5.5 or 5.6;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) shares of Common Stock or Options to acquire shares of Common Stock, including but not limited to restricted stock units and stock appreciation rights payable in shares of Common Stock or in Options or Convertible Securities, issued to Service Providers pursuant to a plan, agreement or arrangement approved by the Board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or the conversion or exchange of Convertible Securities that are outstanding as of the date this Restated Certificate is filed with the Secretary of State of Delaware, in each case provided that such issuance is pursuant to the terms of such Option or Convertible Security;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) shares of Common Stock, Options or Convertible Securities issued to banks, landlords, equipment lessors or other financial institutions pursuant to a debt financing or equipment or real property leasing transaction approved by the Board, including a majority of the Preferred Directors then in office;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) shares of Common Stock, Options or Convertible Securities issued pursuant to a bona fide acquisition of another entity by the Corporation by merger or consolidation with, purchase of substantially all of the assets of, or purchase of more than fifty percent of the outstanding equity securities of, the other entity, *<u>provided</u>*, that such issuances are approved by the Board, including a majority of the Preferred Directors then in office;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) shares of Common Stock, Options or Convertible Securities issued as a result of a decrease in the Conversion Price of any series of Preferred Stock resulting from the operation of Section 5.1.3 or Section 5.7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) shares of Common Stock issued in an offering to the public pursuant to a registration statement filed under the Securities Act of 1933, as amended with, and declared effective by, the Securities and Exchange Commission;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) shares of Common Stock issued on conversion of shares of Series E Preferred Stock or Series E-1 Preferred Stock issued pursuant to the Series E SPA;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) shares of Common Stock or Convertible Securities issued under that certain Warrant (as defined in the Series E SPA); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) shares of Common Stock, Options or Convertible Securities issued following the written approval of the holders of at least 65% of the then outstanding shares of Preferred Stock (voting together as a single class on an as-converted basis and with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose) agreeing that no adjustment shall be made as a result of the issuance; *<u>provided</u>*, *<u>however</u>*, no such issuance of Common Stock, Options or Convertible Securities shall be excluded from the definition of "Additional Shares of Common Stock" pursuant to this clause (x) as it relates to (A) Series C Preferred Stock unless such exclusion has been approved by the vote of the holders of more than 65% of the then outstanding shares of Series C Preferred Stock, voting as a separate class, (B) Series D Preferred Stock and Series D-1 Preferred Stock unless such exclusion has been approved by the vote of the holders of more than 60% of the then outstanding shares of Series D Preferred Stock and Series D-1 Preferred Stock, voting as a separate class (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose), and (C) Series E Preferred Stock and Series E-1 Preferred Stock unless such exclusion has been approved by the vote of the holders of a majority of the then outstanding shares of Series E Preferred Stock and Series E-1 Preferred Stock, voting as a separate class on an as-converted basis.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.2 <u>Deemed Issue of Additional Shares of Common Stock</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If the Corporation at any time or from time to time after the applicable Original Issue Date for a series of Preferred Stock shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability (including the passage of time) but without regard to any provision contained therein for a subsequent adjustment of such number including by way of anti-dilution adjustment) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 5.1.3, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (i) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (ii) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Conversion Price of such series of Preferred Stock computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Conversion Price of such series

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of Preferred Stock as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this Section 5.1.2(b) shall have the effect of increasing the Conversion Price of a series of Preferred Stock to an amount which exceeds the lower of (1) the Conversion Price for such series of Preferred Stock in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (2) the Conversion Price for such series of Preferred Stock that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) If the terms of any Option or Convertible Security (excluding Options or Convertible Securities that are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 5.1.3 (either because the consideration per share (determined pursuant to Section 5.1.4) of the Additional Shares of Common Stock subject thereto was equal to or greater than the Conversion Price of such series of Preferred Stock then in effect, or because such Option or Convertible Security was issued before the Original Issue Date of such series of Preferred Stock), are revised after the Original Issue Date of such series of Preferred Stock as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (i) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (ii) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Section 5.1.2(a)) shall be deemed to have been issued effective upon such increase or decrease becoming effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) that resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 5.1.3, the Conversion Price of such series of Preferred Stock shall be readjusted to such Conversion Price of such series of Preferred Stock as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the Conversion Price of a series of Preferred Stock provided for in this Section 5.1.2 shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in Sections 5.1.2(b) and 5.1.2(c)). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to such Conversion Price that would result under the terms of this Section 5.1.2 at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to such Conversion Price that such issuance or amendment took place at the time such calculation can first be made.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.3 <u>Issuance of Additional Shares of Common Stock</u>. In the event the Corporation shall at any time after the applicable Original Issue Date of a series of Preferred Stock issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 5.1.2), without consideration or for a consideration per share less than the Conversion Price for such series of Preferred Stock in effect immediately prior to such issue, then such Conversion Price shall be reduced, concurrently with such issue, to a price (calculated to the nearest one-thousandth of a cent) determined in accordance with the following formula:

**CP<sub>2</sub> = CP<sub>1 </sub>\* (A + B) ÷ (A + C).** 

For purposes of the foregoing formula, the following definitions shall apply:

"CP<sub>2</sub>" shall mean the applicable Conversion Price in effect immediately after such issue or deemed issue of Additional Shares of Common Stock;

"CP<sub>1</sub>" shall mean the applicable Conversion Price in effect immediately prior to such issue or deemed issue of Additional Shares of Common Stock;

"A" shall mean the number of shares of Common Stock outstanding immediately prior to such issue or deemed issue of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issue or upon conversion or exchange of Convertible Securities (including the Preferred Stock but with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);

"B" shall mean the number of Additional Shares of Common Stock that would have been issued or deemed issued if such Additional Shares of Common Stock had been issued at a price per share equal to CP<sub>1</sub> (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP<sub>1</sub>); and

"C" shall mean the number of such Additional Shares of Common Stock actually issued or deemed issued in such transaction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.4 <u>Determination of Consideration</u>. For purposes of this Section 5.1, the consideration received by the Corporation for the issue or deemed issue of any Additional Shares of Common Stock shall be computed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Cash and Property</u>: Such consideration shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Options and Convertible Securities</u>. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Section 5.1.2, relating to Options and Convertible Securities, shall be determined by dividing

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1.5 <u>Multiple Closing Dates</u>. In the event the Corporation shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Conversion Price of a series of Preferred Stock pursuant to the terms of Section 5.1.2, then, upon the final such issuance, the Conversion Price of such series of Preferred Stock shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period that are a part of such transaction or series of related transaction).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2 <u>Adjustment for Stock Splits and Combinations</u>. If the Corporation shall at any time or from time to time after the Original Issue Date for a series of Preferred Stock effect a subdivision of the outstanding Common Stock, the Conversion Price for such series of Preferred Stock in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Original Issue Date for a series of Preferred Stock combine the outstanding shares of Common Stock, the Conversion Price for such series of Preferred Stock in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this section shall become effective at the close of business on the date the subdivision or combination becomes effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.3 <u>Adjustment for Certain Dividends and Distributions</u>. In the event the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Conversion Price for such series of Preferred Stock in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying such Conversion Price then in effect by a fraction:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

Notwithstanding the foregoing, (i) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, such Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter such Conversion Price shall be adjusted pursuant to this section as of the time of actual payment of such dividends or distributions; and (ii) no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.4 <u>Adjustments for Other Dividends and Distributions</u>. In the event the Corporation at any time or from time to time after the Original Issue Date for a series of Preferred Stock shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock), then and in each such event the holders of such series of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities in an amount equal to the amount of such securities as they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.5 <u>Adjustment for Reclassification, Exchange and Substitution</u>. If, at any time or from time to time after the Original Issue Date for a series of Preferred Stock, the Common Stock issuable upon the conversion of such series of Preferred Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) is changed into the same or a different number of shares of any class or classes of stock of the Corporation, whether by recapitalization, reclassification or otherwise (<u>other</u> <u>than</u> by a stock split or combination, dividend, distribution, merger or consolidation covered by Sections 5.2, 5.3, 5.4 or 5.6 or by Section 2.3 regarding a Deemed Liquidation Event), then in any such event each holder of such series of Preferred Stock shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the number of shares of Common Stock into which such shares of Preferred Stock could have been converted immediately prior to such recapitalization, reclassification or change (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.6 <u>Adjustment for Merger or Consolidation</u>. Subject to the provisions of Section 2.3, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not a series of Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Sections 5.1, 5.3, 5.4 or 5.5), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, provision shall be made that each share of such series of Preferred Stock shall thereafter be convertible in lieu of the Common Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of

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Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions in Section 4 and this Section 5 with respect to the rights and interests thereafter of the holders of such series of Preferred Stock, to the end that the provisions set forth in Section 4 and this Section 5 shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.7 <u>Special Adjustment to Conversion Price of Series E Preferred Stock</u>. In addition to and subject to any and all other adjustments set forth herein (if and to the extent applicable and whether occurring prior to or after the occurrence of a Special Series E Adjustment Event, immediately following the Final Determination (as defined in Exhibit J of the Series E SPA), in the event of a Special Series E Adjustment Event, if the Conversion Price of the Series E Preferred Stock then in effect is greater than the applicable Special Series E Original Issue Price set forth in Section 4 of Exhibit J of the Series E SPA, then such Conversion Price of the Series E Preferred Stock shall be automatically adjusted to such applicable Special Series E Original Issue Price.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8 <u>General Conversion Provisions</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8.1 <u>Certificate as to Adjustments</u>. Upon the occurrence of each adjustment or readjustment of the Conversion Price of a series of Preferred Stock pursuant to this "Section 5, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than 15 days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of such series of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which such series of Preferred Stock is convertible and with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of any series of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (a) the Conversion Price of such series of Preferred Stock then in effect and (b) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of such series of Preferred Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8.2 <u>Reservation of Shares</u>. The Corporation shall at all times while any share of Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose); and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose), the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate. Before taking any action that would cause an adjustment reducing the Conversion Price of a series of Preferred Stock below the then par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8.3 <u>Fractional Shares</u>. No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair value of a share of Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.8.4 <u>No Further Adjustment after Conversion</u>. Upon any conversion of shares of Preferred Stock into Common Stock, no adjustment to the Conversion Price of the applicable series of Preferred Stock shall be made with respect to the converted shares for any declared but unpaid dividends on such series of Preferred Stock or on the Common Stock delivered upon conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6. <u>Redemption</u>.** Except as provided in Article V, the Preferred Stock is not redeemable at the option of the holder thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7. <u>Redeemed or Otherwise Acquired Shares</u>.** Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following redemption.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8. <u>Waiver</u>.** Any of the rights, powers, preferences and other terms of a series of the Preferred Stock or the Preferred Stock as a class that are set forth herein may be waived on behalf of all holders of such series of Preferred Stock or the Preferred Stock as a class by the affirmative written consent or vote of the holders of at least 65% of the shares of such series of Preferred Stock or such Preferred Stock as a class, as the case may be, that are then outstanding, treating any convertible Preferred Stock as if converted to Common Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose); *<u>provided</u>*, *<u>however</u>*, that in no event may holders of Non-Regulated Preferred Stock waive any matter contemplated by Section 3.8 without the written consent or affirmative vote of the holders of a majority of the then outstanding shares of Series D-1 Preferred Stock (with the Series D-1 Preferred Stock not being subject to the Regulatory Voting Restriction for purposes of this specific written consent or affirmative vote). For purposes of clarity, the rights, powers, preferences and other terms of a specific series of the Preferred Stock expressly set forth herein cannot be waived on behalf of all holders of such series of Preferred Stock pursuant to this Section 8 without the affirmative written consent or vote of the holders of at least 65% of the shares of such series of Preferred Stock, treating any convertible Preferred Stock as if converted to Common Stock (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9. <u>Notice of Record Date</u>.** In the event:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Corporation shall set a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock, with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation,

then, and in each such case, the Corporation will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or subscription right, and the amount and character of such dividend, distribution or subscription right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock; with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock for such purpose) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall be sent (A) at least 20 days prior to the earlier of the record date or effective date for the event specified in such notice or (B) such fewer number of days as may be approved the holders of 65% of the outstanding shares of Preferred Stock acting as a single class on an as-converted basis (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10. <u>Notices</u>.** Except as otherwise provided herein, any notice required or permitted by the provisions of this Article IV to be given to a holder of shares of Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation for such holder, given by the holder to the Corporation for the purpose of notice or given by electronic communication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission. If no such address appears or is given, notice shall be deemed given at the place where the principal executive office of the Corporation is located.

**<u>ARTICLE V</u>: <u>REGULATORY PROVISIONS</u>.** 

**A. Definitions**. As used herein, the following terms will have the meanings set forth below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** The "***BHCA***" means the Bank Holding Company Act of 1956, as amended, and as implemented by the Board of Governors of the Federal Reserve System, whether pursuant to regulation or interpretation, together with its affiliates (as defined in Regulation Y (12 C.F.R. Part 225)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** A "***Permitted Regulatory Transferee***" shall mean a person or entity who acquires shares of Series D-1 Preferred Stock from a Regulated Holder or its Transferees in any of the following transfers (each, a "***Permitted Regulatory Transfer***"): (a) a widespread public distribution; (b) a private placement in which no one party acquires the right to purchase 2% or more of any class of voting securities (as such term is used for purposes of the BHCA) of the Corporation; (c) an assignment to a single party (e.g., a broker or investment banker) for the purpose of conducting a widespread public distribution on behalf of a Regulated Holder and its Transferees; (d) to a party who is not a Regulated Holder; or (e) to a party who would control more than 50% of the voting securities (as such term is used for purposes of the BHCA) of the Corporation without giving effect to the shares of Series D-1 Preferred Stock transferred by a Regulated Holder and its Transferees.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.** A "***Regulated Holder***" means a bank holding company subject to the provisions of the BHCA, as amended, and as implemented by the Board of Governors of the Federal Reserve System, together with its affiliates (as defined in Regulation Y (12 C.F.R. Part 225)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.** A "***Transferee***" means a party to whom a Regulated Holder transfers shares of Series D-1 Preferred Stock and the transferees of such party (in each case, other than Permitted Regulatory Transferees).

**B.** The Corporation shall be bound by the following restrictions (each, a "***BHCA Regulatory Restriction***"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.** The Corporation shall not directly or indirectly, repurchase, redeem, retire or otherwise acquire any of the Corporation's capital securities, or take any other action, if, as a result, a Regulated Holder and its Transferees would own or control, or be deemed to own or control, collectively, greater than (i) 4.99% of the voting power of any class of voting securities of the Corporation or (ii) 9.99% of the total equity of the Corporation (in each case, as such terms used in the preceding sentence are defined and used, and as such percentages are calculated, under the BHCA).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.** If the Corporation declares a distribution payable in any form of property other than in cash, and (i) as a result of accepting such property, each holder of a share of Series D-1 Preferred Stock is deemed to be in control of the Corporation (as "control" is used for purposes of BHCA) or believes in good faith, based on the advice of legal counsel, that it is or would be deemed to be in control of the Corporation (as "control" is used for purposes of the BHCA) or (ii) the holder of Series D-1 Preferred Stock believes in reasonable good faith, based on the advice of legal counsel, it is not permitted to hold all or part of such property under the BHCA or any other relevant banking laws, regulations and agency interpretations and guidance, then each holder of a share of Series D-1 Preferred Stock shall be entitled to receive, at its election, in lieu of such property, a cash payment equal to the fair market value of the property that such holder would have been entitled to receive upon such distribution as reasonably determined by the Board in good faith. The Corporation and the stockholders of the Corporation will use commercially reasonable efforts to negotiate in good faith the terms of any Deemed Liquidation Event, including without limitation the terms of any securities issued pursuant to such transaction, to comply with any regulatory requirements applicable to a Regulated Holder or its Transferees.

**C.** In the event of a breach of any BHCA Regulatory Restriction or Section D of this Article V or if a Regulated Holder is unable to transfer pursuant to Section D of this Article V all or any part of the shares of the Corporation's stock then-held by it because such transfer is not permitted pursuant to applicable securities laws, a Regulated Holder may, subject to applicable law regarding dividends, distributions or redemptions, exercise any remedies available to it against the Corporation, including requiring the Corporation to repurchase the relevant portion of the shares held by such Regulated Holder necessary to give effect to Sections B or D, as applicable, at a per share price equal to the then current fair market value of (i) if shares of Series D Preferred Stock are then-outstanding, a share of Series D Preferred Stock (and not the fair market value of a share of Series D-1 Preferred Stock), as determined by the Board in good faith, or (ii) if no shares of Series D Preferred Stock are then-outstanding, a share of Series D-1 Preferred Stock, as determined by the Board in good faith with such determination being made assuming that the rights, preferences and privileges applicable to the Series D Preferred Stock (and not the Series D-1 Preferred Stock) that are set forth herein, as in effect as of the Series D Original Issue Date, are the rights, preferences and privileges of the Series D-1 Preferred Stock.

**D.** If (x) a Regulated Holder is deemed to be in control of the Corporation (as "control" is used for purposes of the BHCA), (y) a Regulated Holder believes in reasonable good faith, based on advice of legal counsel, that it may be deemed to be in control of the Corporation (as "control" is used for purposes of the BHCA) or that it is not permitted to hold all or part of its shares of the Corporation's stock or, if applicable,

------

its other securities of the Corporation under the BHCA or any other relevant banking laws, regulations and agency interpretations and guidance, or (z) a Regulated Holder learns of any activities directly or indirectly by or on behalf of the Corporation or any officer, director, employee or agent thereof that constitute or give rise to a violation of applicable anti-bribery or anti-corruption laws by the Corporation, then (i) the Corporation will cooperate in good faith to provide such Regulated Holder with information relevant to its determination under clause (x), (y) or (z) ; *provided*, *however*, that with respect to (z), information covered under attorney-client privilege or highly confidential information need not be provided, *<u>provided</u>*, *<u>further</u>*, that with respect to (z), Regulated Holder agrees, and any representative of Regulated Holder agrees, to hold in confidence and trust pursuant to the terms of an Amended and Restated Investors' Rights Agreement by and among the Regulated Holder, the Corporation and certain other stockholders of the Corporation, dated on or around the date hereof, as the same may be amended and restated from time to time, (ii) subject to the transferee agreeing in writing reasonably satisfactory to the Corporation to be bound with respect to such shares by all agreements between the Corporation and the Regulated Holder, such Regulated Holder shall be permitted to sell or otherwise transfer its shares of Series D-1 Preferred Stock or any other securities of the Corporation then-held by such Regulated Holder (subject to applicable securities laws) and (iii) the Corporation will use its commercially reasonable efforts to facilitate such sale or transfer in good faith (which shall include, at a minimum, making management available to prospective buyers and providing customary due diligence material, subject to a customary confidentiality agreement).

**E.** To the extent further requested by Regulated Holder (in good faith and based on the advice of legal counsel), the Corporation will (i) cooperate in good faith with a Regulated Holder (x) in order to avoid a Regulated Holder being deemed to control the Corporation or any successor or acquiring corporation or entity (as "control" is used for purposes of the BHCA) as a result of any arrangements with any Regulated Holder and (y) to avoid any circumstances under which a Regulated Holder would not be permitted to hold all or a portion of its shares of Series D-1 Preferred Stock or any other securities of this Corporation or of any (1) successor thereto, (2) acquiring corporation or (3) entity the securities of which have been issued in respect of or exchange for any securities of the Corporation, in each case then-held or to be received by such Regulated Holder, under the BHCA or any other relevant banking laws, regulations and agency interpretations and guidance and (ii) use good faith efforts to provide that any security of the Corporation or of any successor or acquiring corporation or other entity issued or to be issued to a Regulated Holder in any transaction to which the Corporation is a party contains terms and characteristics that provide equivalent protections with respect to any regulatory requirements applicable to such Regulated Holder as are provided by the Series D-1 Preferred Stock under the relevant banking laws, regulations and agency interpretations and guidance.

**F.** In the event of any conflict of this Article V with any other provision of this Restated Certificate, the terms of this Article V shall prevail.

Notwithstanding anything to the contrary in this Restated Certificate, this Article V shall automatically terminate and be of no further force or effect at such time that no shares of Series D-1 Preferred Stock are held by any Regulated Holder or Transferee.

**<u>ARTICLE VI</u>: <u>PREEMPTIVE RIGHTS</u>.** 

No stockholder of the Corporation shall have a right to purchase shares of capital stock of the Corporation sold or issued by the Corporation except to the extent that such a right may from time to time be set forth in a written agreement between the Corporation and any stockholder.

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**<u>ARTICLE VII</u>: <u>STOCK REPURCHASES</u>.** 

Subject to any approvals otherwise required by this Restated Certificate, any repurchases by the Corporation of shares of its capital stock may be made without regard to any preferential dividends arrears amount or any preferential rights amount (as such terms are defined in Section 500(b) of the Corporations Code of the State of California).

**<u>ARTICLE VIII</u>: <u>BYLAW PROVISIONS</u>.** 

**A. AMENDMENT OF BYLAWS.** Subject to any additional vote required by the Restated Certificate or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.

**B. NUMBER OF DIRECTORS.** Subject to any additional vote required by the Restated Certificate, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws of the Corporation.

**C. BALLOT.** Elections of directors need not be by written ballot unless the Bylaws of the Corporation shall so provide.

**D. MEETINGS AND BOOKS.** Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws of the Corporation may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board or in the Bylaws of the Corporation.

**<u>ARTICLE IX</u>: <u>DIRECTOR LIABILITY</u>.** 

**A. LIMITATION.** To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article IX to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this Article IX by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.

**B. INDEMNIFICATION.** To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law.

**C. MODIFICATION.** Any amendment, repeal or modification of the foregoing provisions of this Article IX shall not adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification.

**<u>ARTICLE X</u>: <u>CORPORATE OPPORTUNITIES</u>.** 

In the event that a director of the Corporation who is also a partner, member, director, stockholder, employee or agent of an entity that is a holder of Preferred Stock or any of its affiliates and that is in the business of investing or regularly invests and/or reinvests in other entities (each, a "***Covered Person***"), acquires knowledge of a potential transaction or matter in such person's capacity as a partner, member, director, stockholder, employee or agent of the Covered Person and that may be a corporate opportunity for

------

both the Corporation and such Covered Person, such director shall to the fullest extent permitted by law have fully satisfied and fulfilled such director's fiduciary duty to the Corporation and its stockholders with respect to such corporate opportunity, and the Corporation to the fullest extent permitted by law waives any claim that such business opportunity constituted a corporate opportunity that should have been presented to the Corporation or any of its affiliates, if such director acts in good faith in a manner consistent with the following policy: a corporate opportunity offered to any person who is a director of the Corporation, and who is also a partner, member, director, stockholder, employee or agent of a Covered Person shall belong to such Covered Person, unless such opportunity was expressly offered to such person solely in his or her capacity as a director of the Corporation. Unless otherwise provided herein, the Corporation, to the fullest extent permitted by law, waives any claim that a business opportunity constituted a corporate opportunity that should have been presented to, or acquired, created or developed by, or which otherwise comes into the possession of any holder of Preferred Stock or any partner, member, director, stockholder, employee or agent of any such holder, other than someone who is a director, officer or employee of this Corporation or any of its subsidiaries.

**<u>ARTICLE XI</u>: <u>CREDITOR AND STOCKHOLDER COMPROMISES</u>.** 

Whenever a compromise or arrangement is proposed between the Corporation and its creditors or any class of them and/or between the Corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of the Corporation or of any creditor or stockholder thereof or on the application of any receiver or receivers appointed for the Corporation under the provisions of §291 of Title 8 of the General Corporation Law or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under §279 of Title 8 of the General Corporation Law order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing at least three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of the Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of the Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of the Corporation, as the case may be, and also on the Corporation.

**\* \* \* \* \* \* \* \* \* \* \*** 

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**CERTIFICATE OF AMENDMENT** 

**OF** 

**RESTATED CERTIFICATE OF INCORPORATION** 

**OF** 

**TURO INC.** 

Turo Inc., a Delaware corporation (the "***Corporation***"), does hereby certify that the following amendment to the Corporation's Restated Certificate of Incorporation filed with the Secretary of State of the State of Delaware on July 23, 2019 has been duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law of the State of Delaware with the approval of such amendment by the Corporation's stockholders having been given by written consent without a meeting in accordance with Sections 228(d) and 242 of the Delaware General Corporation Law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Section 3.9 of Article IV, Part B of the Restated Certificate of Incorporation of the Corporation is
amended and restated to read in its entirety as follows:

"3.9. <u>Series E Preferred Stock Protective Provisions</u>. At any time when at least 12,328,875 shares of Series E Preferred Stock and Series E-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Series E Preferred Stock or Series E-1 Preferred Stock in shares of such stock), the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Restated Certificate) the written consent, or affirmative vote at a meeting and evidenced in writing, of the holders of a majority of the then outstanding shares of Series E Preferred Stock and Series E-1 Preferred Stock, consenting or voting together as a single class on an as-converted basis:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) alter or change the rights, powers or preferences of the Series E Preferred Stock or Series E-1 Preferred Stock set forth in the certificate of incorporation of the Corporation, as then in effect, *<u>provided</u>*, that, subject to Section 3.9(b) below, the authorization, creation or issuance of any new or existing class or series of equity security (including any other security convertible into or exercisable for any such new or existing class or series of equity security) having any rights, powers or preferences senior to, pari passu with or junior to the Series E Preferred Stock or Series E-1 Preferred Stock shall not be deemed to alter, amend, terminate, repeal or waive the rights, powers or preferences of the Series E Preferred Stock or Series E-1 Preferred Stock requiring the affirmative vote or written consent of the holders of the Series E Preferred Stock and Series E-1 Preferred Stock pursuant to this Section;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) increase or decrease the authorized number of shares of Series E Preferred Stock or Series E-1 Preferred Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) redeem or repurchase any shares of Common Stock or Preferred Stock (or paying into or setting aside for a sinking fund for such purpose), other than (i) pursuant to an agreement with any Service Provider giving the Corporation the right to repurchase shares at the original cost thereof upon the termination of services; (ii) an exercise of a right of first refusal in favor of the Corporation pursuant to an agreement with any Service Provider, which exercise has been approved by the Board; (iii) pursuant to the Company Tender Offer; or (iv) as contemplated by this Restated Certificate;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) effect any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or any Deemed Liquidation Event which results in a per share consideration payable to the holders of Series E Preferred Stock that is less than the lower of (i) three (3) times the Original Issue Price of the Series E Preferred Stock, or (ii) upon the occurrence of a Special Series E Adjustment Event (regardless if there has been an adjustment to the Conversion Price under Section 3 of Exhibit J of the Series E SPA), three (3) times the Special Series E Original Issue Price (subject to appropriate adjustment in the event of any stock splits and combinations of shares and for dividends paid on the Series E Preferred Stock in shares of such stock);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) consummate the acquisition of another entity by the Corporation (or any subsidiary of the Corporation), by merger or consolidation with, purchase of all or substantially all of the assets of, or purchase of more than fifty percent of the outstanding equity securities of, the other entity; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) increase or decrease the authorized number of directors constituting the Board."

**IN WITNESS WHEREOF**, said Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer this 24th day of April, 2020 and the foregoing facts stated herein are true and correct.

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| | |
|:---|:---|
| **TURO INC.** | **TURO INC.** |
| By: | /s/ Andre Haddad |
|  | Andre Haddad, Chief Executive Officer |

---

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**CERTIFICATE OF AMENDMENT** 

**OF** 

**RESTATED CERTIFICATE OF INCORPORATION** 

**OF** 

**TURO INC.** 

**(a Delaware corporation)** 

Turo Inc., a Delaware corporation (the "***Corporation***"), does hereby certify that the following amendment to the Corporation's Restated Certificate of Incorporation, filed with the Delaware Secretary of State on March 31, 2021, has been duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law, with the approval of such amendment by the Corporation's stockholders having been given by written consent without a meeting in accordance with Sections 228(d) and 242 of the Delaware General Corporation Law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The first paragraph of ARTICLE IV of the Restated Certificate of Incorporation, related to the number of authorized shares of the Corporation, is amended to read in its entirety as follows:

"The total number of shares of all classes of stock which the Corporation shall have authority to issue is (a) 267,000,000 shares of Common Stock, $0.001 par value per share ("***Common Stock***"), and (b) 170,034,432 shares of Preferred Stock, $0.001 par value per share ("***Preferred Stoc*k**"). As of the effective date of this Restated Certificate of Incorporation (this "***Restated Certificate***"), 11,771,489 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series A Preferred Stock***", 23,352,211 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series A-2 Preferred Stock***", 32,525,379 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series B Preferred Stock***", 18,759,750 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series C Preferred Stock***", 24,193,609 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series D Preferred Stock***", 1,070,893 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series D-1 Preferred Stock***", 47,446,080 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series E Preferred Stock***" and 10,915,021 shares of the authorized Preferred Stock of the Corporation are hereby designated "***Series E-1 Preferred Stock***.""

