Exhibit
4.9.7


 




 





 


AMENDED AND RESTATED MASTER MOTOR VEHICLE OPERATING LEASE AND SERVICING
AGREEMENT


 


Dated as of December 21, 2005


 


between


 


HERTZ VEHICLE FINANCING LLC


 


as Lessor


 


and


 


THE HERTZ CORPORATION


 


as Lessee and Servicer


 




 





 


 













 


Table of Contents


 


	
   

  	
   

  	
  Page

  
	
  1.

  	
  DEFINITIONS

  	
  2

  
	
  2.

  	
  GENERAL AGREEMENT

  	
  2

  
	
   

  	
  2.1.

  	
  Lease of Vehicles

  	
  2

  
	
   

  	
  2.2.

  	
  Non-Liability of Lessor

  	
  2

  
	
   

  	
  2.3.

  	
  Return

  	
  3

  
	
   

  	
  2.4.

  	
  Lessee’s Right to Purchase
  Vehicles

  	
  3

  
	
   

  	
  2.5.

  	
  Lessor’s Right to Cause
  Vehicles to be Sold

  	
  4

  
	
   

  	
  2.6.

  	
  Redesignation of Vehicles

  	
  5

  
	
   

  	
  2.7.

  	
  Limitations on the Leasing
  or Redesignation of Certain Vehicles

  	
  6

  
	
   

  	
  2.8.

  	
  Conditions to Each Lease
  of Vehicle

  	
  6

  
	
   

  	
  2.9.

  	
  Compliance with Master
  Exchange Agreement

  	
  7

  
	
  3.

  	
  TERM

  	
  7

  
	
   

  	
  3.1.

  	
  Vehicle Term

  	
  7

  
	
   

  	
  3.2.

  	
  Term

  	
  8

  
	
  4.

  	
  RENT AND CHARGES

  	
  8

  
	
   

  	
  4.1.

  	
  Monthly Base Rent

  	
  8

  
	
   

  	
  4.2.

  	
  Monthly Variable Rent

  	
  9

  
	
   

  	
  4.3.

  	
  Rent

  	
  9

  
	
   

  	
  4.4.

  	
  Monthly Base Rent
  Adjustments

  	
  9

  
	
   

  	
  4.5.

  	
  Payment of Monthly Base
  Rent

  	
  10

  
	
   

  	
  4.6.

  	
  Payment of Monthly
  Variable Rent

  	
  10

  
	
   

  	
  4.7.

  	
  Rejected Vehicles

  	
  10

  
	
   

  	
  4.8.

  	
  Making of Payments

  	
  10

  
	
   

  	
  4.9.

  	
  Billing Process

  	
  10

  
	
   

  	
  4.10.

  	
  Casualty Payments

  	
  11

  
	
   

  	
  4.11.

  	
  Late Payment

  	
  11

  
	
   

  	
  4.12.

  	
  Prepayments

  	
  11

  
	
   

  	
  4.13.

  	
  Net Lease

  	
  11

  
	
  5.

  	
  INSURANCE

  	
  12

  
	
   

  	
  5.1.

  	
  Comprehensive Public
  Liability, Property Damage, and Catastrophic Physical Damage

  	
  12

  
	
   

  	
  5.2.

  	
  Delivery of Certificate of
  Insurance

  	
  13

  
	
  6.

  	
  RISK OF LOSS; CASUALTY AND
  INELIGIBLE VEHICLE OBLIGATIONS

  	
  13

  
	
   

  	
  6.1.

  	
  Risk of Loss Borne by
  Lessees

  	
  13

  
	
   

  	
  6.2.

  	
  Casualty; Ineligible
  Vehicles

  	
  13

  
	
  7.

  	
  VEHICLE USE

  	
  13

  
	
  8.

  	
  LIENS

  	
  14

  
	
  9.

  	
  NON-DISTURBANCE

  	
  14

  
	
  10.

  	
  FEES; TRAFFIC SUMMONSES;
  PENALTIES AND FINES

  	
  15

  
	
  11.

  	
  MAINTENANCE AND REPAIRS

  	
  15

  
	
  12.

  	
  VEHICLE WARRANTIES

  	
  15

  
	
   

  	
  12.1.

  	
  No Lessor Warranties

  	
  15

  
	
   

  	
  12.2.

  	
  Manufacturer’s Warranties

  	
  16

  
							



 


i

















 


	
  13.   VEHICLE USAGE GUIDELINES AND RETURN; SPECIAL DEFAULT PAYMENTS;
  EARLY TERMINATION PAYMENTS

  	
  16

  
	
   

  	
  13.1.

  	
  Usage

  	
  16

  
	
   

  	
  13.2.

  	
  Return

  	
  16

  
	
   

  	
  13.3.

  	
  Special Default Payments

  	
  16

  
	
   

  	
  13.4.

  	
  Early Termination Payments

  	
  17

  
	
  14.

  	
  DISPOSITION PROCEDURE

  	
  17

  
	
  15.

  	
  ODOMETER DISCLOSURE
  REQUIREMENT

  	
  17

  
	
  16.

  	
  ASSIGNMENT

  	
  18

  
	
   

  	
  16.1.

  	
  Right of the Lessor to
  Assign this Agreement

  	
  18

  
	
   

  	
  16.2.

  	
  Limitations on the Right
  of the Lessee to Assign this Agreement

  	
  18

  
	
  17.

  	
  DEFAULT AND REMEDIES
  THEREFOR

  	
  18

  
	
   

  	
  17.1.

  	
  Events of Default

  	
  18

  
	
   

  	
  17.2.

  	
  Effect of Operating Lease
  Event of Default

  	
  19

  
	
   

  	
  17.3.

  	
  Rights of Lessor Upon
  Operating Lease Event of Default

  	
  19

  
	
   

  	
  17.4.

  	
  Liquidation Event of
  Default, Limited Liquidation Event of Default and Non-Performance of Certain
  Covenants.

  	
  20

  
	
   

  	
  17.5.

  	
  Measure of Damages

  	
  21

  
	
   

  	
  17.6.

  	
  Vehicle Return Default

  	
  22

  
	
   

  	
  17.7.

  	
  Servicer Default

  	
  23

  
	
   

  	
  17.8.

  	
  Application of Proceeds

  	
  23

  
	
  18.

  	
  MANUFACTURER EVENTS OF
  DEFAULT

  	
  23

  
	
  19.

  	
  CERTIFICATION OF TRADE OR
  BUSINESS USE

  	
  24

  
	
  20.

  	
  TITLE TO VEHICLES

  	
  24

  
	
  21.

  	
  RIGHTS OF LESSOR ASSIGNED
  TO TRUSTEE

  	
  24

  
	
  22.

  	
  MODIFICATION AND
  SEVERABILITY

  	
  24

  
	
  23.

  	
  SERVICER ACTING AS AGENT
  OF THE LESSOR

  	
  25

  
	
  24.

  	
  MINIMUM DEPRECIATION RATE

  	
  25

  
	
  25.

  	
  CERTAIN REPRESENTATIONS
  AND WARRANTIES

  	
  25

  
	
   

  	
  25.1.

  	
  Organization; Power;
  Qualification

  	
  25

  
	
   

  	
  25.2.

  	
  Authorization;
  Enforceability

  	
  25

  
	
   

  	
  25.3.

  	
  Compliance

  	
  26

  
	
   

  	
  25.4.

  	
  Other

  	
  26

  
	
   

  	
  25.5.

  	
  Financial Statements

  	
  26

  
	
   

  	
  25.6.

  	
  Investment Company Act

  	
  27

  
	
   

  	
  25.7.

  	
  Supplemental Documents
  True and Correct

  	
  27

  
	
   

  	
  25.8.

  	
  Manufacturer Programs

  	
  27

  
	
   

  	
  25.9.

  	
  ERISA

  	
  27

  
	
   

  	
  25.10.

  	
  Indemnification Agreement

  	
  27

  
	
   

  	
  25.11.

  	
  Eligible Vehicles

  	
  27

  
	
  26.

  	
  CERTAIN AFFIRMATIVE
  COVENANTS

  	
  27

  
	
   

  	
  26.1.

  	
  Corporate Existence; Foreign
  Qualification

  	
  28

  
	
   

  	
  26.2.

  	
  Books, Records and
  Inspections

  	
  28

  



 


ii

















 


	
   

  	
  26.3.

  	
  ERISA

  	
  28

  
	
   

  	
  26.4.

  	
  Merger

  	
  28

  
	
   

  	
  26.5.

  	
  Reporting Requirements

  	
  28

  
	
   

  	
  26.6.

  	
  Indemnification Agreement

  	
  30

  
	
  27.

  	
  NO PETITION

  	
  30

  
	
  28.

  	
  SUBMISSION TO JURISDICTION

  	
  31

  
	
  29.

  	
  GOVERNING LAW

  	
  31

  
	
  30.

  	
  JURY TRIAL

  	
  31

  
	
  31.

  	
  NOTICES

  	
  31

  
	
  32.

  	
  SURVIVABILITY

  	
  32

  
	
  33.

  	
  HEADINGS

  	
  32

  
	
  34.

  	
  EXECUTION IN COUNTERPARTS

  	
  32

  



 


iii

















 


AMENDED AND RESTATED MASTER MOTOR VEHICLE OPERATING LEASE AND SERVICING
AGREEMENT


 


This Amended and Restated Master Motor Vehicle Operating Lease and
Servicing Agreement (this “Agreement”), dated as of
December 21, 2005, by and between HERTZ VEHICLE FINANCING LLC, a Delaware
limited liability company (“HVF”), as lessor (in such capacity, the “Lessor”)
and THE HERTZ CORPORATION, a Delaware corporation (“Hertz”), as lessee
(in such capacity, the “Lessee”) and as servicer (in such capacity, the
“Servicer”).


 


W I T N E S S E T H:


 


WHEREAS, HVF and Hertz
entered into a Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of September 18,
2002, as amended pursuant to Amendment No. 1 to the Master Motor
Vehicle Operating Lease and Servicing
Agreement, dated as of March 31, 2004 (the “Prior Agreement”);


 


WHEREAS,
HVF and Hertz desire to amend and restate the Prior Agreement in its entirety
as herein set forth;


 


WHEREAS,
the Lessor has purchased or will purchase passenger automobiles and light-duty
trucks (the “HGI Vehicles”) from Hertz General Interest LLC (“HGI”)
pursuant to the Purchase Agreement;


 


WHEREAS,
the Lessor has received as a capital contribution from Hertz all of Hertz’s
right, title and interest in and to the Initial Hertz Vehicles pursuant to the
Hertz Contribution Agreement;


 


WHEREAS,
the Lessor has purchased from Hertz Funding Corp. (“HFC”) all of HFC’s
right, title and interest in and to the Service Vehicles (collectively with the
HGI Vehicles and the Initial Hertz Vehicles, the “Vehicles”);


 


WHEREAS,
the Lessor desires to lease to the Lessee and the Lessee desires to lease from
the Lessor the Vehicles for use in connection with the daily rental car
business of the Lessee or in the business of, pursuant to a sub-lease between
the Lessee and Hertz Equipment Rental Corporation (“HERC”), Lessee’s
wholly owned subsidiary, in connection with the daily equipment rental business
of HERC, or by Hertz or HERC’s employees in their personal or professional
capacities;


 

















 


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


 


1.  DEFINITIONS. 
Except as otherwise specified, capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Definitions List
attached as Schedule 1 to the Amended and Restated Base Indenture, dated
as of December 21, 2005, between HVF, as Issuer, and BNY Midwest Trust
Company, as Trustee, as such indenture may be amended, supplemented, restated
or otherwise modified from time to time in accordance with its terms.


 


2.  GENERAL AGREEMENT.  The Lessee and the Lessor intend that this
Agreement is a lease and that the relationship between the Lessor and the
Lessee pursuant hereto shall always be only that of lessor and lessee, and the
Lessee hereby declares, acknowledges and agrees that the Lessor is the owner
of, and pursuant to the Nominee Agreement, the Hertz Nominee Agreement or the
HFC Nominee Agreement, the Nominee, the Hertz Nominee or the HFC Nominee, as
applicable, holds legal title to, the Vehicles. 
The Lessee shall not acquire by virtue of this Agreement any right,
equity, title or interest in or to any Vehicles, except the right to use the
same under the terms hereof.  The parties
agree that this Agreement is a “true lease” and agree to treat this Agreement
as a lease for all purposes, including accounting, regulatory and otherwise,
except it will be disregarded for income tax purposes.


