Document:

ex_181801.htm

Exhibit 10.3

 

CERTAIN INFORMATION OF THIS DOCUMENT HAS BEEN REDACTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. INFORMATION THAT WAS OMITTED HAS BEEN NOTED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK “[***].”

 

PRECEDENT AGREEMENT

FOR NATURAL GAS TRANSPORTATION SERVICE

FOR VALLEY CROSSING PIPELINE

 

This Precedent Agreement for Natural Gas Transportation Service (“Precedent Agreement”) is made and entered into effective as of this 2nd day of March, 2020 (the “Effective Date”), by and between Rio Grande LNG Gas Supply LLC, a Texas limited liability company having its principal office at 1000 Louisiana Street, 39th Floor, Houston, Texas, 77002 (“Customer”), and Valley Crossing Pipeline, LLC, a Delaware limited liability company with offices at 5400 Westheimer Court, Houston, Texas 77056 (“Transporter”). Customer and Transporter are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Affiliates of Customer are developing a natural gas liquefaction and export facility for the production and delivery of liquefied natural gas to be located at the Port of Brownsville, Texas, near a parcel of land having an address of 48326 Highway 48, Port Isabel, Texas 78587 (such facility, the “RGLNG Facility”);

 

WHEREAS, Transporter and Customer intend to enter into, or cause an Affiliate to enter into, an interconnection agreement (the “Interconnection Agreement”) in order to allow Customer or its Affiliate to connect certain facilities to be constructed by or on behalf of Customer or its Affiliate to Transporter’s Brownsville Pipeline (as defined in the General Terms & Conditions applicable to the Intrastate Header TSA and Intrastate Pipeline TSA (as amended from time to time by Transporter, the “GTs&Cs”)), as further set forth herein;

 

WHEREAS, Transporter and Customer further intend to enter into two separate but related interruptible transportation service agreements for (1) intrastate natural gas transportation service on Transporter’s Nueces Header (as defined in the GTs&Cs) connected to the Brownsville Pipeline (the “Intrastate Header TSA”) and on the Brownsville Pipeline (the “Intrastate Pipeline TSA” and, together with the Intrastate Header TSA, the “Intrastate TSAs”) and (2) Natural Gas Policy Act (“NGPA”) Section 311 interstate natural gas transportation service on Transporter’s Nueces Header (the “311 Header TSA”) and the Brownsville Pipeline (the “311 Pipeline TSA”; together with the Intrastate Header TSA, the Intrastate Pipeline TSA, and the 311 Header TSA, the “TSAs” and each individually a “TSA”), pursuant to which Transporter will provide interruptible transportation service on Transporter’s system from certain receipt point(s) on Transporter’s Nueces Header (each a “Receipt Point”) to a proposed delivery point specified and further defined in the Interconnection Agreement (the “Delivery Point”), as further set forth herein; and

 

 

 

 

WHEREAS, simultaneously with the execution of this Precedent Agreement, Customer has executed a precedent agreement for natural gas transportation service with an Affiliate of Transporter to provide Customer with firm transportation service from such Affiliate’s Rio Bravo Pipeline (the “RBPL PA”). The terms “Increment”, “Commissioning Start Date”, “Commissioning Period”, “Proposed CSD”, and “Required Completion Date” when used in this Agreement shall have the meanings ascribed to them in the RBPL PA;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and intending to be legally bound hereby, Customer and Transporter agree as follows:

 

	
			1.

				
			Transporter and Customer Obligations.

			

 

1.1     Promptly after the Effective Date, but in no event more than [***] thereafter, the Parties shall enter into, or shall cause their respective Affiliates to enter into an Interconnection Agreement consistent with prudent industry practices and this Section 1.1. “Affiliates” shall mean, with respect to an entity, any entity that controls, is controlled by, or is under common control with, the relevant Party, with control meaning that an entity, directly or indirectly, has more than fifty percent (50%) of the voting rights in such entity, or otherwise has the ability to manage the operations of such entity. The Parties hereby agree that, pursuant to the Interconnection Agreement:

 

(a)     Transporter (or an Affiliate of Transporter that is party to the Interconnection Agreement) shall, at its sole cost and expense, construct, install, own, operate, and maintain tap, riser and valve facilities (the “Transporter Facilities”), which shall connect to the Customer Facilities (as defined below);

 

(b)     The maximum daily quantity of gas that the Transporter Facilities shall be required to deliver on an interruptible basis shall be [***] per day (“Dth/d”);

 

(c)     Customer (or an Affiliate of Customer that is party to the Interconnection Agreement) shall, at its sole cost and expense, construct, install, own, operate, and maintain a custody transfer meter and such other facilities as necessary in order to receive gas from the Transporter Facilities (collectively, the “Customer Facilities”);

 

(d)     The Customer Facilities shall be capable of receiving at least [***] Dth/d of gas;

 

(e)     The Parties shall have such other rights and responsibilities as are customary in interconnection agreements between intrastate natural gas pipeline facilities of similar size in the state of Texas.