**[SIGNATURE PAGE FOLLOWS]** 

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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer this 31<sup>st</sup> day of March 2021 and the undersigned certifies that the foregoing facts stated herein are true and correct.

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| | |
|:---|:---|
| **TURO INC.** | **TURO INC.** |
| By: | /s/ Andre Haddad |
| Name: | Andre Haddad |
| Title: | Chief Executive Officer |

---

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**CERTIFICATE OF AMENDMENT** 

**OF** 

**RESTATED CERTIFICATE OF INCORPORATION** 

**OF** 

**TURO INC.** 

**(a Delaware corporation)** 

Turo Inc., a Delaware corporation (the "***Corporation***"), does hereby certify that the following amendment to the Corporation's Restated Certificate of Incorporation, filed with the Delaware Secretary of State on July 23, 2019, as amended by Certificate of Amendment of Restated Certificate of Incorporation, filed with the Delaware Secretary of State on April 27, 2020, as further amended by Certificate of Amendment of Restated Certificate of Incorporation, filed with the Delaware Secretary of State on March 31, 2021, has been duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law, with the approval of such amendment by the Corporation's stockholders having been given by written consent without a meeting in accordance with Sections 228(d) and 242 of the Delaware General Corporation Law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Section 3.2.1 of ARTICLE IV, Part B of the Restated Certificate of Incorporation of the Corporation is amended to read in its entirety as follows:

"3.2.1. <u>Election</u>. For so long as at least 2,980,000 shares of Series A Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series A Preferred Stock, exclusively and as a separate class, shall be entitled to elect one director of the Corporation (the "***Series A Director***"). For so long as at least 4,760,000 shares of Series B Preferred Stock remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series B Preferred Stock, exclusively and as a separate class, shall be entitled to elect one director of the Corporation (the "***Series B Director***"). Until December 31, 2019 and for so long as at least 4,300,000 shares of Series D Preferred and Series D-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series D Preferred Stock and Series D-1 Preferred Stock, exclusively and as a separate class and with the Series D-1 Preferred Stock being subject to the Regulatory Voting Restriction for such purpose, shall be entitled to elect two directors of the Corporation (each a "***Series D Director***" and together, the "***Series D Directors***"); *<u>provided</u>* that following December 31, 2019, the second Series D Director seat shall terminate and following such date, for so long as at least 4,300,000 shares of Series D Preferred and Series D-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series D Preferred Stock and Series D-1 Preferred Stock, exclusively and as a separate class and with the Series D-1 Preferred Stock being subject to the Regulatory Voting Restriction for such purpose, shall be entitled to elect one Series D Director. For so long as at least 12,328,875 shares of Series E Preferred Stock and Series E-1 Preferred Stock, in total, remain outstanding (as such number is adjusted for stock splits and combinations of shares and for dividends paid on the Preferred Stock in shares of such stock), the holders of record of the shares of Series E Preferred Stock and Series E-1 Preferred Stock, exclusively and as a separate class, shall be entitled to elect two directors of the Corporation (each, a "***Series E Director***", and collectively, the "***Series E Directors***" and, together with the Series A Director, the Series B Director, the Series C Director and the Series D Director(s), the "***Preferred Directors***"). The holders of record of the shares of Common Stock and of every other class or series of voting stock (including the Preferred Stock), voting together as a

------

single class on an as-converted basis (with the Series D-1 Preferred Stock being treated as convertible, but without actual conversion, into Common Stock and being subject to the Regulatory Voting Restriction for such purpose), shall be entitled to elect the remaining number of directors of the Corporation (the "***Remaining Directors***"). Any director elected as provided in this Section 3.2.1 may be removed without cause only by the affirmative vote of the holders of the Specified Stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders."

**[SIGNATURE PAGE FOLLOWS]** 

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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer this 24<sup>th</sup> day of February 2022 and the undersigned certifies that the foregoing facts stated herein are true and correct.

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| | |
|:---|:---|
|  **TURO INC.** | **TURO INC.** |
| By: | /s/ Andre Haddad |
| Name: | Andre Haddad |
| Title: | Chief Executive Officer |

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## Exhibit 10.20

**Exhibit 10.20** 

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---

| | |
|:---|:---|
| ![LOGO](g46403dsp005a.jpg)  | ![LOGO](g46403dsp005b.jpg) |

---

CREDIT AGREEMENT

dated as of

February 6, 2023

among

Turo Inc.,

The Lenders Party Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent

and

CITIBANK, N.A.,

as Joint Lead Arranger and Syndication Agent

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JPMORGAN CHASE BANK, N.A.,

as Sole Bookrunner and Joint Lead Arranger

------

**Exhibit 10.20** 

**TABLE OF CONTENTS** 

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| | |
|:---|:---|
|  | **Page** |
|  ARTICLE I DEFINITIONS | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.01 Defined Terms | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.02 Classification of Loans and Borrowings | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.03 Terms Generally | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.04 Accounting Terms; GAAP | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.05 Interest Rates; Benchmark Notifications | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.06 [*Reserved*] | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.07 Status of Obligations | 35 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.08 Letters of Credit | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 1.09 Divisions | 36 |
|  ARTICLE II THE CREDITS | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.01 Commitments | 36 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.02 Loans and Borrowings | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.03 Requests for Borrowings | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.04 [*Reserved*] | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.05 [*Reserved*] | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.06 Letters of Credit | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.07 Funding of Borrowings | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.08 Interest Elections | 44 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.09 Termination and Reduction of Commitments; Increase in Commitments | 45 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.10 Repayment of Loans; Evidence of Debt | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.11 Prepayment of Loans | 48 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.12 Fees | 49 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.13 Interest | 50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.14 Alternate Rate of Interest; Illegality | 51 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.15 Increased Costs | 53 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.16 Break Funding Payments | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.17 Withholding of Taxes; Gross-Up | 54 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.18 Payments Generally; Allocation of Proceeds; Sharing of Setoffs | 59 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.19 Mitigation Obligations; Replacement of Lenders | 61 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.20 Defaulting Lenders | 62 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.21 Returned Payments | 64 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 2.22 Banking Services and Swap Agreements | 64 |
|  ARTICLE III REPRESENTATIONS AND WARRANTIES | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.01 Organization; Powers | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.02 Authorization; Enforceability | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.03 Governmental Approvals; No Conflicts | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.04 Financial Condition; No Material Adverse Change | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.05 Properties | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.06 Litigation and Environmental Matters | 66 |

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**TABLE OF CONTENTS** 

(continued)

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| | |
|:---|:---|
|  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.07 Compliance with Laws and Agreements; No Default | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.08 Investment Company Status | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.09 Taxes | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.10 ERISA | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.11 Disclosure | 67 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.12 Material Agreements | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.13 Solvency | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.14 Insurance | 68 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.15 Capitalization and Subsidiaries | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.16 Security Interest in Collateral | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.17 Employment Matters | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.18 Margin Regulations | 69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.19 Use of Proceeds | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.20 [*Reserved*] | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.21 Anti-Corruption Laws and Sanctions | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.22 Affected Financial Institutions | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.23 Plan Assets; Prohibited Transactions | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 3.24 Reserved | 70 |
|  ARTICLE IV CONDITIONS | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.01 Effective Date | 70 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 4.02 Each Credit Event | 73 |
|  ARTICLE V AFFIRMATIVE COVENANTS | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.01 Financial Statements and Other Information | 73 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.02 Notices of Material Events | 75 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.03 Existence; Conduct of Business | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.04 Payment of Taxes | 76 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.05 Maintenance of Properties | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.06 Books and Records; Inspection Rights | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.07 Compliance with Laws and Material Contractual Obligations | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.08 Use of Proceeds | 77 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.09 Reserved | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.10 Insurance | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.11 [*Reserved*] | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.12 Casualty and Condemnation | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.13 Post-Closing Obligations | 78 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 5.14 Guarantors; Additional Collateral; Further Assurances | 79 |
|  ARTICLE VI NEGATIVE COVENANTS | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.01 Indebtedness | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.02 Liens | 82 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.03 Fundamental Changes | 84 |

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(continued)

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| | |
|:---|:---|
|  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions | 85 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.05 Asset Sales | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.06 Sale and Leaseback Transactions | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.07 Swap Agreements | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.08 Restricted Payments; Certain Payments of Indebtedness | 88 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.09 Transactions with Affiliates | 89 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.10 Restrictive Agreements | 90 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.11 Amendment of Material Documents | 91 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 6.12 Financial Covenant | 91 |
|  ARTICLE VII EVENTS OF DEFAULT | 91 |
|  ARTICLE VIII THE ADMINISTRATIVE AGENT | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.01 Authorization and Action | 94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.02 Administrative Agent's Reliance, Limitation of Liability, Etc | 97 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.03 Posting of Communications | 98 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.04 The Administrative Agent Individually | 99 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.05 Successor Administrative Agent | 100 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.06 Acknowledgements of Lenders and Issuing Banks | 101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.07 Collateral Matters | 103 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.08 Credit Bidding | 104 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.09 Certain ERISA Matters | 105 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 8.10 Flood Laws | 106 |
|  ARTICLE IX MISCELLANEOUS | 106 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.01 Notices | 106 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.02 Waivers; Amendments | 109 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.03 Expenses; Limitation of Liability; Indemnity; Etc | 111 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.04 Successors and Assigns | 112 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.05 Survival | 116 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.06 Counterparts; Integration; Effectiveness; Electronic Execution | 117 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.07 Severability | 118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.08 Right of Setoff | 118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process | 119 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.10 WAIVER OF JURY TRIAL | 120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.11 Headings | 120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.12 Confidentiality | 120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.13 Several Obligations; Nonreliance; Violation of Law | 121 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.14 USA PATRIOT Act | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.15 Disclosure | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.16 Appointment for Perfection | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.17 Interest Rate Limitation | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.18 No Fiduciary Duty, etc | 122 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.19 Marketing Consent | 123 |

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**TABLE OF CONTENTS** 

(continued)

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| | |
|:---|:---|
|  | **Page** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.20 Acknowledgement and Consent to Bail-In of Affected Financial Institutions | 123 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 9.21 Acknowledgement Regarding Any Supported QFCs | 124 |
|  ARTICLE X GUARANTY | 124 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.01 Guaranty | 124 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.02 Guaranty of Payment | 125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.03 No Discharge or Diminishment of Guaranty | 125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.04 Defenses Waived | 126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.05 Rights of Subrogation | 126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.06 Reinstatement; Stay of Acceleration | 126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.07 Information | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.08 Termination | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.09 Reserved | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.10 Maximum Liability | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.11 Contribution | 127 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.12 Liability Cumulative | 128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; SECTION 10.13 Keepwell | 128 |

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<u>SCHEDULES</u>:

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| | |
|:---|:---|
|  Commitment Schedule |  |
|  Schedule 3.05 – | Properties, etc. |
|  Schedule 3.06 – | Disclosed Matters |
|  Schedule 3.12 – | Material Agreements |
|  Schedule 3.14 – | Insurance |
|  Schedule 3.15 – | Capitalization and Subsidiaries |
|  Schedule 6.01 – | Existing Indebtedness |
|  Schedule 6.02 – | Existing Liens |
|  Schedule 6.04 – | Existing Investments |
| Schedule 6.10 – | Existing Restrictions |

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<u>EXHIBITS</u>:

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| | |
|:---|:---|
|  Exhibit A | Assignment and Assumption |
|  Exhibit B-1 | Borrowing Request |
|  Exhibit B-2 | Interest Election Request |
|  Exhibit C-1 | U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes) |
|  Exhibit C-2 | U.S. Tax Compliance Certificate (For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes) |
|  Exhibit C-3 | U.S. Tax Compliance Certificate (For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes) |
|  Exhibit C-4 | U.S. Tax Compliance Certificate (For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes) |
|  Exhibit D | Compliance Certificate |
|  Exhibit F | Joinder Agreement |

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v

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REVOLVING CREDIT AGREEMENT dated as of February 6, 2023 (as it may be amended or modified from time to time, this "<u>Agreement</u>"), among Turo Inc., as Borrower, the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.

The parties hereto agree as follows:

ARTICLE I

<u>DEFINITIONS</u> 

SECTION 1.01 <u>Defined</u> <u>Terms</u>. As used in this Agreement, the following terms have the meanings specified below:

"<u>ABR</u>", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, is bearing interest at a rate determined by reference to the Alternate Base Rate.

"<u>Account</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Account Debtor</u>" means any Person obligated on an Account.

"<u>Adjusted EBITDA</u>" means, for any period, Net Income for such period *<u>plus</u>* (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period net of tax refunds, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary, unusual, one-time or non-recurring charges for such period, (v) any non-cash charges for such period (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period), (vi) legal and regulatory reserves and settlements for such period, <u>provided</u> that the aggregate amount that may be added to net income pursuant to this clause (vi) shall not exceed 3% of Adjusted EBITDA for such period, (vii) any restructuring and business optimization charges and expenses, severance, relocation costs, integration and facilities' or offices' opening costs, start-up costs and other business optimization and rationalization expenses, (viii) fees, costs and expenses (1) incurred in connection with the closing of this Agreement and the transactions contemplated hereby or (2) payable in connection with the amendment, waiver, consent, supplement or modification to, any Loan Documents, and any other amounts payable pursuant to Section 9.03, (ix) fees, expenses, costs and non-cash impairments incurred in connection with any acquisition, merger, Investment, asset Disposition, issuance or repayment of debt, issuance of equity securities, Restricted Payment, refinancing transaction (including any amendment or other modification of any debt instrument), and other similar transactions permitted hereunder (collectively, the "<u>Specified Transactions</u>") and (x) the amount of any "run rate" cost savings, operating expense reductions and synergies related to the transactions contemplated herein, any Specified Transaction or any restructuring, cost saving initiative or other initiative determined or projected from time to time by the Borrower in good faith, *<u>provided</u>*, that the aggregate amount that may be added to net income pursuant to clauses (a) (vii) and (x) may not exceed 20% of Adjusted EBITDA for such period (determined without giving effect to any such adjustment pursuant to clauses (a) (vii) and (x)) *<u>minus</u>* (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(v) taken in a prior period and (ii) any extraordinary, unusual, one-time or non-recurring gains and any non-cash items of income for such period, all calculated for the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.

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"<u>Adjusted Term SOFR Rate</u>" means for any Interest Period, an interest rate per annum equal to (a) the Term SOFR Rate for such Interest Period, *plus* (b) 0.10%, <u>provided that</u> if at any time the Adjusted Term SOFR Rate as determined in (a) and (b) of this definition is less than the Floor, it shall be deemed to be the Floor for purposes of this Agreement and the other Loan Documents.

"<u>Administrative Agent</u>" means JPMorgan Chase Bank, N.A. (or any of its designated branch offices or affiliates), in its capacity as administrative agent for the Lenders hereunder, or any successor administrative agent.

"<u>Administrative Questionnaire</u>" means an Administrative Questionnaire in a form supplied by the Administrative Agent.

"<u>Affected Financial Institution</u>" means (a) any EEA Financial Institution or (b) any UK Financial Institution.

"<u>Affiliate</u>" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.

"<u>Agent-Related Person</u>" has the meaning assigned to it in <u>Section</u> <u>9.03(d)</u>.

"<u>Aggregate Revolving Credit Exposure</u>" means, at any time, the aggregate Revolving Credit Exposure of all the Lenders at such time.

"<u>Agreement</u>" has the meaning specified in introductory paragraph hereof.

"<u>Alternate Base Rate</u>" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus <sup>1</sup>⁄<sub>2</sub> of 1%, and (c) the Adjusted Term SOFR Rate for a one-month Interest Period as published two (2) U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day), <u>provided that</u>, for the purpose of this definition, the Adjusted Term SOFR Rate for any day shall be based on the Term SOFR Reference Rate at approximately 5:00 a.m. Chicago time on such day (or any amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted Term SOFR Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to <u>Section</u> <u>2.14</u> (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to <u>Section</u> <u>2.14(b)</u>), then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above.

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"<u>Ancillary Document</u>" has the meaning assigned to it in Section 9.06(b).

"<u>Anti-Corruption Laws</u>" means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery, corruption or money laundering.

"<u>Applicable Parties</u>" has the meaning assigned to it in <u>Section</u> <u>8.03(c)</u>.

"<u>Applicable Percentage</u>" means, at any time with respect to any Lender, a percentage equal to a fraction the numerator of which is such Lender's Commitment at such time and the denominator of which is the aggregate Commitments at such time (<u>provided</u> that, if the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender's share of the Aggregate Revolving Credit Exposure at such time); <u>provided</u> that, in accordance with <u>Section</u> <u>2.20</u>, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender's Commitment shall be disregarded in the calculations above.

"<u>Applicable Rate</u>" means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption "ABR Spread", "Term Benchmark Spread" or "Commitment Fee Rate", as the case may be, based upon the Borrower's Adjusted EBITDA as of the most recent determination date, <u>provided</u> that until the delivery to the Administrative Agent, pursuant to Section 5.01, of the Borrower's consolidated financial information for the Borrower's first fiscal quarter ending after the Effective Date, the "Applicable Rate" shall be the applicable rate per annum pursuant to Adjusted EBITDA as determined by the financial statements for the fiscal quarter ending September 30, 2022, which were delivered prior to the Effective Date:

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| | | | |
|:---|:---|:---|:---|
| Adjusted EBITDA | ABR Spread | Term Benchmark | Commitment Fee Rate |
|  <u>Category 1</u><br>Adjusted EBITDA <u><</u> $0.0 | 2.00% | 3.00% | 0.375% |
|  <u>Category 2</u><br>Adjusted EBITDA > $0.0 | 1.50% | 2.50% | 0.25% |

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"<u>Approved Electronic Platform</u>" has the meaning assigned to it in <u>Section</u> <u>8.03(a)</u>.

"<u>Approved Fund</u>" has the meaning assigned to the term in <u>Section</u> <u>9.04(b)</u>.

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"<u>Arranger</u>" means JPMorgan Chase Bank, N.A., in its capacity as sole bookrunner and joint lead arranger hereunder and Citibank, N.A., in its capacity as joint lead arranger.

"<u>Assignment and Assumption</u>" means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by <u>Section</u> <u>9.04</u>), and accepted by the Administrative Agent, in the form of <u>Exhibit</u> <u>A</u> or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.

"<u>Availability Period</u>" means the period from and including the Effective Date to but excluding the earlier of the Revolving Credit Maturity Date and the date of termination of the Commitments.

"<u>Available Tenor</u>" means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of an Interest Period for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of "Interest Period" pursuant to clause (e) of Section 2.14.

"<u>Bail-In Action</u>" means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

"<u>Bail-In Legislation</u>" means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

"<u>Banking Services</u>" means each and any of the following bank services provided to any Loan Party or any Subsidiary by JPM or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, "commercial credit cards" and purchasing cards), (b) stored value cards, (c) merchant processing services, and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement, overdrafts and interstate depository network services and cash pooling services).

"<u>Banking Services Obligations</u>" means any and all obligations of the Loan Parties or its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

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"<u>Bankruptcy Code</u>" means Chapter 11 of Title 11 of the United States Code, as amended from time to time and any successor statute and all rules and regulations promulgated thereunder.

"<u>Bankruptcy Event</u>" means, with respect to any Person, when such Person becomes the subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, or has had any order for relief in such proceeding entered in respect thereof, <u>provided</u> that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the U.S. or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

"<u>Benchmark</u>" means, initially, with respect to any Term Benchmark Loan, the Term SOFR Rate; provided that if a Benchmark Transition Event and the related Benchmark Replacement Date have occurred with respect to the Term SOFR Rate or the then-current Benchmark, then "Benchmark" means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) of Section 2.14.

"<u>Benchmark Replacement</u>" means, for any Available Tenor:

the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment.

If the Benchmark Replacement as determined pursuant to the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.

"<u>Benchmark Replacement Adjustment</u>" means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date

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and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities at such time.

"<u>Benchmark Replacement Conforming Changes</u>" means, with respect to any Benchmark Replacement and/or any Term Benchmark Loan, any technical, administrative or operational changes (including changes to the definition of "Alternate Base Rate," the definition of "Business Day," the definition of "U.S. Government Securities Business Day," the definition of "Interest Period," timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

"<u>Benchmark Replacement Date</u>" means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) in the case of clause (1) or (2) of the definition of "Benchmark Transition Event," the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) in the case of clause (3) of the definition of "Benchmark Transition Event," the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the "Benchmark Replacement Date" will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

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"<u>Benchmark Transition Event</u>" means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.

For the avoidance of doubt, a "Benchmark Transition Event" will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

"<u>Benchmark Unavailability Period</u>" means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.14.

"<u>Beneficial Ownership Certification</u>" means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

"<u>Beneficial Ownership Regulation</u>" means 31 C.F.R. § 1010.230.

"<u>Benefit Plan</u>" means any of (a) an "employee benefit plan" (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a "plan" as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such "employee benefit plan" or "plan".

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"<u>BHC Act Affiliate</u>" of a party means an "affiliate' (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

"<u>Borrower</u>" means Turo Inc., a Delaware corporation.

"<u>Borrowing</u>" means Loans of the same Type, made, converted or continued on the same date and, in the case of Term Benchmark Loans, as to which a single Interest Period is in effect.

"<u>Borrowing Request</u>" means a request by the Borrower for a Borrowing in accordance with <u>Section</u> <u>2.03</u>, which shall be substantially in the form of <u>Exhibit</u> <u>B</u><u>-1</u> hereto or any other form approved by the Administrative Agent.

"<u>Business Day</u>" means any day (other than a Saturday or a Sunday) on which banks are open for business in New York City.

"<u>Capital Lease Obligations</u>" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases or financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

"<u>Cash Equivalents</u>" means, as at any date of determination, (a) readily marketable securities issued or directly and unconditionally guaranteed or insured as to interest and principal by the U.S. (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the U.S.), in each case maturing within one year from the date of issuance thereof; (b) readily marketable direct obligations issued by any state of the U.S. or any political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, a rating of at least A-2 from Standard & Poor's Financial Services LLC, a subsidiary of S&P or at least P-2 from Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency) and, in each case, repurchase agreements and reverse repurchase agreements relating thereto; (c) commercial paper maturing no more than 270 days from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-2 from S&P or at least P-2 from Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency); (d) deposits, money market deposits, time deposit accounts, certificates of deposit or bankers' acceptances (or similar instruments) maturing within one year after such date and issued or accepted by any Lender or by any bank organized under, or authorized to operate as a bank under, the laws of the U.S., any state thereof or the District of Columbia or any political subdivision thereof or any foreign bank or its branches or agencies and that has a combined capital and surplus and undivided profits of not less than $1,500,000,000 and that issues (or the parent of which issues) commercial paper rated at least A-2 from S&P or P-2 from Moody's (or, if at any time neither S&P nor Moody's shall be rating such obligations, an equivalent rating from another

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nationally recognized statistical rating agency); (e) shares or other interests of any investment company, money market mutual fund or other money market or enhanced high yield fund that invests 95% or more of its assets in instruments of the types specified in clauses (a) through (d) above (which investment company or fund may also hold cash pending investment or distribution) and (f) investments permitted by the Borrower's board-approved investment policy as approved from time to time by the Administrative Agent (such approval not to be unreasonably withheld, delayed or conditioned; it being understood that the investment policy provided to the Administrative Agent on December 16, 2022 is deemed approved).

"<u>CFC</u>" has the meaning assigned to it in the definition of "Excluded Subsidiary."

"<u>CFC Holdco</u>" has the meaning assigned to it in the definition of "Excluded Subsidiary."

"<u>Change in Control</u>" means (i) at any time prior to an Initial Public Offering, the Permitted Holders, taken as a whole, shall cease to own, directly or indirectly, at least 51% of the outstanding voting Equity Interests of the Borrower on a fully diluted basis and (ii) at any time on and after an Initial Public Offering, the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) other than any combination of Permitted Holders, of Equity Interests representing more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower, and the aggregate ordinary voting power owned by such person or group exceeds the aggregate ordinary voting power owned by the Permitted Holders.

"<u>Change in Law</u>" means the occurrence after the date of this Agreement of any of the following: (a) the adoption of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or, for purposes of <u>Section</u> <u>2.15(b)</u>, by any lending office of such Lender or by such Lender's or the Issuing Bank's holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; <u>provided</u> that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a "Change in Law", regardless of the date enacted, adopted, issued or implemented.

"<u>Charges</u>" has the meaning assigned to such term in <u>Section</u> <u>9.17</u>.

"<u>CME Term SOFR Administrator</u>" means CME Group Benchmark Administration Limited as administrator of the forward-looking term SOFR (or a successor administrator).

"<u>Code</u>" means the United States Internal Revenue Code of 1986, as amended from time to time.

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"<u>Collateral</u>" means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the Secured Obligations; <u>provided</u> that the Collateral shall exclude Excluded Assets.

"<u>Collateral Documents</u>" means, collectively, the Security Agreement, and any other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Secured Obligations, including, without limitation, all other security agreements, pledge agreements, mortgages, deeds of trust, loan agreements, notes, guarantees, subordination agreements, pledges, powers of attorney, consents, assignments, contracts, fee letters, notices, leases, financing statements and all other written matter whether theretofore, now or hereafter executed by any Loan Party and delivered to the Administrative Agent to secure the Secured Obligations.

"<u>Commitment</u>" means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to <u>Section</u> <u>2.06</u> and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to <u>Section</u> <u>9.04</u>. The initial amount of each Lender's Commitment as of the Effective Date is set forth on the Commitment Schedule. The initial aggregate amount of the Lenders' Commitments as of the Effective Date is $100,000,000.

"<u>Commitment Schedule</u>" means the Schedule attached hereto identified as such.

"<u>Commodity Exchange Act</u>" means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

"<u>Communications</u>" has the meaning assigned to such term in <u>Section</u> <u>8.03(c)</u>.

"<u>Compliance Certificate</u>" means a certificate of a Financial Officer in substantially the form of <u>Exhibit</u> <u>D</u>.

"<u>Connection Income Taxes</u>" means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

"<u>Control</u>" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "<u>Controlling</u>" and "<u>Controlled</u>" have meanings correlative thereto.

"<u>Corresponding Tenor</u>" ****with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

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"<u>Covered Entity</u>" means any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a "covered entity" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a "covered bank" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) a "covered FSI" as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

"<u>Covered Party</u>" has the meaning assigned to it in Section 9.21(b).

"<u>Credit Party</u>" means the Administrative Agent, the Issuing Bank or any Lender.

"<u>Default</u>" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

"<u>Default Right</u>" has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

"<u>Defaulting Lender</u>" means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender's good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender's good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations as of the date of certification) to fund prospective Loans and participations in then outstanding Letters of Credit under this Agreement, <u>provided</u> that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party's receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action.

"<u>Disclosed Matters</u>" means the actions, suits, proceedings and environmental matters disclosed in <u>Schedule</u> <u>3.06</u>.

"<u>Disposition</u>" or "<u>Dispose</u>" means the sale, transfer, license, lease or other disposition (in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

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<u>"Disqualified Equity Interests</u>" shall mean, with respect to any Person, any Equity Interests of such Person which, by its terms, or by the terms of any security into which it is convertible or for which it is putable or exchangeable, or upon the happening of any event, matures or is mandatorily redeemable (other than solely for Qualified Equity Interest), other than as a result of a change of control, asset sale, or similar event, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interest), other than as a result of a change of control, asset sale, or similar event, in whole or in part, in each case, prior to the Revolving Credit Maturity Date.

"<u>Dividing Person</u>" has the meaning assigned to it in the definition of "Division."

"<u>Division</u>" means the division of the assets, liabilities and/or obligations of a Person (the "<u>Dividing Person</u>") among two or more Persons (whether pursuant to a "plan of division" or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

"<u>Division Successor</u>" means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division. A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.

"<u>Document</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Dollars</u>", "<u>dollars</u>" or "<u>$</u>" refers to lawful money of the U.S.