 


2.1.  Lease of Vehicles.  From time to time, subject to the terms and
provisions hereof, the Lessor agrees to lease to the Lessee, and the Lessee
agrees to lease from the Lessor, New Vehicles identified in New Vehicle
Schedules and Transferred Vehicles identified in Transferred Vehicle Schedules,
in each case provided to the Lessor by the Servicer from time to time pursuant
to Sections 1.04 and 1.06 of the Purchase Agreement.  This Agreement, together with the
Manufacturer Programs, the New Vehicle Schedules, the Rejected Vehicle
Schedules, the Transferred Vehicle Schedules, the Initial Hertz Vehicle
Schedules, the Service Vehicle Schedules and any other related documents
attached to this Agreement (collectively, the “Supplemental Documents”),
will constitute the entire agreement regarding the leasing of Vehicles by the
Lessor to the Lessee.


 


2.2.  Non-Liability of Lessor.  AS BETWEEN THE LESSOR AND THE LESSEE,
ACCEPTANCE FOR LEASE OF THE VEHICLES UNDER THE PURCHASE AGREEMENT SHALL
CONSTITUTE THE LESSEE’S ACKNOWLEDGMENT AND AGREEMENT THAT THE LESSEE HAS FULLY
INSPECTED SUCH VEHICLES, THAT SUCH VEHICLES ARE IN GOOD ORDER AND CONDITION AND
ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND CAPACITY SELECTED BY THE
LESSEE, THAT THE LESSEE IS SATISFIED THAT THE SAME ARE SUITABLE FOR THIS USE
AND THAT THE LESSOR IS NOT A MANUFACTURER OR ENGAGED IN THE SALE OR
DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT WITH RESPECT TO MERCHANTABILITY,
CONDITION,


 


2

















 


QUALITY, DURABILITY OR
SUITABILITY OF SUCH VEHICLE IN ANY RESPECT OR IN CONNECTION WITH OR FOR THE
PURPOSES OR USES OF THE LESSEE, OR ANY OTHER REPRESENTATION, WARRANTY OR
COVENANT EXPRESS OR IMPLIED OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH
RESPECT THERETO.  THE LESSOR SHALL NOT BE
LIABLE FOR ANY FAILURE TO PERFORM ANY PROVISION HEREOF RESULTING FROM FIRE OR
OTHER CASUALTY, NATURAL DISASTER, RIOT, STRIKE OR OTHER LABOR DIFFICULTY,
GOVERNMENTAL REGULATION OR RESTRICTION, OR ANY CAUSE BEYOND THE LESSOR’S DIRECT
CONTROL.  IN NO EVENT SHALL THE LESSOR BE
LIABLE FOR ANY INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES RESULTING FROM ANY DEFECT IN OR ANY THEFT,
DAMAGE, LOSS OR FAILURE OF ANY VEHICLE, AND THERE SHALL BE NO ABATEMENT OF RENT
OR OTHER AMOUNTS PAYABLE HEREUNDER BECAUSE OF THE SAME.


 


2.3.  Return.  (a) 
The Servicer will act as the Lessor’s agent in returning (as set forth
in this Section 2.3) or otherwise disposing of each Vehicle on the Vehicle
Operating Lease Expiration Date with respect to such Vehicle.


 


(b)  The Lessee will, subject to Sections 2.4
and 2.5, return each Program Vehicle (other than a Casualty, a Rejected Vehicle
or a Program Vehicle which has become an Ineligible Vehicle) to the Servicer in
accordance with the requirements of Section 3.1(b), who upon receipt of
such Program Vehicle will return such Program Vehicle to the nearest related
Manufacturer official auction or other facility designated by such Manufacturer
at the Lessee’s sole expense in accordance with the requirements of
Section 3.1(b).


 


(c)  The Lessee will, subject to Sections 2.4
and 2.5, return each Non-Program Vehicle to the Servicer not less than thirty
(30) days prior to the Maximum Lease Termination Date with respect to such
Non-Program Vehicle, who upon receipt of such Non-Program Vehicle will dispose
of such Non-Program Vehicle in accordance with the requirements of
Section 2.5(b).


 


2.4.  Lessee’s Right to Purchase Vehicles.  The Lessee shall have the option, exercisable
with respect to any Vehicle during the Vehicle Term, to purchase such Vehicle
for an amount equal to the greater of (i) the Termination Value or
(ii) the Market Value of such Vehicle, in each case, as of the date such
amount shall be deposited in the Collection Account (the greater of such
amounts being referred to as the “Vehicle Purchase Price”).  In the event the Lessee exercises its option
to purchase any Vehicle, the Lessee shall pay the Vehicle Purchase Price of
such Vehicle to the Lessor on or before the Payment Date with respect to the
Related Month in which the Lessee elects to purchase such Vehicle and the
Lessee will pay on or before such Payment Date all accrued and unpaid Monthly
Base Rent and any Monthly Variable Rent then due and payable with respect to
such Vehicle.  Monthly Base Rent and
Monthly Variable Rent will


 


3

















 


continue to accrue with
respect to such Vehicle through the date on which the Vehicle Purchase Price
therefor is deposited into the Collection Account.  The Lessor shall transfer title to any such
Vehicle to, or shall direct the Nominee, the Hertz Nominee or the HFC Nominee,
as applicable, to transfer title to any such Vehicle to, the Lessee
concurrently with or promptly after the deposit of Vehicle Purchase Price (and
any such unpaid Monthly Base Rent and Monthly Variable Rent) into the
Collection Account.


 


2.5.  Lessor’s Right to Cause
Vehicles to be Sold.  If the Lessee
does not elect to purchase any Vehicle pursuant to Section 2.4, then:


 


(a)  The Lessor shall have the right, at any time
with the consent of the Lessee or during the ninety (90) days prior to the
expiration of the Maximum Term for a Program Vehicle, to direct the Servicer to
arrange for the sale of such Program Vehicle to a third party, if permitted
under the related Manufacturer Program, for a price greater than or equal to
the Termination Value of such Program Vehicle, reduced by the amount of any
non-return incentive received by the Lessor or payable to the Lessor from the
Manufacturer in respect of such Program Vehicle pursuant to such Manufacturer
Program if such Manufacturer is an Eligible Program Manufacturer, on or prior
to the Maximum Lease Termination Date with respect to such Program Vehicle.  Notwithstanding the disposition of a Program
Vehicle pursuant to this Section 2.5(a) 
prior to the end of a calendar month, the Lessee shall pay to the Lessor
all accrued and unpaid Monthly Base Rent and any Monthly Variable Rent then due
and payable with respect to such Program Vehicle through the Payment Date with
respect to the Related Month during which the Disposition Proceeds of such
Program Vehicle are deposited into the Collection Account, unless such Program
Vehicle is a Casualty or becomes an Ineligible Vehicle, payment for which will
be made in accordance with Section 6. 
When a sale of such Program Vehicle is arranged by the Servicer pursuant
to this Section 2.5(a), (i) the Servicer shall deliver the Vehicle to
the purchaser thereof and (ii) the Servicer shall cause to be deposited
into the Collateral Account the funds paid for such Vehicle by the purchaser.


 


(b)  The Servicer shall use commercially
reasonable efforts, at its own expense, to arrange for the sale of each
Non-Program Vehicle to a third party for the Vehicle Purchase Price with
respect to such Vehicle on or prior to the Maximum Lease Termination Date with
respect to such Non-Program Vehicle. 
Notwithstanding the disposition of a Non-Program Vehicle by the Servicer
prior to the end of a calendar month, the Lessee shall pay to the Lessor all
accrued and unpaid Monthly Base Rent and any Monthly Variable Rent then due and
payable with respect to such Non-Program Vehicle through the Payment Date with
respect to the Related Month during which the Disposition Proceeds of such
Non-Program Vehicle are deposited into the Collection Account, unless such
Non-Program Vehicle is a Casualty or becomes an Ineligible Vehicle, payment for
which will be made in accordance with Section 6.  When a sale of such Non-Program Vehicle is
arranged by the Servicer pursuant to this Section 2.5(b), (i) the
Servicer shall deliver the Vehicle to the purchaser thereof and (ii) the
Servicer shall cause to be deposited into the Collateral Account the funds paid
for such Vehicle by the purchaser.


 


4

















 


(c)  In the event any Vehicle or Vehicles are not
purchased by the Lessee pursuant to Section 2.4, sold to a third party
pursuant to Section 2.5 or returned to a Manufacturer pursuant to Section 3.1(b),
the Servicer shall return such Vehicle to the Lessor, on the Payment Date with
respect to the Related Month in which the applicable Maximum Lease Termination
Date falls, and the Lessee shall pay an amount equal to all accrued but unpaid
Monthly Base Rent and all Monthly Variable Rent payable with respect to such
Vehicles through such Payment Date.


 


2.6.  Redesignation of Vehicles.  At any time, including without limitation, if
(i) a Program Vehicle becomes ineligible for repurchase by its Manufacturer
or for sale at Auction under the applicable Manufacturer Program or
(ii) the return of a Program Vehicle to the applicable Manufacturer cannot
otherwise be effected for any reason, the Lessor (or the Servicer on its behalf
and at its instruction) may redesignate a Program Vehicle as a Non-Program
Vehicle, provided that no Amortization Event or Potential Amortization
Event with respect to any Series of Notes Outstanding has occurred and is
continuing or would be caused by such redesignation and provided  further,
in each case, that in connection with such redesignation the Lessor shall
establish a Depreciation Schedule for such redesignated Non-Program Vehicle in
accordance with Section 24 and the Lessee shall pay to the Lessor on the
next succeeding Payment Date an amount equal to the difference, if any, between
the Net Book Value of such Vehicle as of the date of redesignation and an
amount (the “Redesignation Amount”) equal to the Net Book Value of such
Vehicle as of the date of redesignation had such Vehicle been a Non-Program
Vehicle on the Vehicle Operating Lease Commencement Date for such Vehicle
subject to such newly established Depreciation Schedule; provided further,
however, that if a Program Vehicle is redesignated as a Non-Program
Vehicle under the circumstances described in Section 18(b), if
(x) the Manufacturer of such redesignated Non-Program Vehicle assumes the
related Manufacturer Program in accordance with the Bankruptcy Code,
(y) following such assumption, such redesignated Non-Program Vehicle
continues to be eligible under such assumed Manufacturer Program and
(z) there are at least thirty (30) days prior to the expiration of
the Maximum Term for a Program Vehicle, the Lessor may redesignate such
Non-Program Vehicle as a Program Vehicle, and, in connection with such
redesignation, future Depreciation Charges in respect of such redesignated
Program Vehicle shall be made in accordance with requirements for Program
Vehicles set forth in the definition of Depreciation Charges and shall pay to
the Lessee on the next succeeding Payment Date the Redesignation Amount paid by
the Lessee to the Lessor in connection with the original designation of such
Vehicle as a Non-Program Vehicle under the circumstances described in
Section 18(b), together with an amount equal to the difference, if any,
between the Net Book Value of such redesignated Program Vehicle as of the date
of redesignation and an amount (the “Assumption Redesignation Amount”)
equal to the Net Book Value of such redesignated Program Vehicle as of the date
of redesignation of such Vehicle as a Program Vehicle had such Vehicle been a
Program Vehicle on the Vehicle Operating Lease Commencement Date for such
Vehicle and such Vehicle had never been redesignated from a Program Vehicle to a
Non-Program Vehicle; provided  further that no payment shall be
required to be


 


5

















 


made and no payment may be
made by the Lessor pursuant to the immediately preceding proviso to the extent
that an Amortization Event of Potential Amortization Event exists or would be
caused by such payment.


 


2.7.  Limitations on the Leasing or
Redesignation of Certain Vehicles. 
The Lessor and the Lessee hereby agree that the Lessor shall not lease
to the Lessee New Vehicles or Transferred Vehicles pursuant to
Section 2.1, the Lessor shall not sell HVF Vehicles to HGI pursuant to
Section 1.06 of the Purchase Agreement and the Lessor shall not
redesignate Program Vehicles as Non-Program Vehicles pursuant to Section 2.6
if, as of the date of the addition of such New Vehicles or Transferred Vehicles
hereunder, the sale of such HVF Vehicles or such redesignation, after giving
effect to such addition, sale or redesignation, (a) an Enhancement
Deficiency would exist (after giving effect to any simultaneous voluntary
increases in the level of Enhancement permitted under the Indenture), unless
such addition, sale or redesignation would decrease the amount of, or cure,
such Enhancement Deficiency or (b) there would be a failure or violation
of any other conditions, requirements or restrictions with respect to the
leasing of Eligible Vehicles under this Agreement as is specified in any Series
Supplement.