 

1.2     Customer shall be solely responsible for securing the supply of gas to be transported on the Nueces Header and Brownsville Pipeline pursuant to the TSAs.

 

1.3     Promptly after the Effective Date, but in no event more than [***] thereafter, Transporter shall provide Customer an illustrative form of TSAs, which will be consistent with prudent industry practices. No later than [***] prior to the Requested In-Service Date (with respect to the first Increment) or the Requested Increment ISD (with respect to any Increment other than the first Increment), the Parties shall enter into a TSA for each such Increment, pursuant to which:

 

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(a)     Transporter shall provide interruptible transportation service for up to [***] Dth/d of gas (exclusive of fuel and LAUF) from certain Receipt Points to the Delivery Point pursuant to such terms and conditions as set forth in the applicable TSA, the Statement of Operating Conditions for NGPA Section 311 interstate natural gas transportation service (as amended from time to time by Transporter, the “SOCs”) filed with the Federal Energy Regulatory Commission applicable to the 311 Header TSA and 311 Pipeline TSA, and the GTs&Cs;

 

(b)     The TSA for the first Increment shall have a term commencing on the In-Service Date and extending until the last day of the Commissioning Period for such first Increment, and the TSA for each Increment other than the first Increment shall have a term commencing on the Requested Increment ISD for such Increment and extending until the the last date of the Commissioning Period for such Increment;

 

(c)     The commodity charge in the TSAs will equal the Reservation Rate applicable to the Increment, as defined and set forth in the RBPL PA;

 

(d)     Until the Commissioning Start Date for a given Increment, for each Day during the term of the Intrastate TSAs, Customer shall pay Transporter an amount equal to the Reservation Rate applicable to the Increment (as such terms are defined in the RBPL PA) designed to serve the liquefaction train undergoing commissioning at the RGLNG Facility multiplied by [***].

 

1.4     Subject to Section 6 hereof, each Party agrees, on an ongoing basis, to provide such additional data and information to the other Party as such other Party may reasonably require in order to commence any engineering, design, or other preparations as such other Party deems appropriate in order to construct the Transporter Facilities or Customer Facilities, as applicable.

 

	
			2.

				
			Notices and Commencement of Service. Within [***] following the date Customer or Customer’s Affiliate issues to its EPC contractor a full notice to proceed with construction activities for the RGLNG Facility (“FNTP”), Customer shall provide written notice to Transporter of such FNTP (the “VCP Notice”) and shall include in the VCP Notice the estimated date by which Customer anticipates being ready to receive gas at the Customer Facilities (the “Requested In-Service Date”). Transporter shall have the right, in its sole discretion, to proceed with the installation of the Transporter Facilities at any time following receipt of the VCP Notice, provided always that the Transporter Facilities are available to deliver gas to the Customer Facilities no later than the later of (i) [***] after Transporter’s receipt of the VCP Notice, and (ii) the date that is [***] prior to the Required Completion Date. [***]. Following the In-Service Date, no later than [***] prior to the Proposed CSD for a given Increment other than the first Increment, Customer shall provide written notice to Transporter of the estimated date by which Customer anticipates requiring gas from Transporter for the train attributable to such Increment (“Requested Increment ISD”), which estimated date shall be no later than the date that is [***] after the Required Completion Date for such Increment. In all cases, Customer shall not have the right to issue such notice or a VCP Notice in relation to any Increment after [***].

			

 

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			3.

				
			Project Design and Approvals. From and after the Effective Date until termination of this Precedent Agreement, and notwithstanding whether Customer has issued FNTP or delivered the VCP Notice, each Party shall have the right to proceed with efforts it determines, in its sole discretion, are necessary or appropriate to obtain from all governmental and regulatory authorities having competent jurisdiction over the Transporter Facilities or Customer Facilities (as applicable to Transporter and Customer, respectively) the authorizations, approvals, permits, waivers and/or exemptions necessary to design, engineer, construct, and install such facilities and acquire materials, supplies, properties, rights-of-way, and any other preparations necessary to construct such facilities that will be subject to the Interconnect Agreement or, in the case of Transporter, to provide the contemplated transportation service that will be subject to the TSAs.

			

 

	
			4.

				
			Termination.

			

 

4.1     Customer Termination. If (i) [***] or (ii) Customer fails to deliver the VCP Notice on or before December 31, 2023, Customer may thereafter terminate this Precedent Agreement in full by providing written notice of termination to Transporter, which termination shall be effective [***] following such notice. Notwithstanding the foregoing, if the conditions giving rise to termination under this Section 4.1 are cured prior to the effective date of the noticed termination, then such termination will not be effective.

