Exhibit 4.9.13


 


EXECUTION VERSION


 




 


 





SECOND
AMENDED AND RESTATED MASTER EXCHANGE AGREEMENT


 


dated
as of September 18, 2009


 


among


 


THE
HERTZ CORPORATION,


 


HERTZ
VEHICLE FINANCING LLC,


 


HERTZ
GENERAL INTEREST LLC,


 


HERTZ
CAR EXCHANGE INC.


 


and


 


DB
SERVICES TENNESSEE, INC.


 




 





 

















 


Table
of Contents


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I

  
	
   

  	
   

  
	
  Definitions

  
	
   

  
	
  SECTION 1.01. Definitions

  	
  2

  
	
   

  	
   

  
	
  ARTICLE II

  
	
   

  	
   

  
	
  General Exchange Provisions

  
	
   

  
	
  SECTION 2.01. Exchange of Property

  	
  9

  
	
  SECTION 2.02. Disposition and Transfer of Relinquished
  Property

  	
  10

  
	
  SECTION 2.03. Acquisition and Transfer of Replacement
  Property

  	
  10

  
	
  SECTION 2.04. Assignment of Agreements

  	
  11

  
	
  SECTION 2.05. Notice to Purchasers and Sellers

  	
  12

  
	
  SECTION 2.06. Direct Transfers

  	
  12

  
	
  SECTION 2.07. Matching of Relinquished and Replacement
  Property

  	
  12

  
	
  SECTION 2.08. Disclosure of Relationship

  	
  12

  
	
  SECTION 2.09. Exclusivity

  	
  13

  
	
  SECTION 2.10. Records

  	
  13

  
	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  
	
  Identification

  
	
   

  
	
  SECTION 3.01. Identification of Replacement Property

  	
  13

  
	
  SECTION 3.02. Revocation of Identification

  	
  14

  
	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  	
   

  
	
  Accounts

  
	
   

  	
   

  
	
  SECTION 4.01. Accounts

  	
  15

  
	
  SECTION 4.02. Separation and
  Application of Funds in Joint Collection Accounts and Exchange Accounts;
  Proceeds from Transfer of Relinquished Property by the QI

  	
  17

  
	
  SECTION 4.03. Payment for Replacement Property

  	
  19

  
	
  SECTION 4.04. Investment of Funds in the Exchange
  Account

  	
  20

  
	
  SECTION 4.05. Disbursements from Account

  	
  20

  
	
  SECTION 4.06.
  Disbursement Occurrence

  	
  20

  



 


i

















 


Table of Contents

(continued)


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE V

  
	
   

  	
   

  
	
  Indemnity By Each Legal Entity

  
	
   

  
	
  SECTION 5.01. No Personal Liability

  	
  21

  
	
  SECTION 5.02. Indemnity

  	
  21

  
	
  SECTION 5.03. Survival

  	
  21

  
	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  	
   

  
	
  Representations, Warranties And Covenants

  
	
   

  
	
  SECTION 6.01. Representations and Warranties of the QI

  	
  22

  
	
  SECTION 6.02. Representations and Warranties of Owner

  	
  23

  
	
  SECTION 6.03. Representations and Warranties of Each
  Legal Entity

  	
  24

  
	
  SECTION 6.04. Survival of Representations and
  Warranties

  	
  25

  
	
  SECTION 6.05. Maintenance of Separate Existence

  	
  25

  
	
  SECTION 6.06. Ownership by Owner; Mergers

  	
  26

  
	
  SECTION 6.07. Organizational Documents

  	
  27

  
	
  SECTION 6.08. No Other Agreements

  	
  27

  
	
  SECTION 6.09. Other Business

  	
  27

  
	
  SECTION 6.10. QI Parent Downgrade Event Sale

  	
  27

  
	
  SECTION 6.11. Trademark License

  	
  28

  
	
  SECTION 6.12. Confidentiality

  	
  29

  
	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  
	
  Term And Compensation; Escrow Agreement Termination

  
	
   

  
	
  SECTION 7.01. Term

  	
  29

  
	
  SECTION 7.02. Compensation

  	
  32

  
	
  SECTION 7.03. Escrow Agreement Termination

  	
  32

  
	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  
	
  Miscellaneous

  
	
   

  
	
  SECTION 8.01. Pending Litigation

  	
  32

  
	
  SECTION 8.02. Notices

  	
  32

  
	
  SECTION 8.03. Amendments

  	
  34

  
	
  SECTION 8.04. Successors and Assigns; No Third-Party
  Beneficiaries

  	
  34

  
	
  SECTION 8.05. Governing Law, Venue, Jury Trial Waiver,
  and Attorneys’ Fees

  	
  35

  
	
  SECTION 8.06. Indebtedness

  	
  35

  
	
  SECTION 8.07. Strict Performance

  	
  35

  
	
  SECTION 8.08. Severability; Interpretation

  	
  35

  
	
  SECTION 8.09. Dates, Descriptions, Values, and
  Matching

  	
  35

  



 

















 


Table of Contents

(continued)


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  SECTION 8.10. Counterparts

  	
  36

  
	
  SECTION 8.11. Entire Agreement

  	
  36

  
	
  SECTION 8.12. Electronic Signature

  	
  36

  
	
  SECTION 8.13. Acknowledgment of Independent
  Relationship

  	
  36

  
	
  SECTION 8.14. Headings

  	
  36

  
	
  SECTION 8.15. Force Majeure

  	
  36

  
	
  SECTION 8.16. Consequential Damages

  	
  36

  
	
  SECTION 8.17. Investment Losses

  	
  37

  
	
  SECTION 8.18. Treasury Regulations Disclosure
  Requirements

  	
  37

  
	
  SECTION 8.19. No Petitions

  	
  37

  
	
  SECTION 8.20.
  Servicer

  	
  38

  



 

















 


This SECOND AMENDED AND RESTATED MASTER EXCHANGE
AGREEMENT (as may be amended, restated or otherwise modified in accordance with
the terms hereof, this “Agreement”) is entered into as of September 18,
2009, by and among, HERTZ CAR EXCHANGE INC., a Delaware corporation (the “QI”),
DB SERVICES TENNESSEE, INC., a Delaware limited liability company (“DB
Services”), THE HERTZ CORPORATION, a Delaware corporation (“Hertz”),
HERTZ VEHICLE FINANCING LLC, a Delaware limited liability company (“HVF”)
and HERTZ GENERAL INTEREST LLC, a Delaware limited liability company (“HGI”).