 


2.8.  Conditions to Each Lease of Vehicle.  The agreement of the Lessor to lease any Vehicle
to the Lessee hereunder is subject to the following conditions precedent being
satisfied on or prior to the Vehicle Operating Lease Commencement Date for such
Vehicle.  The Lessee hereby agrees that
each acceptance of a Vehicle under the Purchase Agreement, the Hertz
Contribution Agreement or the HFC Purchase Agreement shall be deemed to
constitute a representation and warranty by the Lessee to the Lessor and the
Trustee that all the conditions precedent to the leasing of such Vehicle
hereunder shall have been satisfied and shall constitute acceptance by the
Lessee of such Vehicle under the Lease as of such Vehicle Operating Lease
Commencement Date:


 


(a)  No Default.  No Potential Operating Lease Event of Default
or Operating Lease Event of Default shall have occurred and be continuing on
such date or would result from the leasing of such Vehicle hereunder;


 


(b)  Funding.  HVF shall have sufficient funds available
under the Indenture or otherwise to purchase such Vehicle from HGI or HFC
pursuant to the Purchase Agreement or the HFC Purchase Agreement, respectively;


 


(c)  Representations and Warranties.  The representations and warranties contained
in Section 25 are true and correct in all material respects as of such
date;


 


(d)  Eligible Vehicle.  Such Vehicle is an Eligible Vehicle and
(x) if such Vehicle is being purchased under the HFC Purchase Agreement,
such Vehicle satisfies the definition of Service Vehicle and (y) if such
Vehicle is being contributed pursuant to the Hertz Contribution Agreement, such
Vehicle satisfies the definition of Initial Hertz Vehicle; and


 


6

















 


(e)  No Violation of Section 2.7.  No violation of Section 2.7 shall have
occurred and be continuing on such date or would result from the leasing of
such Vehicle hereunder.


 


2.9.  Compliance with Master Exchange
Agreement.  In connection with
(x) any return by the Servicer of a Vehicle leased hereunder to a
Manufacturer pursuant to Section 3.1(b), (y) any sale by the Servicer
of a Vehicle leased hereunder to a third party pursuant to Section 2.5 or
(z) other disposition of a Vehicle leased hereunder, the Servicer agrees,
to the extent requested by the Lessor, to cooperate with the Lessor in
effecting such sale or return on behalf of the Lessor pursuant to, and in
accordance with, the terms of the Master Exchange Agreement.


 


3.  TERM.


 


3.1.  Vehicle Term.  (a) 
  The “Vehicle Operating Lease Commencement Date” with
respect to any Vehicle shall mean the date referenced in the applicable New Vehicle
Schedule, Transferred Vehicle Schedule, Initial Hertz Vehicle Schedule or
Service Vehicle Schedule with respect to such Vehicle but in no event shall
such date be a date later than the date that funds are expended by HVF to
acquire such Vehicle (such date, the “Vehicle Funding Date” for such
Vehicle).  The “Vehicle Term” with
respect to each Vehicle (other than a Vehicle which has a Special Term) shall
extend from the Vehicle Operating Lease Commencement Date through the earliest
of (i) if such Vehicle is a Program Vehicle returned to a Manufacturer
under a Manufacturer Program, the Turnback Date for such Vehicle, (ii) if
such Vehicle is a Vehicle sold to a third party pursuant to Section 2.5,
the date on which funds in respect of such sale are deposited in the Collection
Account or an HVF Exchange Account (by such third party or by the Servicer on
behalf of such third party), (iii) if such Vehicle is sold to the Lessee
pursuant to Section 2.4, the date on which the Vehicle Purchase Price for
such Vehicle is deposited into the Collection Account, (iv) if such
Vehicle becomes a Casualty or an Ineligible Vehicle, the date funds in the
amount of the Termination Value thereof are deposited in the Collection Account
by the Lessee, (v) if such Vehicle becomes a Transferred HVF Vehicle, the
date funds in the amount of the Transfer Price thereof are deposited in the
Collection Account by HGI, (vi) if such Vehicle becomes a Rejected
Vehicle, the date the Rejected Vehicle Payment is deposited in the Collection
Account and (vii) the date that is the last Business Day of the month that
is 36 months after the month in which the Vehicle Operating Lease
Commencement Date occurs with respect to such


 


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Vehicle (the earliest of
such seven dates being referred to as the “Vehicle Operating Lease
Expiration Date” for such Vehicle). 
The “Vehicle Term” with respect to each Vehicle which has a
Special Term shall extend through the earlier of (i) the last date of the
Special Term for such Vehicle as the same may be extended in accordance with
the following sentence and (ii) the Vehicle Operating Lease Expiration
Date for such Vehicle.  The Special Term
shall be automatically renewed until the date that is the last Business Day of
the month that is 36 months after the month in which the Vehicle Operating
Lease Commencement Date occurs with respect to such Vehicle, unless the Lessor
or the Lessee gives prior notice of non-renewal of the Special Term to the
Lessor or the Lessee, as applicable, during the period of any Special Term, or
the Vehicle Operating Lease Expiration Date occurs during the period of any
Special Term.  The “Special Term”
shall mean (i) 180 days with respect to Vehicles titled in the State
of Texas and the State of Maryland; (ii) one year with respect to Vehicles
titled in the State of Illinois; (iii) eleven months with respect to
Vehicles titled in the State of Iowa, the Commonwealth of Massachusetts, the
State of Maine, the State of Vermont and the Commonwealth of Virginia;
(iv) 30 days with respect to Vehicles titled in the State of Nebraska
and the State of West Virginia and (v) 28 days with respect to
Vehicles titled in the State of South Dakota.


 


(b)  Subject to Sections 2.4 and 2.5(a), the
Lessee shall deliver each Program Vehicle to the Servicer for return to the
related Manufacturer in accordance with such Manufacturer Program (a) not
prior to the end of the minimum holding period specified in the related
Manufacturer Program (the “Minimum Term”), (b) not later than the
end of the maximum holding period specified in the related Manufacturer Program
(the “Maximum Term”), and (c) in any event, no later than the
Maximum Lease Termination Date with respect to such Vehicle.  Upon receipt of a Program Vehicle for return
to the related Manufacturer, the Servicer will return such Program Vehicle to
the nearest related Manufacturer official auction or other facility designated
by such Manufacturer at the Servicer’s expense and otherwise in accordance with
the requirements of the applicable Manufacturer Program.  If the Lessee delivers a Program Vehicle to
the Servicer for return to the related Manufacturer before the Minimum Term,
the Lessee will make a payment in an amount equal to the Early Termination
Payment to the Lessor in accordance with Section 13.4, unless such Vehicle
is a Casualty or becomes an Ineligible Vehicle, in which case, the disposition
of such Vehicle will be handled in accordance with Section 6.  If the Lessee delivers a Program Vehicle to
the Servicer for return to the related Manufacturer after the Maximum Term, the
Lessee shall pay to the Lessor the Casualty Payment in respect of such Vehicle
in accordance with Section 6.


 


3.2.  Term. 
The “Operating Lease Commencement Date” shall mean the Initial
Closing Date.  The “Operating Lease
Expiration Date” shall mean the later of (i) the date of the final
payment in full of the last Note Outstanding and (ii) the Vehicle
Operating Lease Expiration Date for the last Vehicle leased by the Lessee
hereunder.  The “Term” of this
Agreement shall mean the period commencing on the Operating Lease Commencement
Date and ending on the Operating Lease Expiration Date.


 


4.  RENT AND CHARGES.  The Lessee will pay Rent due and payable on a
monthly basis as set forth in this Section 4.


 


4.1.  Monthly Base Rent.  The “Monthly Base Rent” for each
Payment Date and each Vehicle shall be the sum of all Depreciation Charges that
have accrued with respect to such Vehicle during the Related Month, as adjusted
in accordance with Section 4.4.


 


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4.2.  Monthly Variable Rent.  The “Monthly Variable Rent” for each
Payment Date and each Vehicle shall equal the sum of (1) the product of
(a) an amount equal to the sum of (i) all interest accruing on each
Series of Notes Outstanding during the Interest Period for such Series of Notes
ending on such Payment Date or on a date immediately preceding such Payment
Date, (ii) all interest due and payable under the HVF Credit Facility as
of such Payment Date and (iii) all Carrying Charges for such Payment Date
multiplied by (b) the quotient obtained by dividing (i) the Net Book
Value as of the last day of the Related Month (or, if earlier, the Disposition
Date) of such Vehicle by (ii) the aggregate Net Book Values as of the last
day of the Related Month (or, if earlier, the Disposition Date) of all Vehicles
leased hereunder during the Related Month plus (2) if such Vehicle
is a Non-Eligible Program Vehicle or a Non-Program Vehicle, 1.50% of the
Net Book Value of such Vehicle as of the last day of the Related Month (or, if
later, as of the Vehicle Operating Lease Commencement Date of such Vehicle) plus
(3) 2% per annum, payable at one-twelfth the annual rate, of the Net Book
Value of such Vehicle as of the last day of the Related Month (or, if later, as
of the Vehicle Operating Lease Commencement Date of such Vehicle).


 


4.3.  Rent. 
“Rent” for each Vehicle means the Monthly Base Rent plus Monthly
Variable Rent for such Vehicle.


 


4.4.  Monthly Base Rent Adjustments.  (a)  If
the Vehicle Operating Lease Commencement Date occurs (i) with respect to a
Program Vehicle, prior to the In-Service Date for such Program Vehicle
pursuant to its Manufacturer Program set forth in the Monthly Servicing
Certificate for the Related Month in which such Vehicle Operating Lease
Commencement Date occurs or (ii) with respect to a Non-Program Vehicle,
prior to the date designated as the In-Service Date of such Non-Program
Vehicle set forth in the Monthly Servicing Certificate for the Related Month in
which such Vehicle Operating Lease Commencement Date occurs, the Depreciation
Charges that accrued with respect to such Vehicle between its Vehicle Operating
Lease Commencement Date and its In-Service Date during the Related Month
in which such Vehicle Operating Lease Commencement Date occurs shall be
deducted from the Monthly Base Rent for such Vehicle for the following Payment
Date.


 


(b)  If the Vehicle Operating Lease Commencement
Date occurs (i) with respect to a Program Vehicle, after the In-Service
Date for such Program Vehicle pursuant to its Manufacturer Program set forth in
the Monthly Servicing Certificate for the Related Month in which such Vehicle
Operating Lease Commencement Date occurs or (ii) with respect to a
Non-Program Vehicle, after the date designated as the In-Service Date of
such Non-Program Vehicle set forth in the Monthly Servicing Certificate for the
Related Month in which such Vehicle Operating Lease Commencement Date occurs,
the Depreciation Charges that accrued with respect to such Non-Program Vehicle
between its In-Service Date and its Vehicle Operating Lease Commencement
Date during the Related Month in which such Vehicle Operating Lease
Commencement Date occurs shall be included in the Monthly Base Rent for such Vehicle
for the following Payment Date.


 


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(c)  If a Program Vehicle is subject to a
Manufacturer Program that calculates Depreciation Charges on a basis other than
a 30-day month, an adjustment shall be made to the Monthly Base Rent for
such Vehicle for the Payment Date following the Related Month in which the
Vehicle Operating Lease Expiration Date for such Program Vehicle occurs to
reconcile the Depreciation Charges that accrued with respect to such Program Vehicle
during the Vehicle Term of such Program Vehicle with the depreciation charges
that accrued with respect to such Program Vehicle under the applicable
Manufacturer Program.


 


4.5.  Payment of Monthly Base Rent.  On each Payment Date, after giving full
credit for all prepayments on account thereof pursuant to Section 4.12,
the Lessee shall pay to the Lessor the Monthly Base Rent for such Payment Date
for each Vehicle that was leased by the Lessee under this Agreement on any day
during the Related Month.


 


4.6.  Payment of Monthly Variable Rent.  On each Payment Date, after giving full
credit for all prepayments on account thereof pursuant to Section 4.12,
the Lessee shall pay to the Lessor the Monthly Variable Rent for such Payment
Date for each Vehicle that was leased by the Lessee under this Agreement on any
day during the Related Month.