 

4.2     Transporter Termination. If (i) [***] or (ii) Customer fails to deliver the VCP Notice on or before December 31, 2023, Transporter may thereafter terminate this Precedent Agreement (and any TSA executed as of such time) in full by providing written notice of termination to Customer, which termination shall be effective [***] following such notice. Notwithstanding the foregoing, if the conditions giving rise to termination under this Section 4.2 are cured prior to the effective date of the noticed termination, then such termination will not be effective.

 

4.3    Termination on the Effectiveness of the TSAs. This Precedent Agreement shall be effective as of the date first written above and, unless terminated earlier pursuant to the provisions of this Precedent Agreement, shall terminate upon the later of the effectiveness of the Interconnect Agreement and the effectiveness of a TSA. Thereafter, the Parties’ rights and obligations related to the matters set forth herein shall be determined pursuant to the terms and conditions of the Interconnect Agreement, the TSAs, and Transporter’s GTs&Cs and SOCs, as applicable. Notwithstanding any expiration or termination of this Precedent Agreement, for any reason, the rights and obligations of each Party that, by their nature, survive such termination or expiration, including but not limited to those regarding limitation of liability, shall each survive the expiration or termination of the Precedent Agreement to the extent necessary to give effect to any other surviving provision, and each Party will be liable for all of its accrued obligations hereunder up to and including the date on which the expiration or termination becomes effective.

 

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			5.

				
			Representations and Warranties. Each Party represents and warrants, on its own behalf, that:

			

 

(a)     it is duly formed or organized, validly existing and in good standing under the laws of the jurisdiction of its formation or incorporation and has full power to (i) execute and deliver this Precedent Agreement and, (ii) perform this Precedent Agreement;

 

(b)     all consents, licenses, clearances, authorizations and approvals of, and registrations and declarations with, any governmental authority or regulatory body necessary for the due execution and delivery by it of this Precedent Agreement have been obtained and remain in full force and effect and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution and delivery of this Precedent Agreement;

 

(c)     except as otherwise expressly set forth herein, its execution, delivery and performance of this Precedent Agreement has been duly authorized by all necessary company or corporate and governmental action and does not contravene any provision of law or of its constitutional documents or any contractual restriction binding on it or its assets;

 

(d)     it is legally bound by the terms of this Precedent Agreement and the terms of this Precedent Agreement are enforceable against it in accordance with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and

 

(e)     in connection with this Precedent Agreement and the activities contemplated herein, such Party will not take any action, or omit to take any action, that would (i) cause that Party or the other Party to be in material violation of any Applicable Law applicable to that Party, or (ii) cause that Party or the other Party to be in violation, whether by virtue of the Party’s jurisdiction of incorporation or conduct of its business operations, of any Applicable Law applicable to such Party, including the U.S. Foreign Corrupt Practices Act of 1977, as amended, or any similar statute, regulation, order or convention binding on such Party, as each may be amended from time to time, and including any implementing regulations promulgated pursuant thereto.

 

	
			6.

				
			Confidentiality. The substance and terms of this Precedent Agreement are confidential. Either Party may disclose the substance and terms of this Precedent Agreement to directors, officers, employees, representatives, agents, consultants, contractors, attorneys, auditors, lenders (and any lender’s independent engineer), and bona fide potential investors in or assignees of the disclosing Party or its Affiliates (collectively, “Representatives”), who have a need to know the terms of this Precedent Agreement and who have agreed to be bound by the confidentiality obligations of this Precedent Agreement. Customer and Transporter agree not to disclose or communicate, and shall cause their respective Representatives not to disclose or communicate, the substance or any of the terms of this Precedent Agreement to any other person, entity, firm, or corporation without the prior written consent of the other Party; provided that either Party may disclose the substance or terms of this Precedent Agreement as required by law, order, rule or regulation of any duly constituted governmental body or official authority having jurisdiction, subject to the condition that the disclosing Party first give the other Party [***] notice of same, or as much notice as possible under the circumstances, so that a protective order or other protective arrangements may be sought. Notwithstanding the foregoing, the Parties acknowledge that either Party may file a copy of this Precedent Agreement, or any of the agreements contemplated to be executed hereunder, with any governmental authority in connection with the application for any approvals related to the subject matter hereof and, if so, will request confidential treatment of the Precedent Agreement and/or any of the agreements contemplated to be executed hereunder, as applicable; provided that either Party may file information with any such regulatory authorities in a public manner disclosing the content of this Precedent Agreement, and/or any of the agreements contemplated to be executed hereunder, as applicable, as necessary or desirable in furtherance of other regulatory proceedings (or appeals thereof). Either Party may individually determine that such Party may be required to disclose to the Securities and Exchange Commission in one or more required filings certain matters pertaining to the execution of this Precedent Agreement by the Parties and/or any of the agreements contemplated to be executed hereunder. The Parties will cooperate in the issuance of any press release or other public statement to be issued contemporaneously with or after the execution of this Precedent Agreement, by means of providing any such press release or statement to the other Party in advance of the issuance of such press release or statement, allowing the other Party the opportunity to review and approve the proposed press release or statement before its issuance by the other Party, such approval not to be unreasonably withheld. The confidentiality requirements set forth in this Section 6 shall not apply to any agreement, or any specific provision of such agreement, that is otherwise subject to the confidentiality requirements of this Section 6, to the extent that such agreement, or such specific provision of such agreement, as applicable, has been made public in a manner that does not violate the provisions of this Section 6, and is not otherwise subject to a protective order or other protective arrangement. The provisions of this Section 6 are in addition to any other non-disclosure agreement in effect between the Parties and to the extent of any inconsistency the provision of this Section 6 shall prevail.