"<u>Domestic Subsidiary</u>" means any Subsidiary that is organized under the laws of any political subdivision of the United States, excluding (x) any CFC Holdco and (y) any such Subsidiary that is owned (directly or indirectly, in whole or in part) by one or more Subsidiaries that are CFCs.

"<u>ECP</u>" means an "eligible contract participant" as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

"<u>EEA Financial Institution</u>" means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

"<u>EEA Member Country</u>" means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

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"<u>EEA Resolution Authority</u>" means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

"<u>Effective Date</u>" means the date on which the conditions specified in <u>Section</u> <u>4.01</u> are satisfied (or waived in accordance with <u>Section</u> <u>9.02</u>).

"<u>Electronic Signature</u>" means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

"<u>Electronic System</u>" means any electronic system, including e-mail, e-fax, web portal access for the Borrower and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

"<u>Environmental Laws</u>" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to (i) the environment, (ii) preservation or reclamation of natural resources, (iii) the management, Release or threatened Release of any Hazardous Material or (iv) health and safety matters.

"<u>Environmental Liability</u>" means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

"<u>Equipment</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Equity Interests</u>" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing, but excluding any debt securities convertible (including Permitted Convertible Indebtedness) or exchangeable for any combination of Equity Interests and/or cash.

"<u>ERISA</u>" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

"<u>ERISA Affiliate</u>" means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

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"<u>ERISA Event</u>" means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) the failure to satisfy the "minimum funding standard" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status or in reorganization, within the meaning of Title IV of ERISA.

"<u>EU Bail-In Legislation Schedule</u>" means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

"<u>Event of Default</u>" has the meaning assigned to such term in <u>Article</u> <u>VII</u>.

"<u>Excluded Accounts</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Excluded Assets</u>" has the meaning assigned to such term in the Security Agreement.

"<u>Excluded Subsidiary</u>" means (a) each Immaterial Subsidiary, (b) any Foreign Subsidiary, including any Subsidiary that is a "controlled foreign corporation" within the meaning of Section 957 of the Code (a "<u>CFC</u>"), (c) any Subsidiary substantially all the assets of which consist of Equity Interests (or Equity Interests and debt) of one or more CFCs or Subsidiaries otherwise described in this <u>clause (c)</u> (a "<u>CFC Holdco</u>"), (d) any Subsidiary of a CFC, (e) a special purpose securitization vehicle (or similar entity), (f) a not-for-profit Subsidiary, (g) a Subsidiary with respect to which (i) it is reasonably agreed by the Borrower and the Administrative Agent that the burden or cost of providing a Guarantee shall outweigh the benefits to be obtained by the Lenders therefrom or (ii) the provision of a guarantee by such Subsidiary would result in material tax consequences to the Borrower or any of its Subsidiaries, as reasonably determined by the Borrower in consultation with the Administrative Agent, (h) a captive insurance Subsidiary, and (i) any Subsidiary that is prohibited or restricted by any requirement of law or by contractual obligations existing on the Effective Date (or, in the case of any newly acquired Subsidiary, in existence at the time of acquisition but not entered into in contemplation thereof) from guaranteeing the Obligations or if guaranteeing the Obligations would require governmental (including regulatory) consent, approval, license or authorization, unless such consent, approval, license or authorization has been obtained.

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"<u>Excluded Swap Obligation</u>" means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor's failure for any reason to constitute an ECP at the time the Guarantee of such Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

"<u>Excluded Taxes</u>" means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that otherwise are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Commitment (other than pursuant to an assignment request by the Borrower under <u>Section</u> <u>2.19(b)</u>) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to <u>Section</u> <u>2.17</u>, amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient's failure to comply with <u>Section</u> <u>2.17(f)</u>, and (d) any withholding Taxes imposed under FATCA.

"<u>FATCA</u>" means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

"<u>Federal Funds Effective Rate</u>" means, for any day, the rate calculated by the NYFRB based on such day's federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the NYFRB's Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate, <u>provided</u> that, if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

"<u>Federal Reserve Board</u>" means the Board of Governors of the Federal Reserve System of the United States of America.

"<u>Financial Officer</u>" means the chief financial officer, principal accounting officer, vice president of finance, treasurer or controller of the Borrower.

"<u>Flood Laws</u>" has the meaning assigned to such term in <u>Section</u> <u>8.10</u>.

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"<u>Floor</u>" means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or renewal of this Agreement or otherwise) with respect to the Adjusted Term SOFR Rate. For the avoidance of doubt, the initial Floor for the Adjusted Term SOFR Rate shall be deemed to be zero.

"<u>Foreign Lender</u>" means (a) if the Borrower is a U.S. Person, a Lender (or, if the Lender is a disregarded entity for U.S. federal income tax purposes, the Person treated as the owner of such assets of such Lender for U.S. federal income tax purposes) that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

"<u>Foreign Subsidiary</u>" means any Subsidiary that is not a Domestic Subsidiary.

"<u>GAAP</u>" means generally accepted accounting principles in the U.S.

"<u>Governmental Authority</u>" means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

"<u>Guarantee</u>" of or by any Person (the "<u>guarantor</u>") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "<u>primary obligor</u>") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; <u>provided</u> that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business, or customary indemnification obligations entered into in connection with any acquisition or disposition of assets or of other entities (other than to the extent that the primary obligations that are the subject of such indemnification obligation would be considered Indebtedness hereunder). The amount of any Guarantee shall be deemed to be an amount equal to the lesser of (a) the stated or determinable amount of the primary payment obligation in respect of which such Guarantee is made and (b) the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary payment obligation and the maximum amount for which such guaranteeing Person may be liable are not stated or determinable, in which case the amount of the Guarantee shall be such guaranteeing Person's maximum reasonably possible liability in respect thereof as reasonably determined by the Borrower in good faith.

"<u>Guaranteed Obligations</u>" has the meaning assigned to such term in <u>Section</u> <u>10.01</u>.

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"<u>Guarantors</u>" means any Subsidiary of the Borrower that has executed the Guaranty or a joinder agreement to the Guaranty pursuant to Section 5.14 hereof, and, other than with respect to its own Secured Obligations, the Borrower. No Excluded Subsidiary shall be required to be a Guarantor.

"<u>Guaranty</u>" means <u>Article</u> <u>X</u> of this Agreement.

"<u>Hazardous Materials</u>" means (a) any substance, material, or waste that is included within the definitions of "hazardous substances," "hazardous materials," "hazardous waste," "toxic substances," "toxic materials," "toxic waste," or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.

"<u>Immaterial Subsidiary</u>" means any Subsidiary that (a) did not, as of the last day of the fiscal quarter of the Borrower most recently ended for which financials have been delivered pursuant to Section 5.01(a) or (b), have (i) total assets with a value in excess of 5% of the Total Assets of the Borrower and its Subsidiaries, on a consolidated basis in accordance with GAAP, or (ii) revenue representing in excess of 5% of the Total Revenue of the Borrower and its Subsidiaries, on a consolidated basis in accordance with GAAP, for the four fiscal quarters ended as of such date and (b) taken together with all Immaterial Subsidiaries as of the last day of the fiscal quarter of the Borrower most recently ended for which financials have been delivered pursuant to Section 5.01(a) or (b), did not have (i) total assets with a value in excess of 10% of the Total Assets of the Borrower and its Subsidiaries, on a consolidated basis in accordance with GAAP, or (ii) revenue representing in excess of 10% of the Total Revenue of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP for the four fiscal quarters ended as of such date. As of the Effective Date, each Immaterial Subsidiary shall be set forth in Schedule 3.15.

"<u>Incremental Amount</u>" means $125,000,000.

"<u>Indebtedness</u>" of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (i) accounts or trade payables incurred in the ordinary course of business, (ii) any earn-out obligation, and (iii) accruals for payroll and other liabilities, including deferred compensation arrangements, in each case, accrued in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed; provided that, if such Person has not assumed or otherwise become liable in respect of such Indebtedness, such obligations shall be deemed to be in an amount equal

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to the lesser of (i) the unpaid amount of such Indebtedness and (ii) fair market value of such property at the time of determination (in Borrower's good faith estimate), (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit, (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances, (k) obligations under any earn-out that (i) has remained outstanding for five (5) Business Days or more after such obligation becoming due and payable (unless such obligation is subject to a good faith dispute) and (ii) such obligation is required to be reflected on the Borrower's balance sheet in accordance with GAAP, (l) any other Off-Balance Sheet Liability, and (m) obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

"<u>Indemnified Taxes</u>" means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.

"<u>Indemnitee</u>" has the meaning assigned to such term in <u>Section</u> <u>9.03(c)</u>.

"<u>Ineligible Institution</u>" has the meaning assigned to such term in <u>Section</u> <u>9.04(b)</u>.

"<u>Information</u>" has the meaning assigned to such term in <u>Section</u> <u>9.12</u>.

"<u>Initial Public Offering</u>" shall mean the issuance by the Borrower of its common Equity Interests in an underwritten primary public offering pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act, as amended.

"<u>Interest Election Request</u>" means a request by the Borrower to convert or continue a Borrowing in accordance with <u>Section</u> <u>2.08</u>, which shall be substantially in the form of <u>Exhibit</u> <u>B</u><u>-2</u> hereto or any other form approved by the Administrative Agent.

"<u>Interest Expense</u>" means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Borrower and its Subsidiaries for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for the Borrower and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.

"<u>Interest Payment Date</u>" means (a) with respect to any ABR Loan, the first Business Day of each calendar quarter and the Revolving Credit Maturity Date and (b) with respect to any Term Benchmark Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Term Benchmark Loan with an Interest Period of more than three (3) months' duration, each day that is three (3) months after the first day of such Interest Period and the last Business Day of such Interest Period, in each case, if any such Interest Payment Date is not a Business Day, the Business Day next succeeding shall be such date.

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"<u>Interest Period</u>" means with respect to any Term Benchmark Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or (Commitment), as the Borrower may elect; <u>provided</u> that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, and (iii) no tenor that has been removed from this definition pursuant to Section 2.14(e) shall be available for specification in such Borrowing Request or Interest Election Request. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

"<u>Inventory</u>" has the meaning assigned to such term in the Security Agreement.

"<u>IRS</u>" means the United States Internal Revenue Service.

"<u>Issuing Bank</u>" means, individually and collectively, each of JPMorgan, Citibank, N.A., Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd., each in their respective capacity as issuer of Letters of Credit hereunder, and any other Lender from time to time designated by the Borrower as an Issuing Bank (in each case, through itself or through one of its designated affiliates or branch offices), with the consent of such Lender and the Administrative Agent, and their respective successors in such capacity as provided in <u>Section</u> <u>2.06(</u><u>i</u><u>)</u>. Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by its Affiliates, in which case the term "Issuing Bank" shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of <u>Section</u> <u>2.06</u> with respect to such Letters of Credit). At any time there is more than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as the context may require.

"<u>Issuing Bank</u> <u>Sublimits</u>" means the lesser of (a) (i) $50,000,000 (or such greater amount as may be agreed by the applicable Issuing Bank from time to time in its sole discretion) and (b) the aggregate unused amount of the Commitments then in effect; *provided* that no Issuing Bank shall be required to issue Letters of Credit in an aggregate amount outstanding at any time in excess of an amount to be agreed by such Issuing Bank in its sole discretion.

"<u>Joinder Agreement</u>" means a Joinder Agreement in substantially the form of <u>Exhibit</u> <u>F</u>.

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"<u>JPMorgan</u>" means JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

"<u>JPMorgan Parties</u>" has the meaning assigned to such term in <u>Section</u> <u>9.19</u>.

"<u>LC Collateral Account</u>" has the meaning assigned to such term in <u>Section</u> <u>2.06(j)</u>.

"<u>LC Disbursement</u>" means any payment made by an Issuing Bank pursuant to a Letter of Credit.

"<u>LC Exposure</u>" means, at any time, the sum of (a) the aggregate undrawn amount of all Letters of Credit outstanding at such time *<u>plus</u>* (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the aggregate LC Exposure at such time.

"<u>Lender Parent</u>" means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

"<u>Lender-Related Person</u>" has the meaning assigned to such term in Section 9.03(b).

"<u>Lenders</u>" means the Persons listed on the <u>Commitment Schedule</u> and any other Person that shall have become a Lender hereunder pursuant to <u>Section</u> <u>2.09</u> an Assignment and Assumption or otherwise, other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption or otherwise. Unless the context otherwise requires, the term "Lenders" includes the Issuing Bank.

"<u>Letters of Credit</u>" means the letters of credit issued pursuant to this Agreement, and the term "Letter of Credit" means any one of them or each of them singularly, as the context may require.

"<u>Letter of Credit Agreement</u>" has the meaning assigned to it in <u>Section</u> <u>2.06(b)</u>.

"<u>Liabilities</u>" means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.

"<u>Lien</u>" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

"<u>Loan Documents</u>" means, collectively, this Agreement, each promissory note issued pursuant to this Agreement, each Letter of Credit Agreement, each Collateral Document, each Compliance Certificate, the Guaranty, and each other agreement, instrument, document and certificate executed and delivered to, or in favor of, the Administrative Agent or any Lender and including each other pledge, power of attorney, consent, assignment, contract, notice, letter of credit agreement, letter of credit applications and any agreements between the Borrower and the

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Issuing Bank regarding the Issuing Bank's Issuing Bank Sublimit or the respective rights and obligations between the Borrower and the Issuing Bank in connection with the issuance of Letters of Credit, and each other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

"<u>Loan Parties</u>" means, collectively, the Borrower and the Guarantors and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their respective successors and assigns, and the term "Loan Party" shall mean any one of them or all of them individually, as the context may require.

"<u>Loans</u>" means the loans and advances made by the Lenders pursuant to this Agreement.

"<u>Margin Stock</u>" means margin stock within the meaning of Regulations T, U and X, as applicable.

"<u>Material Adverse Effect</u>" means a material adverse effect on (a) the business, assets, operations, financial condition or results of operation of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its Obligations or (c) the rights of or remedies available to the Administrative Agent and the Lenders under any of the Loan Documents.

"<u>Material Indebtedness</u>" means Indebtedness (other than the any Indebtedness under the Loan Documents), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Subsidiaries in a principal amount exceeding $15,000,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

"<u>Maximum Rate</u>" has the meaning assigned to such term in <u>Section</u> <u>9.17</u>.

"<u>Moody's</u>" means Moody's Investors Service, Inc.

"<u>Multiemployer Plan</u>" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

"<u>Net Income</u>" means, for any period, the consolidated net income (or loss) determined for the Borrower and its Subsidiaries, on a consolidated basis in accordance with GAAP; <u>provided</u> that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary, and (b) the income (or deficit) of any Person (other than a Subsidiary) in which the Borrower or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the

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undistributed earnings of any Subsidiary, to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

"<u>NYFRB</u>" means the Federal Reserve Bank of New York.

"<u>NYFRB's Website</u>" means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.

"<u>NYFRB Rate</u>" means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business Day, for the immediately preceding Business Day); <u>provided</u> that if none of such rates are published for any day that is a Business Day, the term "NYFRB Rate" means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; <u>provided</u>, <u>further</u>, that if any of the aforesaid rates as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

"<u>Obligated Party</u>" has the meaning assigned to such term in <u>Section</u> <u>10.02</u>.

"<u>Obligations</u>" means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

"<u>Off-Balance Sheet Liability</u>" of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called "synthetic lease" transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheet of such Person (other than operating leases).

"<u>Other Connection Taxes</u>" means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit, or any Loan Document).

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"<u>Other Taxes</u>" means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to <u>Section</u> <u>2.19(b)</u> at the request of the Borrower<u>)</u>.

"<u>Overnight Bank Funding Rate</u>" means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated in Dollars by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on the NYFRB's Website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

"<u>Paid in Full</u>" or "<u>Payment in Full</u>" means, (i) the indefeasible payment in full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid interest thereon, (ii) the termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit, or at the discretion of the Administrative Agent a back-up standby letter of credit satisfactory to the Administrative Agent and the Issuing Bank, in an amount equal to 103% of the LC Exposure as of the date of such payment), (iii) the indefeasible payment in full in cash of the accrued and unpaid fees, (iv) the indefeasible payment in full in cash of all reimbursable expenses and other Secured Obligations (other than Unliquidated Obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon, (v) the termination of all Commitments and (vi) the termination of the Swap Agreement Obligations and the Banking Services Obligations or entering into other arrangements satisfactory to the Secured Parties counterparties thereto.

"<u>Participant</u>" has the meaning assigned to such term in <u>Section</u> <u>9.04(c)</u>.

"<u>Participant Register</u>" has the meaning assigned to such term in <u>Section</u> <u>9.04(c)</u>.

"<u>Payment</u>" has the meaning assigned to it in Section 8.06(c).

"<u>Payment Notice</u>" has the meaning assigned to it in Section 8.06(c).

"<u>PBGC</u>" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

"<u>Permitted Acquisition</u>" means any acquisition by any Loan Party or Subsidiary in a transaction that satisfies each of the following requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) such acquisition is not a hostile acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the business acquired in connection with such acquisition is not materially engaged, directly or indirectly, in any line of business other than the businesses in which the Borrower and its Subsidiaries are engaged on the Effective Date and any business activities that are reasonably related or incidental thereto;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if such acquisition involves a merger or a consolidation involving the Borrower or any other Loan Party, the Borrower or such Loan Party, as applicable, shall be the surviving entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) at the time of and immediately after giving effect to any such Permitted Acquisition, no Event of Default shall have occurred and be continuing or would result therefrom; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) the aggregate cash consideration for all Permitted Acquisitions during any fiscal year shall not exceed $25,000,000; provided that the aggregate cash consideration for Permitted Acquisitions of Persons that are not (or do not become) Loan Parties and assets that are not (or do not become) owned by Loan Parties during any fiscal year shall not exceed $10,000,000; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) upon request of the Administrative Agent, the Borrower shall have delivered to the Administrative Agent the final executed material documentation relating to such acquisition within five (5) Business Days after request following the consummation thereof,

<u>provided that</u>, with respect to clauses (d) and (e) hereof, such requirements shall not apply to the extent that, with respect to the contemplated acquisition, (i) the consideration thereof is financed entirely through equity and not by any third-party debt provider (neither directly nor indirectly) and (ii) each other requirement set forth in this definition has been complied with.

"<u>Permitted Convertible Indebtedness</u>" means unsecured Indebtedness of the Borrower that (a) as of the date of issuance thereof contains terms, conditions, covenants, conversion or exchange rights, redemption rights and offer to repurchase rights, in each case, as are typical and customary for notes of such type (as determined by the Borrower in good faith) and (b) is convertible or exchangeable into shares of common stock of the Borrower (or other securities of a successor Person following merger event, reclassification or other change of the common stock of the Borrower), cash or a combination thereof (it being understood that, subject to the Borrower's settlement method election, the cash component of any property required to be delivered upon conversion, if any, shall be determined in a customary manner by reference to the price of the Borrower's common stock or such other securities or property), and cash in lieu of fractional shares of common stock of the Borrower; provided that (i) such Permitted Convertible Indebtedness shall have a stated final maturity date that is no earlier than the date 91 days after the Revolving Credit Maturity Date (the "<u>Earliest Date</u>"), (ii) such Indebtedness shall not be required to be repaid, prepaid, redeemed, repurchased or defeased, whether on one or more fixed dates, upon the occurrence of one or more events or at the option of any holder thereof (except, in each case, upon any conversion of such Indebtedness (whether into cash, shares of common stock in the Borrower or any combination thereof)), the occurrence of an event of default or a "fundamental change" or following the Borrower's election to redeem such notes) prior to the Earliest Date, and (iii) no Subsidiary that is not a Loan Party shall have Guarantee obligations with respect to obligations of the Borrower thereunder.

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"<u>Permitted Encumbrances</u>" means

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Liens imposed by law for Taxes that are not yet delinquent for a period of more than 30 days or are being contested in compliance with <u>Section</u> <u>5.04</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with <u>Section</u> <u>5.04</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) pledges and deposits (i) made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations or employment laws or to secure other public, statutory or regulatory obligations and (ii) with respect to letters of credit, bank guarantees or similar instruments issued for the account of any Borrower or any Subsidiary in the ordinary course of business to the extent supporting obligations of the type set forth in clause (c)(i) above;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) pledges and deposits to secure the performance of bids, trade and government contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business, (ii) to secure surety and appeal bonds in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII and (iii) in respect of letters of credit, bank guarantees or similar instruments issued for the account of any Borrower or any Subsidiary in the ordinary course of business to the extent supporting obligations of the type set forth in clause (d)(i);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of <u>Article</u> <u>VII</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Uniform Commercial Code financing statements filed (or similar filings under applicable law) solely as a precautionary measure in connection with operating leases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) leases, licenses, subleases or sublicenses of real property or equipment granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of any Borrower and its Subsidiaries, taken as a whole, or (ii) secure any Indebtedness;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) non-exclusive licenses or sublicenses of intellectual property granted by any Loan Party in the ordinary course of business that does not interfere in any material respect with the business of the Loan Parties and their Subsidiaries or the rights and remedies of the Administrative Agent with respect to such intellectual property; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods so long as such Liens attach only to the imported goods prior to possession by the Borrower or its Subsidiaries.

"<u>Permitted Equity Derivative Transaction</u>" shall mean any forward purchase, accelerated share repurchase, call option, warrant or other derivative transaction relating to Borrower's common stock (or other securities or property following a merger event, reclassification or other change of the common stock of Borrower) purchased or sold by Borrower in connection with the issuance of any Permitted Convertible Indebtedness and settled in common stock of Borrower (or such other securities or property), cash or a combination thereof, as the same may be amended, restated, supplemented or otherwise modified from time to time; provided that (a) the aggregate net purchase price for such Permitted Equity Derivative Transactions does not exceed the net cash proceeds received by Borrower from the sale of the Permitted Convertible Indebtedness in connection with which such Permitted Equity Derivative Transactions were entered into, and (b) the other terms, conditions and covenants of each such transaction shall be such as are customary for transactions of such type (as determined by Borrower in good faith).

"<u>Permitted Holders</u>" means the holders of equity interests of the Borrower as of the Effective Date.

"<u>Person</u>" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

"<u>Plan</u>" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"<u>Plan Asset Regulations</u>" means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

"<u>Prime Rate</u>" means the rate of interest last quoted by The Wall Street Journal as the "Prime Rate" in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the "bank prime loan" rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

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"<u>Proceeding</u>" means any claim, litigation, investigation, action, suit, arbitration or administrative, judicial or regulatory action or proceeding in any jurisdiction.

"<u>Projections</u>" has the meaning assigned to such term in <u>Section</u> <u>5.01(f)</u>.

"<u>Purchase Money Indebtedness</u>" means Indebtedness incurred to finance the acquisition, construction or improvement of any fixed or capital asset to the extent incurred prior to or within 180 days following such acquisition, construction or improvement

"<u>PTE</u>" means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

"<u>Public-Sider</u>" means a Lender whose representatives may trade in securities of the Borrower or its Controlling person or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement.

"<u>QFC</u>" has the meaning assigned to the term "qualified financial contract" in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

"<u>QFC Credit Support</u>" has the meaning assigned to it in Section 9.21.

"<u>Qualified ECP Guarantor</u>" means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an "eligible contract participant" under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an "eligible contract participant" at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

"<u>Qualified Equity Interests</u>" means, with respect to any Person, the Equity Interests of such Person other than Disqualified Equity Interests of such Person.

"<u>Recipient</u>" means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, or any combination thereof (as the context requires).

"<u>Reference Time</u>" with respect to any setting of the then-current Benchmark means (1) if such Benchmark is the Term SOFR Rate, 5:00 a.m. (Chicago time) on the day that is two (2) Business Days preceding the date of such setting or (2) if such Benchmark is not the Term SOFR Rate, the time determined by the Administrative Agent in its reasonable discretion.

"<u>Refinance Indebtedness</u>" has the meaning assigned to such term in <u>Section</u> <u>6.01(f)</u>.

"<u>Register</u>" has the meaning assigned to such term in <u>Section</u> <u>9.04(b)(iv)</u>.

"<u>Regulation</u> <u>T</u>" means Regulation T of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

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"<u>Regulation</u> <u>U</u>" means Regulation U of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

"<u>Regulation</u> <u>X</u>" means Regulation X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

"<u>Related Parties</u>" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person's Affiliates.

"<u>Release</u>" means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the environment.

"<u>Relevant Governmental Body</u>" means the Federal Reserve Board and/or the NYFRB, the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB, or, in each case, any successor thereto.

"<u>Report</u>" means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrower's assets from information furnished by or on behalf of the Borrower, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

"<u>Required Lenders</u>" means, subject to <u>Section</u> <u>2.20</u>, Lenders having Revolving Credit Exposure and Unfunded Commitments representing more than 50% of the sum of the Aggregate Revolving Credit Exposure and Unfunded Commitments at such time.

"<u>Requirement of Law</u>" means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

"<u>Resolution Authority</u>" means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

"<u>Responsible Officer</u>" means the president, Financial Officer or other executive officer of the Borrower.

"<u>Restricted Cash</u>" means, at any time, the cash and Cash Equivalents of the Borrower to the extent (a) classified (or required to be classified) as restricted cash or restricted cash equivalents on the balance sheet of the Borrower in accordance with GAAP or (b) such cash or Cash Equivalents are subject to any Lien (including, without limitation, Liens permitted by <u>Section</u> <u>6.02</u>) and not subject to a Lien in favor of the Secured Parties pursuant to the Security Agreement.*<u> </u>*

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"<u>Restricted Payment</u>" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests.

"<u>Reuters</u>" means, as applicable, Thomson Reuters Corp, Refinitiv, or any successor thereto.

"<u>Revolving Credit Exposure</u>" means, with respect to any Lender, at any time, the sum of the aggregate outstanding principal amount of such Lender's Loans and its LC Exposure at such time.

"<u>Revolving Credit Maturity Date</u>" means February 6, 2026 (if the same is a Business Day, or if not then the immediately next succeeding Business Day), or any earlier date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

"<u>S&P</u>" means Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business.

"<u>Sale and Leaseback Transaction</u>" has the meaning assigned to such term in <u>Section</u> <u>6.06</u>.

"<u>Sanctioned Country</u>" means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, the so-called Donetsk People's Republic, the so-called Luhansk People's Republic, the non-government-controlled areas of Zaporizhzhia and Kherson, the Crimea Region of Ukraine, Cuba, Iran, North Korea and Syria).

"<u>Sanctioned Person</u>" means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or by the United Nations Security Council, the European Union, any European Union member state, His Majesty's Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

"<u>Sanctions</u>" means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state or His Majesty's Treasury of the United Kingdom or other relevant sanctions authority.

"<u>SEC</u>" means the Securities and Exchange Commission of the U.S.

"<u>Secured Obligations</u>" means all Obligations, together with all (i) Banking Services Obligations and (ii) Swap Agreement Obligations owing to one or more Lenders or their respective Affiliates; <u>provided</u>, <u>however</u>, that the definition of "Secured Obligations" shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

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"<u>Secured Parties</u>" means (a) the Lenders, (b) the Administrative Agent, (c) each Issuing Bank, (d) each provider of Banking Services, to the extent the Banking Services Obligations in respect thereof constitute Secured Obligations, (e) each counterparty to any Swap Agreement, to the extent the obligations thereunder constitute Secured Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document, and (g) the successors and assigns of each of the foregoing.

"<u>Security Agreement</u>" means that certain Pledge and Security Agreement (including any and all supplements thereto), dated as of the date hereof, among the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, as the same may be amended, restated, supplemented or otherwise modified from time to time.

"<u>SOFR</u>" means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

"<u>SOFR Administrator</u>" means the NYFRB (or a successor administrator of the secured overnight financing rate).

"<u>SOFR Administrator's Website</u>" means the NYFRB's website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

"<u>Statements</u>" has the meaning assigned to such term in <u>Section</u> <u>2.18(f)</u>.

"<u>Subordinated Indebtedness</u>" of a Person means any Indebtedness of such Person, the payment of which is contractually subordinated in right of payment to the Obligations pursuant to a subordination, intercreditor or other similar agreement in form and substance satisfactory to the Administrative Agent, to which the Administrative Agent is a party.

"<u>subsidiary</u>" means, with respect to any Person (the "<u>parent</u>") at any date, any corporation, limited liability company, partnership, association or other entity, the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent and/or one or more subsidiaries of the parent.

"<u>Subsidiary</u>" means any direct or indirect subsidiary of the Borrower or a Loan Party, as applicable.