 


4.7.  Rejected Vehicles.  If a Vehicle becomes a Rejected Vehicle on
any day during the Related Month and HGI makes the Rejected Vehicle Payment
within five Business Days of the date such Vehicle became a Rejected Vehicle,
Monthly Base Rent shall not be payable by the Lessee in respect of such Vehicle
for the following Payment Date.  If a
payment of Monthly Base Rent is made on the Payment Date during the Related
Month in which a Vehicle becomes a Rejected Vehicle, the amount of such payment
shall be credited to the Lessee on the following Payment Date (such amount
being referred to as a “Rejected Vehicle Credit”).


 


4.8.  Making of Payments.  All payments of Rent hereunder (and any other
payments hereunder) shall be made by the Lessee to, or for the account of, the
Lessor in immediately available funds, without setoff, counterclaim or
deduction of any kind.  All such payments
shall be deposited into the Collection Account not later than 12:00 noon,
New York City time, on the date due.  If
any payment of Rent (or any other payments hereunder) falls due on a day which
is not a Business Day, then such due date shall be extended to the next
following Business Day and Monthly Variable Rent shall accrue through such
Business Day.  If the Lessee pays less
than the entire amount of Rent (or any other amounts) due on any Payment Date,
after giving full credit for all prepayments made with respect to such Payment
Date pursuant to Section 4.12, then the payment received from the Lessee
in respect of such Payment Date shall be first applied to the Monthly Variable
Rent due on such Payment Date.


 


4.9.  Billing Process.  The Servicer shall calculate all Rent,
Casualty Payments, Special Default Payments, Early Termination Payments,
Redesignation


 


10

















 


Amounts and Rejected Vehicle
Credits.  The Servicer shall aggregate
the Lessee’s Rent due on all Vehicles, together with any other amounts due to the
Lessor and any credits owing to the Lessee, and provide to the Lessor a monthly
statement of the total amount, in a form acceptable to the Lessor, no later
than the Determination Date.  The monthly
statement shall include a description of the charges owing from the Lessee and
credits owing to the Lessee.


 


4.10.  Casualty Payments.  On each Payment Date, after giving full
credit for all prepayments on account thereof pursuant to Section 4.12,
the Lessee shall pay to the Lessor all Casualty Payments and Early Termination
Payments that have accrued with respect to all Vehicles that were leased by the
Lessee as provided in Section 6.2 and Section 13.4.


 


4.11.  Late Payment.  In the event the Lessee fails to remit
payment of any amount due under this Agreement on or before the Payment Date or
when otherwise due and payable hereunder, the amount not paid will be
considered delinquent and the Lessee will pay a charge equal to
(i) interest payable by HVF on any overdue amounts owed by HVF on its
related obligations, or (ii) if no such interest is due and payable by
HVF, one-month LIBOR plus 1.0%, times the delinquent amount from the
Payment Date until such delinquent amount (with accrued interest) is received
by the Trustee.  “LIBOR” means,
with respect to amounts due and unpaid under this Agreement, the London
Interbank Offered Rate appearing on Page 3750 of the Dow Jones Market
Screen (or on any successor or substitute page of such service or any successor
to or substitute for such screen, providing rate quotations comparable to those
currently provided on such page of such screen) at approximately
11:00 a.m., London time as the rate for dollar deposits with a one-month
maturity that is effective on the date that such amounts are due and unpaid
under this Agreement.


 


4.12.  Prepayments.  On any date, the Lessee may, at its option,
pay to the Lessor, in whole or in part, any month’s Rent or other payments, or
portion thereof, in advance of the related Payment Date to the extent that such
Rent or other payments have accrued.


 


4.13.  Net Lease.  THIS AGREEMENT SHALL BE A NET LEASE, AND THE
LESSEE’S OBLIGATION TO PAY ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE
AND UNCONDITIONAL, AND SHALL NOT BE SUBJECT TO ANY ABATEMENT, SETOFF,
COUNTERCLAIM, DEDUCTION OR REDUCTION FOR ANY REASON WHATSOEVER.  The obligations and liabilities of the Lessee
hereunder shall in no way be released, discharged or otherwise affected (except
as may be expressly provided herein) for any reason, including without
limitation: (i) any defect in the condition, merchantability, quality or
fitness for use of the Vehicles or any part thereof; (ii) any damage to,
removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Vehicles or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Vehicles or any part thereof; (iv) any defect in or any Lien on title to
the Vehicles


 


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or any part thereof;
(v) any change, waiver, extension, indulgence or other action or omission
in respect of any obligation or liability of the Lessee or the Lessor;
(vi) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to the Lessee, the
Lessor or any other Person, or any action taken with respect to this Agreement
by any trustee or receiver of any Person mentioned above, or by any court;
(vii) any claim that the Lessee has or might have against any Person,
including without limitation the Lessor; (viii) any failure on the part of
the Lessor or the Lessee to perform or comply with any of the terms hereof or
of any other agreement; (ix) any invalidity or unenforceability or
disaffirmance of this Agreement or any provision hereof or any of the other
Related Documents or any provision of any thereof, in each case whether against
or by the Lessee or otherwise; (x) any insurance premiums payable by the
Lessee with respect to the Vehicles; or (xi) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not the Lessee shall
have notice or knowledge of any of the foregoing and whether or not foreseen or
foreseeable.  This Agreement shall be
noncancellable by the Lessee and, except as expressly provided herein, the
Lessee, to the extent permitted by law, waives all rights now or hereafter
conferred by statute or otherwise to quit, terminate or surrender this
Agreement, or to any diminution or reduction of Rent or other amounts payable
by the Lessee hereunder.  All payments by
the Lessee made hereunder shall be final (except to the extent of adjustments
provided for herein), absent manifest error and, except as otherwise provided
herein, the Lessee shall not seek to recover any such payment or any part
thereof for any reason whatsoever, absent manifest error.  If for any reason whatsoever this Agreement
shall be terminated in whole or in part by operation of law or otherwise except
as expressly provided herein, the Lessee shall nonetheless pay an amount equal
to all Rent and all other amounts due hereunder at the time and in the manner
that such payments would have become due and payable under the terms of this
Agreement as if it had not been terminated in whole or in part.  All covenants and agreements of the Lessee
herein shall be performed at its cost, expense and risk unless expressly
otherwise stated.


 


5.  INSURANCE. 
The Lessee represents that it is and at all times hereunder shall remain
a self-insurer, or will provide insurance, in accordance with all applicable
state law requirements and agrees to maintain or cause to be maintained
insurance/self-insurance coverage in force as follows:


 


5.1.  Comprehensive Public Liability, Property
Damage, and Catastrophic Physical Damage. 
Comprehensive public liability and property damage protection in respect
of the possession, condition, maintenance, operation and use of the Vehicles,
in the amount required to meet the minimum financial responsibility
requirements mandated by applicable state law for each occurrence, and
catastrophic physical damage insurance, in an amount not less than
$50,000,000.  Catastrophic physical
damage insurance shall name the Collateral Agent as loss payee as its interests
may appear.


 


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5.2.  Delivery of Certificate of Insurance.  On or prior to the Initial Closing Date, the
Lessee shall deliver to the Lessor, the Trustee and the Collateral Agent a
certificate(s) of insurance/self-insurance as to the items required by
Section 5.1 herein above.  The
Lessee shall not change or cancel such insurance/self-insurance without
giving at least 30 days’ prior written notice to the Lessor, the Trustee
and the Collateral Agent.  Any insurance,
as opposed to self-insurance, obtained by the Lessee shall be obtained from
a  Qualified Insurer only.


 


6.  RISK OF LOSS; CASUALTY AND INELIGIBLE VEHICLE
OBLIGATIONS.


 


6.1.  Risk of Loss Borne by Lessees.  Upon payment by the Lessor for each Vehicle,
as between the Lessor and the Lessee, the Lessee assumes and bears the risk of
loss, damage, theft, taking, destruction, attachment, seizure, confiscation or
requisition with respect to such Vehicle, however caused or occasioned, and all
other risks and liabilities, including personal injury or death and property
damage, arising with respect to such Vehicle or the manufacture, purchase,
acceptance, rejection, ownership, delivery, leasing, subleasing, possession,
use, inspection, registration, operation, condition, maintenance, repair,
storage, sale, return or other disposition of such Vehicle, howsoever arising.


 


6.2.  Casualty; Ineligible Vehicles.  If a Vehicle suffers a Casualty or becomes an
Ineligible Vehicle, then the Lessee will promptly (i) notify the Servicer
thereof and the Servicer shall include notice of such occurrence in the Monthly
Servicing Certificate for the Related Month during which such Vehicle suffered
the Casualty or became an Ineligible Vehicle and (ii) promptly, but in no
event later than the Payment Date with respect to the Related Month during
which such Vehicle suffered a Casualty or became an Ineligible Vehicle, pay to
the Lessor the Termination Value of such Vehicle as of the date such Vehicle
became a Casualty or an Ineligible Vehicle (the “Casualty Payment”).  Upon receipt of the Casualty Payment on or
before the next Payment Date, this Agreement will terminate with respect to
such Vehicle.  Upon receipt of the
Casualty Payment by the Lessor, (i) the Lessor shall cause title to such Vehicle
to be transferred to the Lessee and (ii) the Lessee shall be entitled to
any physical damage insurance proceeds applicable to such Vehicle.


 


7.  VEHICLE USE. 
The Lessee may use Vehicles leased hereunder in its regular course of
business and the Lessee’s and its subsidiaries’ employees may use Vehicles
leased hereunder in their personal or professional capacities, subject to
Sections 2.5 and 17 hereof and Section 9.2 of the Base
Indenture.  Such use shall be confined
primarily to the United States, with limited use in Canada and Mexico; provided
that the principal place of business or rental office of the Lessee with
respect to the Vehicles is located in the United States.  Subject to the preceding sentence, the Lessee
may, at its sole expense, change the place of principal location of any Vehicles.  Notwithstanding the foregoing, no change of
location shall be undertaken unless and until all legal requirements applicable
to such Vehicles shall have been met or obtained.  The Lessee shall not knowingly use any
Vehicles or knowingly permit the same to be used for any unlawful


 


13

















 


purpose.  The
Lessee shall use reasonable precautions to prevent loss or damage to
Vehicles.  The Lessee shall comply with
all applicable statutes, decrees, ordinances and regulations regarding titling,
registering, leasing, insuring and disposing of Vehicles and shall take
reasonable steps to ensure that operators are licensed.  The Lessee and the Lessor agree that the
Lessee shall perform, at its own expense, such Vehicle preparation and
conditioning services with respect to Vehicles leased by the Lessee hereunder
as are customary.  The Lessor or the
Trustee, or any authorized representative of the Lessor or the Trustee, may
during reasonable business hours from time to time, without disruption of the
Lessee’s business, subject to applicable law, inspect Vehicles wherever they
are located.  In addition to its normal
daily rental operations, the Lessee may sublet Vehicles to (A) Person(s)
in the ordinary course of business, so long as (i) the sublease to such
Person(s) is subject to the terms and conditions of this Agreement,
(ii) the Vehicles being subleased are being used in such Person(s)’ daily
rental car business and (iii) the aggregate Net Book Value of the Vehicles
being subleased at any one time is less than ten percent of the aggregate Net
Book Value of all Vehicles being leased under this Agreement at such time, and
(B) to any wholly-owned subsidiary of the Lessee (including HERC), so long
as (i) the sublease of such Vehicles to such wholly-owned subsidiary is
subject to the terms and conditions of this Agreement and expressly states that
it is subordinate in all respects to this Agreement and (ii) the Vehicles
being subleased are being used in such wholly-owned subsidiary’s daily rental
car business or equipment rental business, or by such subsidiary’s employees in
their personal or professional capacities. 
The sublease of any Vehicles permitted by this Section 7 shall not release
the Lessee from any obligations under this Agreement.


 


8.  LIENS. 
The Lessor may grant security interests in the Vehicles leased by the
Lessee hereunder without consent of the Lessee. 
Except for Permitted Liens, the Lessee shall keep all Vehicles free of
all Liens arising during the Term.  If on
the Vehicle Operating Lease Expiration Date for any Vehicle, there is a Lien on
such Vehicle, the Lessor may, in its discretion, remove such Lien and any sum
of money that may be paid by the Lessor in release or discharge thereof,
including reasonable attorneys’ fees and costs, will be paid by the Lessee upon
demand by the Lessor.