 


W I T N E S S E T H :


 


WHEREAS, the QI, DB Services, Hertz, HVF and
HGI entered into a Master Exchange Agreement dated as of December 21,
2005;


 


WHEREAS, the QI, DB Services, Hertz, HVF and
HGI entered into an Amended and Restated Master Exchange Agreement dated as of January 26,
2007 (as amended prior to the date hereof, the “Prior Agreement”);


 


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


 


WHEREAS, HVF and HGI are single member
limited liability companies, solely owned by Hertz, and therefore disregarded
entities for purposes of the Code and the Treasury Regulations;


 


WHEREAS, each action taken by a Legal Entity
in its individual capacity pursuant to this Agreement shall, for purposes of
the Code and the Treasury Regulations, have been taken by Exchangor;


 


WHEREAS, Exchangor desires to exchange
certain Vehicles that are held for productive use in its trade or business and
that constitute Relinquished Property for other vehicles to be held for
productive use in its trade or business that are like-kind to the Relinquished
Property;


 


WHEREAS, the Relinquished Property will be
sold to various buyers (each a “Buyer”) from time to time, including
Manufacturers and purchasers at auctions;


 


WHEREAS, the Replacement Property will be
purchased from time to time from various Manufacturers and vehicle dealers
(each a “Seller”);


 


WHEREAS, it is the intention of the parties
that each Exchange of Relinquished Property for Replacement Property, and the
transactions related thereto, be effectuated pursuant to the terms of this Agreement;


 

















 


WHEREAS, Exchangor and the QI desire and
intend that the Exchanges accomplished by Exchangor and the QI under this
Agreement (the “LKE Program”) satisfy the requirements of a “like kind
exchange program” pursuant to Section 3.02 of Revenue Procedure 2003-39;


 


WHEREAS, Exchangor desires to effectuate each
Exchange in a manner that will qualify as a like-kind exchange within the
meaning of Section 1031 of the Internal Revenue Code of 1986, as amended
(the “Code”) and the treasury regulations (the “Treasury Regulations”)
promulgated thereunder (and any applicable corresponding provisions of state
tax legislation) pursuant to one or more of the “safe harbors” described in Section 1.1031(k)-1(g) of
the Treasury Regulations, and Revenue Procedure 2003-39;


 


WHEREAS, the QI is willing to act as a “qualified
intermediary” within the meaning of Section 1031 of the Code and Section 1.1031(k)-1(g)(4) of
the Treasury Regulations (such entity, a “Qualified Intermediary”) in
order to facilitate Exchanges of Relinquished Property for Replacement
Property;


 


WHEREAS, it is the intention of the parties
to maintain Joint Collection Accounts, Exchange Accounts and Joint Disbursement
Accounts so that for purposes of the Treasury Regulations Exchangor is not
determined to be in actual or constructive receipt of proceeds (including any
earnings thereon) from the disposition of any Relinquished Property;


 


WHEREAS, Exchangor and the QI desire and
intend this Agreement to satisfy the requirement of a written agreement
referred to in Section 1.1031(k)-1(g)(4)(iii)(B) of the Treasury
Regulations with respect to the applicable Relinquished Property and the
applicable Replacement Property; and


 


WHEREAS, each Legal Entity will continue to
comply with its obligations under the Related Documents to which it is a party;


 


NOW, THEREFORE,  in
consideration of the mutual covenants, conditions and agreements set forth
herein, each Legal Entity and the QI hereby agree as follows:


 


ARTICLE
I


 


Definitions


 


SECTION 1.01.  Definitions.  Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in Schedule I to the
Base Indenture; provided, that, if any such capitalized term is defined
in the Base Indenture, but has a corresponding Segregated Series-specific definition
set forth in the related Segregated Series Supplement, the capitalized
term set forth herein shall have the meaning of the corresponding Segregated
Series-specific definition set forth in the applicable Segregated Series Supplement
in all contexts relating to the HVF Segregated Vehicles, HVF Segregated Vehicle
Collateral or other Series-Specific Collateral with respect to such Segregated
Series; provided, further, that if any capitalized term is
defined in each of the Base Indenture and the HGI Lease, the definition of such
capitalized term set forth in the HGI Lease shall apply in all contexts
relating to the HGI 


 


2

















 


Vehicles and HGI Vehicle Collateral. 
The following terms used in this Agreement shall have the following
meanings, unless otherwise expressly provided herein:


 


“Accounts” shall mean any Exchange
Account, any Joint Collection Account or any Joint Disbursement Account, as the
context requires.


 


“Accession Agreement” shall have the
meaning set forth in Section 6.10(d).


 


“Additional Subsidies” shall mean
funds (other than funds that currently constitute Relinquished Property
Proceeds) that Exchangor may use for the acquisition of Replacement Property
and to make Non-LKE Disbursements, which include:


 


(i) funds
on deposit in any Account that were Relinquished Property Proceeds but have not
been identified to Replacement Property within the Identification Period
or with respect to which any identification has been revoked or the Exchange
Period has expired without acquisition of Replacement Property;


 


(ii) funds
on deposit in any Account that were Relinquished Property Proceeds but are no
longer Relinquished Property Proceeds because Exchangor has received all of the
Replacement Property that was identified with respect to the related
Relinquished Property Proceeds during the Identification Period for the related
Exchange pursuant to Section 3.01 hereof;


 


(iii) funds
on deposit in any Account that never were Relinquished Property Proceeds, including,
among other amounts, Non-Qualified Funds, additional amounts transferred to a
Joint Disbursement Account by a Legal Entity pursuant to Section 4.03(e) and
any earnings on deposit in any Account that are not Qualified Earnings; and/or


 


(iv) funds
that may be withdrawn pursuant to Section 4.06.


 


“Agreement” shall have the meaning set
forth in the preamble hereto.


 


“Automated Clearing House” shall mean
a facility that processes debit and credit transactions under rules established
by a Federal Reserve Bank operating circular on automated clearing house items
or under rules of an automated clearing house association.


 


“Base Indenture” shall mean the Third
Amended and Restated Base Indenture, dated as of September 18, 2009,
between HVF and The Bank of New York Mellon, N.A., as trustee, as amended,
modified or supplemented from time to time.


 


“Business Day” shall mean any day
except a Saturday, Sunday or legal holiday on which the offices of the Trustee,
any Legal Entity, the QI or, with respect to any matter involving any Account,
the Escrow Agent (or any successor thereto) are not open for business.