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"<u>Supported QFC</u>" has the meaning assigned to it in Section 9.21.

"<u>Swap Agreement Obligations</u>" means any and all obligations of the Loan Parties and their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any Swap Agreement permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction permitted hereunder with a Lender or an Affiliate of a Lender.

"<u>Swap Agreement</u>" means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; <u>provided</u> that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

"<u>Swap Obligation</u>" means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

"<u>Syndication Agent</u>" means Citibank, N.A. (or any of its designated branch offices or affiliates), in its capacity as syndication agent for the Lenders hereunder, or any successor administrative agent.

"<u>Taxes</u>" means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

"<u>Term Benchmark</u>" when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate.

"<u>Term SOFR Determination Day</u>" has the meaning assigned to it under the definition of Term SOFR Reference Rate.

"<u>Term SOFR Rate</u>" means, with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two (2) U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator.

"<u>Term SOFR Reference Rate</u>" means, for any day and time (such day, the "<u>Term SOFR Determination Day</u>"), and for any tenor comparable to the applicable Interest Period, the rate per annum published by the CME Term SOFR Administrator and identified by the Administrative Agent as the forward-looking term rate based on SOFR; provided that if the Term SOFR Reference

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Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement. If by 5:00 pm (Chicago time) on such Term SOFR Determination Day, the "Term SOFR Reference Rate" for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.

"<u>Total Assets</u>" means the total assets of the Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP, as shown on the most recent balance sheet of the Borrower delivered pursuant to <u>Section</u> <u>5.01</u>.

"<u>Total Liquidity</u>" means, at any time, the sum of (a) all cash and Cash Equivalents (except, for the avoidance of doubt, any Restricted Cash) held by the Borrower and its Subsidiaries on a consolidated basis at such time and (b) the aggregate unused amount of the Commitments then in effect.

"<u>Total Revenue</u>" means the revenue of the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, as shown on the most recent income statement of the Borrower delivered pursuant to <u>Section</u> <u>5.01</u>.

"<u>Transactions</u>" means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

"<u>Type</u>", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted Term SOFR Rate or the Alternate Base Rate.

"<u>UCC</u>" means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state, the laws of which are required to be applied in connection with the issue of perfection of security interests.

"<u>UK Financial Institutions</u>" means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.

"<u>UK Resolution Authority</u>" means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.

"<u>Unadjusted Benchmark Replacement</u>" means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

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"<u>Unfunded Commitment</u>" means, with respect to each Lender, the Commitment of such Lender less its Revolving Credit Exposure.

"<u>Unliquidated Obligations</u>" means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

"<u>U.S.</u>" means the United States of America.

"<u>U.S. Government Securities Business Day</u>" means any day except for (i) a Saturday, (ii) a Sunday or (iii) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

"<u>U.S. Person</u>" means a "United States person" as defined in Section 7701(a)(30) of the Code.

"<u>U.S. Special Resolution Regime</u>" has the meaning assigned to it in Section 9.21.

"<u>U.S. Tax Compliance Certificate</u>" has the meaning assigned to such term in <u>Section</u> <u>2.17(f)(ii)(B)(III)</u>.

"<u>USA PATRIOT Act</u>" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

"<u>Withdrawal Liability</u>" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

"<u>Write-Down and Conversion Powers</u>" means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.

SECTION 1.02 <u>Classification of Loans and Borrowings</u>. For purposes of this Agreement, Loans may be classified and referred to by Type (<u>e.g.</u>, a "Term Benchmark Loan" or an "ABR Loan") Borrowings also may be classified and referred to by Type (<u>e.g.</u>, a "Term Benchmark Borrowing" or an "ABR Borrowing").

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SECTION 1.03 <u>Terms Generally</u>. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "law" shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities. The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person's successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase "at any time" or "for any period" shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04 <u>Accounting Terms; GAAP</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; <u>provided</u> that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of such change in GAAP or in the application thereof (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such migration or change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Loan Party at "fair value", as defined therein and (ii) without giving effect to any treatment of Indebtedness under Financial Accounting Standards Board Accounting Standards

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Codification 470-20 or 2015-03 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary contained in Section 1.04(a), the definition of "Capital Lease Obligations" or elsewhere in the Loan Documents, any change in accounting for leases pursuant to GAAP resulting from the adoption of Financial Accounting Standards Board Accounting Standards Update No. 2016-02, Leases (Topic 842) ("FAS 842"), to the extent such adoption would require treating any lease (or similar arrangement conveying the right to use) as a capital lease where such lease (or similar arrangement) would not have been required to be so treated under GAAP as in effect on December 31, 2015, such lease shall not be considered a capital lease, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.

SECTION 1.05 <u>Interest Rates;</u> <u>Benchmark</u> <u>Notifications</u>. The interest rate on a Loan denominated in dollars may be derived from an interest rate benchmark that may be discontinued or is, or may in the future become, the subject of regulatory reform. Upon the occurrence of a Benchmark Transition Event, Section 2.14(b) provides a mechanism for determining an alternative rate of interest. The Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission, performance or any other matter related to any interest rate used in this Agreement, or with respect to any alternative or successor rate thereto, or replacement rate thereof, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the existing interest rate being replaced or have the same volume or liquidity as did any existing interest rate prior to its discontinuance or unavailability. The Administrative Agent and its affiliates and/or other related entities may engage in transactions that affect the calculation of any interest rate used in this Agreement or any alternative, successor or alternative rate (including any Benchmark Replacement) and/or any relevant adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to ascertain any interest rate used in this Agreement, any component thereof, or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Borrower, any Lender or any other person or entity for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof) provided by any such information source or service.

SECTION 1.06 [*Reserved*]

SECTION 1.07 <u>Status of Obligations</u>. In the event that the Borrower or any other Loan Party shall at any time issue or have outstanding any Subordinated Indebtedness, the Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of

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senior indebtedness under the terms of such Subordinated Indebtedness. Without limiting the foregoing, the Secured Obligations are hereby designated as "senior indebtedness" and as "designated senior indebtedness" and words of similar import under and in respect of any indenture or other agreement or instrument under which such Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

SECTION 1.08 <u>Letters of Credit.</u> Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit available to be drawn at such time; provided that with respect to any Letter of Credit that, by its terms or the terms of any Letter of Credit Agreement related thereto, provides for one or more automatic increases in the available amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum amount is available to be drawn at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Article 29(a) of the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce Publication No. 600 (or such later version thereof as may be in effect at the applicable time) or Rule 3.13 or Rule 3.14 of the International Standby Practices, International Chamber of Commerce Publication No. 590 (or such later version thereof as may be in effect at the applicable time) or similar terms of the Letter of Credit itself, or if compliant documents have been presented but not yet honored, such Letter of Credit shall be deemed to be "outstanding" and "undrawn" in the amount so remaining available to be paid, and the obligations of the Borrower and each Lender shall remain in full force and effect until the Issuing Bank and the Lenders shall have no further obligations to make any payments or disbursements under any circumstances with respect to any Letter of Credit.

SECTION 1.09 Divisions. For all purposes under the Loan Documents, in connection with any Division or plan of division under Delaware law (or any comparable event under a different jurisdiction's laws): (a) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person, then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (b) if any new Person comes into existence, such new Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Equity Interests at such time.

ARTICLE II

<u>THE CREDITS</u> 

SECTION 2.01 <u>Commitments</u>. Subject to the terms and conditions set forth herein, each Lender severally (and not jointly) agrees to make Loans in dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender's Revolving Credit Exposure exceeding such Lender's Commitment or (ii) the aggregate Revolving Credit Exposure exceeding the aggregate Commitments. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.

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SECTION 2.02 <u>Loans and Borrowings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; <u>provided</u> that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to <u>Section</u> <u>2.14</u>, each Borrowing shall be comprised entirely of ABR Loans or Term Benchmark Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of <u>Sections</u> <u>2.14</u>, <u>2.15</u>, <u>2.16</u> and <u>2.17</u> shall apply to such Affiliate to the same extent as to such Lender); <u>provided</u> that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At the commencement of each Interest Period for any Term Benchmark Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000; <u>provided</u> that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by <u>Section</u> <u>2.06(e)</u>. Borrowings of more than one Type may be outstanding at the same time; <u>provided</u> that there shall not at any time be more than a total of ten Term Benchmark Borrowings outstanding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Revolving Credit Maturity Date.

SECTION 2.03 <u>Requests for Borrowings</u>. To request a Borrowing, the Borrower shall notify the Administrative Agent of such request either in writing (delivered by hand or fax) by delivering a Borrowing Request signed by a Responsible Officer of the Borrower or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, (a) in the case of a Term Benchmark Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing; <u>provided</u> that any such notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated by <u>Section</u> <u>2.06(e)</u> may be given not later than 10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable. Each such Borrowing Request shall specify the following information in compliance with <u>Section</u> <u>2.01</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the aggregate amount of the requested Borrowing, and a breakdown of the separate wires comprising such Borrowing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the date of such Borrowing, which shall be a Business Day;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) whether such Borrowing is to be an ABR Borrowing or a Term Benchmark Borrowing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) in the case of a Term Benchmark Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period."

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Term Benchmark Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing.

SECTION 2.04 [*Reserved*]

SECTION 2.05 <u>[</u>*Reserved*]

SECTION 2.06 <u>Letters of Credit</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>General</u>. Subject to the terms and conditions set forth herein, the Borrower may request any Issuing Bank to issue Letters of Credit denominated in dollars as the applicant thereof for the support of its or its Subsidiaries' obligations, in a form reasonably acceptable to such Issuing Bank, at any time and from time to time during the Availability Period, and such Issuing Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Notice of Issuance, Amendment, Extension; Certain Conditions</u>. To request the issuance of a Letter of Credit (or the amendment or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or fax (or transmit through Electronic System, if arrangements for doing so have been approved by the respective Issuing Bank) to an Issuing Bank selected by it and to the Administrative Agent (reasonably in advance of the requested date of issuance, amendment or extension, but in any event no less than three Business Days) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended or extended, and specifying the date of issuance, amendment or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend or extend such Letter of Credit. In addition, as a condition to any such Letter of Credit issuance, the Borrower shall have entered into a continuing agreement (or other letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application, in each case, as required by the respective Issuing Bank and using such Issuing Bank's standard form (each, a "<u>Letter of Credit Agreement</u>"). In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement, the terms and conditions of this Agreement shall control. A Letter of Credit shall be issued, amended or extended only if (and upon issuance, amendment or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment or extension (i) the aggregate LC Exposure shall not exceed $50,000,000.00, (ii) no Lender's Revolving Credit Exposure shall

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exceed its Commitment and (iii) the Aggregate Revolving Credit Exposure shall not exceed the aggregate Commitments. Notwithstanding the foregoing or anything to the contrary contained herein, no Issuing Bank shall be obligated to (i) issue or modify any Letter of Credit if, immediately after giving effect thereto, the outstanding LC Exposure in respect of all Letters of Credit issued by such Person and its Affiliates would exceed such Issuing Bank's Issuing Bank Sublimit or (ii) issue any commercial or trade letters of credit unless otherwise agreed to by such Issuing Bank. Without limiting the foregoing and without affecting the limitations contained herein, it is understood and agreed that the Borrower may from time to time request that an Issuing Bank issue Letters of Credit in excess of its individual Issuing Bank Sublimit in effect at the time of such request, and each Issuing Bank agrees to consider any such request in good faith. Any Letter of Credit so issued by an Issuing Bank in excess of its individual Issuing Bank Sublimit then in effect shall nonetheless constitute a Letter of Credit for all purposes of the Credit Agreement, and shall not affect the Issuing Bank Sublimit of any other Issuing Bank, subject to the limitations on the aggregate LC Exposure set forth in clause (i) of this <u>Section</u> <u>2.06(b)</u>.

An Issuing Bank shall not be under any obligation to issue any Letter of Credit if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Bank from issuing such Letter of Credit, or any Requirement of Law relating to such Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Bank shall prohibit, or request that such Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon such Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which such Issuing Bank in good faith deems material to it,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the issuance of such Letter of Credit would violate one or more policies of such Issuing Bank applicable to letters of credit generally, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) in the case of Morgan Stanley Senior Funding, Inc., such Letter of Credit is any Letter of Credit other than a standby Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Expiration Date</u>. Each Letter of Credit shall expire (or be subject to termination or non-renewal by notice from the applicable Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any extension of the expiration thereof, including, without limitation, any automatic renewal provision, one year after such extension) and (ii) the date that is five Business Days prior to the Revolving Credit Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Participations</u>. By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the applicable Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender's Applicable Percentage of the aggregate amount available to be drawn under such Letter

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of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the respective Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason, including after the Revolving Credit Maturity Date. Each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Reimbursement</u>. If an Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 p.m., New York City time, on (i) the Business Day that the Borrower receives notice of such LC Disbursement, if such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is received after 10:00 a.m., New York City time, on the day of receipt; <u>provided</u> that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with <u>Section</u> <u>2.03</u> or <u>2.05</u> that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof, and such Lender's Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in <u>Section</u> <u>2.07</u> with respect to Loans made by such Lender (and <u>Section</u> <u>2.07</u> shall apply, <u>mutatis mutandis</u>, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the respective Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the respective Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank, as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse an Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Obligations Absolute</u>. The Borrower's obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the respective Issuing Bank under a Letter of Credit against

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presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower's obligations hereunder. Neither the Administrative Agent, the Lenders nor any Issuing Bank, or any of their respective Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit, or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms, any error in translation or any consequence arising from causes beyond the control of the respective Issuing Bank; <u>provided</u> that the foregoing shall not be construed to excuse an Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to special, indirect, consequential or punitive damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by such Issuing Bank's failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of an Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, an Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Disbursement Procedures</u>. The Issuing Bank for any Letter of Credit shall, within the time allowed by applicable law or the specific terms of the Letter of Credit following its receipt thereof, examine all documents purporting to represent a demand for payment under such Letter of Credit. Such Issuing Bank shall promptly after such examination notify the Administrative Agent and the Borrower by telephone (confirmed by fax or through Electronic Systems) of such demand for payment if such Issuing Bank has made or will make an LC Disbursement thereunder; <u>provided</u> that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Interim Interest</u>. If the Issuing Bank for any Letter of Credit shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans and such interest shall be due and payable on the date when such reimbursement is due; <u>provided</u> that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then <u>Section</u> <u>2.13(c)</u> shall apply. Interest accrued pursuant to this paragraph shall be for the account of such Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank for such LC Disbursement shall be for the account of such Lender to the extent of such payment.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Replacement and Resignation of an Issuing Bank</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) An Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to <u>Section</u> <u>2.12(b)</u>. From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit or extend or otherwise amend any existing Letter of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Subject to the appointment and acceptance of a successor Issuing Bank, any Issuing Bank may resign as an Issuing Bank at any time upon thirty days' prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, such resigning Issuing Bank shall be replaced in accordance with <u>Section</u> <u>2.06(i)(i)</u> above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Cash Collateralization</u>. If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders (the "<u>LC Collateral Account</u>"), an amount in cash equal to 103% of the amount of the LC Exposure as of such date plus accrued and unpaid interest thereon; <u>provided</u> that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of <u>Article</u> <u>VII</u>. The Borrower also shall deposit cash collateral in accordance with this paragraph as and to the extent required by <u>Sections</u> <u>2.11(b)</u> or <u>2.20</u>. Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations. In addition, and without limiting the foregoing or paragraph (c) of this Section, if any LC Exposure remains outstanding after the expiration date specified in said paragraph (c), the Borrower shall immediately deposit in the LC Collateral Account an amount in cash equal to 103% of such LC Exposure as of such date plus any accrued and unpaid interest thereon. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account and all moneys or other assets on deposit therein or credited thereto. Other than any

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interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse each Issuing Bank for LC Disbursements for which it has not been reimbursed, together with related fees, costs, and customary processing charges, and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure), be applied to satisfy other Secured Obligations. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all such Events of Defaults have been cured or waived as confirmed in writing by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Issuing Bank Reports to the Administrative Agent</u>. Unless otherwise agreed by the Administrative Agent, each Issuing Bank shall, in addition to its notification obligations set forth elsewhere in this Section, report in writing to the Administrative Agent (i) periodic activity (for such period or recurrent periods as shall be requested by the Administrative Agent) in respect of Letters of Credit issued by such Issuing Bank, including all issuances, extensions and amendments, all expirations and cancelations and all disbursements and reimbursements, (ii) reasonably prior to the time that such Issuing Bank issues, amends or extends any Letter of Credit, the date of such issuance, amendment or extension, and the stated amount of the Letters of Credit issued, amended or extended by it and outstanding after giving effect to such issuance, amendment or extension (and whether the amounts thereof shall have changed), (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date and amount of such LC Disbursement, (iv) on any Business Day on which the Borrower fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount of such LC Disbursement, and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request as to the Letters of Credit issued by such Issuing Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Letters of Credit Issued for Account of Subsidiaries</u>. Notwithstanding that a Letter of Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a Subsidiary, or states that a Subsidiary is the "account party," "applicant," "customer," "instructing party," or the like of or for such Letter of Credit, and without derogating from any rights of the applicable Issuing Bank (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the Borrower (i) shall reimburse, indemnify and compensate the applicable Issuing Bank hereunder for such Letter of Credit (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued solely for the account of the Borrower and (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit. The Borrower hereby acknowledges that the issuance of such Letters of Credit for its Subsidiaries inures to the benefit of the Borrower, and that the Borrower's business derives substantial benefits from the businesses of such Subsidiaries.

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SECTION 2.07 <u>Funding of Borrowings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof solely by wire transfer of immediately available funds by 1:00 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender's Applicable Percentage. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the funds so received in the aforesaid account of the Administrative Agent to the account specified by Borrower in the Borrowing Request; <u>provided</u> that Loans made to finance the reimbursement of an LC Disbursement as provided in <u>Section</u> <u>2.06(e)</u> shall be remitted by the Administrative Agent to the Issuing Bank.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower each severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the one-month Term SOFR Rate. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing; <u>provided</u>, that any interest received from the Borrower by the Administrative Agent during the period beginning when Administrative Agent funded the Borrowing until such Lender pays such amount shall be solely for the account of the Administrative Agent.

SECTION 2.08 <u>Interest Elections</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Term Benchmark Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Term Benchmark Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election either in writing by delivering an Interest Election Request signed by a Responsible Officer of the Borrower or through Electronic System, by the time that a Borrowing Request would be required under <u>Section</u> <u>2.03</u> if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request shall be irrevocable.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each Interest Election Request (including requests submitted through Electronic System) shall specify the following information in compliance with <u>Section</u> <u>2.02</u>:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Term Benchmark Borrowing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the resulting Borrowing is a Term Benchmark Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term "Interest Period".

If any such Interest Election Request requests a Term Benchmark Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month's duration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender's portion of each resulting Borrowing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Term Benchmark Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be deemed to have an Interest Period of one month. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Term Benchmark Borrowing and (ii) unless repaid, each Term Benchmark Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09 <u>Termination and Reduction of Commitments; Increase in Commitments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Unless previously terminated, all the Commitments shall terminate on the Revolving Credit Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrower may at any time terminate the Commitments upon the Payment in Full of the Secured Obligations.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Borrower may from time to time reduce the Commitments; <u>provided</u> that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with <u>Section</u> <u>2.11</u>, (A) any Lender's Revolving Credit Exposure would exceed such Lender's Commitment or (B) the Aggregate Revolving Credit Exposure would exceed the aggregate Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) or (c) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; <u>provided</u> that a notice of reduction or termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities or other transactions specified therein, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The Borrower shall have the right to increase the Commitments by obtaining additional Commitments, either from one or more of the Lenders or another lending institution (any such increase, the "<u>New Commitments</u>"), <u>provided</u> that (i) any such request for an increase shall be in a minimum amount of $5,000,000, (ii) the Borrower may make a maximum of 3 such requests, (iii) after giving effect thereto, the sum of the total of the additional Commitments does not exceed the Incremental Amount (iv) the Administrative Agent and the Issuing Bank have approved the identity of any such new Lender, such approvals not to be unreasonably withheld, (v) any such new Lender assumes all of the rights and obligations of a "Lender" hereunder, and (vi) the procedures described in <u>Section</u> <u>2.09 (f)</u> and <u>Section</u> <u>2.09 (g)</u> below have been satisfied. Nothing contained in this <u>Section</u> <u>2.09</u> shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Commitment hereunder at any time, and any Lender that does not respond to a request for an increase shall be deemed to have declined such request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Any amendment hereto for such an increase or addition shall be in form and substance satisfactory to the Administrative Agent and shall only require the written signatures of the Administrative Agent, the Borrower and each Lender being added or increasing its Commitment, subject only to the approval of all Lenders if any such increase or addition would cause the Commitments to exceed $225,000,000. As a condition precedent to such an increase or addition, the Borrower shall deliver to the Administrative Agent (i) a certificate of each Loan Party signed by an authorized officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrower, certifying that, before and after giving effect to such increase or addition, (1) the representations and warranties contained in <u>Article</u> <u>III</u> and the other Loan Documents are true and correct in all material respects, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and (2) no Default exists and (3) the Borrower is in compliance (giving pro forma effect to such increase or addition) with the covenant contained in <u>Section</u> <u>6.12</u> and (ii) legal opinions and documents consistent with those delivered on the Effective Date, to the extent requested by the Administrative Agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) On the effective date of any such increase or addition, (i) any Lender increasing (or, in the case of any newly added Lender, extending) its Commitment shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender's portion of the outstanding Loans of all the Lenders to equal its revised Applicable Percentage of such outstanding Loans, and the Administrative Agent shall make such other adjustments among the Lenders with respect to the Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding Loans as of the date of any increase (or addition) in the Commitments (with such reborrowing to consist of the Types of Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of <u>Section</u> <u>2.03</u>). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Term Benchmark Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of <u>Section</u> <u>2.16</u> if the deemed payment occurs other than on the last day of the related Interest Periods. Within a reasonable time after the effective date of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment Schedule to each of the Lenders and the Borrower, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) The terms and provisions (including pricing) of the New Commitments shall be identical to the existing Commitments.

SECTION 2.10 <u>Repayment of Loans; Evidence of Debt</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan on the Revolving Credit Maturity Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, if any, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; <u>provided</u> that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. For the avoidance of doubt, in the event of any conflict between the accounts maintained pursuant to this Section 2.10 and the Register maintained in accordance with Section 9.04(b)(iv), the Register shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to <u>Section</u> <u>9.04</u>) be represented by one or more promissory notes in such form.

SECTION 2.11 <u>Prepayment of Loans</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty, subject to prior notice in accordance with paragraph (e) of this Section and, if applicable, payment of any break funding expenses under <u>Section</u> <u>2.16</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event and on such occasion that the Aggregate Revolving Credit Exposure exceeds the aggregate Commitments, the Borrower shall prepay, on demand, the Loans, and/or LC Exposure (or, if no such Borrowings are outstanding, deposit cash collateral in the LC Collateral Account in accordance with <u>Section</u> <u>2.06(j</u>)) in an aggregate amount equal to such excess.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Borrower shall notify the Administrative Agent by telephone (confirmed by fax) or through Electronic System, if arrangements for doing so have been approved by the Administrative Agent, of any prepayment under this Section: (i) in the case of prepayment of a Term Benchmark Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time, one (1) Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; <u>provided</u> that if a notice of prepayment is given as contemplated by <u>Section</u> <u>2.09</u>, then such notice of prepayment may state that such prepayment is conditioned upon the effectiveness of other credit facilities or other transactions specified therein, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in <u>Section</u> <u>2.02</u>. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by <u>Section</u> <u>2.13</u> and (ii) break funding payments pursuant to <u>Section</u> <u>2.16</u>.

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SECTION 2.12 <u>Fees</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower agrees to pay to the Administrative Agent a commitment fee for the account of each Lender, which shall accrue at the relevant percentage set forth in the row entitled "Commitment Fee Rate" in the definition of "Applicable Rate" on the daily amount of the undrawn portion of the Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Lenders' Commitments terminate; it being understood that the LC Exposure of a Lender shall be included in the drawn portion of the Commitment of such Lender for purposes of calculating the commitment fee. Commitment fees accrued through and including the last day of March, June, September and December of each year shall be payable in arrears on the fifteenth (15th) day following such last day and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof; provided that any commitment fees accruing after the date on which the Commitments terminate shall be payable on demand. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day and the last day of each period but excluding the date on which the Commitments terminate).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in each outstanding Letter of Credit, which shall accrue on the daily maximum stated amount then available to be drawn under such Letter of Credit at the same Applicable Rate used to determine the interest rate applicable to Term Benchmark Loans, during the period from and including the Effective Date to but excluding the later of the date on which such Lender's Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank for its own account a fronting fee with respect to each Letter of Credit issued by such Issuing Bank, which shall accrue at the rate of 0.125% per annum on the daily maximum stated amount then available to be drawn under such Letter of Credit, during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure with respect to Letters of Credit issued by such Issuing Bank, as well as such Issuing Bank's standard fees and commissions with respect to the issuance, amendment or extension of any Letter of Credit and other processing fees. Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the fifteenth (15<sup>th</sup>) day following such last day, commencing on the first such date to occur after the Effective Date; <u>provided</u> that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to an Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times as set forth in that certain Fee Letter, dated as of October 11, 2022, between the Borrower and the Administrative Agent, including, but not limited to, the Annual Administrative Agent's Fee described therein.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) All fees payable hereunder shall be paid on the dates due, in dollars in immediately available funds, to the Administrative Agent (or to an Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances.

SECTION 2.13 <u>Interest</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Loans comprising each Term Benchmark Borrowing shall bear interest at the Adjusted Term SOFR Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of <u>Section</u> <u>9.02</u> requiring the consent of "each Lender affected thereby" for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; <u>provided</u> that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Term Benchmark Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year). In each case, interest shall be payable for the actual number of days elapsed (including the first day but excluding the last day). All interest hereunder on any Loan shall be computed on a daily basis based upon the outstanding principal amount of such Loan as of the applicable date of determination. The applicable Alternate Base Rate, Adjusted Term SOFR Rate or Term SOFR Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

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SECTION 2.14 <u>Alternate Rate of Interest; Illegality</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to clauses (b), (c), (d), (e) and (f) of this Section 2.14, if:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) prior to commencement of any Interest Period for a Term Benchmark Borrowing, that adequate and reasonable means do not exist for ascertaining the Adjusted Term SOFR Rate or the Term SOFR Rate, as applicable (including, because the Term SOFR Reference Rate is not available or published on a current basis) for such Interest Period; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Administrative Agent is advised by the Required Lenders that prior to the commencement of any Interest Period for a Term Benchmark Borrowing, the Adjusted Term SOFR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders through Electronic System as provided in <u>Section</u> <u>9.01</u> as promptly as practicable thereafter and, until (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Borrower delivers a new Interest Election Request in accordance with the terms of Section 2.08 or a new Borrowing Request in accordance with the terms of Section 2.03, any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Term Benchmark Borrowing and any Borrowing Request that requests a Term Benchmark Borrowing shall instead be deemed to be an Interest Election Request or a Borrowing Request, as applicable, for an ABR Borrowing; provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then all other Types of Borrowings shall be permitted. Furthermore, if any Term Benchmark Loan is outstanding on the date of the Borrower's receipt of the notice from the Administrative Agent referred to in this Section 2.14(a) with respect to the Adjusted Term SOFR Rate, then until (x) the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist with respect to the relevant Benchmark and (y) the Borrower delivers a new Interest Election Request in accordance with the terms of Section 2.08 or a new Borrowing Request in accordance with the terms of Section 2.03, any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute, an ABR Loan, on such day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding anything to the contrary herein or in any other Loan Document, (and any Swap Agreement shall be deemed not to be a "Loan Document" for purposes of this Section 2.14), if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (Chicago time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding anything to the contrary herein or in any other Loan Document, the Administrative Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender (or group of Lenders) pursuant to this Section 2.14, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.14.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including the Term SOFR Rate) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of "Interest Period" for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of "Interest Period" for all Benchmark settings at or after such time to reinstate such previously removed tenor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Upon the Borrower's receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Term Benchmark Borrowing of, conversion to or continuation of Term Benchmark Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any request for a Term Benchmark Borrowing into a request for a Borrowing of or conversion to an ABR Borrowing. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of ABR based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not

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be used in any determination of ABR. Furthermore, if any Term Benchmark Loan is outstanding on the date of the Borrower's receipt of notice of the commencement of a Benchmark Unavailability Period with respect to the Adjusted Term SOFR Rate, then until such time as a Benchmark Replacement is implemented pursuant to this Section 2.14, any Term Benchmark Loan shall on the last day of the Interest Period applicable to such Loan (or the next succeeding Business Day if such day is not a Business Day), be converted by the Administrative Agent to, and shall constitute, an ABR Loan.