 


9.  NON-DISTURBANCE.  So long as the Lessee satisfies its
obligations hereunder, its quiet enjoyment, possession and use of the Vehicles
will not be disturbed during the Term subject, however, to Sections 2.5
and 17 hereof and except that the Lessor and the Trustee each retains the
right, but not the duty, to inspect such Vehicles without disturbing the
ordinary conduct of the Lessee’s business. 
Upon the request of the Lessor or the Trustee from time to time, the
Lessee will make reasonable efforts to confirm to the Lessor and the Trustee
the location, mileage and condition of each Vehicle leased by the Lessee
hereunder and to make available for the Lessor’s or the Trustee’s inspection
within a reasonable time period, not to exceed 45 days, such Vehicles at
the location where such Vehicles are normally domiciled.  Further, the Lessee will, during normal
business hours and with prior notice of three Business Days, make its records
pertaining to the Vehicles available to the Lessor or the Trustee for
inspection at the location where the Lessee’s records are normally domiciled.


 


14

















 


10.  FEES; TRAFFIC SUMMONSES; PENALTIES AND FINES.  The Lessee shall be responsible for the
payment of all registration fees, title fees, license fees or other similar
governmental fees and taxes (including the cost of any recording or
registration fees or other similar governmental charges with respect to the
notation on the Certificates of Title of the Vehicles of the interest of the
Collateral Agent), all costs and expenses in connection with the transfer of
title of, or reflection of the interest of any lienholder in, any Vehicle,
traffic summonses, penalties, judgments and fines incurred with respect to any
Vehicle leased hereunder during the Vehicle Term for such Vehicle or imposed
during the Vehicle Term for such Vehicle by any Governmental Authority or any
court of law or equity with respect to such Vehicles in connection with the
Lessee’s operation of such Vehicles. 
Pursuant to the Nominee Agreement, the Hertz Nominee Agreement or the
HFC Nominee Agreement, the Lessor has directed the Nominee or the HFC Nominee,
respectively, to execute a power of attorney to the Servicer to allow the
Servicer to title, register and dispose of the Vehicles leased hereunder in
accordance with the terms hereof. 
Pursuant to the Hertz Nominee Agreement, the Lessor has directed the
Hertz Nominee to execute a power of attorney to the Lessor, and the Lessor has
in turn executed a power of attorney to the Servicer, to allow the Servicer to
title, register and dispose of the Vehicles leased hereunder in accordance with
the terms hereof.


 


11.  MAINTENANCE AND REPAIRS.  The Lessee shall pay for all maintenance and
repairs to keep the Vehicles in good working order and condition, and the
Lessee will maintain the Vehicles as required in order to keep the
Manufacturer’s warranty in force.  The
Lessee will return Vehicles to an authorized Manufacturer facility or
Manufacturer authorized warranty station for warranty work.  The Lessee will comply with any
Manufacturer’s recall of any Vehicle. 
The Lessee will pay, or cause to be paid, all usual and routine expenses
incurred in the use and operation of Vehicles including, but not limited to,
fuel, lubricants, and coolants.  The
Lessee shall not make any material alterations to any Vehicles without the
prior consent of the Lessor.  Any
improvements or additions to any Vehicles shall become and remain the property
of the Lessor, except that any addition to Vehicles made by the Lessee shall
remain the property of the Lessee if such addition can be disconnected from
such Vehicles without impairing the functioning of such Vehicles or its resale
value, excluding such addition.


 


12.  VEHICLE WARRANTIES.


 


12.1.  No Lessor Warranties.  THE LESSEE ACKNOWLEDGES THAT THE LESSOR IS
NOT THE MANUFACTURER, THE AGENT OF THE MANUFACTURER, OR THE DISTRIBUTOR OF THE
VEHICLES.  THE LESSOR MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE FITNESS, SAFENESS, DESIGN,
MERCHANTABILITY, CONDITION, QUALITY, CAPACITY OR WORKMANSHIP OF THE
VEHICLES NOR ANY WARRANTY THAT THE VEHICLES WILL SATISFY THE REQUIREMENTS OF
ANY LAW OR ANY CONTRACT SPECIFICATION, AND AS BETWEEN THE LESSOR AND THE
LESSEE, THE LESSEE AGREES TO BEAR ALL SUCH RISKS AT ITS SOLE COST AND
EXPENSE.  THE LESSEE SPECIFICALLY WAIVES
ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY VEHICLE FOR


 


15

















 


BREACH OF ANY WARRANTY OF
ANY KIND WHATSOEVER AND, AS TO THE LESSOR, THE LESSEE LEASES THE VEHICLES “AS
IS.”  IN NO EVENT SHALL THE LESSOR BE
LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHATSOEVER OR HOWSOEVER
CAUSED.


 


12.2.  Manufacturer’s Warranties.  If a Vehicle is covered by a Manufacturer’s
warranty, the Lessee, during the Vehicle Term for such Vehicle, shall have the
right to make any claims under such warranty which the Lessor could make.


 


13.  VEHICLE USAGE GUIDELINES AND RETURN; SPECIAL
DEFAULT PAYMENTS; EARLY TERMINATION PAYMENTS.


 


13.1.  Usage. 
As used herein, “Vehicle Turn-In Condition” (a) with
respect to each Program Vehicle shall mean the standard established by a set of
criteria for evaluating such Vehicle upon its delivery to the Manufacturer and
shall be determined in accordance with the related Manufacturer Program and
(b) with respect to each Non-Program Vehicle shall mean (i) if such
Non-Program Vehicle is manufactured by the same Manufacturer as any Program
Vehicle leased hereunder, the same standard as required with respect to such
Program Vehicle and (ii) if such Non-Program Vehicle does not satisfy
clause (i) above, such condition that would reasonably be considered to be
normal wear and tear or otherwise de minimis damages by the Manufacturer of
such Vehicle (or its authorized agent) under such Manufacturer’s Manufacturer
Program or, if such Manufacturer does not maintain a Manufacturer Program,
under the Manufacturer Program of another Manufacturer with comparable sales
volume.


 


13.2.  Return.  The Lessee agrees that the Vehicles will be
in Vehicle Turn-In Condition upon return to the Lessor pursuant to
Section 2.3.  Any rebate or credits
applicable to the unexpired term of any license plates for a Vehicle leased
hereunder shall inure to the benefit of the Lessee.  Each Program Vehicle not meeting the Vehicle
Turn-In Condition under the applicable Manufacturer Program will, unless
redesignated as a Non-Program Vehicle pursuant to Section 2.6, be treated
as a Casualty.  The Lessee will provide
condition report data concerning the Program Vehicles returned to the
Manufacturers during the Related Month to the Lessor in the format set forth on
the Condition Report(s) on the Determination Date.


 


13.3.  Special Default Payments.  (a)  On
the Determination Date immediately following the receipt of payment of the
Repurchase Price of each Program Vehicle from the Manufacturer (or the receipt
of payment of the Repurchase Price of each such Program Vehicle sold through an
auction conducted by or through a Manufacturer) or on the Determination Date
immediately following the date by which the Repurchase Price of each such
Program Vehicle turned back to a Manufacturer would have been paid if not for a
Manufacturer Event of Default, the Servicer will calculate the amount of any
Excess Damage


 


16

















 


Charges and/or Excess
Mileage Charges applicable to such Program Vehicle pursuant to the applicable
Manufacturer Program, and the Lessee will pay the full amount of such charges
to the Lessor on the Payment Date immediately following such Determination Date
(any such charges are referred to as “Program Vehicle Special Default
Payments”).


 


(b)  On the first Determination Date following the
last day of the Related Month in which the Disposition Proceeds from the sale
or other disposition of any Non-Program Vehicle (other than a Casualty, a
Vehicle that has been purchased by the Lessee pursuant to Section 2.4 or a
Transferred HVF Vehicle) are deposited into a Collateral Account, the Servicer
will calculate, in respect of such Non-Program Vehicle, an amount equal to the
quotient of (i) the sum of all Program Vehicle Special Default Payments
payable by the Lessee on the twelve Payment Dates preceding such Determination
Date divided by (ii) the number of Program Vehicles that were
turned back to Manufacturers or sold through auctions conducted by or through
Manufacturers during the twelve Related Months respectively preceding such
twelve Payment Dates, and the Lessee will pay such amount to the Lessor on the
Payment Date immediately following such Determination Date (any such charges
are referred to as “Non-Program Vehicle Special Default Payments” and,
together with the Program Vehicle Special Default Payments, the “Special
Default Payments”).


 


13.4.  Early Termination Payments.  If the Lessee turns back any Program Vehicle
to a Manufacturer under its Manufacturer Program before the Minimum Term, on
the Payment Date immediately following the receipt of the Repurchase Price of
such Vehicle from such Manufacturer or on the Payment Date immediately
following the date by which the Repurchase Price would have been paid if not
for a Manufacturer Event of Default, the Lessee will pay the Lessor an amount
equal to the excess, if any, of (x) the Termination Value of such Vehicle
(as of the Turnback Date) over (y) the sum of the Repurchase Price
received with respect to such Vehicle or that would have been received but for
a Manufacturer Event of Default, as applicable, and any Special Default
Payments made by the Lessee in respect of such Vehicle pursuant to
Section 13.3 (any such amount is referred to as an “Early Termination
Payment”).  On each Payment Date, the
Lessee shall pay to the Lessor all Early Termination Payments that have accrued
during the Related Month.  The provisions
of this Section 13.4 will survive the expiration or earlier termination of
the Term.


 


14.  DISPOSITION PROCEDURE.  The Servicer will comply with the
requirements of law and the requirements of the Manufacturer Programs in
connection with, among other things, the delivery of Certificates of Title and
documents of transfer signed as necessary, signed Condition Reports, and signed
odometer statements to be submitted with the Program Vehicles returned to a
Manufacturer pursuant to Section 3.1(b) and accepted by the Manufacturer
or its agent at the time of Program Vehicle return.


 


15.  ODOMETER DISCLOSURE REQUIREMENT.  The Servicer agrees to comply with all
requirements of law and all Manufacturer Program requirements with


 


17

















 


respect to each Vehicle in connection with the
transfer of ownership by the Lessor of such Vehicle, including, without
limitation, the submission of any required odometer disclosure statement at the
time of any such transfer of ownership.


 


16.  ASSIGNMENT.


 


16.1.  Right of the Lessor to Assign this
Agreement.  The Lessor shall have the
right to finance the acquisition and ownership of Vehicles by selling or
assigning its right, title and interest in this Agreement, including, without
limitation, in moneys due from the Lessee and any third party under this
Agreement, to the Trustee for the benefit of the Noteholders; provided, however,
that any such sale or assignment shall be subject to the rights and interest of
the Lessee in the Vehicles, including but not limited to the Lessee’s right of
quiet and peaceful possession of such Vehicles as set forth in Section 9
hereof, and under this Agreement.


 


16.2.  Limitations on the Right of the Lessee to
Assign this Agreement.  The Lessee
shall not assign this Agreement or any of its rights hereunder to any other
party; provided, however, that the Lessee may rent the Vehicles
leased hereunder under the terms of its normal daily rental programs, and may
sublease Vehicles pursuant to Section 7. 
Any purported assignment in violation of this Section 16.2 shall be
void and of no force or effect.  Nothing
contained herein shall be deemed to restrict the right of the Lessee to acquire
or dispose of, by purchase, lease, financing, or otherwise, motor vehicles that
are not subject to the provisions of this Agreement.


 


17.  DEFAULT AND REMEDIES THEREFOR.


 


17.1.  Events of Default.  Any one or more of the following will
constitute an event of default (an “Operating Lease Event of Default”)
as that term is used herein:


 


17.1.1.  there occurs a default in the payment of any
Rent or other amount payable by the Lessee under this Agreement for a period of
five Business Days (without giving effect to any payment made with available
Enhancement);


 


17.1.2.  any unauthorized assignment or transfer of
this Agreement by the Lessee occurs;


 


17.1.3.  the failure, in any material respect, of the
Lessee to maintain, or cause to be maintained, insurance as required in
Section 5;


 


17.1.4.  the failure, in a material respect, of the
Lessee to observe or perform any other covenant, condition, agreement or
provision hereof, including, but not limited to, usage, and maintenance, and
such default continues for more than thirty (30) days after the earlier of
the date written notice thereof is delivered by the Lessor or the Trustee to
the Lessee or the Lessee has actual knowledge thereof;


 


18

















 


17.1.5.  if any representation or warranty made by the
Lessee herein is inaccurate or incorrect or is breached or is false or
misleading in any material respect as of the date of the making thereof or any
schedule, certificate, financial statement, report, notice, or other writing
furnished by or on behalf of the Lessee to the Lessor or the Trustee is false
or misleading in any material respect on the date as of which the facts therein
set forth are stated or certified, and the circumstance or condition in respect
of which such representation, warranty or writing was inaccurate, incorrect,
breached, false or misleading in any material respect, as the case may be,
shall not have been eliminated or otherwise cured for thirty (30) days
after the earlier of (x) the date of the receipt of written notice thereof
from the Lessor or the Trustee to the Lessee and (y) the date the Lessee
learns of such circumstance or condition;


 


17.1.6.  an Event of Bankruptcy occurs with respect to
the Lessee;


 


17.1.7.  this Agreement or any portion thereof ceases
to be in full force and effect or a proceeding shall be commenced by the Lessee
to establish the invalidity or unenforceability of this Agreement;


 


17.1.8.  a Servicer Default occurs; or


 


17.1.9.  a Liquidation Event of Default occurs.