 


“Buyer” shall have the meaning set
forth in the recitals hereto.


 


3

















 


“Collateral Agency Agreement” means
the Third Amended and Restated Collateral Agency Agreement, dated as of the
date hereof, among HVF, HGI, Hertz and the Trustee, as amended, modified or
supplemented from time to time.


 


“Disbursement Occurrence” shall have
the meaning set forth in Section 4.06 hereof.


 


“Disqualified Person” shall have the
meaning set forth in Section 6.01(k) hereof.


 


“Electronic Funds Transfer” shall mean
any funds transfer initiated by an electronic instruction, including, without
limitation, any funds transfer via the Automated Clearing House system, any
wire transfer via the Federal Reserve System and any funds transfer recorded on
the books and records of the banking institution maintaining the relevant
accounts.


 


“Escrow Accounts” shall mean the “Escrow
Accounts” under and as defined in the Escrow Agreement.


 


“Escrow Agent” shall mean the “Escrow
Agent” under and as defined in the Escrow Agreement.


 


“Escrow Agreement” shall mean that
agreement by and among the Escrow Agent, each Legal Entity and the QI, dated as
of September 18, 2009, as amended, modified or supplemented from time to
time, or any successor agreement thereto, pursuant to which one or more
Exchange Accounts and Joint Disbursement Accounts shall be maintained as escrow
accounts on behalf of the Legal Entities and any replacement of such agreement.


 


“Event of Default” shall have the
meaning set forth in the GE Credit Agreement.


 


“Exchange” shall mean Exchangor’s
transfer of Relinquished Property and Exchangor’s corresponding receipt of
Replacement Property within the relevant Exchange Period with which the
Relinquished Property has been matched by Exchangor that are of like-kind, as
defined in Sections 1.1031(a)-1(b) and 1.1031(a)-2 of the Treasury
Regulations.


 


“Exchange Account” shall mean any
account established by the QI pursuant to the Escrow Agreement and (a) in
the case of any HVF Exchange Account, maintained by the Trustee, in the joint
name of the QI and the Trustee pursuant to Section 5A.1 of the Base
Indenture, (b) in the case of any HVF Segregated Exchange Account relating
to a particular Segregated Series of Notes, maintained by the Trustee, in
the joint name of the QI and the Trustee pursuant to such Segregated Series Supplement
or (c) in the case of any Hertz GE Exchange Account, maintained by the GE
Collateral Agent in the joint name of the QI and the GE Collateral Agent
pursuant to the provisions of the GE Credit Agreement and the GE Collateral
Agreement, that (1) is used to receive Relinquished Property Proceeds and
any Additional Subsidies from a Joint Collection Account, and (2) is used
to provide such funds to another Exchange Account or a Joint Disbursement
Account (to the extent of the funds in such Exchange Account pursuant to the
Escrow Agreement).


 


“Exchange Period” shall mean, with
respect to the Relinquished Property transferred in an Exchange, as defined in Section 1.1031(k)-1(b)(2) of
the Treasury Regulations, 


 


4

















 


the period beginning on the
date such Relinquished Property is transferred to the QI and ending at 11:59 p.m.
(New York City time) on the earlier of (a) the one hundred eightieth
(180th) calendar day thereafter (irrespective of whether such day is a weekend
day or a holiday) or (b) the due date (including extensions) for Exchangor’s
U.S. federal income tax return for the year in which the transfer of the
Relinquished Property takes place.


 


“Exchangor” shall mean Hertz, HVF and
HGI, collectively, which are treated as a single taxpayer for purposes of the
Code and the Treasury Regulations.


 


“GE Collateral Account” shall have the
meaning assigned to the term “Collateral Account” in the GE Collateral
Agreement.


 


“GE Collateral Agent” shall have the
meaning assigned to the term “Domestic Collateral Agent” in the GE Credit
Agreement.


 


“GE Collateral Agreement” shall mean
the Domestic Guarantee and Collateral Agreement, dated as of September 29,
2006, made by Hertz and certain of its subsidiaries in favor of Gelco
Corporation dba GE Fleet Services, as administrative agent and collateral
agent, as amended, amended and restated, modified or supplemented or refinanced
or replaced from time to time.


 


“GE Credit Agreement” means the Credit
Agreement, dated as of September 29, 2006, among Hertz and Puerto
Ricancars, Inc., as borrowers, the lenders from time to time parties
thereto and Gelco Corporation dba GE Fleet Services, as administrative agent,
domestic collateral agent and PRUSVI collateral agent, as amended, amended and
restated modified or supplemented or refinanced or replaced from time to time.


 


“GE Financed Vehicle” shall mean a
Vehicle that is owned by Hertz that is registered or submitted for registration
in the state of Hawaii or Kansas, regardless of whether the GE Collateral Agent
is the named lienholder for such Vehicle. 
Buses, salvage vehicles and tow trucks shall not be deemed to be GE
Financed Vehicles.


 


“GE Loan Documents” shall have the
meaning assigned to the term “Loan Documents” in the GE Credit Agreement.


 


“Hertz” shall have the meaning set
forth in the preamble hereto.


 


“Hertz Exchange Account” shall mean
any Exchange Account that receives funds from a Joint Collection Account or
another Exchange Account relating to Relinquished Property Proceeds from a
Vehicle that was owned by Hertz in the circumstances described in Section 4.02(a) hereof.


 


“Hertz GE Exchange Account” shall mean
the Hertz Exchange Account maintained pursuant to the provisions of the GE
Credit Agreement and the GE Collateral Agreement.


 


“HGI” shall have the meaning set forth
in the preamble hereto.


 


5

















 


“HGI Exchange Account” shall mean any
Exchange Account that (a) receives funds from a Joint Collection
Account or another Exchange Account relating to Relinquished Property Proceeds
from a Vehicle that was owned by HGI in the circumstances described in Section 4.02(a) hereof
and (b) may receive funds from an HVF Exchange Account or a Hertz Exchange
Account in the circumstances described in Section 4.02(a) hereof.


 


“HVF” shall have the meaning set forth
in the preamble hereto.


 


“HVF Exchange Account” shall mean any
Exchange Account that receives funds from a Joint Collection Account or another
Exchange Account relating to Relinquished Property Proceeds from an HVF Vehicle
in the circumstances described in Section 4.02(a) hereof.