SECTION 2.15 <u>Increased Costs</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If any Change in Law shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted Term SOFR Rate) or the Issuing Bank; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) impose on any Lender or the Issuing Bank or the applicable offshore interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then upon request of such Lender, Issuing Bank or other Recipient, the Borrower will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or the Issuing Bank's capital or on the capital of such Lender's or the Issuing Bank's holding company, if any, as a consequence of this Agreement, the Commitments of or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or the Issuing Bank's policies and the policies of such Lender's

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or the Issuing Bank's holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding company for any such reduction suffered.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the Issuing Bank's right to demand such compensation; <u>provided</u> that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the Issuing Bank's intention to claim compensation therefor; <u>provided</u>, <u>further</u>, that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16 <u>Break Funding Payments</u>. (a) In the event of (a) the payment of any principal of any Term Benchmark Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to <u>Section</u> <u>2.11</u>), (b) the conversion of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Term Benchmark Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under <u>Section</u> <u>2.09(d)</u> and is revoked in accordance therewith), or (d) the assignment of any Term Benchmark Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to <u>Section</u> <u>2.19</u> or <u>9.02(d)</u>, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

SECTION 2.17 <u>Withholding of Taxes; Gross-Up</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Payments Free of Taxes</u>. Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such

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Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding for Indemnified Taxes has been made (including such deductions and withholdings for Indemnified Taxes applicable to additional sums payable under this <u>Section</u> <u>2.17</u>), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding for Indemnified Taxes been made.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Payment of Other Taxes by Loan Parties</u>. The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Evidence of Payment</u>. As soon as practicable after any payment of Taxes any Loan Party to a Governmental Authority pursuant to this <u>Section</u> <u>2.17</u>, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Indemnification by the Loan Parties</u>. The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Indemnification by the Lenders</u>. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender's failure to comply with the provisions of <u>Section</u> <u>9.04(c)</u> relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to setoff and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Status of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in <u>Section</u> <u>2.17(f)(ii)(A)</u>, <u>(ii)(B)</u> and <u>(ii)(D)</u> below) shall not be required if in the Lender's reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) any Lender (or, if the Lender is a disregarded entity for U.S. federal income tax purposes, the Person treated as the owner of the assets of such Lender for U.S. federal income tax purposes) that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the U.S. is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "interest" article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the "business profits" or "other income" article of such tax treaty;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) in the case of a Foreign Lender claiming that its extension of credit will generate U.S. effectively connected income, an executed copy of IRS Form W-8ECI;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of <u>Exhibit C</u><u>-1</u> to the effect that such Foreign Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, a "10 percent shareholder" of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, or a "controlled foreign corporation" related to the Borrower described in Section 881(c)(3)(C) of the Code (a "<u>U.S. Tax Compliance Certificate</u>") and (y) an executed copy of IRS Form W 8BEN or IRS Form W-8BEN-E, as applicable; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4) to the extent a Foreign Lender is not the beneficial owner, an executed copy of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate substantially in the form of <u>Exhibit C</u><u>-2</u> or <u>Exhibit C</u><u>-3</u>, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; <u>provided</u> that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of <u>Exhibit C</u><u>-4</u> on behalf of each such direct and indirect partner;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), "FATCA" shall include any amendments made to FATCA after the date of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) On or before the date the Administrative Agent (or any successor or replacement Administrative Agent) becomes the Administrative Agent hereunder, it shall deliver to the Borrower two duly executed copies of either (i) IRS Form W-9, or (ii) a U.S. branch withholding certificate on IRS Form W-8IMY evidencing its agreement with the Borrower to be treated as a U.S. Person (with respect to amounts received on account of any Lender) and IRS Form W-8ECI (with respect to amounts received on its own account), with the effect that, in either case, the Loan Parties will be entitled to make payments hereunder to the Administrative Agent without withholding or deduction on account of U.S. federal withholding Tax.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Treatment of Certain Refunds</u>. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this <u>Section</u> <u>2.17</u> (including by the payment of additional amounts pursuant to this <u>Section</u> <u>2.17</u>), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this <u>Section</u> <u>2.17</u> with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid. This paragraph (g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Survival</u>. Each party's obligations under this <u>Section</u> <u>2.17</u> shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document (including the Payment in Full of the Secured Obligations).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Defined Terms</u>. For purposes of this <u>Section</u> <u>2.17</u>, the term "applicable law" includes FATCA and the term "Lender" includes Issuing Banks.

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SECTION 2.18 <u>Payments Generally; Allocation of Proceeds; Sharing of Setoffs</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower shall make each payment or prepayment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under <u>Sections</u> <u>2.15</u>, <u>2.16</u> or <u>2.17</u>, or otherwise) prior to 3:00 p.m., New York City time, on the date when due or the date fixed for any prepayment hereunder, in immediately available funds, without setoff, recoupment or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 10 S. Dearborn St., Chicago IL 60603 except payments to be made directly to the Issuing Bank as expressly provided herein and except that payments pursuant to <u>Sections</u> <u>2.15</u>, <u>2.16</u>, <u>2.17</u> and <u>9.03</u> shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. Unless otherwise provided for herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be made in dollars.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) All payments and any proceeds of Collateral received by the Administrative Agent after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied ratably <u>first</u>, to pay any fees, indemnities, or expense reimbursements then due to the Administrative Agent and the Issuing Bank from the Borrower (other than in connection with Banking Services Obligations or Swap Agreement Obligations), <u>second</u>, to pay any fees, indemnities, or expense reimbursements then due to the Lenders from the Borrower (other than in connection with Banking Services Obligations or Swap Agreement Obligations), <u>third</u>, to pay interest then due and payable on the Loans ratably, <u>fourth</u>, to prepay unreimbursed LC Disbursements, to pay an amount to the Administrative Agent equal to one hundred three percent (103%) of the aggregate LC Exposure, to be held as cash collateral for such Obligations, and to pay any amounts owing in respect of Swap Agreement Obligations and Banking Services Obligations up to and including the amount most recently provided to the Administrative Agent pursuant to <u>Section</u> <u>2.22</u>, ratably, and <u>fifth</u>, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender from the Borrower or any other Loan Party. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations. Notwithstanding the foregoing, Secured Obligations arising under Banking Services Obligations or Swap Agreement Obligations shall be excluded from the application described above and paid in clause <u>fifth</u> if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may have reasonably requested from the applicable provider of such Banking Services or Swap Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees, costs and expenses pursuant to <u>Section</u> <u>9.03</u>), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder, whether made following a request by the Borrower pursuant to <u>Section</u> <u>2.03</u> or <u>2.05</u> or a deemed request as provided in this Section or may be deducted from any deposit account of the Borrower maintained with the Administrative Agent. The Borrower hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans, and that all such Borrowings shall

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be deemed to have been requested pursuant to <u>Sections</u> <u>2.03</u> or <u>2.05</u>, as applicable, and (ii) the Administrative Agent to charge any deposit account of the Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; <u>provided</u> that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Unless the Administrative Agent shall have received, prior to any date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank pursuant to the terms hereof or any other Loan Document (including any date that is fixed for prepayment by notice from the Borrower to the Administrative Agent pursuant to <u>Section</u> <u>2.11(e)</u>), notice from the Borrower that the Borrower will not make such payment or prepayment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the NYFRB Rate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) The Administrative Agent may from time to time provide the Borrower with account statements or invoices with respect to any of the Secured Obligations (the "<u>Statements</u>"). The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrower's convenience. Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured

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Obligations. If the Borrower pays the full amount indicated on a Statement on or before the due date indicated on such Statement, the Borrower shall not be in default of payment with respect to the billing period indicated on such Statement; <u>provided</u> that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the total amount actually due at that time (including but not limited to any past due amounts) shall not constitute a waiver of the Administrative Agent's or the Lenders' right to receive payment in full at another time.

SECTION 2.19 <u>Mitigation Obligations; Replacement of Lenders</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) If any Lender requests compensation under <u>Section</u> <u>2.15</u>, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to <u>Section</u> <u>2.17</u>, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to <u>Sections</u> <u>2.15</u> or <u>2.17</u>, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If any Lender requests compensation under <u>Section</u> <u>2.15</u>, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender) pursuant to <u>Section</u> <u>2.17</u> and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with paragraph (a) of this Section, or if any Lender becomes a Defaulting Lender or Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in <u>Section</u> <u>9.04</u>), all its interests, rights (other than its existing rights to payments pursuant to <u>Sections</u> <u>2.15</u> or <u>2.17</u>) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); <u>provided</u> that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and in circumstances where its consent would be required under <u>Section</u> <u>9.04</u>, the Issuing Bank), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under <u>Section</u> <u>2.15</u> or payments required to be made pursuant to <u>Section</u> <u>2.17</u>, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Each party hereto agrees that (i) an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (ii) the Lender required to

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make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to and be bound by the terms thereof; <u>provided</u> that, following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, <u>provided</u> that any such documents shall be without recourse to or warranty by the parties thereto.

SECTION 2.20 <u>Defaulting Lenders</u>. Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to <u>Section</u> <u>2.12(a)</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to <u>Article VII</u> or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to <u>Section</u> <u>9.08</u> shall be applied at such time or times as may be determined by the Administrative Agent as follows: <u>first</u>, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; <u>second</u>, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank hereunder; <u>third</u>, to cash collateralize LC Exposure with respect to such Defaulting Lender in accordance with this Section; <u>fourth</u>, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; <u>fifth</u>, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender's potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize future LC Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; <u>sixth</u>, to the payment of any amounts owing to the Lenders or the Issuing Banks as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the Issuing Banks against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement or under any other Loan Document; <u>seventh</u>, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement or under any other Loan Document; and <u>eighth</u>, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; <u>provided</u> that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in <u>Section</u> <u>4.02</u> were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Borrower's obligations corresponding to such Defaulting Lender's LC Exposure are held by the Lenders pro rata in accordance with the Commitments without giving effect to clause (d) below. Any

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payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in <u>Section</u> <u>9.02(b)</u>) and the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder or under any other Loan Document; <u>provided</u> that, except as otherwise provided in <u>Section</u> <u>9.02</u>, this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) if any LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) all or any part of the LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only (x) to the extent that such reallocation does not, as to any non-Defaulting Lender, cause such non-Defaulting Lender's Revolving Credit Exposure to exceed its Commitment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Administrative Agent cash collateralize, for the benefit of the Issuing Bank, the Borrower's obligations corresponding to such Defaulting Lender's LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in <u>Section</u> <u>2.06(j)</u> for so long as such LC Exposure is outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender's LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to <u>Section</u> <u>2.12(b)</u> with respect to such Defaulting Lender's LC Exposure during the period such Defaulting Lender's LC Exposure is cash collateralized;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to <u>Sections</u> <u>2.12(a)</u> and <u>2.12(b)</u> shall be adjusted in accordance with such non-Defaulting Lenders' Applicable Percentages; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) if all or any portion of such Defaulting Lender's LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under <u>Section</u> <u>2.12(b)</u> with respect to such Defaulting Lender's LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) so long as such Lender is a Defaulting Lender, the Issuing Bank shall not be required to issue, amend, renew, extend or increase any Letter of Credit, unless it is satisfied that the related exposure and such Defaulting Lender's then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with <u>Section</u> <u>2.20(d)</u>, and LC Exposure related to any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with <u>Section</u> <u>2.20(d)(i)</u> (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to a Lender Parent shall occur following the date hereof and for so long as such event shall continue or (ii) the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Issuing Bank shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Issuing Bank, to defease any risk to it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrower and the Issuing Bank agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender's Commitment and on the date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

SECTION 2.21 <u>Returned Payments</u>. If, after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender. The provisions of this <u>Section</u> <u>2.21</u> shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds. The provisions of this <u>Section</u> <u>2.21</u> shall survive the termination of this Agreement.

SECTION 2.22 <u>Banking Services and Swap Agreements</u>. Each Lender or Affiliate thereof providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall deliver to the Administrative Agent, promptly after entering into such Banking Services or Swap Agreements, written notice setting forth the aggregate amount of all Banking Services Obligations and Swap Agreement Obligations of such Loan Party or Subsidiary or Affiliate thereof to such Lender or Affiliate (whether matured or unmatured, absolute or contingent). In furtherance of that requirement, each such Lender or Affiliate thereof shall furnish the Administrative Agent, from time to time after a significant change therein or upon a request therefor, a summary of the amounts due or to become due in

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respect of such Banking Services Obligations and Swap Agreement Obligations. The most recent information provided to the Administrative Agent shall be used in determining which tier of the waterfall, contained in Section 2.18(b), such Banking Services Obligations and/or Swap Agreement Obligations will be placed. For the avoidance of doubt, so long as Chase or its Affiliate is the Administrative Agent, neither Chase nor any of its Affiliates providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall be required to provide any notice described in this Section 2.22 in respect of such Banking Services or Swap Agreements.

ARTICLE III

<u>REPRESENTATIONS AND WARRANTIES</u> 

Each Loan Party represents and warrants to the Lenders that (and where applicable, agrees):

SECTION 3.01 <u>Organization; Powers</u>. Each Loan Party and each Subsidiary is duly organized or formed, validly existing and (to the extent the concept is applicable in such jurisdiction) in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02 <u>Authorization; Enforceability</u>. The Transactions are within each Loan Party's corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational actions and, if required, actions by equity holders. Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03 <u>Governmental Approvals; No Conflicts</u>. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) for filings necessary to perfect Liens created pursuant to the Loan Documents, and (iii) those approvals, consents, registrations, filings or other actions, the failure of which to obtain or make would not reasonably be expected to have a Material Adverse Effect, (b) except as would not reasonably be expected to have a Material Adverse Effect, will not violate any Requirement of Law applicable to any Loan Party or any Subsidiary, (c) except as would not reasonably be expected to have a Material Adverse Effect, will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any Subsidiary or the assets of any Loan Party or any Subsidiary, or give rise to a right thereunder to require any payment to be made by any Loan Party or any Subsidiary, and (d) will not result in the creation or imposition of, or other requirement to create, any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan Documents.

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SECTION 3.04 <u>Financial Condition; No Material Adverse Change</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower has heretofore furnished to the Administrative Agent its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended 2021 reported on by KPMG LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended September 30, 2022 certified by its Financial Officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No event, change or condition has occurred that has had, or would reasonably be expected to have, a Material Adverse Effect, since December 31, 2021.

SECTION 3.05 <u>Properties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) As of the date of this Agreement, Schedule 3.05 sets forth the address of each parcel of real property that is owned or leased by any Loan Party. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists, except as would not reasonably be expected to have a Material Adverse Effect. Each of the Loan Parties and each Subsidiary has good and indefeasible title (except for minor defects in title that do not materially interfere with its ability to conduct its business or to utilize such assets for their intended purposes) to, or valid leasehold interests in, all of its material real and personal property, free of all Liens other than those permitted by Section 6.02.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Loan Party and each Subsidiary owns, or is licensed to use, all material trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on <u>Schedule</u> <u>3.05</u>, and the use thereof by each Loan Party and each Subsidiary does not infringe in any material respect upon the rights of any other Person, and each Loan Party's and each Subsidiary's rights thereto are not subject to any licensing agreement or similar arrangement.

SECTION 3.06 <u>Litigation and Environmental Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened in writing against or affecting any Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters set forth on <u>Schedule</u> <u>3.06</u>) or (ii) that involve any Loan Document or the Transactions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except for the Disclosed Matters, (i) no Loan Party or any Subsidiary has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any Subsidiary (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law (B) has become subject to any Environmental Liability, (C) has received written notice of any claim with respect to any Environmental Liability or (D) knows of any reasonable basis for any Environmental Liability.

SECTION 3.07 <u>Compliance with Laws and Agreements; No Default</u>. Except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Loan Party and each Subsidiary is in compliance with (i) all Requirement of Law applicable to it or its property and (ii) all indentures, agreements and other instruments binding upon it or its property. No Default has occurred and is continuing.

SECTION 3.08 <u>Investment Company Status</u>. No Loan Party or any Subsidiary is an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09 <u>Taxes</u>. Each Loan Party and each Subsidiary has timely filed or caused to be filed all income and other material Tax returns and reports required to have been filed (taking into account any customary, nondiscretionary extensions of time not exceeding 6 months) and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10 <u>ERISA</u>. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87 or subsequent recodification thereof, as applicable) did not, as of the date of the most recent financial statements reflecting such amounts, the fair market value of the assets of all such underfunded Plans.

SECTION 3.11 <u>Disclosure</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) None of the reports, financial statements, certificates or other written information furnished by or on behalf of any Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished), when taken as a whole, as of the date of such report, financial statement, certificate or written information was delivered to the Lender, taken together with all such reports, financial statements, certificates and written information delivered to the Lender, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, when taken as a whole, in the light of

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the circumstances under which they were made, not materially misleading; <u>provided</u> that, with respect to projections or other forward-looking information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and, if such projected financial information was delivered prior to the Effective Date, as of the Effective Date; it being understood that projections are as to future events and are not to be viewed as fact and actual results may differ from projected results with such differences being material.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As of the Effective Date, to the knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Effective Date to any Lender in connection with this Agreement is true and correct in all respects.

SECTION 3.12 <u>Material Agreements</u>. <u>Schedule</u> <u>3.12</u> lists all material agreements and contracts that any Loan Party or any Subsidiary is a party or is bound as of the date of this Agreement and which the loss or termination of which would reasonably be expected to result in a Material Adverse Effect. No Loan Party or any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any material agreement to which it is a party or (ii) any agreement or instrument evidencing or governing Indebtedness, in each case which has resulted in, or which such default or defaults could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.

SECTION 3.13 <u>Solvency</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No Loan Party intends to, nor will permit any Subsidiary to, and no Loan Party believes that it or any Subsidiary will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

SECTION 3.14 <u>Insurance</u>. <u>Schedule</u> <u>3.14</u> sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The Loan Parties believe that the insurance maintained by or on behalf of the Loan Parties and their Subsidiaries is adequate and is customary for companies engaged in the same or similar businesses operating in the same or similar locations.

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SECTION 3.15 <u>Capitalization and Subsidiaries</u>. <u>Schedule</u> <u>3.15</u> sets forth, as of the Effective Date, (a) a correct and complete list of the name and relationship to the Borrower of each Subsidiary, (b) a true and complete listing of each class of each of the Borrower's authorized Equity Interests, of which all of such issued Equity Interests are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on <u>Schedule</u> <u>3.15</u>, (c) the type of entity of the Borrower and each Subsidiary and (d) whether each Subsidiary is a Guarantor or an Excluded Subsidiary. All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable.

SECTION 3.16 <u>Security Interest in Collateral</u>. The provisions of this Agreement and the other Loan Documents create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and (a) when financing statements and other filings in appropriate form are filed or registered, as applicable, in the offices of the Secretary of State (or equivalent thereof) of each Loan Party's jurisdiction of organization or formation and applicable documents are filed and recorded as applicable in the United States Copyright Office or the United States Patent and Trademark Office, as applicable, (b) upon the taking of possession or control by the Administrative Agent of such Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Administrative Agent to the extent possession or control by the Administrative Agent is required by the applicable Collateral Document) and (c) subject to the satisfaction of the requirements set forth in Section 5.15, such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party (subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law) and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) any Liens permitted by Section 6.02 hereof, to the extent any such Liens would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law or agreement and (b) Liens perfected only by possession (including possession of any certificate of title), to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral.

SECTION 3.17 <u>Employment Matters</u>. As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party, threatened. The hours worked by and payments made to employees of the Loan Parties and their Subsidiaries have not been in violation in any material respect of the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such matters. All payments due from any Loan Party or any Subsidiary, or for which any material claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party or such Subsidiary.

SECTION 3.18 <u>Margin Regulations</u>. No Loan Party is engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing or Letter of Credit extension hereunder will be used to buy or carry any Margin Stock. Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of any Loan Party only or of the Loan Parties and their Subsidiaries on a consolidated basis) will be Margin Stock.

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SECTION 3.19 <u>Use of Proceeds</u>. The proceeds of the Loans have been used and will be used, whether directly or indirectly as set forth in Section 5.08.

SECTION 3.20 <u>[</u>*Reserved*<u>]</u>.

SECTION 3.21 <u>Anti-Corruption Laws and Sanctions</u>. Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and directors and, to the knowledge of such Loan Party, its employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) any Loan Party, any Subsidiary, any of their respective directors or officers or employees, or (b) to the knowledge of any such Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.22 <u>Affected Financial Institutions</u>. No Loan Party is an Affected Financial Institution.

SECTION 3.23 <u>Plan Assets; Prohibited Transactions</u>. None of the Loan Parties or any of their Subsidiaries is an entity deemed to hold "plan assets" (within the meaning of the Plan Asset Regulations), and neither the execution, delivery nor performance of the transactions contemplated under this Agreement, including the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

SECTION 3.24 <u>Reserved.</u><u> </u>

ARTICLE IV

<u>CONDITIONS</u> 

SECTION 4.01 <u>Effective Date</u>. The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or permitted to be delivered post-closing pursuant to the terms and conditions of <u>Section</u> <u>5.15</u> or waived in accordance with <u>Section</u> <u>9.02</u>):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Credit Agreement and Loan Documents</u>. The Administrative Agent (or its counsel) shall have received (i) from each party hereto a counterpart of this Agreement signed on behalf of such party (which, subject to Section 9.06(b), may include any Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page) and (ii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan

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Documents, including any promissory notes requested by a Lender pursuant to <u>Section</u> <u>2.10</u> payable to each such requesting Lender and a written opinion of the Loan Parties' counsel, addressed to the Administrative Agent, the Issuing Bank and the Lenders, all in form and substance satisfactory to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Financial Statements and Projections</u>. The Lenders shall have received (i) audited consolidated financial statements of the Borrower and its Subsidiaries for the 2019, 2020 and 2021 fiscal years, (ii) unaudited interim consolidated financial statements of the Borrower and its Subsidiaries for each fiscal quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and such financial statements shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of the Borrower and its Subsidiaries , as reflected in the audited, consolidated financial statements described in clause (i) of this paragraph and (iii) reasonably satisfactory projections through 2024; provided that the Lenders hereby agree and acknowledge that the projections delivered by the Borrower to the Administrative Agent on October 7, 2022 are satisfactory.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates</u>. The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall (A) certify the resolutions of its board of directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of the Borrower, its Financial Officers, and (C) contain appropriate attachments, including the charter, articles or certificate of organization or incorporation of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, or other organizational or governing documents, and (ii) a long form good standing certificate for each Loan Party from its jurisdiction of organization.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Default Certificate</u>. The Administrative Agent shall have received a certificate, signed by a Financial Officer of the Borrower and each other Loan Party, dated as of the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained in the Loan Documents are true and correct as of such date, and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Fees</u>. The Lenders and the Administrative Agent shall have received all fees required to be paid, and all reasonable and documented out-of-pocket expenses required to be reimbursed for which invoices have been presented (including the reasonable and documented fees and expenses of legal counsel), on or before the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Lien Searches</u>. The Administrative Agent shall have received the results of a recent lien search in the jurisdiction of organization of each Loan Party and each jurisdiction where assets of the Loan Parties are located, and such search shall reveal no Liens on any of the assets of the Loan Parties except for liens permitted by <u>Section</u> <u>6.02</u>.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) [*Reserved*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) [*Reserved*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) [*Reserved*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Solvency</u>. The Administrative Agent shall have received a solvency certificate signed by a Financial Officer dated the Effective Date dated the Effective Date in form and substance reasonably satisfactory to the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) [*Reserved*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Filings, Registrations and Recordings</u>. Each document (including any Uniform Commercial Code financing statement) required by the Collateral Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by <u>Section</u> <u>6.02</u>), shall be in proper form for filing, registration or recordation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) [*Reserved*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) [*Reserved*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Insurance</u>. The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of <u>Section</u> <u>5.10</u> of this Agreement and Section 4.12 of the Security Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>[</u>*Reserved*<u>]</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Legal Due Diligence</u>. The Administrative Agent and its counsel shall have completed all legal due diligence, the results of which shall be satisfactory to Administrative Agent in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>USA PATRIOT Act, Etc</u>. (i) The Administrative Agent shall have received, (x) at least five (5) days prior to the Effective Date, all documentation and other information regarding the Borrowers requested in connection with applicable "know your customer" and anti-money laundering rules and regulations, including the USA PATRIOT Act, to the extent requested in writing of the Borrowers at least ten (10) days prior to the Effective Date, and (y) a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party, and (ii) to the extent the Borrower qualifies as a "legal entity customer" under the Beneficial Ownership Regulation, at least five (5) days prior to the Effective Date, any Lender that has requested, in a written notice to the Borrower at least ten (10) days prior to the Effective Date, a Beneficial Ownership Certification in relation to the Borrower shall have received such Beneficial Ownership Certification (<u>provided</u> that, upon the execution and delivery by such Lender of its signature page to this Agreement, the condition set forth in this clause (ii) shall be deemed to be satisfied).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Other Documents</u>. The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrower, the Lenders and the Issuing Bank of the Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02 <u>Each Credit Event</u>. The obligation of each Lender to make a Loan on the occasion of any Borrowing (for the avoidance of doubt, excluding any conversion or continuation of any Loans that does not increase the principal amount of such Loans), and of the Issuing Bank to issue, amend or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct in all material respects with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment or extension of such Letter of Credit, as applicable (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.

ARTICLE V

<u>AFFIRMATIVE COVENANTS</u> 

Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 5.01 <u>Financial Statements and Other Information</u>. The Borrower will furnish to the Administrative Agent and each Lender:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) On or before the date on which such financial statements are required to be filed with the SEC (or, if such financial statements are not required to be filed with the SEC, within one hundred twenty (120) days after the end of each fiscal year of the Borrower), its audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG LLP or any other independent public accountants of recognized national standing (without a "going concern" or like qualification or exception, and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) on or before the date on which such financial statements are required to be filed with the SEC (or, if such financial statements are not required to be filed with the SEC, within sixty (60) days after the end of each of the first three fiscal quarters of the Borrower), its consolidated balance sheet and related statements of operations and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) [*reserved*];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) concurrently with any delivery of financial statements under clause (a) or (b) above, a Compliance Certificate (i) certifying, in the case of the financial statements delivered under clause (b) above, as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with <u>Section</u> <u>6.12</u> and (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the most recent audited financial statements delivered to the Administrative Agent and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) [reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) (i) prior to an Initial Public Offering, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and cash flow statement) of the Borrower for each month of the fiscal year then in progress (the "<u>Projections</u>") and (ii) after an Initial Public Offering, a detailed consolidated budget for the fiscal year then in progress), in each case no later than 90 days after the end of each fiscal year of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) [reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) [reserved];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) promptly after receipt thereof by the Borrower or any Subsidiary, copies of each material written notice or other correspondence received from the SEC concerning any investigation or possible investigation or other inquiry by the SEC regarding financial or other operational results of the Borrower or any Subsidiary thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) promptly following any request in writing therefor, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) promptly following any request in writing therefor, (x) such other information regarding the operations, changes in ownership of Equity Interests, business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender (through Administrative Agent) may reasonably request and (y) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable "know your customer" and anti-money laundering rules and regulations, including the USA PATRIOT Act and the Beneficial Ownership Regulation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; <u>provided</u> that if the Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof.

Documents required to be delivered pursuant to <u>Section</u> <u>5.01(a)</u>, <u>(b)</u> or <u>(i)</u> (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR); or (ii) on which such documents are posted on the Borrower's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether made available by the Administrative Agent).

SECTION 5.02 <u>Notices of Material Events</u>. If a Responsible Officer becomes aware or, with reasonable inquiry, would have become aware, of any of the following, the Borrower will furnish to the Administrative Agent (for distribution to each Lender) prompt (but in any event within any time period that may be specified below) written notice of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the occurrence of any Default;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) receipt of any notice of any investigation by a Governmental Authority or any litigation or proceeding commenced or threatened against any Loan Party or any Subsidiary that (i) would reasonably be expected to result in damages in excess of $15,000,000, (ii) seeks injunctive relief that would reasonably be expected to result in a Material Adverse Effect, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party or any Subsidiary, (v) alleges the violation of, or seeks to impose remedies under, any Environmental Law or related Requirement of Law, or seeks to impose Environmental Liability, or (vi) asserts liability on the part of any Loan Party or any Subsidiary in excess of $15,000,000 in respect of any tax, fee, assessment, or other governmental charge;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any material change in accounting or financial reporting practices by the Borrower or any Subsidiary other than in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties and their Subsidiaries in an aggregate amount exceeding $15,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) [*Reserved*];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) [*Reserved*];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners required to be identified in such certification.