			

 

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			7.

				
			Notices. All notices and other communications to Transporter or Customer may be given by electronic mail, facsimile transmission, or be hand delivered or sent by courier or overnight mail to such Party at its respective email address, fax number, or address as set forth below:

			

 

All notices and communications to Transporter shall be sent to:

 

[***]

 

[***]

 

All notices and communications to Customer shall be sent to:

 

[***]

 

with a copy to:

 

[***]

 

 

Either Party may change its designee, address, and any other information applicable to its receipt of notices and communications hereunder by providing written notice of such change to the other Party in any manner set forth in this Section 7.

 

	
			8.

				
			Assignment.

			

 

8.1     Except as set forth in this Section 8, neither Customer nor Transporter may assign any of its rights or obligations under this Precedent Agreement without the prior written consent of the other Party hereto, provided such consent shall not be unreasonably withheld, conditioned, or delayed. Any assignment in violation of this Section 8 shall be void ab initio.

 

8.2     Any company which succeeds by purchase, merger, or consolidation of title to the properties, substantially as an entirety, of Transporter or Customer, will be entitled to the rights and will be subject to the obligations of its predecessor in title under this Precedent Agreement.

 

8.3     Any Party to this Precedent Agreement may assign this Precedent Agreement and its rights hereunder as security for indebtedness, and each Party hereby agrees to timely execute and deliver such documents and certificates as are reasonably requested by the assigning Party or its lenders, or any agent or trustee therefor, in connection with any such collateral assignment.

 

8.4     Transporter may assign this Precedent Agreement to any entity that is an Affiliate of Transporter and that owns and operates the Nueces Header and the Brownsville Pipeline.

 

	
			9.

				
			Effect of Agreement and Modification. This Precedent Agreement will inure to the benefit of and be binding upon both of the Parties. This Precedent Agreement and its attachments, when executed, supersede and replace all prior agreements and understandings, whether oral or written, with respect thereto. The Parties agree that the execution of this Precedent Agreement or the exhibits does not supersede and is without prejudice to any rights or obligations the Parties have to each other under separate and distinct agreements. No modification of the terms and provisions of this Precedent Agreement will be made except by the execution of written amendments by Transporter and Customer.

			

 

	
			10.

				
			No Third-Party Beneficiary. Except as expressly provided for in this Precedent Agreement, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person not a Party hereto any rights, remedies or obligations under or by reason of this Precedent Agreement.

			

 

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			11.

				
			No Presumption. Each and every provision of this Precedent Agreement shall be considered as prepared through the joint efforts of the Parties and shall not be construed against either Party as a result of the preparation or drafting thereof. It is expressly agreed that no consideration shall be given or presumption made on the basis of who drafted this Precedent Agreement or any specific provision hereof.

			

 

	
			12.

				
			Interpretation. The recitals and representations appearing first above are hereby incorporated in and made a part of this Precedent Agreement. References in this Precedent Agreement to section and/or paragraph numbers refer to sections and/or paragraphs of this Precedent Agreement unless otherwise indicated. The headings contained in this Precedent Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Precedent Agreement.

			

 

	
			13.

				
			Limitation of Liability. THE PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY PUNITIVE, SPECIAL, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSS OF PROFITS OR BUSINESS INTERRUPTIONS ARISING OUT OF OR IN ANY MANNER RELATED TO THIS PRECEDENT AGREEMENT, AND WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF OR THE SOLE, CONCURRENT OR CONTRIBUTORY NEGLIGENCE (WHETHER ACTIVE OR PASSIVE), STRICT LIABILITY (INCLUDING, WITHOUT LIMITATION, STRICT STATUTORY LIABILITY AND STRICT LIABILITY IN TORT) OR OTHER FAULT OF EITHER PARTY. THE IMMEDIATELY PRECEDING SENTENCE SPECIFICALLY PROTECTS EACH PARTY AGAINST SUCH PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES EVEN IF WITH RESPECT TO THE NEGLIGENCE, GROSS NEGLIGENCE, WILLFUL MISCONDUCT, STRICT LIABILITY OR OTHER FAULT OR RESPONSIBILITY OF SUCH PARTY; AND ALL RIGHTS TO RECOVER SUCH DAMAGES OR PROFITS ARE HEREBY WAIVED AND RELEASED.