 


“HVF Segregated Exchange Account”
shall mean any Exchange Account that receives funds from a Joint Collection
Account or another Exchange Account relating to Relinquished Property Proceeds
from an HVF Segregated Vehicle that was pledged as Series-Specific Collateral
for a particular Segregated Series in the circumstances described in Section 4.02(a) hereof;
provided, that, unless otherwise specified in the applicable Segregated Series Supplement,
each HVF Segregated Exchange Account shall receive funds relating solely to the
Series-Specific Collateral for such Segregated Series.


 


“Identification Period” shall mean,
with respect to the Relinquished Property transferred in an Exchange, as
defined in Section 1.1031(k)-l(b)(2) of the Treasury Regulations, the
period beginning on the date such Relinquished Property is transferred to the
QI and ending at 11:59 p.m. (New York City time) on the forty-fifth (45th)
calendar day thereafter (irrespective of whether such day is a weekend day or a
holiday).


 


“Identified Replacement Vehicles”
means vehicles that have been identified and designated as Replacement Property
with respect to Relinquished Property pursuant to Section 3.01 hereof,
provided such identification has not been revoked pursuant to Section 3.02
hereof.


 


“Independent Director” shall mean a
Person who is not, and during the previous five years was not (i) a
stockholder, member, partner, director, officer, employee, affiliate,
associate, creditor or independent contractor of Owner or any of its affiliates
or associates (excluding, however, any service provided by a Person engaged as
an “independent” manager or director, as the case may be) or (ii) a Person
owning directly or beneficially any outstanding shares of common stock of Owner
or any of its affiliates, or a stockholder, director, officer, employee,
affiliate, associate, creditor or independent contractor of such beneficial
owner or any of such beneficial owner’s affiliates or associates, or (iii) a
member of the immediate family of any Person described above.


 


“Joint Collection Account” shall mean
any account maintained by the Collateral Agent, in the joint name of the QI and
the Collateral Agent (as a Collateral Account) pursuant to Section 2.5(a) of
the Collateral Agency Agreement that (1) processes funds collected on
behalf of each Legal Entity, (2) is used for identification and subsequent
separation of the portion of such funds attributable to receipts of Hertz, HVF,
and HGI and (3) is used to separate Relinquished Property Proceeds from
Additional Subsidies.


 


6














 


“Joint Disbursement Account” shall
mean an account as defined in Section 5.02 of Revenue
Procedure 2003-39 (1) that is used to receive Relinquished Property
Proceeds from an Exchange Account and any Additional Subsidies from whatever
source, and (2) which may be used to disburse Relinquished Property
Proceeds and Additional Subsidies in order to acquire Replacement Property and
to disburse Additional Subsidies to make Non-LKE Disbursements.


 


“Legal Entity” shall mean each of
Hertz, HVF or HGI, individually.


 


“Licensed Trademark” shall have the
meaning set forth in Section 6.10(a) hereof.


 


“Licensed Services” shall have the
meaning set forth in Section 6.10(a) hereof.


 


“Material Action” shall mean any
action described in clauses (i) through (iii) of Section 8(a) of
the QI’s certificate of incorporation.


 


“LKE Program” shall have the meaning
set forth in the recitals hereto.


 


“Non-LKE Disbursements” shall mean
disbursements for items other than the acquisition of Replacement Property
(including the acquisition of non-Replacement Property and any fees, expenses
or other costs required to be paid pursuant to Section 7.02 hereof) that
are funded solely with Additional Subsidies.


 


“Non-Qualified Funds” shall mean all
amounts that are deposited into the Joint Collection Accounts that are not
Relinquished Property Proceeds.


 


“Owner” shall mean DB Services
Tennessee, Inc., or any other entity that acquires all of the issued and
outstanding shares of the QI pursuant to Section 6.10 hereof.


 


“Qualified Earnings” shall mean, with
respect to any Relinquished Property, the earnings received on the Relinquished
Property Proceeds from such Relinquished Property that have been held in an
Escrow Account for a period not exceeding the Exchange Period for such
Relinquished Property.


 


“Qualified Intermediary” shall have
the meaning set forth in the recitals hereto.


 


“QI” shall have the meaning set forth
in the preamble hereto.


 


“QI Indemnitee” shall have the meaning
set forth in Section 5.02(a) hereof.


 


“QI Parent Downgrade Event” shall
mean, on any date of determination, either (i) Deutsche Bank AG (or any
entity that becomes the ultimate parent of the QI) shall have a short-term
credit rating of below “A-1” from S&P or below “P-1” from Moody’s or (ii) if
at any time Deutsche Bank AG (or any entity that becomes the ultimate parent of
the QI) does not have a short-term credit rating, Deutsche Bank AG (or any
entity that is a successor to Deutsche Bank AG as the ultimate parent of the
QI) shall have a long-term credit rating of below “AA-” from S&P or below “Aa3”
from Moody’s.


 


“QI Sale” shall have the meaning set
forth in Section 6.10(a) hereof.


 


7

















 


“Relinquished Property” shall mean
certain vehicles used in Exchangor’s business and qualifying as “relinquished
property” within the meaning of Section 1.1031(k)-1(a) of the
Treasury Regulations, which have been identified as such in a written notice
delivered by a Legal Entity pursuant to Section 2.05 hereof to each other
party to the applicable Relinquished Property Agreement of the assignment of
such Relinquished Property Agreement to the QI.


 


“Relinquished Property Agreement”
shall mean any agreement relating to the sale or other disposition of
Relinquished Property, including but not limited to each Manufacturer Program
relating to Relinquished Property of a Legal Entity, each agreement arising
from the exercise by a Legal Entity of its right to sell a Vehicle that is
Relinquished Property to a Manufacturer pursuant to the terms of its Manufacturer
Program and each agreement by a Legal Entity to sell a Vehicle that is
Relinquished Property to any third party otherwise than pursuant to a
Manufacturer Program.


 


“Relinquished Property Proceeds” shall
mean, funds derived from or otherwise attributable to the transfer of
Relinquished Property, including any Qualified Earnings thereon, and excluding
earnings thereon that do not constitute Qualified Earnings.


 


“Replacement Property” shall mean
certain vehicles that are like-kind, as defined in Sections 1.1031(a)-1(b) and
1.1031(a)-2 of the Treasury Regulations, to the Relinquished Property and held
for productive use, as described in Section 1.1031(a)-1 of the Treasury
Regulations, in connection with Exchangor’s business operations and qualifying as
“replacement property” within the meaning of Section 1.1031(k)-1(a) of
the Treasury Regulations.