Each notice delivered under this Section (i) shall be in writing, (ii) shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto (if applicable).

SECTION 5.03 <u>Existence; Conduct of Business</u>. Each Loan Party will, and will cause each Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; <u>provided</u> that (i) the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under <u>Section</u> <u>6.03</u> and (ii) none of the Borrower or any of its Subsidiaries shall be required to preserve, renew or keep in full force and effect its legal existence, rights, qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses or permits where failure to do so would not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.04 <u>Payment of Taxes</u>. Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Taxes before the same shall become delinquent or in default (subject to any applicable cure or grace periods), except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, and such Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

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SECTION 5.05 <u>Maintenance of Properties</u>. Each Loan Party will, and will cause each Subsidiary to, keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.

SECTION 5.06 <u>Books and Records; Inspection Rights</u>. Each Loan Party will, and will cause each Subsidiary to, (a) keep proper books of record and account entries in which full, true and correct in all material respects are made and are sufficient to prepare financial statements in accordance with GAAP and (b) permit any representatives designated by the Administrative Agent or any Lender (pursuant to the request made through the Administrative Agent) (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, conduct at the Loan Party's premises field examinations of the Loan Party's assets, liabilities, books and records, including examining and making extracts from its books and records, environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers, all at such reasonable times and as often as reasonably requested (but no more than once annually if no Event of Default is continuing). Notwithstanding anything to the contrary in this Section, none of the Borrower or any of its Subsidiaries shall be required to disclose, permit the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter that (i) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to the Administrative Agent or any Lender (or their respective representatives) is prohibited by applicable law or any third party contract legally binding on the Borrower or its Subsidiaries or (iii) is subject to attorney, client or similar privilege or constitutes attorney work product. The Loan Parties acknowledge that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties' assets for internal use by the Administrative Agent and the Lenders.

SECTION 5.07 <u>Compliance with Laws and Material Contractual Obligations</u>. Each Loan Party will, and will cause each Subsidiary to, (i) comply with each Requirement of Law applicable to it or its property (including without limitation Environmental Laws) and (ii) perform in all material respects its obligations under material agreements to which it is a party, in each case, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. Each Loan Party will maintain in effect and enforce policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.08 <u>Use of Proceeds</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The proceeds of the Loans and the Letters of Credit will be used only for working capital and general corporate purposes. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the regulations of the Federal Reserve Board, including Regulations T, U and X.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions, or (iii) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

SECTION 5.09 <u>Reserved</u>.

SECTION 5.10 <u>Insurance</u>. Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best Company (a) insurance in such amounts (with no greater risk retention) and against such risks (including loss or damage by fire and loss in transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; business interruption; and general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required pursuant to the Collateral Documents. The Borrower will furnish to the Administrative Agent (for distribution to the Lenders), upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained.

SECTION 5.11 [*Reserved*<u>]</u>

SECTION 5.12 <u>Casualty and Condemnation</u>. The Borrower will furnish to the Administrative Agent (for distribution to the Lenders) prompt written notice of any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding.

SECTION 5.13 <u>Post-Closing Obligations</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Control Agreements</u>. The Administrative Agent shall have received a deposit account control agreement required to be provided pursuant to Section 4.14 of the Security Agreement within 90 days of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Pledged Equity Interests</u>. The Administrative Agent shall have received the certificates representing the Equity Interests pledged pursuant to the Security Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof within 45 days of the Effective Date.

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SECTION 5.14 <u>Guarantors; Additional Collateral; Further Assurances</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Subject to applicable Requirement of Law, each Loan Party will cause any Domestic Subsidiary (other than an Excluded Subsidiary), formed or acquired after the date of this Agreement to become a Loan Party by executing a Joinder Agreement within 60 days (or such longer period of time as the Administrative Agent may agree in its sole discretion) of such formation or acquisition. In connection therewith, the Administrative Agent shall have received all documentation and other information regarding such newly formed or acquired Subsidiaries as may be required to comply with the applicable "know your customer" rules and regulations, including the USA PATRIOT Act. Upon execution and delivery thereof, each such Person (i) shall become a Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which constitutes Collateral, including any parcel of real property with a fair market value of at least $2,500,000 located in the U.S. owned by any Loan Party, but excluding, in each case, any Excluded Assets.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Except to the extent constituting Excluded Assets, each Loan Party will cause (i) 100% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries and (ii) 65% of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by any Loan Party to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) [*Reserved*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) If any material assets are acquired by any Loan Party after the Effective Date that constitutes Collateral, which in any case would not be subject to a perfected security interest upon acquisition pursuant to the Collateral Documents (excluding any Excluded Assets or assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreement upon acquisition thereof), the Borrower will (i) notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, cause such assets to be subjected to a Lien securing the Secured Obligations and (ii) take, and cause each applicable Loan Party to take, such actions as shall be necessary or desirable, and reasonably requested by the Administrative Agent, to grant and perfect such Liens, all at the expense of the Loan Parties.

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ARTICLE VI

<u>NEGATIVE COVENANTS</u> 

Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 6.01 <u>Indebtedness</u>. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Secured Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Indebtedness existing on the date hereof and set forth in <u>Schedule</u> <u>6.01</u> and any extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with clause (f) hereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary, <u>provided</u> that (i) Indebtedness owed by any Subsidiary that is not a Loan Party to the Borrower or any other Loan Party shall be subject to and (ii) Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations on customary terms reasonably satisfactory to the Administrative Agent; <u>provided further</u>, that delivery of a global intercompany note in form and substance reasonably satisfactory to the Administrative Agent shall satisfy the obligation in the foregoing clause (c)(ii);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, <u>provided</u> that the Indebtedness so Guaranteed is permitted by this <u>Section</u> <u>6.01</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Indebtedness of the Borrower or any Subsidiary constituting Capital Lease Obligations and Purchase Money Indebtedness; *provided* that the aggregate principal amount of Indebtedness pursuant to this clause (e) shall not exceed the greater of (i) $50,000,000 and (ii) 5% of the Total Assets of the Borrower and its Subsidiaries at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the "<u>Refinance Indebtedness</u>") of any of the Indebtedness described in this Section 6.01 (such Indebtedness being referred to herein as the "<u>Original Indebtedness</u>"); <u>provided</u> that (i) such Refinance Indebtedness does not increase the principal amount of the Original Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in

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a shortening of the average weighted maturity of such Original Indebtedness, and (v) if such Original Indebtedness was (x) subordinated in right of payment to the Obligations, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are no less favorable to the interests of the Administrative Agent and the Lenders than those that were applicable to such Original Indebtedness and (y) secured on a junior lien basis to Liens securing the Obligations, then such Refinancing Indebtedness must either be unsecured or secured by Liens that are junior to the Liens securing the Obligations;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Indebtedness owed to any Person providing workers' compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Subordinated Indebtedness;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Indebtedness of any Person that becomes a Subsidiary after the date hereof; <u>provided</u> that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (j), together with (and without duplication) any Refinance Indebtedness in respect thereof permitted by clause (f) above, shall not exceed $25,000,000 at any time outstanding;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Permitted Convertible Indebtedness, in an aggregate principal amount at any time outstanding not to exceed $500,000,000;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) to the extent constituting Indebtedness, any Permitted Equity Derivative Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Except for any letters of credit existing on the date hereof and set forth in <u>Schedule</u> <u>6.01</u>, Indebtedness constituting letters of credit (A) that are issued for the purpose of securing insurance obligations and airport obligations in an unlimited amount and (B) otherwise, in an amount not to exceed the greater of (i) $25,000,000 and (ii) 2.5% of the Total Assets of the Borrower and its Subsidiaries per year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Indebtedness in connection with corporate credit cards issued to the Borrower and its Subsidiaries in an amount not to exceed the greater of (i) $35,000,000 and (ii) 3.5% of the Total Assets of the Borrower and its Subsidiaries per year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Indebtedness in respect of netting services, overdraft protections, payment processing, automatic clearinghouse arrangements, arrangements in respect of pooled deposit or sweep accounts, check endorsement guarantees and otherwise in connection with deposit accounts or cash management services incurred in the ordinary course of business;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Indebtedness consisting of insurance premium financing incurred in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Indebtedness under Swap Agreements permitted by Section 6.07; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) other Indebtedness of the Borrower or any Subsidiary in an aggregate principal amount at any time outstanding not to exceed the greater of (i) $50,000,000 and (ii) 5% of the Total Assets of the Borrower and its Subsidiaries.

SECTION 6.02 <u>Liens</u>. No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Liens created pursuant to any Loan Document;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Permitted Encumbrances;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in <u>Schedule</u> <u>6.02</u> and any modifications, renewals and extensions thereof and any Lien granted as a replacement or substitute therefor; <u>provided</u> that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary other than improvements thereon or proceeds thereof and (ii) such Lien shall secure only those obligations which it secures on the date hereof and refinancing, extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof, except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, extensions, renewals or replacements;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; <u>provided</u> that (i) such Liens secure Indebtedness permitted by <u>Section</u> <u>6.01</u>, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary other than additions, accessions, parts, attachments or improvements thereon or proceeds thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; <u>provided</u> that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and any refinancing, extension, renewal or replacement thereof that does not increase the outstanding principal amount thereof except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, extensions, renewals or replacements;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Liens of a collecting bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Liens arising out of Sale and Leaseback Transactions permitted by <u>Section</u> <u>6.06</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Liens granted by a Subsidiary that is not a Loan Party in favor of the Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) other Liens securing obligations (other than Indebtedness for borrowed money of any foreign Subsidiary evidenced by any revolving credit agreement, term loan credit agreement or other similar credit agreement) in an aggregate amount at any time outstanding not to exceed the greater of (i) $35,000,000 and (ii) 5.0% of the Total Assets of the Borrower and its Subsidiaries per year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) licenses, sublicenses, leases or subleases granted to others in the ordinary course of business not interfering in any material respect with the business of the Borrower and its Subsidiaries, taken as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) the interest and title of a lessor under any lease or sublease entered into by the Borrower or any Subsidiary in the ordinary course of its business and other statutory and common law landlords' Liens under leases;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) in connection with the sale or transfer of any assets in a transaction not prohibited hereunder, customary rights and restrictions contained in agreements relating to such sale or transfer pending the completion thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) Liens on cash and Cash Equivalents securing letters of credit permitted under <u>Section</u> <u>6.01</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods the Borrower or any Subsidiary in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Liens for Taxes not yet due or that are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) zoning restrictions, easements, rights-of-way, restrictions on use of real property and other similar encumbrances that exist on the date hereof or are incurred hereafter in the ordinary course of business which, in the aggregate, do not materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the business of any Borrower or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Liens arising out of judgments or awards, in respect of which Borrower or any Subsidiary shall in good faith be prosecuting an appeal or proceedings for review in respect of which there shall be secured a subsisting stay of execution pending such appeal or proceedings;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) statutory and common law landlord's Liens under leases to which a Borrower or any Subsidiary is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Liens on assets securing judgments, awards, attachments or decrees not constituting an Event of Default; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) purported Liens evidenced by the filing of precautionary UCC financing statements, including those relating to operating leases or consignment or bailee arrangements entered into in the ordinary course of business.

SECTION 6.03 <u>Fundamental Changes</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or otherwise Dispose of all or substantially all of its assets, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, (i) any Subsidiary of the Borrower may merge into the Borrower in a transaction in which the Borrower is the surviving entity and any Subsidiary of the Borrower that is not a Loan Party may merge into another Subsidiary, (ii) any Loan Party (other than the Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party, and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No Loan Party will, nor will it permit any Subsidiary to, consummate a Division as the Dividing Person, without the prior written consent of Administrative Agent. Without limiting the foregoing, if any Loan Party that is a limited liability company consummates a Division (with or without the prior consent of Administrative Agent as required above), each Division Successor shall be required to comply with the obligations set forth in <u>Section</u> <u>5.14</u> and the other further assurances obligations set forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No Loan Party will, nor will it permit any Subsidiary to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date hereof and businesses reasonably related or incidental thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) No Loan Party will, nor will it permit any Subsidiary to, without giving at least twenty (20) Business Days prior written notice to the Administrative Agent thereof, change its fiscal year or any fiscal quarter from the basis of in effect on the Effective Date, <u>provided that</u> no notice shall be required to be given pursuant to this clause (d) if (A) any Loan Party or any Subsidiary changes its fiscal year to end on December 31 or (B) if any Loan Party or any Subsidiary, subject to and in accordance with this Agreement, acquires the Equity Interest of any other Person and elects to change its fiscal year to the corresponding fiscal year of such acquired Person at the time of the completion of that acquisition.

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SECTION 6.04 <u>Investments, Loans, Advances, Guarantees and Acquisitions</u>. No Loan Party will, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any capital stock, evidences of Indebtedness or other Equity Interests of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise) (each, an "<u>Investment</u>"), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Investments in cash and Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Investments by the Borrower existing on the date hereof in the capital stock of its Subsidiaries and other Investments described in <u>Schedule</u> <u>6.04</u> and any modification, replacement, renewal or extension thereof to the extent not involving any additional Investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Investments made by (i) any Loan Party in any other Loan Party, (ii) any Subsidiary that is not a Loan Party in any Loan Party, (iii) any Subsidiary that is not a Loan Party in any other Subsidiary that are not a Loan Party or (iv) so long as no Event of Default under clauses (a), (h) and (i) of Article VII then exists or would result therefrom, any Loan Party in any Subsidiary that is not a Loan Party; <u>provided</u> that, with respect to any such Investments made by the Loan Parties in Subsidiaries that are not Loan Parties, such Investments shall be (i) if Total Liquidity immediately prior to the consummation of such Investment and after giving pro forma effect to such Investment is equal to or greater than $150,000,000, in an unlimited amount or (ii) if Total Liquidity immediately prior to the consummation of such Investment and after giving pro forma effect to such Investment is less than $150,000,000, not exceed the greater of (i) $50,000,000 and (ii) 5.0% of the Total Assets of the Borrower and its Subsidiaries in any fiscal year of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) to the extent constituting an Investment, licenses of intellectual property by the Borrower or any Subsidiary to the Borrower or any other Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Guarantees constituting Indebtedness permitted by <u>Section</u> <u>6.01</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes to any employee and loans to employees, officers or directors relating to the purchase of Equity Interests of the Borrower or its Subsidiaries pursuant to employee equity purchase agreements approved by the Borrower's or such Subsidiary's board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor's Accounts in the ordinary course of business, consistent with past practices;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) Investments in the form of Swap Agreements permitted by <u>Section</u> <u>6.07</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Investments of any Person existing at the time such Person becomes a Subsidiary of the Borrower or consolidates or merges with the Borrower or any Subsidiary (including in connection with a Permitted Acquisition), so long as such Investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) Investments received in connection with the disposition of assets permitted by <u>Section</u> <u>6.05</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Investments constituting deposits permitted by Section 6.02;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) minority equity Investments; provided that any cash Investment does not exceed $15,000,000 per year;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) any Permitted Acquisition;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) so long as no Event of Default under clauses (a), (h) and (i) of <u>Article VII</u> then exists or would result therefrom other Investments; <u>provided</u> that if Total Liquidity immediately prior to the consummation of such Investment or acquisition and after giving pro forma effect to such Investment or acquisition is less than $150,000,000, such Investments shall not exceed $25,000,000 in the aggregate for any fiscal year of the Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) Investments consisting of Permitted Equity Derivative Transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions to, customers and suppliers in the ordinary course of business; provided that this clause (q) shall not apply to Investments of the Borrower in any Subsidiary or Affiliate;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower's business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) Swap Agreements permitted by Section 6.07;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) Investments received in settlement of debts, claims or disputes owed to the Borrower or any Subsidiary that arose out of transactions in the ordinary course of business; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) advances and extensions of credit in the nature of accounts receivable arising from the sale or lease of goods or services or the licensing of property in the ordinary course of business;

<u>provided</u> that, for purposes of calculating any amounts under the foregoing Investments covenant, in each case such determination shall not give effect to any write-up, write-down or other subsequent changes in value.

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SECTION 6.05 <u>Asset Sales</u>. No Loan Party will, nor will it permit any Subsidiary to, Dispose of any asset, including any Equity Interest owned by it (for the avoidance of doubt, other than Equity Interests of the Borrower), nor will the Borrower permit any Subsidiary to issue or sell any additional Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with <u>Section</u> <u>6.04</u>), except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Dispositions of (i) Inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus Equipment or property in the ordinary course of business;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Dispositions of assets to the Borrower or any Subsidiary, <u>provided</u> that any such Dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with <u>Section</u> <u>6.09</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Dispositions of Accounts (excluding sales or dispositions in a factoring arrangement) in connection with the compromise, settlement or collection thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Dispositions (i) of Cash Equivalents and other Investments permitted by clauses (d), (i) and (k) of <u>Section</u> <u>6.04</u> and (ii) made through the granting of Liens permitted by <u>Section</u> <u>6.02</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Sale and Leaseback Transactions permitted by <u>Section</u> <u>6.06</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) Dispositions of other assets in an aggregate fair market value of all assets Disposed of in reliance upon this paragraph (g) shall not exceed 5.0% of the Total Assets of the Borrower and its Subsidiaries in the aggregate for any fiscal year of the Borrower; <u>provided</u>, that (i) the consideration received for such assets shall be in an amount at least equal to the aggregate fair market value thereof (determined in good faith by the Borrower) and (ii) no less than 75% of such consideration shall be paid in cash and cash equivalents; <u>provided</u> that for purposes of this <u>clause (ii)</u>, the following consideration shall be deemed to be cash consideration: (A) Permitted Investments or any other securities, notes or other obligations received by the Borrower or any Subsidiary that are converted within 180 days into cash or Cash Equivalents, (B) any consideration arising from the assumption of liabilities and (C) any contingent or deferred consideration payable in cash or Cash Equivalents;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) (i) non-exclusive licenses of intellectual property granted to third parties in the ordinary course of business, and (ii) licenses of intellectual property that may be exclusive only as to territory, provided that such territory only includes discrete geographical areas outside of the United States, provided that such licenses described herein do not interfere in any material respect with the business of the Loan Parties and their Subsidiaries;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the sale or issuance of any Subsidiary's Equity Interests to the Borrower or any Guarantor that is a wholly owned Subsidiary;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) leases or subleases of real property granted in the ordinary course of business (and in the ordinary course of such Person's business), and leases, subleases, non exclusive licenses or sublicenses of personal property (other than intellectual property) granted in the ordinary course of business, if the leases, subleases, licenses and sublicenses do not (i) do not materially interfere with the ordinary conduct of business of the Borrower or any Subsidiary or (ii) prohibit granting the Administrative Agent, on behalf of itself, the Lenders and other Secured Parties, a security interest therein;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) Dispositions to a Loan Party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) Dispositions of any assets acquired in connection with the acquisition of another person or a division or line of business of such person which the Borrower reasonably determines are surplus or non-core assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) the sale, assignment, transfer, disposal, abandonment, cancellation or lapse of any intellectual property, which, in the reasonable good faith determination of the Borrower is uneconomical, or not material to the conduct of the business of the Borrower and/or its Subsidiaries; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) (i) the sale of any Permitted Convertible Indebtedness by the Borrower, (ii) the entry into any Permitted Equity Derivative Transaction by the Borrower in connection with the issuance of any Permitted Convertible Indebtedness, (iii) the settlement, unwinding or termination of any Permitted Equity Derivative Transaction, or (iv) the issuance of Equity Interests pursuant to the conversion or exchange of Permitted Convertible Indebtedness.

SECTION 6.06 <u>Sale and Leaseback Transactions</u>. No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred (a "<u>Sale and Leaseback Transaction</u>"), except for any such sale of any fixed or capital assets by the Borrower or any Subsidiary that is made for cash consideration in an amount not less than the fair value of such fixed or capital asset and is consummated within 180 days after the Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset.

SECTION 6.07 <u>Swap Agreements</u>. No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement for speculative purposes.

SECTION 6.08 <u>Restricted Payments; Certain Payments of Indebtedness</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No Loan Party will, nor will it permit any Subsidiary to, declare or make, directly or indirectly, any Restricted Payment, except (i) the Borrower may declare and pay dividends payable solely in additional shares of its Equity Interests, (ii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (iii) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans or agreements for directors, management, employees or other eligible service providers of the Borrower or its Subsidiaries, including the repurchase of Equity Interests or rights in respect thereof granted to directors, management, employees or other eligible service providers of the Borrower or its Subsidiaries pursuant to a right of repurchase set forth in any such stock option plans or other benefit plans or agreements in connection with a cessation of service: (iv) so long as there exists no Default or Event of Default, the Borrower may make Restricted Payments not otherwise permitted under this <u>Section</u> <u>6.08</u> in an amount not to exceed the amount of proceeds of any issuance of Qualified Equity Interests made no earlier than sixty (60) days prior to making such Restricted Payment, (v) so long as no Default or Event of Default then exists or would result therefrom, the Borrower may declare or make other Restricted Payments (x) if Total Liquidity

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immediately prior to the making of such Restricted Payment and after giving pro forma effect to such Restricted Payment is equal to or greater than $225,000,000, in an unlimited amount or (y) if Total Liquidity immediately prior to the making of such Restricted Payment and after giving pro forma effect to such Restricted Payment is less than $225,000,000, in an amount not to exceed the greater of (i) $35,000,000 and (ii) 5% of the Total Assets of the Borrower and its Subsidiaries per year in the aggregate for any fiscal year of the Borrower, (vi) the purchase by the Borrower of Equity Interests of the Borrower contemporaneously and otherwise in connection with Permitted Convertible Indebtedness, (vii) any payment (including payment of any premium) or delivery with respect to, or early unwind or settlement or termination of, any Permitted Equity Derivative Transaction and (viii) the Borrower may repurchase fractional shares of its Equity Interests arising out of stock dividends, splits or combinations, business combinations or conversions of convertible securities or, so long as no Default or Event of Default then exists or would result therefrom, make cash settlement payments upon the exercise of warrants to purchase its Equity Interests, or "net exercise" or "net share settle" warrants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) No Loan Party will, nor will it permit any Subsidiary to, make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Subordinated Indebtedness or Permitted Convertible Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Subordinated Indebtedness or Permitted Convertible Indebtedness, except:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) payment of or in respect of Indebtedness in accordance with the terms of any subordination, intercreditor or other similar agreement to which the Administrative Agent is a party;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness permitted under <u>Section</u> <u>6.01</u>, other than payments in respect of the Subordinated Indebtedness prohibited by the subordination provisions thereof;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) any refinancing of Indebtedness to the extent such Indebtedness is permitted by <u>Section</u> <u>6.01</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) payment of or in respect of any Permitted Convertible Indebtedness with Equity Interests and cash in lieu of fractional shares in accordance with the terms of any such Permitted Convertible Indebtedness; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) payment of or in respect of any Permitted Convertible Indebtedness with cash so long as Total Liquidity after giving pro forma effect to such payment is equal to or greater than $225,000,000.

SECTION 6.09 <u>Transactions with Affiliates</u>. No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii)

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are on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Loan Parties not involving any other Affiliate, (c) any Investment permitted by <u>Sections</u> <u>6.04(c)</u> or <u>6.04(d)</u>, (d) any Indebtedness permitted under <u>Section</u> <u>6.01(c)</u>, (e) any Restricted Payment permitted by <u>Section</u> <u>6.08</u>, (f) loans or advances to employees permitted under <u>Section</u> <u>6.04(f)</u>, (g) the payment of customary directors' fees, reasonable out-of-pocket expense reimbursement, indemnities (including the provision of directors and officers insurance) and compensation arrangements for members of the board of directors, officers or other employees of the Borrower or any Subsidiary, and compensation, bonus, incentive, retention and severance and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrower or its Subsidiaries in the ordinary course of business, (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, stock options and stock ownership plans approved by the Borrower's board of directors, (i) any transaction involving amounts less than $5,000,000 in the aggregate for any fiscal year of the Borrower and (j) transactions approved by a majority of the disinterested directors of the Borrower's board of directors.

SECTION 6.10 <u>Restrictive Agreements</u>. No Loan Party will, nor will it permit any Subsidiary to, directly or indirectly enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets to secure the Obligations, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; <u>provided</u> that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on <u>Schedule</u> <u>6.10</u> (but shall apply to any extension or renewal of, or any amendment or modification materially expanding the scope of, any such restriction or condition taken as a whole), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, <u>provided</u> such restrictions and conditions apply only to the Subsidiary or assets to be sold and such sale is permitted hereunder, (iv) the foregoing shall not apply to any agreement or restriction or condition in effect at the time any Subsidiary becomes a Subsidiary of the Borrower, so long as such agreement was not entered into in contemplation of such Person becoming a Subsidiary of the Borrower, (v) the foregoing shall not apply to customary provisions in joint venture agreements and other similar agreements applicable to joint ventures, (vi) the foregoing shall not apply to restrictions or conditions set forth in any agreement governing Indebtedness not prohibited by <u>Section</u> <u>6.01</u>; provided that such restrictions and conditions are customary for such Indebtedness (as determined in good faith by Borrower), (vii) the foregoing shall not apply to restrictions on cash or other deposits (including escrowed funds) imposed under contracts entered into in the ordinary course of business, (viii) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (ix) clause (a) of the foregoing shall not apply to customary provisions in leases, licenses, subleases and sublicenses and other contracts restricting the assignment thereof).

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SECTION 6.11 <u>Amendment of Material Documents</u>. No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (a) any agreement relating to any Subordinated Indebtedness or (b) its charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents, in each case in a manner materially adverse to the interests of the Lenders, without the prior written consent of the Administrative Agent.

SECTION 6.12 <u>Financial Covenant</u>. The Borrower will not, and will not permit any of its Subsidiaries to, permit, at any time, Total Liquidity to be less than $25,000,000.