			

 

	
			14.

				
			Governing Law and Exclusive Jurisdiction; WAIVER OF JURY TRIAL. This Precedent Agreement shall be governed by, construed, interpreted, and performed in accordance with the laws of the State of Texas, without recourse to any laws governing the conflict of laws. With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Precedent Agreement or for recognition or enforcement of any judgment (“Proceedings”), each Party irrevocably submits to the exclusive jurisdiction of the courts of the State of Texas and the United States District Court for the Southern District of Texas, located in Houston, Texas; and waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum, and waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such Party. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT TO A JURY TRIAL. Each of the Parties hereto agrees that a final judgment in any such Proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

			

 

	
			15.

				
			Non-Waiver of Rights. Except as may be otherwise provided for with respect to a particular provision, failure or delay by a Party in exercising any right, power, or privilege hereunder shall not operate as a waiver thereof, nor shall any limited or partial exercise preclude any further exercise thereof or the exercise of any further right, power, or privilege hereunder.

			

 

	
			16.

				
			Counterparts. This Precedent Agreement may be executed in any number of counterparts, each of which will be an original, but such counterparts together will constitute one and the same instrument.

			

 

	
			17.

				
			Capitalized Terms. When used in this Precedent Agreement, and unless otherwise defined herein, capitalized terms shall have the meaning set forth in Transporter’s GTs&Cs and SOCs, as applicable and as amended from time to time.

			

 

[signature page follows]

7

 

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Precedent Agreement to be duly executed by their duly authorized representatives effective as of the date first written above.

 

 

 

Rio Grande LNG Gas Supply LLC

 

By: /s/ Matthew Schatzman 

 

Name: Matthew Schatzman

 

Title: President

 

 

Valley Crossing Pipeline, LLC

 

By: /s/ Robert L. Huffman

 

Name: Robert L. Huffman

 

Title: President

 

 

 

8

 

 

EXHIBIT A

 

[***]Exhibit 10.1

 

AMENDED AND RESTATED OFFER LETTER,
CONFIDENTIALITY AND NON-COMPETITION AGREEMENT

 

This Amended and Restated
Offer Letter, Confidentiality and Non-Competition Agreement (this “Agreement”) made as of May 16, 2020 (the
 “Effective Date”), is between Hertz Global Holdings, Inc., a Delaware corporation (the “Company”),
and Paul Stone (“Executive”).

 

RECITALS

 

WHEREAS, Executive
has previously entered into an offer letter with The Hertz Corporation (“Hertz”),
dated February 27, 2018 (the “Prior Offer Letter”) to employ Executive as Executive Vice President and
Chief Retail Operations Officer, North America;

 

WHEREAS, Executive
has previously entered into the Employee Confidentiality and Non-Competition Agreement with Hertz and the Company (collectively,
the “Companies”), dated February 28, 2018 (the “Prior
Restrictive Covenant Agreement”), which is incorporated by reference into the Prior Offer Letter;

 

WHEREAS, the Company
and Executive desire to replace and supersede the Prior Offer Letter and Prior Restrictive Covenant Agreement in their entirety
by entering into this Agreement setting forth the terms of Executive’s employment with the Company and its subsidiaries and
affiliates from and after the Effective Date;

 

NOW, THEREFORE, in
consideration of the foregoing, the premises and mutual covenants contained in this Agreement and for other good and valuable consideration,
the receipt and sufficiency of which are acknowledged, the Company and Executive agree as follows:

 

		1.	RELATIONSHIP: AT WILL EMPLOYMENT

 

The Company hereby
agrees to employ Executive as Chief Executive Officer and President of the Companies. Executive specifically acknowledges that
his employment with the Company is and will be “at will” and that, consequently, either Executive or the Company may
terminate the employer-employee relationship at any time, for any reason or for no reason at all, subject to the continuing obligations
of Executive as set forth in Section 5 of this Agreement.

