Exhibit: Legal Terms for Revenue
Participation
1. Purpose and Scope
These Legal Terms for Revenue
Participation (“Terms”) govern the rights and obligations of
participants receiving a share of revenue generated by fleet assets
owned and managed under the
CartShare Fleet Syndicate Program (“Program”).
Participation does not
constitute ownership of CartShare LLC or its affiliates, except as
expressly stated in the participant’s Subscription or Operating
Agreement.
2. Revenue Participation Rights
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2.1 Definition.
“Revenue Participation” means the right to receive a specified
percentage of net operating revenue (“Net Revenue”) derived from
fleet assets, as defined in the applicable Revenue Share or Cap
Table schedule.
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2.2 Allocation.
Net Revenue shall be distributed according to each participant’s
fractional ownership or contractual allocation.
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2.3 Payment Frequency.
Distributions shall be made
monthly or quarterly,
within fifteen (15) days after the close of each accounting period.
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2.4 Adjustments.
CartShare reserves the right to withhold or defer distributions to
account for maintenance reserves, taxes, or other reasonable
business expenses.
3. No Equity or Voting Rights
Except as otherwise stated in a
separate equity agreement:
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Revenue Participants have
no voting rights,
management rights, or rights to inspect company books.
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Participation is a
contractual economic right
only, not a security or membership interest, unless
explicitly designated as such under state or federal securities
laws.
4. Accounting and Reporting
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4.1 Records.
CartShare shall maintain accurate financial records of revenue and
expenses related to fleet operations.
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4.2 Reports.
Participants shall receive periodic reports detailing gross
receipts, expenses, and distributions.
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4.3 Audit Rights.
Upon written notice, any participant holding more than 5% of total
participation units may request a third-party audit once per fiscal
year, at their own expense.
5. Tax Treatment
Each participant acknowledges and
agrees:
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Revenue participation payments
may constitute ordinary
income, subject to applicable taxes.
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CartShare shall issue
appropriate tax forms (e.g., Form 1099 or K-1 if structured as an
LLC member).
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Participants are responsible
for their own tax reporting and compliance.
6. Transfer and Assignment
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Revenue Participation interests
are non-transferable
without prior written consent of CartShare LLC.
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Any attempted assignment or
pledge without consent shall be
void.
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Transfers to immediate family,
trusts, or successor entities may be approved upon reasonable
documentation.
7. Termination of Rights
Revenue participation rights
terminate upon:
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Expiration or sale of the
underlying fleet assets;
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Participant breach of contract;
or
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Redemption by CartShare LLC
upon notice and fair market value payment.
8. Representations and
Warranties
Participants represent that they:
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Are entering this arrangement
for investment or commercial purposes;
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Understand the risks associated
with fleet operations and revenue variability;
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Have not relied on any
unauthorized guarantees of returns.
9. Governing Law and Dispute
Resolution
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These Terms shall be governed
by and construed in accordance with the laws of the
State of Colorado.
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Any disputes shall be resolved
through binding
arbitration in Denver, Colorado, administered by the
American Arbitration
Association.
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Each Party waives the right to
a jury trial.
10. Entire Agreement
These Terms, together with any
executed Participation Agreement, Cap Table, and Operating Agreement,
constitute the entire understanding between the Parties concerning
revenue participation and supersede all prior communications.
CartShare LLC
By: ___________________________
Name: _________________________
Title: _________________________
Date: _________________________
Participant
By: ___________________________
Name: _________________________
Title: _________________________
Date: _________________________
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