ARTICLE VII

<u>EVENTS OF DEFAULT</u> 

If any of the following events ("<u>Events of Default</u>") shall occur:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made or deemed made;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in <u>Section</u> <u>5.02(a)</u>, <u>5.03</u> (with respect to a Loan Party's existence) or <u>5.08</u> or in <u>Article</u> <u>VI</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those specified in clause (a), (b) or (d) above), and such failure shall continue unremedied for a period of 30 days after the earlier of any Loan Party's knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) and such failure shall have continued after the applicable grace period, if any, or shall have not been waived in accordance with the terms thereof;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with the giving of notice, if required, but without further lapse of time, but with all applicable grace periods in respect of such event or condition under the documentation representing such Material Indebtedness having expired) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; <u>provided</u> that this clause (g) shall not apply to (i) any requirement to, or any offer, to repurchase, prepay or redeem Indebtedness of a Person acquired in an acquisition permitted hereunder, to the extent such offer is required as a result of, or in connection with, such acquisition, so long as such requirement is satisfied at the time of such acquisition, (ii) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, (iii) any event that permits or causes redemption, repurchase, conversion or settlement with respect to any convertible debt instrument (including Permitted Convertible Indebtedness) pursuant to its terms (including any termination of any related Swap Agreement) unless such redemption, repurchase, conversion or settlement results from a default thereunder or an event of the type that constitutes an Event of Default, (iv) an early payment requirement, unwinding or termination with respect to any Swap Agreement except (x) an early payment, unwinding or termination that results from a default or non-compliance thereunder by the Borrower or any Subsidiary, or another event of the type that would constitute an Event of Default or (y) an early termination of such Swap Agreement by the counterparty thereto or (v) any early payment requirement or unwinding or termination with respect to any Permitted Equity Derivative Transaction, or satisfaction of any condition giving rise to or permitting the foregoing, in accordance with the terms thereof, so long as, in any such case, the Borrower and its Subsidiaries are not the "defaulting party" or otherwise in breach under the terms of such Permitted Equity Derivative Transaction;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) any Loan Party or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) any Loan Party or any Subsidiary shall become unable, admit in writing its inability or fail generally, to pay its debts as they become due;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) one or more judgments for the payment of money in an aggregate amount in excess of $15,000,000 shall be rendered against any Loan Party, any Subsidiary or any combination thereof (to the extent not paid or covered by a reputable and solvent independent third-party insurance company which has not disputed coverage) and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed or bonded, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary to enforce any such judgment and such action shall not be stayed or bonded; <u>provided</u>, that any judgments covered by insurance shall not be subject to this clause (k);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) a Change in Control shall occur;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) the Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of the Guaranty, or any Guarantor shall deny that it has any further liability under the Guaranty, or shall give notice to such effect, including, but not limited to notice of termination delivered pursuant to <u>Section</u> <u>10.08</u>;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) except as permitted by the terms of any Collateral Document, (i) any Collateral Document shall for any reason fail to create a valid security interest in any Collateral purported to be covered thereby, or (ii) any Lien securing any Secured Obligation shall cease to be a perfected, first priority Lien;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) [reserved]; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms);

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, whereupon the Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payment and other obligations of the Borrower accrued hereunder and under any other Loan Document, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, and (iii) require cash collateral for the LC Exposure in accordance with <u>Section</u> <u>2.06(j)</u> hereof; and in the case of any event with

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respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, and cash collateral for the LC Exposure, together with accrued interest thereon and all fees (including, for the avoidance of doubt, any break funding payments) and other obligations of the Borrower accrued hereunder and under any other Loan Documents, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE VIII

<u>THE ADMINISTRATIVE AGENT</u> 

SECTION 8.01 <u>Authorization and Action</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender, on behalf of itself and any of its Affiliates that are Secured Parties and each Issuing Bank hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors and assigns to serve as the administrative agent and collateral agent under the Loan Documents and each Lender and each Issuing Bank authorizes the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such agreements and to exercise such powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than within the United States, each Lender and each Issuing Bank hereby grants to the Administrative Agent any required powers of attorney to execute and enforce any Collateral Document governed by the laws of such jurisdiction on such Lender's or such Issuing Bank's behalf. Without limiting the foregoing, each Lender and each Issuing Bank hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, and to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As to any matters not expressly provided for herein and in the other Loan Documents (including enforcement or collection), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender and each Issuing Bank; <u>provided</u>, <u>however</u>, that the Administrative Agent shall not be required to take any action that (i) the Administrative Agent in good faith believes exposes it to liability unless the Administrative Agent receives an indemnification and is exculpated in a manner satisfactory to it from the Lenders and the Issuing Banks with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable law, including any action that may be in violation of the automatic stay under any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors; <u>provided</u>, <u>further</u>, that the Administrative Agent may seek clarification or direction from the Required Lenders prior to the exercise of any such instructed action and may refrain from acting until such clarification or direction has been provided. Except as expressly set forth in the Loan

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Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, any other Loan Party, any Subsidiary or any Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In performing its functions and duties hereunder and under the other Loan Documents, the Administrative Agent is acting solely on behalf of the Lenders and the Issuing Banks (except in limited circumstances expressly provided for herein relating to the maintenance of the Register), and its duties are entirely mechanical and administrative in nature. Without limiting the generality of the foregoing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for any Lender, Issuing Bank, any other Secured Party or holder of any other obligation other than as expressly set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of Default has occurred and is continuing (and it is understood and agreed that the use of the term "agent" (or any similar term) herein or in any other Loan Document with reference to the Administrative Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law, and that such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties); additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and/or the transactions contemplated hereby;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) [reserved]; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) nothing in this Agreement or any Loan Document shall require the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any of their respective duties and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities pursuant to this Agreement. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agent.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) No Arranger shall have obligations or duties whatsoever in such capacity under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacity, but all such persons shall have the benefit of the indemnities provided for hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Administrative Agent (irrespective of whether the principal of any Loan or any reimbursement obligation in respect of any LC Disbursement shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Disbursements and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim under <u>Sections</u> <u>2.12</u>, <u>2.13</u>, <u>2.15</u>, <u>2.17</u> and <u>9.03</u>) allowed in such judicial proceeding; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Issuing Banks or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent, under the Loan Documents (including under <u>Section</u> <u>9.03</u>). Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and, except solely to the extent of the Borrower's rights to consent pursuant to and subject to the conditions set forth in this Article, none of the Borrower or any Subsidiary, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions. Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the Guarantees of the Secured Obligations provided under the Loan Documents, to have agreed to the provisions of this Article.

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SECTION 8.02 <u>Administrative Agent</u><u>'</u><u>s Reliance, Limitation of Liability, Etc</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Neither the Administrative Agent nor any of its Related Parties shall be (i) liable for any action taken or omitted to be taken by such party, the Administrative Agent or any of its Related Parties under or in connection with this Agreement or the other Loan Documents (x) with the consent of or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents) or (y) in the absence of its own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a court of competent jurisdiction by a final and non-appealable judgment) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document (including, for the avoidance of doubt, in connection with the Administrative Agent's reliance on any Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page) or for any failure of any Loan Party to perform its obligations hereunder or thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Administrative Agent shall be deemed not to have knowledge of any (i) notice of any of the events or circumstances set forth or described in Section 5.02 unless and until written notice thereof stating that it is a "notice under Section 5.02" in respect of this Agreement and identifying the specific clause under said Section is given to the Administrative Agent by the Borrower, or (ii) notice of any Default or Event of Default unless and until written notice thereof (stating that it is a "notice of Default" or a "notice of an Event of Default") is given to the Administrative Agent by the Borrower, a Lender or an Issuing Bank. Further, the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default or Event of Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in <u>Article</u> <u>IV</u> or elsewhere in any Loan Document, other than to confirm receipt of items (which on their face purport to be such items) expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation, perfection or priority of Liens on the Collateral.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any promissory note as its holder until such promissory note has been assigned in accordance with <u>Section</u> <u>9.04</u>, (ii) may rely on the Register to the extent set forth in <u>Section</u> <u>9.04(b)</u>, (iii) may consult with legal counsel (including counsel to the Borrower), independent public accountants and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iv) makes no warranty or representation to any Lender or Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or representations made by or on behalf of any Loan Party in connection with this Agreement or any other Loan Document, (v) in determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, may

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presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank sufficiently in advance of the making of such Loan or the issuance of such Letter of Credit and (vi) shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).

SECTION 8.03 <u>Posting of Communications</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make any Communications available to the Lenders and the Issuing Banks by posting the Communications on IntraLinks<sup>™</sup>, DebtDomain, SyndTrak, ClearPar or any other electronic system chosen by the Administrative Agent to be its electronic transmission system (the "<u>Approved Electronic Platform</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Effective Date, a user ID/password authorization system) and the Approved Electronic Platform is secured through a per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders, each of the Issuing Banks and the Borrower acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting the representatives or contacts of any Lender that are added to the Approved Electronic Platform, and that there may be confidentiality and other risks associated with such distribution. Each of the Lenders, each of the Issuing Banks and the Borrower hereby approves distribution of the Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED "AS IS" AND "AS AVAILABLE". THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY ARRANGER OR ANY OF THEIR RESPECTIVE RELATED PARTIES (COLLECTIVELY, "<u>APPLICABLE PARTIES</u>") HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER, ANY ISSUING BANK OR ANY OTHER PERSON OR ENTITY FOR

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DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY'S OR THE ADMINISTRATIVE AGENT'S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC PLATFORM.

"<u>Communications</u>" means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through an Approved Electronic Platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Lender and each Issuing Bank agrees that notice to it (as provided in the next sentence) specifying that Communications have been posted to the Approved Electronic Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each Lender and Issuing Bank agrees (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Lender's or Issuing Bank's (as applicable) email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each of the Lenders, each of the Issuing Banks and the Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Communications on the Approved Electronic Platform in accordance with the Administrative Agent's generally applicable document retention procedures and policies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Nothing herein shall prejudice the right of the Administrative Agent, any Lender or any Issuing Bank to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

SECTION 8.04 <u>The Administrative Agent Individually</u>. With respect to its Commitment, Loans and Letters of Credit, the Person serving as the Administrative Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or Issuing Bank, as the case may be. The terms "Issuing Banks", "Lenders", "Required Lenders" and any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity as a Lender, Issuing Bank or as one of the Required Lenders, as applicable. The Person serving as the Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of banking, trust or other business with, any Loan Party, any Subsidiary or any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and without any duty to account therefor to the Lenders or the Issuing Banks.

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SECTION 8.05 <u>Successor Administrative Agent</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Administrative Agent may resign at any time by giving 30 days' prior written notice thereof to the Lenders, the Issuing Banks and the Borrower, whether or not a successor Administrative Agent has been appointed. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within thirty (30) days after the retiring Administrative Agent's giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York or an Affiliate of any such bank. In either case, such appointment shall be subject to the prior written approval of the Borrower (which approval may not be unreasonably withheld and shall not be required while an Event of Default has occurred and is continuing). Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent. Upon the acceptance of appointment as Administrative Agent by a successor Administrative Agent, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. Prior to any retiring Administrative Agent's resignation hereunder as Administrative Agent, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notwithstanding paragraph (a) of this Section, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Banks and the Borrower, whereupon, on the date of effectiveness of such resignation stated in such notice, (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents; <u>provided</u> that, solely for purposes of maintaining any security interest granted to the Administrative Agent under any Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties, and continue to be entitled to the rights set forth in such Collateral Document and Loan Document, and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this Section (it being understood and agreed that the retiring Administrative Agent shall have no duty or obligation to take any further action under any Security Agreement, including any action required to maintain the perfection of any such security interest), and (ii) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent; <u>provided</u> that (A) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (B) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall directly be given or made to each Lender and each Issuing Bank. Following the effectiveness of the Administrative Agent's resignation from its capacity as such, the provisions of this Article, <u>Section</u> <u>2.17(d)</u> and <u>Section</u> <u>9.03</u>, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

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SECTION 8.06 <u>Acknowledgements of Lenders and Issuing Banks</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender and each Issuing Bank represents and warrants that (i) the Loan Documents set forth the terms of a commercial lending facility, (ii) it is engaged in making, acquiring or holding commercial loans and in providing other facilities set forth herein as may be applicable to such Lender or Issuing Bank, in each case in the ordinary course of business, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument (and each Lender and each Issuing Bank agrees not to assert a claim in contravention of the foregoing),(iii) it has, independently and without reliance upon the Administrative Agent, any Arranger, or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder and (iv) it is sophisticated with respect to decisions to make, acquire and/or hold commercial loans and to provide other facilities set forth herein, as may be applicable to such Lender or such Issuing Bank, and either it, or the Person exercising discretion in making its decision to make, acquire and/or hold such commercial loans or to provide such other facilities, is experienced in making, acquiring or holding such commercial loans or providing such other facilities. Each Lender and each Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Arranger or any other Lender or Issuing Bank, or any of the Related Parties of any of the foregoing, and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrower and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date or the effective date of any such Assignment and Assumption or any other Loan Document pursuant to which it shall have become a Lender hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) (i) Each Lender hereby agrees that (x) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal, interest, fees or otherwise; individually and collectively, a "<u>Payment</u>") were erroneously transmitted to such Lender (whether or not known to such Lender), and demands the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from

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time to time in effect, and (y) to the extent permitted by applicable law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without limitation any defense based on "discharge for value" or any similar doctrine. A notice of the Administrative Agent to any Lender under this Section 8.06(c) shall be conclusive, absent manifest error.

(ii) Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (x) that is in a different amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such Payment (a "<u>Payment Notice</u>") or (y) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly, but in no event later than one (1) Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The Borrower and each other Loan Party hereby agrees that (x) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (y) an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower or any other Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Each party's obligations under this Section 8.06(c) shall survive the resignation or replacement of the Administrative Agent or any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties' books and records, as well as on representations of the Loan Parties' personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification

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provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to the Borrower, or the indemnifying Lender's participation in, or the indemnifying Lender's purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys' fees) incurred by the Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

SECTION 8.07 <u>Collateral Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except with respect to the exercise of setoff rights in accordance with <u>Section</u> <u>9.08</u> or with respect to a Secured Party's right to file a proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof. In its capacity, the Administrative Agent is a "representative" of the Secured Parties within the meaning of the term "secured party" as defined in the UCC. In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In furtherance of the foregoing and not in limitation thereof, no arrangements in respect of Banking Services the obligations under which constitute Secured Obligations and no Swap Agreement the obligations under which constitute Secured Obligations, will create (or be deemed to create) in favor of any Secured Party that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Loan Party under any Loan Document. By accepting the benefits of the Collateral, each Secured Party that is a party to any such arrangement in respect of Banking Services or Swap Agreement, as applicable, shall be deemed to have appointed the Administrative Agent to serve as administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion, to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by <u>Section</u> <u>6.02(b)</u>. The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent's Lien thereon or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders or any other Secured Party for any failure to monitor or maintain any portion of the Collateral.

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SECTION 8.08 <u>Credit Bidding</u>. The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law. In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase). In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles (ii) each of the Secured Parties' ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the acquisition vehicle or vehicles (<u>provided</u> that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in <u>Section</u> <u>9.02</u> of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership interests, limited partnership interests or membership interests, in any such acquisition vehicle and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata with their original interest in such Obligations and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action. Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will

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receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

SECTION 8.09 <u>Certain ERISA Matters</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such Lender is not using "plan assets" (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender's entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) (A) such Lender is an investment fund managed by a "Qualified Professional Asset Manager" (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender's entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that none of the Administrative Agent, or any Arranger or any of their respective Affiliates is a fiduciary with respect to the Collateral or the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Administrative Agent and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide investment advice or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments, this Agreement and any other Loan Documents (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker's acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

SECTION 8.10 <u>Flood Laws</u>. JPMorgan has adopted internal policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and related legislation (the "<u>Flood Laws</u>"). JPMorgan, as administrative agent or collateral agent on a syndicated facility, will post on the applicable electronic platform (or otherwise distribute to each Lender in the syndicate) documents that it receives in connection with the Flood Laws. However, JPMorgan reminds each Lender and Participant in the facility that, pursuant to the Flood Laws, each federally regulated Lender (whether acting as a Lender or Participant in the facility) is responsible for assuring its own compliance with the flood insurance requirements.

ARTICLE IX

<u>MISCELLANEOUS</u> 

SECTION 9.01 <u>Notices</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if to any Loan Party, to it in care of the Borrower at:

Turo Inc.

111 Sutter Street, Floor 12

San Francisco, California 94104

Attention: Chuck Fisher, Chief Financial Officer

Email:

Telephone No:

With a copy to:

Cooley LLP

1299 Pennsylvania Avenue, Suite 700

Washington, DC 20004-2400

Attention: Michael Tollini

Email: mtollini@cooley.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if to the Administrative Agent:

JPMorgan Chase Bank, N.A.

131 S Dearborn St, Floor 04

Suite IL1-1145

Chicago, IL 60603-5506

Attention: Loan and Agency Servicing

Email: jpm.agency.cri@jpmorgan.com

*Agency Withholding Tax Inquiries*:

Email: agency.tax.reporting@jpmorgan.com

*Agency Compliance/Financials/Intralinks*:

Email: covenant.compliance@jpmchase.com

*Agency Collateral Inquiries*:

Attention: LC Agency Team

Email: tamonica.j.carter@chase.com

Telephone No: 312-385-7228

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) if to JPMorgan in its capacity as an Issuing Bank, to JPMorgan Chase Bank, N.A. at:

JPMorgan Chase Bank, N.A.

131 S Dearborn St, Floor 04

Suite IL1-1145

Chicago, IL 60603-5506

Attention: LC Agency Team

Email: chicago.lc.agency.activity.team@jpmchase.com

Fax No: 856-294-5267

Telephone No: 800-364-1969

with a copy to:

JPMorgan Chase Bank, N.A.

131 S Dearborn St, Floor 04

Suite IL1-1145

Chicago, IL 60603-5506

Attention: Loan and Agency Servicing

Email: jpm.agency.cri@jpmorgan.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) if to any other Lender or Issuing Bank, to it at its address, email address or fax number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail shall be deemed to have been given when received, (ii) sent by fax shall be deemed to have been given when sent, <u>provided</u> that if not given during normal business hours for the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (iii) delivered through Electronic Systems or Approved Electronic Platforms, as applicable, to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Notices and other communications to the Borrower, any Loan Party, the Lenders and the Issuing Banks hereunder may be delivered or furnished by using Electronic Systems or Approved Electronic Platforms, as applicable, or pursuant to procedures approved by the Administrative Agent; <u>provided</u> that the foregoing shall not apply to notices pursuant to <u>Article</u> <u>II</u> or to compliance and no Default certificates delivered pursuant to <u>Section</u> <u>5.01(e)</u> unless otherwise agreed by the Administrative Agent and the applicable Lender. Each of the Administrative Agent and the Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by using Electronic Systems or Approved Electronic Platforms, as applicable, pursuant to procedures approved by it; <u>provided</u> that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise proscribes, all such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return e-mail or other written acknowledgement), <u>provided</u> that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is

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available and identifying the website address therefor; <u>provided</u> that, for both clauses (i) and (ii) above, if such notice, e-mail or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day of the recipient.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.

SECTION 9.02 <u>Waivers; Amendments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Subject to <u>Section</u> <u>2.14(c), (d) and (e)</u> and <u>Section</u> <u>9.02(e)</u> below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; <u>provided</u> that no such agreement shall (A) increase the Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby (except that any amendment or modification of the financial covenants in this Agreement (or defined terms used in the financial covenants in this Agreement) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (B)), (C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (D) change <u>Section</u> <u>2.09(c)</u> or <u>Section</u> <u>2.18(b)</u> or (d) in a manner that would alter the ratable reduction of Commitments or the manner in which payments are shared, without the written consent of each Lender (other than any Defaulting Lender), (E) change any of the provisions of this Section or the definition of "Required Lenders"

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or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (F) change <u>Section</u> <u>2.20</u>, without the consent of each Lender (other than any Defaulting Lender), (G) release any Guarantor from its obligation under its Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender (other than any Defaulting Lender), (H) except as provided in clause (c) of this Section or in any Loan Document, release all or substantially all of the Collateral without the written consent of each Lender (other than any Defaulting Lender) or (I) contractually subordinate any of the Obligations in right of payment to any other Indebtedness or contractually subordinate any Liens on Collateral securing the Obligations to any Lien on such Collateral securing any other Indebtedness; <u>provided</u>, <u>further</u>, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing Bank hereunder without the prior written consent of the Administrative Agent or the Issuing Bank, as the case may be (it being understood that any amendment to <u>Section</u> <u>2.20</u> shall require the consent of the Administrative Agent and the Issuing Bank); <u>provided</u>, <u>further</u>, that no such agreement shall amend or modify the provisions of <u>Section</u> <u>2.06</u> without the prior written consent of the Administrative Agent and the Issuing Banks. The Administrative Agent may also amend the <u>Commitment Schedule</u> to reflect assignments entered into pursuant to <u>Section</u> <u>9.04</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Lenders and the Issuing Bank hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the Payment in Full of all Secured Obligations, and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property certifies to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to <u>Article</u> <u>VII</u>. Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

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SECTION 9.03 <u>Expenses; Limitation of Liability; Indemnity; Etc</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Expenses</u>. The Loan Parties, jointly and severally, shall pay all (i) reasonable and documented out of pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable and documented fees, charges and disbursements of one outside counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through an Electronic System or Approved Electronic Platform) of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) reasonable and documented out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any one outside counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Limitation of Liability</u>. To the extent permitted by applicable law (i) neither the Borrower nor any Loan Party shall assert, and the Borrower and each Loan Party hereby waives, any claim against the Administrative Agent, any Arranger, any Issuing Bank and any Lender, and any Related Party of any of the foregoing Persons (each such Person being called a "<u>Lender-Related Person</u>") for any Liabilities arising from the use by others of information or other materials (including, without limitation, any personal data) obtained through telecommunications, electronic or other information transmission systems (including the Internet), and (ii) no party hereto shall assert, and each such party hereby waives, any Liabilities against any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; provided that, nothing in this Section 9.03(b) shall relieve the Borrower or any Loan Party of any obligation it may have to indemnify an Indemnitee, as provided in Section 9.03(c), against any special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Indemnity</u>. The Loan Parties, jointly and severally, shall indemnify the Administrative Agent, each Arranger, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an "<u>Indemnitee</u>") against, and hold each Indemnitee harmless from, any and all Liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, (ii) the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (iii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iv) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party or a Subsidiary, or (v) any actual or prospective Proceeding relating to any of the foregoing, whether or not such Proceeding is brought by any Loan Party or their respective equity holders, Affiliates, creditors or

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any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; <u>provided</u> that such indemnity shall not, as to any Indemnitee, be available to the extent that such Liabilities or related expenses are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted primarily from the gross negligence or willful misconduct of such Indemnitee. This <u>Section</u> <u>9.03(c)</u> shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Lender Reimbursement</u>. Each Lender severally agrees to pay any amount required to be paid by any Loan Party under paragraphs (a), (b) or (c) of this <u>Section</u> <u>9.03</u> to the Administrative Agent and each Issuing Bank, and each Related Party of any of the foregoing Persons (each, an "<u>Agent-Related Person</u>") (to the extent not reimbursed by the Loan Parties and without limiting the obligation of any Loan Party to do so), ratably according to their respective Applicable Percentage in effect on the date on which such payment is sought under this Section (or, if such payment is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Applicable Percentage immediately prior to such date), and agrees to indemnify and hold each Agent-Related Person harmless from and against any and all Liabilities and related expenses, including the fees, charges and disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent-Related Person in any way relating to or arising out of the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent-Related Person under or in connection with any of the foregoing; <u>provided</u> that the unreimbursed expense or Liability or related expense, as the case may be, was incurred by or asserted against such Agent-Related Person in its capacity as such; <u>provided</u>, <u>further</u>, that no Lender shall be liable for the payment of any portion of such Liabilities, costs, expenses or disbursements that are found by a final and non-appealable decision of a court of competent jurisdiction to have resulted primarily from such Agent-Related Person's gross negligence or willful misconduct. The agreements in this Section shall survive the termination of this Agreement and Payment in Full of the Secured Obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Payments.</u> All amounts due under this Section 9.03 shall be payable promptly after written demand therefor.

SECTION 9.04 <u>Successors and Assigns</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, participations in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld or delayed) of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) the Borrower, <u>provided</u> that, the Borrower shall be deemed to have consented to an assignment of all or a portion of the Loans and Commitments unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof, and <u>provided</u>, <u>further</u>, that no consent of the Borrower shall be required for (i) an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the Administrative Agent; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the Issuing Bank;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Assignments shall be subject to the following additional conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) except in the case of an assignment to a Lender, an Affiliate of a Lender, or an Approved Fund, or an assignment of the entire remaining amount of the assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, <u>provided</u> that no such consent of the Borrower shall be required if an Event of Default under clauses (a), (h) or (i) in Article VII hereof has occurred and is continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C) the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $3,500; and

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the other Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee's compliance procedures and applicable laws, including federal and state securities laws.

For the purposes of this <u>Section</u> <u>9.04(b)</u> and <u>Section</u> <u>9.04(c)</u>, the terms "<u>Approved Fund</u>" and "<u>Ineligible Institution</u>" have the following meanings:

"<u>Approved Fund</u>" means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

"<u>Ineligible Institution</u>" means a (a) natural person, (b) a Defaulting Lender or its Lender Parent, (c) company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; <u>provided</u> that, with respect to clause (c), such company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Commitments, (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (z) has assets greater than $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business; <u>provided</u> that upon the occurrence and during the continuance of an Event of Default, any Person (other than a Lender) shall be an Ineligible Institution if after giving effect to any proposed assignment to such Person, such Person would hold more than 25% of the then outstanding Aggregate Revolving Credit Exposure or Commitments, as the case may be or (d) a Loan Party or a Subsidiary or other Affiliate of a Loan Party.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of <u>Sections</u> <u>2.15</u>, <u>2.16</u>, <u>2.17</u> and <u>9.03</u>) with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this <u>Section</u> <u>9.04</u> shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices in the United States a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amounts (and stated interest) of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the "<u>Register</u>"). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. No assignment shall be effective unless recorded in the Register pursuant to this Section 9.04(b)(iv). The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice. This Section 9.04 shall be construed so that the Obligations are at all times maintained in "registered form" within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; <u>provided</u> that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to <u>Section</u> <u>2.05</u>, <u>2.06(d)</u> or <u>(e)</u>, <u>2.07(b)</u>, <u>2.18(d)</u> or <u>9.03(d)</u>, the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Any Lender may, without the consent of, or notice to, the Borrower, the Administrative Agent or the Issuing Bank, sell participations to one or more banks or other entities (a "<u>Participant</u>") other than an Ineligible Institution in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); <u>provided</u> that (i) such Lender's obligations under this Agreement shall remain unchanged; (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and/or obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under <u>Section</u> <u>9.03(c)</u> with respect to any payments made by such Lender to its Participant(s). Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; <u>provided</u> that such agreement or instrument may provide that such Lender will

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not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to <u>Section</u> <u>9.02(b)</u> that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of <u>Sections</u> <u>2.15</u>, <u>2.16</u> and <u>2.17</u> (subject to the requirements and limitations therein, including the requirements under <u>Sections</u> <u>2.17(f)</u> (it being understood that the documentation required under <u>Section</u> <u>2.17(f)</u> shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; <u>provided</u> that such Participant (A) agrees to be subject to the provisions of <u>Sections</u> <u>2.18</u> and <u>2.19</u> as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under <u>Sections</u> <u>2.15</u> or <u>2.17</u> with respect to any participation than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrower's request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of <u>Section</u> <u>2.19(b)</u> with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of <u>Section</u> <u>9.08</u> as though it were a Lender, <u>provided</u> such Participant agrees to be subject to <u>Section</u> <u>2.18(d)</u> as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under this Agreement or any other Loan Document (the "<u>Participant Register</u>"); <u>provided</u> that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any Commitments, Loans, Letters of Credit or its other obligations under this Agreement or any other Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; <u>provided</u> that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05 <u>Survival</u>. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding

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that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of <u>Sections</u> <u>2.15</u>, <u>2.16</u>, <u>2.17</u> and <u>9.03</u> and <u>Article</u> <u>VIII</u> shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06 <u>Counterparts; Integration; Effectiveness; Electronic Execution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to (i) fees payable to the Administrative Agent and (ii) increases or reductions of the Issuing Bank Sublimit of the Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in <u>Section</u> <u>4.01</u>, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Delivery of an executed counterpart of a signature page of (x) this Agreement, (y) any other Loan Document and/or (z) any document, amendment, approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 9.01), certificate, request, statement, disclosure or authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an "<u>Ancillary Document</u>") that is an Electronic Signature transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words "execution," "signed," "signature," "delivery," and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing, (i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Borrower or any other Loan Party without further verification thereof and without any obligation to review

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the appearance or form of any such Electronic Signature and (ii) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart. Without limiting the generality of the foregoing, the Borrower and each Loan Party hereby (A) agrees that, for all purposes, including without limitation, in connection with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders, the Borrower and the Loan Parties, Electronic Signatures transmitted by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original, (B) the Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person's business, and destroy the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability as a paper record), (C) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively, including with respect to any signature pages thereto and (D) waives any claim against any Lender-Related Person for any Liabilities arising solely from the Administrative Agent's and/or any Lender's reliance on or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf. or any other electronic means that reproduces an image of an actual executed signature page, including any Liabilities arising as a result of the failure of the Borrower and/or any Loan Party to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.

SECTION 9.07 <u>Severability</u>. Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08 <u>Right of Setoff</u>. If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held, and other obligations at any time owing, by such Lender, such Issuing Bank or any such Affiliate, to or for the credit or the account of any Loan Party against any and all of the Secured Obligations owing to such Lender or such Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, Issuing Bank or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Loan Parties may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender or such Issuing Bank different from the branch office or Affiliate holding such deposit or obligated on such indebtedness; <u>provided</u> that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of <u>Section</u> <u>2.20</u> and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in

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trust for the benefit of the Administrative Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The applicable Lender, the Issuing Bank or such Affiliate shall notify the Borrower and the Administrative Agent of such setoff or application; <u>provided</u> that the failure to give such notice shall not affect the validity of such setoff or application under this Section. The rights of each Lender, each Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Bank or their respective Affiliates may have.