 


“Replacement Property Acquisition Cost”
shall mean, with respect to a Replacement Property, the amount of consideration
required to be paid to the Seller of such Replacement Property under any
related Replacement Property Agreement.


 


“Replacement Property Agreement” shall
mean any agreement (including an obligation of HGI) relating to the acquisition
of Replacement Property, including but not limited to each agreement by HGI to
purchase a vehicle which is Replacement Property from a Manufacturer or a
vehicle dealer, whether such agreement to purchase arises under a Manufacturer
Program or otherwise.


 


“Rights” shall mean (1) with
respect to any Relinquished Property, each Legal Entity’s rights in a
Relinquished Property Agreement (but not its obligations), as defined in
Treasury Regulations Section 1.1031(k)-1(g)(4)(iv) and (v), to sell
the Relinquished Property and (2) with respect to any Replacement
Property, each Legal Entity’s rights in a Replacement Property Agreement (but
not its obligations), as defined in Treasury Regulations Section 1.1031(k)-1(g)(4)(iv) and
(v), to acquire the Replacement Property.


 


“S&P” shall mean Standard and Poor’s
Rating Service or any successor thereto.


 


“Safe Harbor” shall mean any one or
more of the safe harbors described in Section 1.1031(k)-1(g) of the
Treasury Regulations and any one or more of the safe harbor provisions of
Revenue Procedure 2003-39.


 


8

















 


“Sale Notice” shall have the meaning
set forth in Section 6.10(a) hereof.


 


“Seller” shall have the meaning set
forth in the recitals hereto.


 


“Special Termination Date” shall have
the meaning set forth in Section 7.01(b) hereof.


 


“Start Date” shall mean the date on
which Exchangor begins exchanging vehicles in the applicable LKE Program.


 


“Termination Date” shall have the
meaning set forth in Section 7.01(a) hereof.


 


“Treasury Regulations” shall have the
meaning set forth in the recitals hereto.


 


“Vehicle” shall mean a “Vehicle” (as
defined in Schedule I to the Base Indenture or the corresponding Segregated
Series-specific definition set forth in each Segregated Series Supplement)
or a passenger automobile, light-duty truck, bus or tow truck which is owned by
Hertz, as the context may require.


 


ARTICLE
II


 


General Exchange Provisions


 


SECTION 2.01.  Exchange of Property.  (a)  In accordance with the terms of
this Agreement, the QI agrees to transfer Relinquished Property to a Buyer,
pursuant to the terms of Section 2.02 hereof, and to subsequently acquire
Replacement Property of a like-kind from a Seller pursuant to the terms of Section 2.03
hereof in transactions intended to qualify as exchanges under Section 1031
of the Code.


 


(b)  No transfer by a Legal Entity of
Relinquished Property pursuant to this Agreement shall be made unless each of
the following conditions are satisfied:  (u) the
Escrow Agreement shall be in effect; (v) in connection with the transfer
of any Program Vehicle pursuant to an Eligible Manufacturer Program, the
applicable Legal Entity shall have contracted to sell such Program Vehicle
pursuant to such Eligible Manufacturer Program (the Manufacturer party to which
shall have consented to the purchase and sale of Vehicles by the QI pursuant to
an Assignment Agreement, which consent shall not have been revoked) and shall
have directed the QI to sell such Program Vehicle pursuant to such Eligible
Manufacturer Program on the date such Program Vehicle becomes Relinquished
Property pursuant to this Agreement; (w) on the date of any transfer of
any Vehicle to the QI, the only obligations or liabilities, if any, secured by
such Vehicle are obligations or liabilities arising under the Related
Documents, the GE Credit Agreement, the GE Collateral Agreement or the other GE
Loan Documents; (x) solely with respect to (i) a proposed transfer by
HVF of Relinquished Property (other than any Relinquished Property relating to
Series-Specific Collateral for any Segregated Series which does not have
one or more Rating Agencies rating the related Segregated Notes at the request
of the Issuer) pursuant to this Agreement or (ii) a proposed transfer by
Hertz of Relinquished Property with respect to a GE Financed Vehicle pursuant
to this Agreement, as of the date of any such transfer, a QI Parent Downgrade
Event shall not have occurred and continued unremedied for a period of seven
calendar days (ending at 11:59 p.m. on such seventh day) prior to such
date (unless such 


 


9

















 


QI Parent Downgrade Event has been remedied) and (y) on the date
of any such transfer, the following statements shall be true:  (i) solely with respect to a proposed
transfer by HVF of Relinquished Property relating to Collateral pursuant to
this Agreement, no Potential Amortization Event or Amortization Event and no
Liquidation Event of Default or Limited Liquidation Event of Default has
occurred and is continuing or would result from the making of such transfer, in
each case with respect to a Series of Notes, (ii) solely with respect
to a proposed transfer by HVF of Relinquished Property relating to
Series-Specific Collateral of a particular Segregated Series pursuant to
this Agreement, no Potential Amortization Event or Amortization Event with
respect to such Segregated Series and no Liquidation Event of Default or
Limited Liquidation with respect to such Segregated Series has occurred
and is continuing or would result from the making of such transfer, (iii) solely
with respect to a proposed transfer by Hertz of Relinquished Property with
respect to a GE Financed Vehicle pursuant to this Agreement, no Event of
Default has occurred and is continuing or would result from the making of such
transfer, (iv) (a) solely with respect to a proposed transfer by HVF
of Relinquished Property relating to HVF Vehicles, the Termination Date has not
occurred with respect to the HVF Vehicles and (b) solely with respect to
the proposed transfer by HVF of Relinquished Property relating to HVF Segregated
Vehicles constituting Series-Specific Collateral of a particular Segregated
Series, the Termination Date has not occurred with respect to such HVF
Segregated Vehicles and (v) the representations and warranties of the QI
in Article VI hereof are true and correct on and as of such date and shall
be deemed to have been made on and as of such date with the same effect as
though made on and as of such date.  In
connection with any such transfer of Relinquished Property, (A) the
applicable Legal Entity, by making such transfer, shall be deemed to have
represented and warranted to the effect set forth in clauses (z)(i), (ii),
(iii) and (iv) above, and (B) the QI shall be deemed to have
represented and warranted to the effect set forth in clause (z)(v) above.