 


17.2.  Effect of Operating Lease Event of
Default.  If any Operating Lease
Event of Default described in Sections 17.1.1, 17.1.2, 17.1.6 or 17.1.9
shall occur, (x) the right of the Lessee to lease additional Vehicles from
the Lessor shall immediately terminate and (y) any accrued and unpaid Rent
and all other payments accrued but unpaid under this Agreement shall
automatically, without further action by the Lessor or the Trustee, become
immediately due and payable and (z) the Lessee shall, at the request of
the Lessor or the Trustee acting at the direction of the Requisite Investors,
return or cause to be returned all Vehicles leased by the Lessee subject to
this Agreement to the Lessor or the Trustee as the case may be in accordance
with the provisions of Section 2.3. 
If any other Operating Lease Event of Default shall occur, (x) the
right of the Lessee to lease additional Vehicles from the Lessor shall
automatically terminate and (y) the Trustee acting at the direction of the
Requisite Investors may declare any accrued and unpaid Rent and all other
payments accrued but unpaid under this Agreement to be due and payable
whereupon such Rent and such other charges, amounts and payments shall become
immediately due and payable.


 


17.3.  Rights of Lessor Upon Operating Lease
Event of Default.  If an Operating
Lease Event of Default, Limited Liquidation Event of Default or Liquidation
Event of Default shall occur, then the Lessor at its option may:


 


(i)  in the case of an Operating Lease Event of
Default, proceed by appropriate court action or actions, either at law or in
equity, to enforce performance by the Lessee of


 


19

















 


the applicable covenants and terms of this Agreement
or to recover damages for the breach hereof calculated in accordance with
Section 17.5; or


 


(ii)  in the case of a Liquidation Event of
Default, by notice in writing to the Lessee, terminate this Agreement in its
entirety and/or the right of possession hereunder of the Lessee of any or all
Vehicles and the Lessor may direct delivery by the Servicer of Certificates of
Title for the Vehicles to or upon the direction of the Lessor, whereupon all
rights and interests of the Lessee to such Vehicles will cease and terminate
(but the Lessee will remain liable hereunder as herein provided, provided,
however, its liability will be calculated in accordance with
Section 17.5); and, in the case of a Limited Liquidation Event of Default,
the Lessor may, by notice in writing to the Lessee, terminate the right of
possession hereunder of such number of Vehicles as will generate disposition
proceeds in an amount sufficient to pay all principal of and interest on (and
all other amounts due the Holders of) the Series of Notes as to which the
Limited Liquidation Event of Default shall have occurred, whereupon all rights
and interests of the Lessee to such Vehicles will cease and terminate (but the
Lessee will remain liable hereunder as provided, provided, however
that its liability will be calculated in accordance with
Section 17.5).  Upon termination of
the right of possession of the Lessee with respect to any Vehicles, the Lessor
or its agents may peaceably enter upon the premises of the Lessee or other
premises where such Vehicles may be located and take possession of them and
thenceforth hold, possess and enjoy the same free from any right of the Lessee,
or its successors or assigns, to use such Vehicles for any purpose whatsoever,
and the Lessor will, nevertheless, have a right to recover from the Lessee any
and all amounts which under the terms of this Section 17.3 (as limited by
Section 17.5 of this Agreement) as may be then due.  Each and every power and remedy hereby
specifically given to the Lessor will be in addition to every other power and
remedy hereby specifically given or now or hereafter existing at law, in equity
or in bankruptcy and each and every power and remedy may be exercised from time
to time and simultaneously and as often and in such order as may be deemed
expedient by the Lessor; provided, however, that the measure of damages
recoverable against the Lessee will in any case be calculated in accordance
with Section 17.5.  All such powers
and remedies will be cumulative, and the exercise of one will not be deemed a
waiver of the right to exercise any other or others.  No delay or omission of the Lessor in the
exercise of any such power or remedy and no renewal or extension of any
payments due hereunder will impair any such power or remedy or will be
construed to be a waiver of any default or any acquiescence therein.  Any extension of time for payment hereunder
or other indulgence duly granted to the Lessee will not otherwise alter or
affect the Lessor’s rights or the obligations hereunder of the Lessee.  The Lessor’s acceptance of any payment after
it will have become due hereunder will not be deemed to alter or affect the
Lessor’s rights hereunder with respect to any subsequent payments or defaults
therein.


17.4.  Liquidation Event of
Default, Limited Liquidation Event of Default and Non-Performance of Certain
Covenants.


 


(i)  If a Liquidation Event of Default or a
Limited Liquidation Event of Default shall have occurred and be continuing, the
Trustee, to the extent provided in the Indenture, shall have the rights against
the Lessee and the Collateral provided in the


 


20

















 


Indenture and the Collateral Agency Agreement upon a
Liquidation Event of Default or a Limited Liquidation Event of Default, as the
case may be, including the right to take possession of all or a portion of the Vehicles
immediately from the Lessee.


 


(ii)  Upon the occurrence of a Liquidation Event of
Default or a Limited Liquidation Event of Default, the Servicer shall return
any or all Program Vehicles to the related Manufacturers in accordance with the
instructions of the Lessor.  To the
extent any Manufacturer fails to accept any such Program Vehicles under the
terms of the applicable Manufacturer Program, the Lessor shall have the right
to otherwise dispose of such Program Vehicles and to direct the Servicer to
dispose of such Program Vehicles in accordance with its instructions.  Upon the occurrence of a Liquidation Event of
Default or a Limited Liquidation Event of Default, the Servicer shall dispose
of any or all Non-Program Vehicles in accordance with the instructions of the
Lessor.  To the extent the Servicer fails
to so dispose of any such Non-Program Vehicles, the Lessor shall have the right
to otherwise dispose of such Non-Program Vehicles.  In addition, following the occurrence of a
Liquidation Event of Default or a Limited Liquidation Event of Default, the
Lessor shall have all of the rights, remedies, powers, privileges and claims
vis-a-vis the Lessee, necessary or desirable to allow the Trustee to exercise
the rights, remedies, powers, privileges and claims given to the Trustee
pursuant to Sections 3.3 and 9.2 of the Indenture, and the Lessee
acknowledges that it has hereby granted to the Lessor all of the rights,
remedies, powers, privileges and claims granted by the Lessor to the Trustee
pursuant to Article 3 of the Indenture and that the Trustee may act in lieu of
the Lessor in the exercise of all such rights, remedies, powers, privileges and
claims.


 


17.5.  Measure of Damages.  If an Operating Lease Event of Default, a
Limited Liquidation Event of Default or a Liquidation Event of Default occurs
and the Lessor or the Trustee exercises the remedies granted to the Lessor or
the Trustee under this Article 17 or Section 9.2 of the Indenture,
the amount that the Lessor shall be permitted to recover from the Lessee as
payment shall be equal to:


 


(i)  all accrued and unpaid Rent for each Vehicle
to the earlier of the date of the return to the Lessor of such Vehicle or
disposition by the Servicer of such Vehicle in accordance with the terms of
this Agreement and all other payments payable under this Agreement; plus


 


(ii)  any reasonable out-of-pocket damages and
expenses, including reasonable attorneys’ fees and expenses which the Lessor or
the Trustee will have sustained by reason of the Operating Lease Event of
Default, Limited Liquidation Event of Default or Liquidation Event of Default,
together with reasonable sums for such attorneys’ fees and such expenses as
will be expended or incurred in the seizure, storage, rental or sale of the
Vehicles or in the enforcement of any right or privilege hereunder or in any
consultation or action in such connection; plus


 


(iii)  interest from time to time on amounts due and
unpaid under this Agreement at one-month LIBOR plus 1.0% computed from
the date of the Operating Lease Event of Default, Limited Liquidation Event of
Default or Liquidation Event of Default or the date payments were originally
due to the Lessor under this Agreement or from the date of


 


21

















 


each expenditure by the Lessor or the Trustee, as
applicable, which is recoverable from the Lessee pursuant to this
Section 17, as applicable, to and including the date payments are made by
the Lessee.


 


17.6.  Vehicle Return Default.  If the Lessee fails to comply with the
provisions of (a) Section 2.3 hereof with respect to any Vehicle or
(b) Section 3.1 with respect to returning any Program Vehicles to the
Servicer for return to the related Manufacturer not later than the end of the
Maximum Term (each, a “Vehicle Return Default”), and the Vehicle is not
redesignated as a Non-Program Vehicle in accordance with Section 2.6, then
the Lessor at its option may:


 


(i)  proceed by appropriate court action or
actions, either at law or equity, to enforce performance by the Lessee of such
covenants and terms of this Agreement or to recover damages for the breach
hereof calculated in accordance with Section 17.5 as it relates to such
Vehicle; or


 


(ii)  by notice in writing to the Lessee following
the occurrence of such Vehicle Return Default, terminate this Agreement with
respect to such Vehicle and/or the right of possession hereunder of the Lessee
with respect to such Vehicle and the Lessor may direct delivery by the Servicer
of the Certificate of Title to such Vehicle to or upon the order of the Lessor,
whereupon all rights and interests of the Lessee to such Vehicle will cease and
terminate (but the Lessee will remain liable hereunder as herein provided, provided,
however, that its liability will be calculated in accordance with Section 17.5
as it relates to such Vehicle); and thereupon the Lessor or its agents may
peaceably enter upon the premises of the Lessee or other premises where the
Vehicle may be located and take possession of it and thenceforth hold, possess
and enjoy the same free from any right of the Lessee or its successors or
assigns to use such Vehicle for any purpose whatsoever and the Lessor will
nevertheless have a right to recover from the Lessee any and all amounts which,
under the terms of this Agreement may then be due; or


 


(iii)  hold, keep idle or lease to others such
Vehicle, as the Lessor in its sole discretion may determine, free and clear of
any rights of the Lessee without any duty to account to the Lessee with respect
to such action or inaction or for any proceeds with respect to such action or
inaction except that the Lessee’s obligation to pay Monthly Base Rent for
periods commencing after the Lessee shall have been deprived of the use of such
Vehicle pursuant to this clause (iii) shall be reduced by the net
proceeds, if any, received by the Lessor from leasing such Vehicle to any
person other than the Lessee for the same period or any portion thereof; or


 


(iv)  whether or not the Lessor shall have
exercised or shall thereafter exercise any of the rights under the foregoing
clauses (i), (ii) or (iii), demand by written notice to the Lessee that it
pay to the Lessor immediately, and it shall so pay to the Lessor, the Casualty
Payment with respect to such Vehicle in accordance with Section 6 hereof.


 


(v)  if the Lessor shall have sold any Vehicle
repossessed by the Lessor pursuant to clause (ii) above, the Lessor in
lieu of exercising its rights under clause (iv) above with respect to such
Vehicle may, if it shall so elect, demand that the Lessee pay to the Lessor


 


22

















 


and the Lessee shall pay to the Lessor on the date
of such sale as liquidated damages for loss of a bargain and not as a penalty,
any unpaid Rent due through such date of sale plus the amount of any deficiency
between the net proceeds of such sale and the Termination Value of such Vehicle
computed as of the date of the sale.