 

		2.	DUTIES

 

As of the Effective
Date, Executive shall serve as Chief Executive Officer and President of the Companies, and will, honestly and to the best of his
ability perform the duties of Chief Executive Officer. Executive’s duties and authority shall consist of and include all
duties, responsibilities and authority customarily performed and held by individuals serving in such position. From and after the
Effective Date, the Boards of Directors of the Companies shall take such actions as are necessary to nominate and appoint Executive
as a Director on the Boards of Directors of each of the Companies (the “Boards”) to serve as a Director until
his successor shall be duly qualified and elected. Upon the termination of Executive’s employment for any reason (unless
otherwise agreed in writing between Executive and the Company), Executive shall be deemed to have resigned, without any further
action on Executive’s part, from any and all officer and director positions that Executive, immediately prior to such termination,
(i) held with the Companies or any of their affiliates, or (ii) held with any other entities at the direction of the Companies
or any of their affiliates. Executive shall report solely and directly to the Boards.

 

     

     

    

 

		3.	COMPENSATION AND BENEFITS

 

(a)       As
of the Effective Date, Executive’s annual base salary shall be $1,000,000.00, paid in accordance with the Company’s
normal payroll practices. In addition, Executive shall be eligible to participate in the Company Pre-Paid Key Executive Retention
and Incentive Program, if any. In the event of a Qualifying Termination (as defined in the Senior Executive Severance Plan, the
 “Severance Plan”)), Executive will continue to be eligible to receive severance in accordance with the terms
and conditions of the Severance Plan, as may be amended from time to time. Payment of any such severance shall be contingent upon
the execution of a general release including customary non-competition, non-disclosure and non-disparagement provisions.

 

(b)       Executive
shall continue to be eligible to receive a company-provided vehicle for his personal and professional use. The Company retains
the right and sole discretion to amend, modify or rescind such policy at any time and for any reason. Executive will continue to
be eligible for four weeks’ vacation per the terms and conditions of The Hertz Corporation vacation policy. Executive shall,
subject to and in accordance with the terms and conditions of the applicable plan documents and all applicable laws, be eligible
to participate in the employee benefit plans and arrangements the Company makes available from time to time to its U.S. senior
executives generally, as such plans may be amended from time to time.

 

(c)       Payments
under this Agreement are subject to all applicable withholding taxes.

 

		4.	LOCATION

 

Executive’s role
is based out of the Company’s Estero, Florida headquarters. As a condition to Executive’s employment as Chief Executive
Officer and President, he represents and acknowledges that for the duration of his employment as Chief Executive Officer and President
of the Companies, he shall maintain his principal place of residence within thirty (30) miles of the Company’s world headquarters
in Estero, Florida.

 

		5.	CONFIDENTIALITY; RESTRICTIVE COVENANTS

 

(a)       Executive
recognizes and acknowledges that the business of the Company is highly competitive and that during the course of his relationship
with the Company he will have access to significant proprietary and confidential information belonging to the Company. Executive
therefore covenants and agrees, for the duration of this Agreement and at all times following its termination, he will not use
or disclose (other than in furtherance of Company’s business interests during the term of this Agreement and as authorized
by the Company) any confidential proprietary information of the Company, including, but not limited to, customer and supplier lists,
customer or prospect information, pricing information, business plans, business development plans or other strategic plans or information,
sales and marketing information, patents, patent rights, inventions, trademark or trade name rights, copyrights and other intellectual
property rights, techniques, know-how and trade secret information, plans or information regarding the Company’s future products
and services and other business and financial information of or relating to the Company or its customers. Executive shall retain
all such information in trust for the sole benefit of the Company. Executive agrees that the Company has expended considerable
time, effort and expense in assembling and maintaining such information and that such information constitutes both (i) trade secret
and/or confidential and proprietary information of the Company and (ii) part of the Company’s goodwill.

 

(b)       During
the term of this Agreement and Executive’s employment by the Company, and for a period of eighteen (18) months after the
termination of Executive’s employment with the Company, whether said termination was voluntary or involuntary (the “Restricted
Period”), Executive shall not, without the prior written consent of the Company, directly or indirectly, whether as a
principal, agent, officer, director, partner, employee, consultant, independent contractor or in any other capacity whatsoever,
alone or in association with any other person, carry on, or be engaged, concerned or take part in, or render services or assistance
to, or own, share in the earnings of, or invest in the stocks, bonds or other securities of any business, firm, corporation, entity,
institution or any other person that (i) is directly or indirectly in competition with the Companies, (ii) that is, seeks to become
or, during the Restricted Period becomes, a creditor, equityholder, or creditor committee member of, or lender or financial advisor
to, the Companies, or (iii) during the Restricted Period obtains, an interest in the Companies. An individual or entity will be
presumed to be in competition with the Companies if the individual or entity markets, sells, produces, renders or distributes the
same or similar types or kinds of products and/or services as those marketed, sold, produced, rendered or distributed or which
were in research and development by the Companies at any point during the term of this Agreement. The foregoing restriction will
not preclude Executive from owning up to 1% of the stock of a publicly traded company or from engaging in competitive business
activities which do not otherwise violate the terms and conditions of subsection (a) or subsection (c) of this Agreement.