 


SECTION 2.02.  Disposition and Transfer of Relinquished
Property.  Each Legal Entity has
entered, and/or from time to time may enter, into one or more Relinquished
Property Agreements with one or more Buyers for the sale of Relinquished
Property.  In connection with each
Exchange, the applicable Legal Entity shall, in accordance with Section 1.1031(k)-1(g)(4)(v) of
the Treasury Regulations:  (a) assign
to the QI all of its Rights with respect to such Relinquished Property under
the applicable Relinquished Property Agreements in accordance with Section 2.04
hereof, such assignment to be made without recourse to the QI (and the QI
agrees to accept such assignments); (b) notify all parties to the
applicable Relinquished Property Agreements in writing of the assignment in
accordance with Section 2.05 prior to or concurrent with the date of
transfer of the Relinquished Property to the applicable Buyer, and (c) transfer
its interest in the Relinquished Property to the applicable Buyer pursuant to
the applicable Relinquished Property Agreements.


 


SECTION 2.03.  Acquisition and Transfer of Replacement
Property.  HGI has entered, and/or
from time to time may enter, into one or more Replacement Property Agreements
with one or more Sellers for the purchase of Replacement Property.  In connection with each Exchange, HGI shall,
in accordance with Section 1.1031(k)-1(g)(4)(v) of the Treasury
Regulations:  (a) assign to the QI
all of its Rights with respect to such Replacement Property under the
applicable Replacement Property Agreements in accordance with Section 2.04
hereof, any such assignment to be made without recourse to the QI (and the QI
agrees to accept such assignments); (b) notify all parties to the
applicable Replacement Property Agreement in writing 


 


10

















 


of the assignment in accordance with Section 2.05 prior to or
concurrent with the date of transfer of the Replacement Property from the
applicable Seller, and (c) receive an ownership interest in the
Replacement Property from the applicable Seller pursuant to the applicable
Replacement Property Agreement.


 


SECTION 2.04.  Assignment of Agreements.


 


(a)  Existing Agreements.  Each Legal Entity hereby assigns to the QI,
solely in the QI’s capacity as Exchangor’s Qualified Intermediary, such Legal
Entity’s Rights, but not its obligations, under each related Relinquished
Property Agreement to which such Legal Entity is a party as of the date hereof,
such assignment to be effective only upon such Legal Entity’s transfer of such
Relinquished Property pursuant to Section 2.02 hereof and only with
respect to such Relinquished Property, and the QI hereby agrees to accept such
assignment, solely in its capacity as Exchangor’s Qualified Intermediary.  HGI hereby assigns to the QI, solely in the
QI’s capacity as Exchangor’s Qualified Intermediary, HGI’s Rights, but not its
obligations, under each related Replacement Property Agreement to which HGI is
a party as of the date hereof with respect to such Replacement Property, and
the QI hereby accepts such assignment, solely in its capacity as Exchangor’s
Qualified Intermediary.


 


(b)  New Agreements.  Each Legal Entity hereby assigns to the QI,
solely in the QI’s capacity as Qualified Intermediary, such Legal Entity’s
Rights, but not its obligations, under each related Relinquished Property
Agreement that it enters into after the date of this Agreement, such assignment
to be effective only upon such Legal Entity’s transfer of such Relinquished
Property pursuant to Section 2.02 hereof and only with respect to such
Relinquished Property.  HGI hereby
assigns to the QI, solely in the QI’s capacity as Qualified Intermediary, HGI’s
Rights, but not its obligations, under each Replacement Property Agreement that
it enters into after the date of this Agreement with respect to such
Replacement Property.  Unless otherwise
agreed by the parties, each Legal Entity shall make available to the QI a
report of daily activity listing such new agreements into which it entered
during the period covered by such report. 
The QI shall and hereby does accept each assignment pursuant to this Section 2.04(b) from
each Legal Entity, solely in its capacity as Exchangor’s Qualified
Intermediary.


 


(c)  Revocation of, or Change in,
Assignment.  (i) By notice to
the QI, each Legal Entity may revoke its assignment to the QI of its Rights
with respect to any Replacement Property identified in such notice.  (ii) By notice to the QI, each Legal
Entity may cease assigning to the QI such Legal Entity’s Rights pursuant to
this Section 2.04 with respect to any of its Relinquished Property
identified in such notice and any related Relinquished Property Agreement, if
then in existence, whereupon the property identified in such notice shall cease
to be Relinquished Property and any related agreement shall cease to be a
Relinquished Property Agreement to the extent related to the property specified
in such notice.  (iii) Not later
than the Termination Date specified in any notice of termination delivered
pursuant to Section 7.01(a) hereof, the applicable Legal Entity shall
cease assigning to the QI its Rights with respect to any Relinquished Property
relating to the Vehicles with respect to which the Termination Date
relates.  (iv) On the Special
Termination Date specified in Section 7.01(b) hereof, the Legal
Entities shall cease assigning to the QI its Rights with respect to any
Relinquished Property arising on or after such date.  Any such notices shall only be effective with
respect to property transferred or received after the date on which such notice
is given.


 


11

















 


(d)  Safe Harbor.  For purposes of the Code and the Treasury
Regulations, each assignment to the QI made by a Legal Entity pursuant to this Section 2.04
is made by Exchangor pursuant to the assignment Safe Harbor set forth in Section 6.02
of Revenue Procedure 2003-39 and, except as may be otherwise required by
applicable law, shall be effective when provided in Section 2.04(a) or
2.04(b) hereof, as applicable, without the need for any further actions
other than those provided in Sections 2.01, 2.02, 2.03, 2.04(a) and
2.04(b) hereof by a Legal Entity or the QI with respect to the transfer of
any Relinquished Property or any Replacement Property.


 


(e)  Limitation on Rights Transferred
to QI.  Each of the parties hereto
agrees and acknowledges that any assignment to the QI hereunder shall not give
the QI any rights under any Relinquished Property Agreement to which any Legal
Entity is a party relating to the disposition of a Vehicle except the Rights in
respect of a Vehicle that becomes Relinquished Property.  The QI hereby acknowledges that it shall have
no interest in any Relinquished Property Agreement with respect to any Vehicle
that is not Relinquished Property.


 


SECTION 2.05.  Notice to Purchasers and Sellers.  Each Legal Entity represents and agrees that
it will provide notice, on or before the date of the relevant transfer of
property, to each other party to any Relinquished Property Agreement or any
Replacement Property Agreement with respect to which any of its Rights
thereunder have been assigned to the QI that such Legal Entity’s Rights in such
Relinquished Property Agreement or such Replacement Property Agreement, as the
case may be, have been assigned, to the extent set forth herein, to the QI, as
its Qualified Intermediary.