 


17.7.  Servicer Default.  Any of the following events will constitute a
default of the Servicer (“Servicer Default”) as that term is used
herein:  (i) the failure in a
material respect of the Servicer to comply with or perform any provision of
this Agreement or any other Related Document, and such default continues for
more than thirty (30) days after the earlier of the date written notice is
delivered by the Lessor or the Trustee to the Servicer or the Servicer has
actual knowledge thereof; (ii) an Event of Bankruptcy occurs with respect
to the Servicer; (iii) the failure of the Servicer to make any payment
when due from it hereunder or under any of the other Related Documents or to
deposit any Collections received by it into a Collateral Account when required
under the Related Documents and, in each case, such failure continues for
5 Business Days; or (iv) if any representation or warranty made by
the Servicer in any Related Document is inaccurate or incorrect or is breached
or is false or misleading in any material respect as of the date of the making
thereof or any schedule, certificate, financial statement, report, notice, or other
writing furnished by or on behalf of the Servicer to the Lessor or the Trustee
pursuant to any Related Document is false or misleading in any material respect
on the date as of which the facts therein set forth are stated or certified,
and the circumstance or condition in respect of which such representation,
warranty or writing was inaccurate, incorrect, breached, false or misleading in
any material respect, as the case may be, shall not have been eliminated or
otherwise cured for thirty (30) days after the earlier of (x) the
date of the receipt of written notice thereof from the Lessor or the Trustee to
the Servicer and (y) the date the Servicer learns of such circumstance or
condition.  In the event of a Servicer
Default, the Trustee, acting pursuant to Section 8.7(b) of the Indenture,
shall have the right to replace the Servicer as servicer.


 


17.8.  Application of Proceeds.  The proceeds of any sale or other disposition
pursuant to Section 17.2, 17.3 or 17.6 shall be applied by the Lessor in
its sole discretion as the Lessor deems appropriate.


 


18.  MANUFACTURER EVENTS OF DEFAULT.  (a) 
Upon the occurrence of a Manufacturer Event of Default with respect to
any Manufacturer (a “Defaulting Manufacturer”), the Lessor shall no
longer purchase Program Vehicles from such Defaulting Manufacturer pursuant to
the Purchase Agreement.


 


(b)  Upon the occurrence of a Manufacturer Event
of Default, the Servicer agrees to (i) act at the direction of the Lessor
or the Trustee to take commercially reasonable action to liquidate the Program
Vehicles subject to a Manufacturer Program with respect to which such
Manufacturer Event of Default has occurred or (ii) convert such Program
Vehicles to Non-Program Vehicles in accordance with Section 2.6 and
subject to the limitations set forth therein.


 


23

















 


(c)  Upon the occurrence of a Manufacturer Event
of Default, the Lessee shall not be liable for any failure by the Lessor to
recover all or any portion of the Repurchase Price with respect to any Program
Vehicles subject to the Manufacturer Program of the Defaulting Manufacturer; provided,
however, that nothing in this Section 18 shall be construed to modify,
terminate or otherwise affect the Lessee’s obligations under this Agreement.


 


19.  CERTIFICATION OF TRADE OR BUSINESS USE.  The Lessee hereby warrants and certifies,
under penalties of perjury, that it intends to use the Vehicles which are
subject to this Agreement in its trade or business.


 


20.  TITLE TO VEHICLES.  This is an agreement to lease only and title
to Vehicles will at all times remain in the Lessor, the Nominee, the Hertz
Nominee or the HFC Nominee, as applicable, and beneficial ownership will at all
times remain in the Lessor.  The Lessee
will not have any rights or interest in Vehicles whatsoever other than the
right of possession and use as provided by this Agreement.


 


21.  RIGHTS OF LESSOR ASSIGNED TO TRUSTEE.  The Lessee acknowledges that the Lessor has
assigned or will assign all of its rights under this Agreement to the Trustee
pursuant to the Indenture.  Accordingly,
the Lessee agrees that:


 


(i)  subject to the terms of the Indenture, the
Trustee shall have all the rights, powers, privileges and remedies of the
Lessor hereunder and the Lessee’s obligations hereunder (including the payment
of Rent and all other amounts payable hereunder) shall not be subject to any
claim or defense which the Lessee may have against the Lessor (other than the
defense of payment actually made) and shall be absolute and unconditional and
shall not be subject to any abatement, setoff, counterclaim, deduction or
reduction for any reason whatsoever. 
Specifically, the Lessee agrees that, upon the occurrence of an
Operating Lease Event of Default, a Limited Liquidation Event of Default or a
Liquidation Event of Default, the Trustee may exercise (for and on behalf of
the Lessor) any right or remedy against the Lessee provided for herein and the
Lessee will not interpose as a defense that such claim should have been
asserted by the Lessor;


 


(ii)  Upon the delivery by the Trustee of any
notice to the Lessee stating that an Operating Lease Event of Default,
Liquidation Event of Default or Limited Liquidation Event of Default has
occurred, the Lessee will, if so requested by the Trustee, treat the Trustee
for all purposes as the Lessor hereunder and in all respects comply with all
obligations under this Agreement that are asserted by the Trustee, as the
Lessor hereunder, irrespective of whether the Lessee has received any such
notice from the Lessor; and


 


(iii)  The Lessee acknowledges that pursuant to this
Agreement it has agreed to make all payments of Rent hereunder (and any other
payments hereunder) directly to the Trustee for deposit in the Collection
Account.


 


22.  MODIFICATION AND SEVERABILITY.  The terms of this Agreement will not be
waived, altered, modified, amended, supplemented or terminated in any manner


 


24

















 


whatsoever unless (i) the same shall be in
writing and signed and delivered by the Lessor, the Servicer and the Lessee and
consented to in writing by the Trustee and (ii) the Rating Agency
Condition with respect to each Series of Notes Outstanding shall have been
satisfied with respect to such amendment. 
If any part of this Agreement is not valid or enforceable according to
law, all other parts will remain enforceable.


 


23.  SERVICER ACTING AS AGENT OF THE LESSOR.  The parties to this Agreement acknowledge and
agree that Hertz acts as Servicer of the Lessor pursuant to this Agreement,
and, in such capacity, as the agent of the Lessor, for purposes of performing
certain duties of the Lessor under this Agreement and the Related
Documents.  As compensation for the
Servicer’s performance of such duties, the Lessor shall pay to the Servicer on
each Payment Date (i) a fee (the “Monthly Servicing Fee”) equal to
..50% per annum, payable at one-twelfth the annual rate, on the outstanding Net
Book Value of the Vehicles as of the last day of the preceding calendar month
and (ii) the reasonable costs and expenses of the Servicer incurred by it
as a result of arranging for the sale of Vehicles returned to the Lessor in
accordance with Section 2.3(a) or as a result of a Vehicle Return Default
and sold to third parties; provided, however, that such costs and
expenses shall only be payable to the Servicer to the extent of any excess of
the sale price received by the Lessor for any such Vehicle over the Termination
Value thereof.


 


24.  MINIMUM DEPRECIATION RATE.  The Lessor agrees that the Depreciation Schedules
with respect to Non-Program Vehicles leased under this Agreement shall be
established such that (i) the Depreciation Charges accruing with respect
to each Non-Program Vehicle during each Related Month shall be at least equal
to 1.25%, and (ii) the weighted average of the Depreciation Charges
accruing with respect to all Non-Program Vehicles during each Related Month
shall be at least equal to the lesser of (a) 1.75% and (b) such lower
percentage in respect of which the Rating Agency Condition with respect to each
Series of Notes Outstanding shall have been satisfied.


 


25.  CERTAIN REPRESENTATIONS AND WARRANTIES.  The Lessee represents and warrants to the
Lessor and the Trustee that as of the Restatement Effective Date, as of each
Vehicle Operating Lease Commencement Date and as of each Closing Date with
respect to each subsequent Series of Notes:


 


25.1.  Organization; Power; Qualification.  The Lessee has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power under the laws of such State to execute and
deliver this Agreement and the other Related Documents to which it is a party
and to perform its obligations hereunder and thereunder, and is duly qualified
and in good standing to do business as a foreign corporation in each
jurisdiction where the character of its properties or the nature of its
business makes such qualification necessary and where the failure to do so
would reasonably be expected to result in a Material Adverse Effect.


 


25.2.  Authorization; Enforceability.  Each of this Agreement and the other Related
Documents to which it is a party has been duly authorized, executed and


 


25

















 


delivered on behalf of the Lessee
and, assuming due authorization, execution and delivery by the other parties
hereto or thereto, is a valid and legally binding agreement of the Lessee
enforceable against the Lessee in accordance with its terms (except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally or by general equitable principles, whether considered in a
proceeding at law or in equity or by an implied covenant of good faith and fair
dealing).


 


25.3.  Compliance.  The execution, delivery and performance by
the Lessee of this Agreement and the Related Documents will not conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Lessee pursuant to the
terms of, any indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or other similar agreement or instrument under which
the Lessee is a debtor or guarantor (except to the extent that such conflict,
breach, creation or imposition is not reasonably likely to have a Material
Adverse Effect) nor will such action result in a violation of any provision of
applicable law or regulation (except to the extent that such violation is not
reasonably likely to result in a Material Adverse Effect) or of the provisions
of the certificate of incorporation or the by-laws of the Lessee.


 


25.4.  Other. 
There is no consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority having jurisdiction over
the Lessee which is required for, and the absence of which would materially
affect, the execution, delivery and performance of this Agreement or the
Related Documents.


 


25.5.  Financial Statements.  (a) 
The Lessee has furnished each of the Lessor and the Trustee with, and
the Lessor and the Trustee hereby acknowledge receipt of, a copy of the Lessee’s
Annual Report to the Securities and Exchange Commission (the “SEC”) on
Form 10-K for the year ended December 31, 2004 (the “10-K
Report”).  The financial statements
set forth in such report present fairly in all material respects the
consolidated financial position of the Lessee and its consolidated subsidiaries
at December 31, 2004 and 2003, and the consolidated results of operations
and cash flows for each of the three years in the period ended
December 31, 2004, in conformity with generally accepted accounting
principles in the United States.


 


(b)  The Lessee has furnished each of the Lessor
and the Trustee with, and the Lessor and the Trustee hereby acknowledge receipt
of, a copy of the Lessee’s Quarterly Report to the SEC on Form 10-Q
for the quarter ended September 30, 2005 (the “10-Q Report”).  The financial statements set forth in such
report present fairly in all material respects the consolidated financial
position of the Lessee and its consolidated subsidiaries at September 30,
2005 and the consolidated results of operations and cash flows of the Lessee
and its consolidated subsidiaries for the quarterly period ended
September 30, 2005, in conformity with generally accepted accounting
principles in the United States.


 


26

















 


(c)  As of the date of this Agreement there has
not occurred any material adverse change in the financial position of the
Lessee and its subsidiaries considered as a whole, since December 31,
2004, other than as set forth or contemplated in the 10-K Report or the
10–Q Report.


 


(d)  The financial data which shall be delivered
to the Lessor and the Trustee pursuant to Section 26.5 will be prepared in
conformity with generally accepted accounting principles in the United States
and will present fairly in all material respects the financial condition of the
Lessee as of the dates thereof and the results of its operations for the
periods covered thereby.


 


25.6.  Investment Company Act.  The Lessee is not an “investment company” or
a company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the Lessee is not subject to
any other statute which would impair or restrict its ability to perform its
obligations under this Agreement or the other Related Documents, and neither
the entering into or performance by the Lessee of this Agreement violates any
provision of such Act.


 


25.7.  Supplemental Documents True and Correct.  All information contained in any material
Supplemental Document which has been submitted, or which may hereafter be
submitted by the Lessee to the Lessor is, or will be, true, correct and
complete in all material respects.


 


25.8.  Manufacturer Programs.  No Manufacturer Event of Default has occurred
and is continuing with respect to any Manufacturer of an Eligible Program
Vehicle.


 


25.9.  ERISA. 
The Lessee has satisfied the minimum funding standards under ERISA with
respect to its Plans and is in compliance in all material respects with the
currently applicable provisions of ERISA.


 


25.10.  Indemnification Agreement.  The Indemnification Agreement is in full
force and effect, and is a valid and legally binding agreement of the Lessee
enforceable against the Lessee in accordance with its terms (except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally or by general equitable principles, whether considered in a
proceeding at law or in equity and by an implied covenant of good faith and
fair dealing).


 


25.11.  Eligible Vehicles.  Each Vehicle is or will be, as the case may
be, on the applicable Vehicle Operating Lease Commencement Date, an Eligible
Vehicle.