SECTION 9.09 <u>Governing Law; Jurisdiction; Consent to Service of Process</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the internal laws of the State of New York, but giving effect to federal laws applicable to national banks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each of the Lenders and the Administrative Agent hereby irrevocably and unconditionally agrees that, notwithstanding the governing law provisions of any applicable Loan Document, any claims brought against the Administrative Agent by any Secured Party relating to this Agreement, any other Loan Document, the Collateral or the consummation or administration of the transactions contemplated hereby or thereby shall be construed in accordance with and governed by the law of the State of New York.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York, New York, in the borough of Manhattan and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Documents, the transactions relating hereto or thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such state court or, to the extent permitted by law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in <u>Section</u> <u>9.01</u>. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10 <u>WAIVER OF JURY TRIAL</u>. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY 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 FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11 <u>Headings</u>. Article and Section headings and the **Table of Contents** used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 9.12 <u>Confidentiality</u>. Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower, (h) to holders of Equity Interests in the Borrower, (i) to any Person providing a Guarantee of all or any portion of the Secured Obligations, (j) on a confidential basis to (1) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided for herein or (2) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of identification numbers with respect to the credit facilities provided for herein, or (k) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than the Borrower. For the purposes of this

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Section, "<u>Information</u>" means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Borrower and other than information pertaining to this Agreement provided by arrangers to data service providers, including league table providers, that serve the lending industry; <u>provided</u> that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

**EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN <u>SECTION</u> <u>9.12</u> FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.** 

**ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.** 

SECTION 9.13 <u>Several Obligations;</u> <u>Nonreliance</u><u>; Violation of Law</u>. The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Federal Reserve Board) for the repayment of the Borrowings provided for herein. Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law.

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SECTION 9.14 <u>USA PATRIOT Act</u>. Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA PATRIOT Act and Beneficial Ownership Regulation.

SECTION 9.15 <u>Disclosure</u>. Each Loan Party, each Lender and the Issuing Bank hereby acknowledges and agrees that the Administrative Agent, each Arranger and/or each of their respective Affiliates from time to time may hold investments in, make other loans to or have other relationships with, any of the Loan Parties and their respective Affiliates.

SECTION 9.16 <u>Appointment for Perfection</u>. Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession or control. Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent's request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent's instructions.

SECTION 9.17 <u>Interest Rate Limitation</u>. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the "<u>Charges</u>"), shall exceed the maximum lawful rate (the "<u>Maximum Rate</u>") which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the NYFRB Rate to the date of repayment, shall have been received by such Lender.

SECTION 9.18 <u>No Fiduciary Duty, etc</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The Borrower acknowledges and agrees, and acknowledges its Subsidiaries' understanding, that no Credit Party will have any obligations except those obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm's length contractual counterparty to the Borrower with respect to the Loan Documents and the transactions contemplated herein and therein and not as a financial advisor or a fiduciary to, or an agent of, the Borrower or any other person. The Borrower agrees that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby. Additionally, the Borrower acknowledges and agrees that no Credit Party is advising the Borrower as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction. The Borrower shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated herein or in the other Loan Documents, and the Credit Parties shall have no responsibility or liability to the Borrower with respect thereto.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Borrower further acknowledges and agrees, and acknowledges its Subsidiaries' understanding, that each Credit Party, together with its Affiliates, is a full service securities or banking firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, any Credit Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, the Borrower and other companies with which the Borrower may have commercial or other relationships. With respect to any securities and/or financial instruments so held by any Credit Party or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In addition, the Borrower acknowledges and agrees, and acknowledges its Subsidiaries' understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which the Borrower may have conflicting interests regarding the transactions described herein and otherwise. No Credit Party will use confidential information obtained from the Borrower by virtue of the transactions contemplated by the Loan Documents or its other relationships with the Borrower in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies. The Borrower also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to the Borrower, confidential information obtained from other companies.

SECTION 9.19 <u>Marketing Consent</u> The Borrower hereby authorizes JPMorgan and its affiliates (collectively, the "<u>JPMorgan Parties</u>"), at their respective sole expense, and without any prior approval by the Borrower, to include the Borrower's name and logo in advertising, marketing, tombstones, case studies and training materials, and to give such other publicity to this Agreement as JPMorgan Parties may from time to time determine in their sole discretion. The foregoing authorization shall remain in effect unless the Borrower notifies JPMorgan in writing that such authorization is revoked.

SECTION 9.20 <u>Acknowledgement and Consent to Bail-In of Affected Financial Institutions</u>. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the effects of any Bail-In Action on any such liability, including, if applicable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) a reduction in full or in part or cancellation of any such liability;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.

SECTION 9.21 <u>Acknowledgement Regarding Any Supported QFCs</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support "QFC Credit Support" and each such QFC a "Supported QFC"), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the "U.S. Special Resolution Regimes") in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event a Covered Entity that is party to a Supported QFC (each, a "Covered Party") becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

ARTICLE X

<u>GUARANTY</u> 

SECTION 10.01 <u>Guaranty</u>. Each Guarantor (other than those that have delivered a separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise,

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and at all times thereafter, of the Obligations and all costs and expenses including, without limitation, all court costs and reasonable attorneys' and paralegals' fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, the Borrower, any Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the "<u>Guaranteed Obligations</u>"); <u>provided</u>, <u>however</u>, that the definition of "Guaranteed Obligations" shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

SECTION 10.02 <u>Guaranty of Payment</u>. This Guaranty is a guaranty of payment and not of collection. Each Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue the Borrower, any Guarantor, any other guarantor of, or any other Person obligated for all or any part of the Guaranteed Obligations (each, an "<u>Obligated Party</u>"), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

SECTION 10.03 <u>No Discharge or Diminishment of Guaranty</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Except as otherwise provided for herein, the obligations of each Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the Payment in Full of the Guaranteed Obligations), including: (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of the Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any other Person, whether in connection herewith or in any unrelated transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The obligations of each Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Further, the obligations of any Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the Borrower for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the Payment in Full of the Guaranteed Obligations).

SECTION 10.04 <u>Defenses Waived</u>. To the fullest extent permitted by applicable law, each Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of the Borrower, any Guarantor or any other Obligated Party, other than the Payment in Full of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party, or any other Person. Each Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder. The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Guarantor under this Guaranty, except to the extent the Guaranteed Obligations have been Paid in Full. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against any Obligated Party or any security.

SECTION 10.05 <u>Rights of Subrogation</u>. No Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

SECTION 10.06 <u>Reinstatement; Stay of Acceleration</u>. If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), each Guarantor's obligations under this Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of

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this Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Guarantors forthwith on demand by the Administrative Agent.

SECTION 10.07 <u>Information</u>. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Guarantor assumes and incurs under this Guaranty, and agrees that none of the Administrative Agent, the Issuing Bank or any Lender shall have any duty to advise any Guarantor of information known to it regarding those circumstances or risks.

SECTION 10.08 <u>Termination</u>. Each of the Lenders and the Issuing Bank may continue to make loans or extend credit to the Borrower based on this Guaranty until five (5) days after it receives written notice of termination from any Guarantor. Notwithstanding receipt of any such notice, each Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations. Nothing in this <u>Section</u> <u>10.08</u> shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or remedies the Administrative Agent or any Lender may have in respect of, any Default or Event of Default that shall exist under <u>Article</u> <u>VII</u> hereof as a result of any such notice of termination.

SECTION 10.09 <u>Reserved</u>.

SECTION 10.10 <u>Maximum Liability</u>. Notwithstanding any other provision of this Guaranty, the amount guaranteed by each Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, Uniform Voidable Transactions Act or similar statute or common law. In determining the limitations, if any, on the amount of any Guarantor's obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Guarantor may have under this Guaranty, any other agreement or applicable law shall be taken into account.

SECTION 10.11 <u>Contribution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) To the extent that any Guarantor shall make a payment under this Guaranty (a "<u>Guarantor Payment</u>") which, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Guarantor if each Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Guarantor's "Allocable Amount" (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guarantor Payment, the Payment in Full of the Guaranteed Obligations and

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the termination of this Agreement, such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) As of any date of determination, the "Allocable Amount" of any Guarantor shall be equal to the excess of the fair saleable value of the property of such Guarantor over the total liabilities of such Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities, calculated, without duplication, assuming each other Guarantor that is also liable for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Guarantors as of such date in a manner to maximize the amount of such contributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) This <u>Section</u> <u>10.11</u> is intended only to define the relative rights of the Guarantors, and nothing set forth in this <u>Section</u> <u>10.11</u> is intended to or shall impair the obligations of the Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Guaranty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor or Guarantors to which such contribution and indemnification is owing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) The rights of the indemnifying Guarantors against other Guarantors under this <u>Section</u> <u>10.11</u> shall be exercisable upon the Payment in Full of the Guaranteed Obligations and the termination of this Agreement.

SECTION 10.12 <u>Liability Cumulative</u>. The liability of each Loan Party as a Guarantor under this <u>Article</u> <u>X</u> is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

SECTION 10.13 <u>Keepwell</u>. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guarantee in respect of a Swap Obligation (<u>provided</u>, <u>however</u>, that each Qualified ECP Guarantor shall only be liable under this <u>Section</u> <u>10.13</u> for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this <u>Section</u> <u>10.13</u> or otherwise under this Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this <u>Section</u> <u>10.13</u> shall remain in full force and effect until the termination of all Swap Obligations. Each Qualified ECP Guarantor intends that this <u>Section</u> <u>10.13</u> constitute, and this <u>Section</u> <u>10.13</u> shall be deemed to constitute, a "keepwell, support, or other agreement" for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

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[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective authorized officers as of the day and year first above written.

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| | |
|:---|:---|
|  TURO INC. | TURO INC. |
|  By: | /s/ Charles Fisher |
|  Name: | Charles Fisher |
|  Title: | Chief Financial Officer |

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| | |
|:---|:---|
| JPMORGAN CHASE BANK, N.A., individually, and as Administrative Agent and Issuing Bank | JPMORGAN CHASE BANK, N.A., individually, and as Administrative Agent and Issuing Bank |
|  By: | /s/ Alexander Freedman |
|  Name: | Alexander Freedman |
|  Title: | Vice President |

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[Signature Page to Credit Agreement]

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| | |
|:---|:---|
| CITIBANK, N.A. | CITIBANK, N.A. |
|  By: | /s/ Kristina Skalskaya |
|  Name: | Kristina Skalskaya |
|  Title: | SVP, Technology |

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| | |
|:---|:---|
| MORGAN STANLEY SENIOR FUNDING, INC. | MORGAN STANLEY SENIOR FUNDING, INC. |
|  By: | /s/ Michael King |
|  Name: | Michael King |
|  Title: | Vice President |

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| | |
|:---|:---|
| MUFG BANK, LTD. | MUFG BANK, LTD. |
|  By: | /s/ Marie Alava |
|  Name: | Marie Alava |
|  Title: | Director |

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[Signature Page to Credit Agreement]

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COMMITMENT SCHEDULE

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| | |
|:---|:---|
| **Lender** | **Commitment** |
|  JPMorgan Chase Bank, N.A. | $45000000.00 |
|  Citibank, N.A. | $20000000.00 |
|  MUFG Bank, Ltd. | $20000000.00 |
|  Morgan Stanley Senior Funding, Inc. | $15000000.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Total** | $100000000 |

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Commitment Schedule

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**<u>SCHEDULE 3.05</u>**

<u>Properties, etc.</u> 

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**<u>SCHEDULE 3.06</u>**

<u>Disclosed Matters</u> 

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**<u>SCHEDULE 3.12</u>**

<u>Material Agreements</u> 

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**<u>SCHEDULE 3.14</u>**

<u>Insurance</u> 

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**<u>SCHEDULE 3.15</u>**

<u>Capitalization and Subsidiaries</u> 

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**<u>SCHEDULE 3.24</u>**

<u>Affiliate Transactions</u> 

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**<u>SCHEDULE 6.01</u>**

<u>Existing Indebtedness</u> 

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**<u>SCHEDULE 6.02</u>**

<u>Existing Liens</u> 

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**<u>SCHEDULE 6.04</u>**

<u>Existing Investments</u> 

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**<u>SCHEDULE 6.10</u>**

<u>Existing Restrictions</u> 

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**EXHIBIT A** 

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this "<u>Assignment and Assumption</u>") is dated as of the Effective Date set forth below and is entered into by and between [*Insert name of Assignor*] (the "<u>Assignor</u>") and [*Insert name of Assignee*] (the "<u>Assignee</u>"). Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, supplemented or otherwise modified from time to time, the "<u>Credit Agreement</u>"), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in <u>Annex</u> <u>I</u> attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor's rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit and guarantees included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and other rights of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the "<u>Assigned Interest</u>"). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

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| | | |
|:---|:---|:---|
| 1. | Assignor: |  |
| 2. | Assignee: |  |
|  |  | [and is an Affiliate/Approved Fund of [*identify Lender*]] |
| 3. | Borrower: |  |
| 4. | Administrative Agent: | JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement |
| 5. | Credit Agreement: | The $100,000,000 Credit Agreement dated as of February 6, 2023 among Turo Inc., the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the other parties thereto. |
| 6. | Assigned Interest: |  |

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Exhibit A - 1

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| | | |
|:---|:---|:---|
| Facility Assigned | Aggregate Amount of<br>Commitment/Loans for<br>all Lenders | Percentage<br>Assigned of<br>Commitment/Loans<sup>1</sup> |
|  | $| $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% |
|  | $| $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% |
|  | $| $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% |

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Effective Date: [_____________ ___], 20[___] [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee's compliance procedures and applicable laws, including federal and state securities laws. The terms set forth in this Assignment and Assumption are hereby agreed to:

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| |
|:---|
|  <u>ASSIGNOR</u> |
|  [NAME OF ASSIGNOR] |
|  By: |
|  Name: |
|  Title: |

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| |
|:---|
|  <u>ASSIGNEE</u> |
|  [NAME OF ASSIGNEE] |
|  By: |
|  Name: |
|  Title: |

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<sup>1</sup> Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder. 

Exhibit A - 2

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| |
|:---|
|  Consented to and Accepted: |
| JPMORGAN CHASE BANK, N.A., as Administrative Agent and Issuing Bank |
|  By: |
|  Name: |
|  Title: |

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| |
|:---|
|  [Consented to: |
| TURO INC. |
|  By: |
|  Name: |
|  Title: |

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Exhibit A - 3

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ANNEX 1 to

ASSIGNMENT AND ASSUMPTION

$100,000,000 REVOLVING CREDIT AGREEMENT

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. <u>Representations and Warranties</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Assignor</u>. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any Subsidiary or Affiliate or any other Person obligated in respect of any Loan Document, (iv) any requirements under applicable law for the Assignee to become a lender under the Credit Agreement or any other Loan Document or to charge interest at the rate set forth therein from time to time or (v) the performance or observance by the Borrower, any Subsidiary or Affiliate, or any other Person of any of their respective obligations under any Loan Document.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.2. <u>Assignee</u>. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement and under applicable law that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of this type, (v) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section <u>5.01</u> thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent, any Arranger, the Assignor or any other Lender or any of their respective Related Parties, and (vi) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, any Arranger, the Assignor or any other Lender or any of their respective Related Parties, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

Annex 1 - 1

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. <u>Payments</u>. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. <u>General Provisions</u>. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Acceptance and adoption of the terms of this Assignment and Assumption by the Assignee and the Assignor by Electronic Signature (as defined in the Credit Agreement) or delivery of an executed counterpart of a signature page of this Assignment and Assumption by any Approved Electronic Platform (as defined in the Credit Agreement) shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

Annex 1 - 2

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**EXHIBIT B-1** 

**[FORM OF] BORROWING REQUEST** 

**Turo Inc.** 

JPMorgan Chase Bank, N.A.

131 S Dearborn St, Floor 04

Chicago, IL, 60603-5506, United States

Attention: Natavia Johnson, Loan Servicing Associate I

Email: Jpm.agency.servicing.1@jpmorgan.com / natavia.johnson@chase.com

Fax No: 888-499-5663

Telephone No: (312) 336-0704

Date:

Ladies and Gentlemen:

This Borrowing Request is furnished pursuant to <u>Section</u> <u>2.03</u> of that certain Credit Agreement dated as of February 6, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the "<u>Agreement</u>") among Turo Inc., (the "<u>Borrower</u>"), the other Loan Parties, the lenders party thereto and JPMorgan Chase Bank, N.A. ("<u>JPMorgan</u>"), as Administrative Agent for the Lenders. Unless otherwise defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the Agreement. The Borrower represents that, as of this date, the conditions precedent set forth in <u>Section</u> <u>4.02</u> are satisfied.

The Borrower hereby notifies JPMorgan of its request for the following Borrowing:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Aggregate Amount of the Borrowing:
$[ <u> </u> ]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Borrowing Date of the Borrowing (must be a Business Day):

[<u> </u>]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Type of Borrowing: [ABR Borrowing] [Term Benchmark Borrowing].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. If a Term Benchmark Borrowing, the duration of Interest Period:

One Month<u> </u>

Three Months<u> </u>

Six Months<u> </u>

---

| |
|:---|
|  Turo Inc. |
|  By: |
|  Name: |
|  Title: |

---

Exhibit B-1 - 1

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**EXHIBIT B-2** 

**[FORM OF] INTEREST ELECTION REQUEST** 

Turo Inc.

JPMorgan Chase Bank, N.A.

10 South Dearborn, Floor L2

Suite IL1-1145

Chicago, IL, 60603-2300

Attention: Natavia Johnson

Fax No: 888-499-5663

Date:

Ladies and Gentlemen:

This Interest Election Request is furnished pursuant to <u>Section</u> <u>2.08(c)</u> of that certain Credit Agreement dated as of February 6, 2023 (as amended, restated, supplemented or otherwise modified from time to time, the "<u>Agreement</u>") among Turo Inc., (the "<u>Borrower</u>"), the other Loan Parties, the lenders party thereto and JPMorgan Chase Bank, N.A. ("<u>JPMorgan</u>"), as Administrative Agent for the Lenders. Unless otherwise defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the Agreement.

The Borrower is hereby requesting to convert or continue certain Borrowings as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Borrowing to which this Interest Election Request applies:

[<u> </u>]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Date of conversion/continuation (must be a Business Day):
[ <u> </u> ],
20[ <u> </u> ]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Amount of Borrowings being converted/continued:
$[ <u> </u> ]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Nature of conversion/continuation:

☐ a. Conversion of ABR Borrowings to Term Benchmark Borrowings

☐ b. Conversion of Term Benchmark Borrowings to ABR Borrowings

☐ c. Continuation of Term Benchmark Borrowings as such

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. If Borrowings are being continued as or converted to Term Benchmark Borrowings, the duration of the new
Interest Period that commences on the conversion/continuation date: One Month <u> </u> Three Months <u> </u> Six Months <u> </u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. The undersigned officer of Borrower certifies that, both before and after giving effect to the request above,
no Default or Event of Default has occurred and is continuing under the Agreement.

---

| |
|:---|
|  Turo Inc. |
|  By: |
|  Name: |
|  Title: |

---

Exhibit B-2 - 1

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**EXHIBIT C-1** 

**[FORM OF]** 

**U.S. TAX COMPLIANCE CERTIFICATE** 

**(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)** 

Reference is hereby made to the Credit Agreement dated as of February 6, 2023 (as amended, supplemented or otherwise modified from time to time, the "<u>Credit Agreement</u>"), among Turo Inc., and each lender from time to time party thereto.

Pursuant to the provisions of <u>Section</u> <u>2.17</u> of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

---

| |
|:---|
|  By:<u> </u> |
|  Name:<u> </u> |
|  Title:<u> </u> |

---

Date:<u> </u><u> </u>, 20[ ]

Exhibit C-1 - 1

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**EXHIBIT C-2** 

**[FORM OF]** 

**U.S. TAX COMPLIANCE CERTIFICATE** 

**(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)** 

Reference is hereby made to the Credit Agreement dated as of February 6, 2023 (as amended, supplemented or otherwise modified from time to time, the "<u>Credit Agreement</u>"), among Turo Inc. and each lender from time to time party thereto.

Pursuant to the provisions of <u>Section</u> <u>2.17</u> of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

---

| |
|:---|
|  By:<u> </u> |
|  Name:<u> </u> |
|  Title:<u> </u> |

---

Date: <u>[ </u>], 20[ ]

Exhibit C-2 - 1

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**EXHIBIT C-3** 

**[FORM OF]** 

**U.S. TAX COMPLIANCE CERTIFICATE** 

**(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)** 

Reference is hereby made to the Credit Agreement dated as of [<u> </u>] 2023 (as amended, supplemented or otherwise modified from time to time, the "<u>Credit Agreement</u>"), among Turo Inc., and each lender from time to time party thereto.

Pursuant to the provisions of <u>Section</u> <u>2.17</u> of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by a withholding statement together with an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

---

| |
|:---|
|  By:<u> </u> |
|  Name:<u> </u> |
|  Title:<u> </u> |

---

Date: <u>[ </u>], 20[<u> </u>]

Exhibit C-3 - 1

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**EXHIBIT C-4** 

**[FORM OF]** 

**U.S. TAX COMPLIANCE CERTIFICATE** 

**(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)** 

Reference is hereby made to the Credit Agreement dated as of February 6, 2023 (as amended, supplemented or otherwise modified from time to time, the "<u>Credit Agreement</u>"), among Turo Inc., and each lender from time to time party thereto.

Pursuant to the provisions of <u>Section</u> <u>2.17</u> of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any promissory note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any promissory note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by a withholding statement together with an IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate prior to the first payment to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

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| |
|:---|
|  By:<u> </u> |
|  Name:<u> </u> |
|  Title:<u> </u> |

---

Date: <u>[ </u>], 20[<u> </u>]

Exhibit C-4 - 1

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**EXHIBIT D** 

**COMPLIANCE CERTIFICATE** 

To: The Lenders party to the

Credit Agreement described below

This Compliance Certificate ("<u>Certificate</u>"), for the period ended [_______ __], 20[__], is furnished pursuant to that certain Credit Agreement dated as of February 6, 2023 (as amended, modified, renewed or extended from time to time, the "<u>Agreement</u>") among Turo Inc. (the "<u>Borrower</u>"), the other Loan Parties, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders and as an Issuing Bank. Unless otherwise defined herein, capitalized terms used in this Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1. I am the
[ <u> </u> ] of the Borrower and I am authorized to deliver this Certificate on
behalf of the Borrower and its Subsidiaries;

2. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a
detailed review of the compliance of the Borrower and its Subsidiaries with the Agreement during the accounting period covered by the attached financial statements (the " <u>Relevant Period</u> ");

3. The attached financial statements of the Borrower and, as applicable, its Subsidiaries and/or Affiliates for
the Relevant Period: [(a)] have been prepared on an accounting basis (the " <u>Accounting Method</u> ") consistent with the requirements of the Agreement and, except as may have been otherwise expressly agreed to in the Agreement, in
accordance with GAAP consistently applied[, and (b) to the extent that the attached are not the Borrower's annual fiscal year end statements, are subject to normal year-end audit adjustments and the
absence of footnotes];<sup>2</sup>

4. The examinations described in paragraph 2 did not disclose and I have no knowledge of, except as set forth
below, (a) the existence of any condition or event which constitutes a Default or an Event of Default under the Agreement or any other Loan Document during or at the end of the Relevant Period or as of the date of this Certificate or
(b) any change in the Accounting Method or in the application thereof that has occurred since the date of the annual financial statements delivered to the Administrative Agent in connection with the closing of the Agreement or subsequently
delivered as required in the Agreement;

5. I hereby certify that, except as set forth below, no Loan Party has changed (i) its name, (ii) its
chief executive office, (iii) its principal place of business, (iv) the type of entity it is or (v) its state of incorporation or organization without having given the Administrative Agent the notice required by Section 4.15 of
the Security Agreement;

------

<sup>2</sup> Clause (b) is only required for quarterly financial statements.

Exhibit D - 1

------

7. <u>Schedule I</u> attached hereto sets forth financial data and computations evidencing the Borrower's
compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct; and

8. <u>Schedule II</u> hereto sets forth the computations necessary to determine the Applicable Rate commencing on
the Business Day this Certificate is delivered.

Described below are the exceptions, if any, referred to in paragraph 4 hereof by listing, in detail, the (i) nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event or (ii) change in the Accounting Method or the application thereof and the effect of such change on the attached financial statements:

____________________________________________________________________________________________________

The foregoing certifications, together with the computations set forth in <u>Schedule</u> <u>I</u> and <u>Schedule</u> <u>II</u> hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this [<u> </u>] day of [<u> </u>,<u> </u>].

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| |
|:---|
|  By: |
|  Name: |
|  Title: |

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Exhibit D - 2

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Schedule I to Compliance Certificate

Compliance as of<u> </u>,<u> </u><u> </u> (the "<u>Compliance Test Date</u>") with

Section 6.12 of the Agreement

[Schedule I must include detailed calculation tables for all components of the financial covenant calculations. Sample calculation tables are set forth below.]

**Financial Covenant.**

**Total Liquidity.** The Borrower and its Subsidiaries on a consolidated basis shall not permit, at any time, its Total Liquidity to be less than $25,000,000.

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| | |
|:---|:---|
|  Total cash and Cash Equivalents (other than Restricted Cash) as of the Compliance Test Date<sup>3</sup> | $|
|  Aggregate unused Commitments as of the Compliance Test Date | $|
|  **Total Liquidity** | **$** |

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Compliance as of the Compliance Test Date shown above: [<u> </u>] Yes [<u> </u>] No

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<sup>3</sup> Tested quarterly.

Schedule I - 1

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Schedule II to Compliance Certificate

Borrower's Calculation of Adjusted EBITDA for purposes of determining the Applicable Rate

Schedule II - 1

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**EXHIBIT F** 

**JOINDER AGREEMENT** 

THIS JOINDER AGREEMENT (this "<u>Agreement</u>"), dated as of [___________], is entered into between [__________________________], a [_________________] (the "<u>New Subsidiary</u>") and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the "<u>Administrative Agent</u>") under that certain Credit Agreement dated as of February 6, 2023 (as the same may be amended, modified, extended or restated from time to time, the "<u>Credit Agreement</u>") among Turo Inc. (the "<u>Borrower</u>"), the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent for the Lenders. All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

The New Subsidiary and the Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement and shall have all of the obligations of a Loan Party and a Guarantor thereunder as if it had executed the Credit Agreement. The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation (a) all of the representations and warranties of the Loan Parties set forth in <u>Article</u> <u>III</u> of the Credit Agreement, \*[and]\* (b) all of the covenants set forth in <u>Articles</u> <u>V</u> and <u>VI</u> of the Credit Agreement \*[and (c) all of the guaranty obligations set forth in <u>Article</u> <u>X</u> of the Credit Agreement. Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in <u>Section</u> <u>10.10</u> and <u>10.13</u> of the Credit Agreement, hereby guarantees, jointly and severally with the other Guarantors, to the Administrative Agent and the Lenders, as provided in <u>Article</u> <u>X</u> of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and severally together with the other Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.]\*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such Collateral Documents (and such other documents and instruments) as requested by the Administrative Agent in accordance with the Credit Agreement.

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. The address of the New Subsidiary for purposes of <u>Section</u> <u>9.01</u> of the Credit Agreement is as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Secured Parties, has caused the same to be accepted by its authorized officer, as of the day and year first above written.

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| |
|:---|
|  [NEW SUBSIDIARY] |
|  By: |
|  Name: |
|  Title: |

---

---

| |
|:---|
|  Acknowledged and accepted: |
| JPMORGAN CHASE BANK, N.A., as Administrative Agent |
|  By: |
|  Name: |
|  Title: |

---

## Exhibit 23.1

**Exhibit 23.1** 

**Consent of Independent Registered Public Accounting Firm** 

We consent to the use of our report dated March 23, 2023, with respect to the consolidated financial statements of Turo Inc. and subsidiaries, included herein, and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

San Francisco, California

March 23, 2023

## Exhibit 99.3

**Exhibit 99.3** 

**Consent of SCIMA LLC** 

We hereby consent to the use of our name, SCIMA LLC, and our industry data and report titled *Economic Opportunity: Estimating the Economic Benefits of Hosting with Turo (February 2022)* in the Registration Statement on Form S-1 (together with any amendments or supplements thereto) to be filed by Turo Inc. a Delaware corporation, and in the prospectus contained therein

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| | |
|:---|:---|
| Dated: March 15, 2023 | Dated: March 15, 2023 |
| SCIMA LLC | SCIMA LLC |
| By: | /s/ Justin Hong |
| Name: | Justin Hong |
| Title: | Principal/Owner |

---