 


SECTION 2.06.  Direct Transfers.  For purposes of this Agreement, the QI shall
be considered to have (1) acquired Relinquished Property from Exchangor
and transferred it to the Buyer thereof in each case where such Relinquished
Property is in fact transferred by a Legal Entity directly to such Buyer
pursuant to the relevant Relinquished Property Agreement in accordance with Section 2.02
hereof, and (2) acquired Replacement Property from the Seller thereof and
transferred it to Exchangor in each case where the Replacement Property is in
fact transferred by such Seller to HGI pursuant to the relevant Replacement
Property Agreement in accordance with Section 2.03 hereof, in each case as
provided by Sections 1.1031(k)-1(g)(4)(iv) and (v) of the
Treasury Regulations.


 


Each Legal Entity and the QI agree that the
QI shall not (1) take possession of, (2) hold legal title to, or (3) be
the registered owner of, any Relinquished Property or Replacement Property.


 


SECTION 2.07.  Matching of Relinquished and Replacement
Property.  Exchangor shall match
Replacement Property with Relinquished Property for each Exchange on its books
and records in accordance with Section 1.1031(a)-2 of the Treasury
Regulations and the Safe Harbor set forth in Sections 4.01 and 4.02 of
Revenue Procedure 2003-39.


 


SECTION 2.08.  Disclosure of Relationship.  Each Legal Entity acknowledges and agrees
that the QI shall have the right to disclose the relationships set forth in
this Agreement to any Seller, Buyer or other person and that the QI is, and is
acting in the sole capacity as, Exchangor’s Qualified Intermediary.


 


12

















 


SECTION 2.09.  Exclusivity.  Except as permitted under this Agreement and
the Escrow Agreement, the QI agrees that it will not enter into any agreements
or conduct any transactions or other business other than agreements,
transactions or business with the Legal Entities pursuant to agreements between
such Legal Entities and the QI, or any transactions directly ancillary thereto.


 


SECTION 2.10.  Records.  The QI agrees that it will monitor and keep
detailed and accurate records of the transactions carried out pursuant to this
Agreement, including the dollar amounts involved in each of such
transactions.  Such records shall include
information concerning the date of each transfer of Relinquished Property to a
Buyer and the date of each receipt of Replacement Property from a Seller.  Such records shall be maintained in
accordance with recognized accounting practices and in such a manner so as they
may be readily audited.  All such records
will be available for inspection by the Collateral Agent, the GE Collateral
Agent, the Trustee, each Enhancement Provider and each Legal Entity, or its
designated representatives, upon such Legal Entity’s request, at reasonable,
mutually agreeable times, while this Agreement remains in force.  After expiration, termination or cancellation
of this Agreement, at the applicable Legal Entity’s expense (which expenses
shall be reasonable and approved by such Legal Entity), the QI shall continue
to maintain such records, and to allow such Legal Entity to audit or inspect
the records, until such time as such Legal Entity notifies the QI that the
records are no longer required.  The QI
shall cooperate with the applicable Legal Entity, or its designated
representatives, in the conduct of any such inspection.  Notwithstanding anything set forth above,
unless otherwise requested by a Legal Entity, the records relating to any
particular day’s activities may be destroyed at any time, upon 10 Business Days’
prior written notice to the applicable Legal Entity, after the date which is
seven (7) years from the date such record was originated.


 


ARTICLE
III


 


Identification


 


SECTION 3.01.  Identification of Replacement Property.  Any Legal Entity may, at any time during the
Identification Period, with respect to an Exchange, by written notice to the
QI, signed by such Legal Entity and sent to the QI in any manner prescribed by Section 1.1031(k)-1(c)(2) of
the Treasury Regulations, identify and designate the Replacement Property with
respect to the Relinquished Property transferred in such Exchange; provided, however,
that (a) HVF shall not so identify and designate Replacement Property (i) with
respect to HVF Vehicles, after 11:59 p.m. on the seventh calendar day
after the occurrence of a QI Parent Downgrade Event that continues unremedied
at such time, unless such QI Parent Downgrade Event has been remedied, (ii) with
respect to HVF Segregated Vehicles (other than any HVF Segregated Vehicles
constituting Series-Specific Collateral for any Segregated Series which
does not have one or more Rating Agencies rating the related Segregated Notes
at the request of the Issuer), after 11:59 p.m. on the seventh calendar
day after the occurrence of a QI Parent Downgrade Event that continues
unremedied at such time, unless such QI Parent Downgrade Event has been
remedied, (iii) with respect to HVF Vehicles, for so long as an
Amortization Event is continuing with respect to any Series of Notes and (iv) with
respect to HVF Segregated Vehicles constituting Series-Specific Collateral of
any Segregated Series, for so long as an Amortization Event is continuing with
respect to such Segregated Series; (b) Hertz 


 


13

















 


shall not so identify and designate Replacement Property with respect
to GE Financed Vehicles (i) after 11:59 p.m. on the seventh calendar
day after the occurrence of a QI Parent Downgrade Event that continues
unremedied at such time, unless such QI Parent Downgrade Event has been
remedied or (ii) after the occurrence of an Event of Default that
continues unremedied at such time; and (c) no Legal Entity shall so
identify and designate Replacement Property with respect to any Vehicles after
the Special Termination Date.  The Legal
Entities shall only designate Replacement Property that is like-kind to such
Relinquished Property, as defined in Sections 1.1031(a)-(b) and
1.1031(a)-2 of the Treasury Regulations. 
The Legal Entities shall identify as Replacement Property either (a) no
more than three vehicles in the aggregate or (b) any number of vehicles
whose aggregate fair market value does not exceed 200% of the aggregate fair
market value of the related Relinquished Property involved in such Exchange.


 


SECTION 3.02.  Revocation of Identification.  (a)  Any identification by a Legal
Entity pursuant to Section 3.01 hereof may be revoked by written notice
from any Legal Entity to the QI prior to the end of the Identification Period.


 


(b)  During the continuance of an
Amortization Event with respect to any Series of Notes, any identification
pursuant to Section 3.01 with respect to Relinquished Property of HVF
which relates to HVF Vehicles which can be revoked pursuant to Section 3.02(a) shall
be revoked.