 

    	 	2	 

     

    

 

(c)       During
the Restricted Period, Executive shall not, as a principal, proprietor, director, officer, partner, shareholder, employee, member,
manager, consultant, agent, independent contractor or otherwise, for himself or on behalf of any other person or entity other than
the Companies, directly or indirectly:

 

(i)       Solicit
or attempt to solicit any competitive business as described above from any customer or prospective customer of the Companies whom
Executive came to know, came to service, or came to learn the identity of during course of the Employee’s relationship with
the Company;

 

(ii)       Solicit
or induce or attempt to solicit or induce any person who is employed by the Companies to leave the Companies; or

 

(iii)       Aid,
assist or counsel any other person, firm, corporation, entity or the like to take any of the actions set forth in Section 3(c)(i)
or (ii).

 

(d)       All
written materials, records and documents made by Executive or coming into Executive’s possession during the term of this
Agreement concerning the business or affairs of the Companies, together with all intellectual and industrial property rights attached
thereto, shall be the sole property of the Companies; and, upon termination of Executive’s employment and/or this Agreement
or at the request of the Company at any time, Executive shall promptly deliver all such materials and information in his possession
or control to the Company. Upon a termination of employment for any reason, Executive shall promptly deliver to the Company all
non-personal documents and data of any nature and in whatever medium pertaining to Executive’s employment with the Companies,
or any of their subsidiaries or affiliates, or any other property of the Companies or any of their subsidiaries or affiliates (including,
without limitation, any electronic equipment) and he shall not take with him any such property, documents or data, in any form
or media, of any description or any reproduction thereof, or any documents containing or pertaining to confidential and proprietary
information.

 

(e)       In
view of the services which Executive will perform for the Companies, which services are special, unique and extraordinary in character
and which will place Executive in a position of confidence and trust with customers of the Companies and will provide Executive
with access to confidential and proprietary financial information, trade secrets, “know-how” and other confidential
and proprietary information of the Company, Executive expressly acknowledges that the restrictive covenants set forth in this Section
5 are reasonable and necessary to protect and maintain the proprietary and other legitimate business interests of the Companies
and that the enforcement of such restrictive covenants will not prevent Executive from earning a livelihood or impose any undue
burden on Executive or his family. Executive further acknowledges that the remedy at law for any breach or threatened breach of
this Section 5 by him, if such breach or threatened breach is held by the Court to exist, will be inadequate and, accordingly,
that the Companies shall, in addition to all other available remedies, be entitled to injunctive relief without being required
to post bond or other security and without having to prove the inadequacy of the remedies available at law. In addition, in the
event a Court determines that there has been a breach or threatened breach or repudiation of Section 5 of this Agreement by Executive,
Executive agrees that, in addition to injunctive relief and monetary damages, the Companies shall be entitled to recover from Executive
its reasonable attorneys’ fees and costs in obtaining any restraining order, preliminary or permanent injunction or any monetary
judgment against Executive.

 

    	 	3	 

     

    

 

(f)       If
any portion of the provisions of this Section 5 is held to be unenforceable for any reason, including but not limited to the duration
of such provision, the territory being covered thereby or the type of conduct restricted therein, the parties agree that the Court
is authorized and directed to modify the duration, geographic area and/or other terms of such provisions to the maximum benefit
of the Companies as permitted by law, and, as so modified, said provision shall then be enforceable.

 

(g)       The
period of time during which the provisions of this Section 5 shall apply shall be extended by the length of time during which Executive
is deemed to be in breach of any of the terms of this Section 5.

 

(h)       Executive
agrees not to make negative comments or otherwise disparage the Companies or its affiliates or their respective officers, directors,
other employees at the level of manager or above, or stockholders holding more than 5% of the Company’s outstanding common
stock (or affiliates or principals of such stockholders) in any manner reasonably likely to be harmful to them or their business,
business reputation or personal reputation. Notwithstanding the foregoing, nothing contained in this Section 5(h) shall prohibit
Executive from (i) disclosing truthful information in pursuing or responding to valid claims if legally required (whether by oral
questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process) or
(ii) exercising any legally protected whistleblower rights (including pursuant to Rule 21F under the Securities Exchange Act of
1934).

 

		6.	WAIVER OF JURY TRIAL

 

Executive expressly waives
a trial by jury and agrees not to plead or defend on grounds of adequate remedy at law or any element thereof in an action by the
Company against Executive for injunctive relief or for specific performance of any obligation set forth in this Agreement.