 


26.  CERTAIN AFFIRMATIVE COVENANTS.  Until the expiration or termination of this
Agreement, and thereafter until the obligations of the Lessee under this
Agreement and the Related Documents are satisfied in full, the Lessee covenants
and agrees that, unless at any time the Lessor and the Trustee shall otherwise
expressly consent in writing, it will:


 


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26.1.  Corporate Existence; Foreign Qualification.  Do and cause to be done at all times all
things necessary to (i) maintain and preserve its corporate existence;
(ii) be, and ensure that it is, duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction where the character of
its properties or the nature of its business makes such qualification necessary
and where the failure to so qualify would be reasonably expected to result in a
Material Adverse Effect; and (iii) comply with all Contractual Obligations
and Requirements of Law binding upon it, except to the extent that the failure
to comply therewith would not, in the aggregate, be reasonably expected to
result in a Material Adverse Effect.


 


26.2.  Books, Records and Inspections.  (i) Maintain complete and accurate books
and records with respect to the Vehicles leased by it under this Agreement and
the other HVF Vehicle Collateral and (ii) at any time and from time to
time during regular business hours, upon not less than reasonable prior notice
from the Lessor or the Trustee, permit the Lessor or the Trustee (or such other
person who may be designated from time to time by the Lessor or the Trustee) to
examine and make copies of such books, records and documents in the possession
or under the control of the Lessee relating to the Vehicles leased under this
Agreement and the other HVF Vehicle Collateral; and (iii) permit the
Lessor, the Trustee or the Collateral Agent (or such other person who may be
designated from time to time by the Lessor, the Trustee or the Collateral
Agent) to visit the office and properties of the Lessee for the purpose of
examining such materials, and to discuss matters relating to the Vehicles
leased under this Agreement with the Lessee’s independent public accountants or
with any of the officers or employees of the Lessee having knowledge of such
matters, all at such reasonable times and as often as the Lessor or the Trustee
may reasonably request.  The Lessor
agrees that it will not disclose any information obtained pursuant to this
Section 26.2 which is not otherwise publicly available without the prior
approval of the Lessee, except that the Lessor may disclose such information
(x) to its officers, employees, attorneys and advisors, in each case on a
confidential and need-to-know basis, and (y) as required by applicable law
or compulsory legal process.


 


26.3.  ERISA. 
Comply with the minimum funding standards under ERISA with respect to
its Plans and use its best efforts to comply in all material respects with all
other applicable provisions of ERISA and the regulations and interpretations
promulgated thereunder.


 


26.4.  Merger.  Not merge or consolidate with or into any
other Person unless (i) the Lessee is the surviving entity of such merger
or consolidation or (ii) the surviving entity of such merger or
consolidation expressly assumes the Lessee’s obligations under this Agreement.


 


26.5.  Reporting Requirements.  Furnish, or cause to be furnished to the
Lessor and the Trustee:


 


(i)  within 120 days after the end of each of
its fiscal years, copies of the Annual Report on Form 10-K filed by the
Lessee with the SEC or, if the Lessee is not a reporting


 


28

















 


company, information equivalent to that which would
be required to be included in such an Annual Report if it were a reporting
company, including without limitation, consolidated financial statements
consisting of a balance sheet of the Lessee and its consolidated subsidiaries
as at the end of such fiscal year and statements of income, stockholders’
equity and cash flows of the Lessee and its consolidated subsidiaries for such
fiscal year, setting forth in comparative form the corresponding figures for
the preceding fiscal year (if applicable), certified by and containing an
opinion, unqualified as to scope, of a firm of independent certified public
accountants of nationally recognized standing selected by the Lessee and
acceptable to the Lessor and the Trustee;


 


(ii)  within 60 days after the end of each of
the first three quarters of each of its fiscal years, copies of the Quarterly
Report on Form 10-Q filed by the Lessee with the SEC or, if the
Lessee is not a reporting company, information equivalent to that which would
be required to be included in such a Quarterly Report if it were a reporting
company, including without limitation, (x) financial statements consisting
of consolidated balance sheets of the Lessee and its consolidated subsidiaries
as at the end of such quarter and statements of income, stockholders’ equity
and cash flows of the Lessee and its consolidated subsidiaries for each such
quarter, setting forth in comparative form the corresponding figures for the
corresponding periods of the preceding fiscal year (if applicable), all in
reasonable detail and certified (subject to normal year-end audit adjustments)
by a senior financial officer of the Lessee as having been prepared in accordance
with GAAP;


 


(iii)  simultaneously with the delivery of the
Annual Report on Form 10-K (or equivalent information) referred to
in (i) above and the Quarterly Report on Form 10-Q (or equivalent
information) referred to in (ii) above, an Officer’s Certificate of the Lessee
stating whether, to the knowledge of such officer, there exists on the date of
the certificate any condition or event which then constitutes, or which after
notice or lapse of time or both would constitute, a Potential Operating Lease
Event of Default or Operating Lease Event of Default, and, if any such
condition or event exists, specifying the nature and period of existence
thereof and the action of the Lessee is taking and proposes to take with
respect thereto.


 


(iv)  promptly after becoming aware thereof,
(a) notice of the occurrence of any Potential Operating Lease Event of
Default or Operating Lease Event of Default, together with a written statement
of an Authorized Officer describing such event and the action that the Lessee proposes
to take with respect thereto, and (b) notice of any Amortization Event;


 


(v)  promptly after obtaining actual knowledge
thereof, notice of any Manufacturer Event of Default or termination or
replacement of a Manufacturer Program;


 


(vi)  promptly after any executive officer of the
Lessee becomes aware of the occurrence of any Reportable Event (other than a
reduction in active Plan participants) with respect to any Plan, a certificate
signed by the Executive Vice President and Chief Financial Officer, the
Treasurer or the Controller of the Lessee setting forth the details as to such
Reportable Event and the action which the Lessee is taking and proposes to take


 


29

















 


with respect thereto, together with a copy of the
notice of such Reportable Event given to the Pension Benefit Guaranty
Corporation.


 


(vii)  from time to time while this Agreement is in
effect, upon the reasonable request of the Lessor or the Trustee, officials of
the Lessee will confer with officials of the Lessor or the Trustee, as
applicable, and advise them as to matters bearing on the Vehicles or the
operations or financial condition of the Lessee.


 


Notwithstanding the foregoing, if any audited
or reviewed financial statements or information required to be included in any
such filing are not reasonably available on a timely basis as a result of the
Lessee’s accountants not being “independent” (as defined pursuant to the
Exchange Act and the rules and regulations of the SEC thereunder), the Lessee
may, in lieu of making such filing or transmitting or making available the
information, documents and reports so required to be filed, elect to make a
filing on an alternative form or transmit or make available unaudited or
unreviewed financial statements or information substantially similar to such
required audited or reviewed financial statements or information, provided
that the Lessee shall in any event be required to make such filing and so
transmit or make available such audited or reviewed financial statements or
information no later than the first anniversary of the date on which the same
was otherwise required pursuant to the preceding provisions of this section.


 


26.6.  Indemnification Agreement.  Comply in all material respects with all of its
obligations under the Indemnification Agreement.


 


26.7.  Ford Program Agreements.  Comply in all material respects with all of
its obligations under those certain Auction Agent Agreements dated as of
various dates, by and among the Servicer, the Lessee, the Trustee and the
various auction houses at which Program Vehicles manufactured by Ford are sold
pursuant to which such auction houses agree to certain procedures regarding the
transfer of title to such Program Vehicles.


 


27.  NO PETITION. 
Each of the Lessee and the Servicer hereby covenants and agrees that,
prior to the date which is one year and one day after the payment in full of
all of the Notes, it will not institute against, or join any other Person in
instituting against the Lessor, the Nominee, the HFC Nominee or the
Intermediary, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States.  In the event that the Lessee or the Servicer
takes action in violation of this Section 27, the Lessor, the Nominee or the
HFC Nominee, as the case may be, agrees, for the benefit of the Noteholders,
that it shall file an answer with the bankruptcy court or otherwise properly
contest the filing of such a petition by the Lessee or the Servicer, as the
case may be, against it or the commencement of such action and raise the
defense that the Lessee or the Servicer, as the case may be, has agreed in
writing not to take such action and should be estopped and precluded
therefrom.  The provisions of this
Section 27 shall survive the termination of this Agreement.


 


30

















 


28.  SUBMISSION TO JURISDICTION.  The Lessor and the Trustee may enforce any
claim arising out of this Agreement in any state or federal court having
subject matter jurisdiction, including, without limitation, any state or
federal court located in the State of New York. 
For the purpose of any action or proceeding instituted with respect to
any such claim, the Lessee hereby irrevocably submits to the jurisdiction of
such courts.  The Lessee further
irrevocably consents to the service of process out of said courts by mailing a
copy thereof, by registered mail, postage prepaid, to the Lessee and agrees
that such service, to the fullest extent permitted by law, (i) shall be
deemed in every respect effective service of process upon it in any such suit,
action or proceeding and (ii) shall be taken and held to be valid personal
service upon and personal delivery to it. 
Nothing herein contained shall affect the right of the Trustee and the
Lessor to serve process in any other manner permitted by law or preclude the
Lessor or the Trustee from bringing an action or proceeding in respect hereof
in any other country, state or place having jurisdiction over such action. The
Lessee hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may have or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in any such court located in the State
of New York and any claim that any such suit, action or proceeding brought in
such a court has been brought in an inconvenient forum.


 


29.  GOVERNING LAW.  THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.  Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.  All obligations of the Lessee and the
Servicer and all rights of the Lessor or the Trustee expressed herein shall be
in addition to and not in limitation of those provided by applicable law or in
any other written instrument or agreement.


 


30.  JURY TRIAL. 
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT IS A PARTY, OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM ANY RELATIONSHIP
EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED TRANSACTION, AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.


 


31.  NOTICES. 
All notices, requests and other communications to any party hereunder
shall be in writing (including facsimile transmission or similar writing) and
shall be given to such party, addressed to it, at its address or telephone
number set forth on the signature pages below, or at such other address or
telephone number as such party may hereafter specify for the purpose by notice
to the other party.  Copies of notices,


 


31

















 


requests and other communications delivered to the
Trustee, the Lessee and/or the Lessor pursuant to the foregoing sentence shall
be sent to the following addresses:


 


TRUSTEE:


 


BNY Midwest Trust Company

2 North LaSalle Street

Chicago, IL 60602

Attention:  Corporate Trust Administration
Structured

Finance

Telephone:  (312) 827-8569

Fax:  (312) 827-8562


 


LESSOR:


 


225 Brae Boulevard

Park Ridge, NJ 07656

Attention:  Treasury Department

Telephone:  (201) 307-2000

Fax:  (201) 307-2746


 


LESSEE:


 


225 Brae Boulevard

Park Ridge, NJ 07656

Attention:  Treasury Department

Telephone:  (201) 307-2000

Fax:  (201) 307-2746


 


Each such notice, request or communication
shall be effective when received at the address specified below.  Copies of all notices must be sent by first
class mail promptly after transmission by facsimile.


 


32.  SURVIVABILITY.  In the event that, during the term of this
Agreement, the Lessee becomes liable for the payment or reimbursement of any
obligations, claims or taxes pursuant to any provision hereof, such liability
will continue, notwithstanding the expiration or termination of this Agreement,
until all such amounts are paid or reimbursed by the Lessee.


 


33.  HEADINGS. 
Section headings used in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.


 


34.  EXECUTION IN COUNTERPARTS.  This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute one
and the same Agreement.


 


32

















 


IN
WITNESS WHEREOF, the parties have executed this Agreement or caused it to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.


 


	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  HERTZ
  VEHICLE FINANCING LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  225 Brae Boulevard

  
	
   

  	
   

  	
  Park Ridge, NJ 07656

  
	
   

  	
  Attention:

  	
  Treasury Department

  
	
   

  	
  Telephone:

  	
  (201) 307-2000

  
	
   

  	
  Fax:

  	
  (201) 307-2746

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LESSEE
  AND SERVICER:

  
	
   

  	
   

  
	
   

  	
  THE
  HERTZ CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  225 Brae Boulevard

  
	
   

  	
   

  	
  Park Ridge, NJ 07656

  
	
   

  	
  Attention:

  	
  Treasury Department

  
	
   

  	
  Telephone:

  	
  (201) 307-2000

  
	
   

  	
  Fax:

  	
  (201) 307-2746

  



 


33

















 


Acknowledging its obligations under
Section 27 hereof:


 


 


	
   

  	
  NOMINEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ VEHICLES LLC,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
  HFC NOMINEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ FUNDING CORPORATION,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  



 


34