 

		7.	MISCELLANEOUS

 

(a)       Governing
Law, Forum Selection and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the
State of Florida without giving effect to conflict of laws principals thereof. Executive and the Company hereby agree that any
action initiated by or on behalf of either party seeking to interpret or enforce the terms of this Agreement shall only be brought
in either the Circuit Court of the Twentieth Judicial Circuit, Lee County, Florida or the United States District Court for the
Middle District of Florida. The parties consent to the exclusive jurisdiction and venue of said Courts and waive any challenge
to personal jurisdiction. The terms of this Agreement may be enforced by the Company or its successors or assigns.

 

(b)       Severability.
If any provision of this Agreement is held invalid or unenforceable, the remainder shall nevertheless remain in full force and
effect. If any provision is invalid or unenforceable with respect to particular circumstances, it shall nevertheless remain in
full force and effect in all other circumstances.

 

(c)       Entire
Agreement. This Agreement represents the entire understanding of the parties with respect to the subject matter hereof and
supersedes and replaces in its entirety all prior agreements and understandings oral or written between the parties hereto with
respect to the subject matter hereof, including, without limitation, the Prior Offer Letter and Prior Restrictive Covenant Agreement.
No other representations, promises, agreements or understandings regarding the subject matter hereof shall be of any force or-effect
unless in writing, executed by the party to be bound, and dated subsequent to the date hereof.

 

    	 	4	 

     

    

 

(d)       Amendment.
This Agreement may not be cancelled, changed, modified or amended orally, and no cancellation, change, modification or amendment
hereof shall be effective or binding unless in written instrument signed by the Company and Executive. A provision of this Agreement
may be waived only by written instrument signed by the party against whom or which enforcement of such waiver is sought.

 

(e)       Headings.
The headings contained in this Agreement are for reference purposes only, and shall not affect the meaning or interpretation of
this Agreement.

 

(f)       Notice.
All notices, requests, demands or other communications to the Company and/or Executive under or relating to this Agreement shall
be in writing to the address listed on the first page of this Agreement or Executive’s address of record with Company, respectively.
Notice shall be duly given if in writing and delivered by hand or mailed by first class, registered mail, return-receipt requested,
with postage and registry fees pre-paid

 

(g)       No
Prior Non-Compete or Employment Agreement. Executive represents and warrants that he is not presently subject to any non-compete,
restrictive covenant or like agreement that will preclude him from employment with the Company or in any away limit him in performing
any obligations under this Agreement. Executive agrees and acknowledges that if he is subject to any such non-compete, restrictive
covenant or other agreement, the Company will have no obligation to perform its duties under this Agreement or to continue employment.
Further, Executive acknowledges and represents that as of the Effective Date, Executive has not committed any act that would reasonably
give rise to a termination of employment for cause.

 

(h)       Interpretation
and Construction. The parties agree that this Agreement shall be construed in favor of providing all reasonable protection
to the legitimate business interests of the Company. The parties further agree that, in interpreting and enforcing this Agreement,
the court shall not employ any rule of contract construction that requires the court to construe narrowly against the drafter of
the Agreement and shall consider the Agreement as if each party participated equally in its preparation.

 

(i)       Survival.
Executive’s obligations as set forth in Section 5 represent independent covenants by which Executive is and shall remain
bound notwithstanding any breach or claim of breach by the Company, and shall survive the termination or expiration of this Agreement.

 

(j)       Acknowledgments.
Executive acknowledges that he has read this Agreement, that he was given sufficient time and opportunity to review it and to consult
an attorney regarding its terms and conditions, and that the Company has recommended to Executive that he consult an attorney prior
to execution of this Agreement. Executive further acknowledges that, pursuant to Section 1, this Agreement does not alter Executive’s
status as an employee-at-will or in any way limit the Company’s right to terminate the employment relationship at any time.
Executive further acknowledges and agrees that the restrictions on competition set forth in this Agreement are reasonable and necessary
for the protection of the Company and that agreement to and fulfillment of same are a material condition of employment or, as applicable,
continued employment, with the Company. Executive agrees that should a court issue injunctive relief to enforce any term of this
Agreement, or if a court (or jury) determine that Executive has breached any provision of this Agreement, Executive will reimburse
the Company for all attorney’s fees and costs incurred in enforcing the terms of the Agreement, and Executive will also be
liable for any other damages or relief permitted by law.

 

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blank]

 

    	 	5	 

     

    

 

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

 

 

	 	HERTZ GLOBAL HOLDINGS, INC.
	 	 
	 	 
	 	By:	/s/ M. David Galainena	 
	 	 	Name:	M. David Galainena
	 	 	Title:	Executive Vice President, General

                                                Counsel and Secretary

	 	 	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 
	 	PAUL
STONE

	 	 	 	 
	 	 	 	 
	 	By:	/s/ Paul Stone

	 
	 	 	Name:	Paul Stone

 

 

 

 

 

 

 

 

    	 	6

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