 


(c)  During the continuance of an
Amortization Event with respect to any Segregated Series of Notes, any
identification pursuant to Section 3.01 with respect to Relinquished
Property of HVF which relates to HVF Segregated Vehicles constituting
Series-Specific Collateral for such Segregated Series which can be revoked
pursuant to Section 3.02(a) shall be revoked.


 


(d)  During the continuance of an Event
of Default, any identification pursuant to Section 3.01 with respect to
Relinquished Property of Hertz which relates to GE Financed Vehicles which can
be revoked pursuant to Section 3.02(a) shall be revoked.


 


(e)  If a QI Parent Downgrade Event
shall have occurred and continues unremedied at 11:59 p.m. on the seventh
calendar day after the occurrence of such event, any identification pursuant to
Section 3.01 with respect to Relinquished Property of HVF (other than any
such Relinquished Property which relates to HVF Segregated Vehicles
constituting Series-Specific Collateral for any Segregated Series which
does not have one or more Rating Agencies rating the related Segregated Notes
at the request of the Issuer) or Relinquished Property of Hertz which relates
to GE Financed Vehicles which can be revoked pursuant to Section 3.02(a) shall
be revoked.


 


(f)  Hertz will give the QI written
notice of the occurrence of an Amortization Event with respect to any Series of
Indenture Notes, an Event of Termination pursuant to the Purchase Agreement, an
Event of Default or a QI Parent Downgrade Event promptly after Hertz becomes
aware of the occurrence of such event.


 


14

















 


ARTICLE
IV


 


Accounts


 


SECTION 4.01.  Accounts.  (a)  Each Legal Entity and the QI shall
enter into the Escrow Agreement with the QI and the Escrow Agent, pursuant to
which the Legal Entities and the QI shall maintain one or more Exchange
Accounts and Joint Disbursement Accounts, at The Bank of New York Mellon, N.A.
or the Escrow Agent or an affiliate thereof. 
One or more Joint Collection Accounts have been or will be established
and will be maintained by the Collateral Agent in accordance with Section 2.5
of the Collateral Agency Agreement or the analogous section in any collateral
agency agreement relating to a Segregated Non-Collateral Agency Series, as
applicable; one or more HVF Exchange Accounts have been or will be established
and will be maintained by the Trustee in accordance with Section 5A.1 of
the Base Indenture, each in the name of “The Bank of New York Mellon, N.A., as
Trustee, and Hertz Car Exchange Inc., as Qualified Intermediary for HVF”; one
or more HVF Segregated Exchange Accounts have been or will be established and
will be maintained by the Trustee in accordance with the applicable section of
the related Segregated Series Supplement, each in the name of “The Bank of
New York Mellon, N.A., as Trustee, and Hertz Car Exchange Inc., as Qualified
Intermediary for HVF”; and one or more Hertz GE Exchange Accounts have been or
will be established and will be maintained by the GE Collateral Agent in
accordance with the provisions of the GE Credit Agreement and the GE Collateral
Agreement, each in the name of “Gelco Corporation dba GE Fleet Services, as
Collateral Agent, and Hertz Car Exchange, Inc., as Qualified Intermediary
for Hertz”.  All such Accounts shall be
operated in accordance with the terms of this Agreement, the Collateral Agency
Agreement or any collateral agency agreement relating to a Segregated
Non-Collateral Agency Series, the Base Indenture, the Segregated Series Supplements,
the GE Credit Agreement and the GE Collateral Agreement, as applicable.  If any Joint Collection Account is not
maintained in accordance with Section 2.5 of the Collateral Agency
Agreement or the analogous section in any collateral agency agreement relating
to a Segregated Non-Collateral Agency Series, as applicable, then within ten (10) Business
Days of obtaining knowledge of such fact, the Collateral Agent (or any
collateral agent with respect to any Segregated Non-Collateral Agency Series)
and the QI shall establish a new Joint Collection Account which complies with
such section and transfer into the new Joint Collection Account all funds from
the old Joint Collection Account.  If any
HVF Exchange Account is not maintained in accordance with Section 5A.1 of
the Base Indenture, then within ten (10) Business Days of obtaining
knowledge of such fact, the Trustee and the QI shall establish a new HVF
Exchange Account which complies with such section and transfer into the new HVF
Exchange Account all funds from the old HVF Exchange Account.  If any HVF Segregated Exchange Account is not
maintained in accordance with the applicable section of the related Segregated Series Supplement,
then within ten (10) Business Days of obtaining knowledge of such fact,
the Trustee and the QI shall establish a new HVF Segregated Exchange Account
which complies with such section and transfer into the new HVF Segregated
Exchange Account all funds from the old HVF Segregated Exchange Account. If any
Hertz GE Exchange Account is not maintained in accordance with the provisions
of the GE Credit Agreement and the GE Collateral Agreement, then within ten (10) Business
Days of obtaining knowledge of such fact, the GE Collateral Agent and the QI
shall establish a new Hertz GE Exchange Account which complies with such
provisions and transfer into the new Hertz GE Exchange Account all funds from
the old Hertz GE Exchange Account.


 


15

















 


(b)  The Joint Collection Accounts are
intended to facilitate the orderly and efficient collection of proceeds from
the disposition of the Relinquished Property, including the collection of all
Relinquished Property Proceeds, and to allow (1) the identification and
subsequent separation of the portion of such funds attributable to Vehicles
disposed of by Hertz, HVF or HGI, (2) the further identification and
subsequent separation of the portion of such funds attributable to HVF Vehicles
and the portion of such funds attributable to HVF Segregated Vehicles, in which
case the Segregated Series with respect to which such HVF Segregated
Vehicle constitutes Series-Specific Collateral shall be identified and (3) the
further identification and subsequent separation of the portion of such funds
of each Legal Entity that are Relinquished Property Proceeds of such Legal
Entity from the portion of such funds that are Non-Qualified Funds of such
Legal Entity.  All proceeds received from
Buyers by or on behalf of the QI or a Legal Entity in respect of sales of
Relinquished Property shall be immediately deposited in a Joint Collection
Account.


 


(c)  The Exchange Accounts are intended (i) to
receive all Relinquished Property Proceeds and (ii) (A) in the case
of an HVF Exchange Account, an HVF Segregated Exchange Account or a Hertz
Exchange Account, to provide Relinquished Property Proceeds to an HGI Exchange
Account upon the purchase of a vehicle by Hertz or HVF from HGI and (B) in
the case of an HGI Exchange Account, to provide Relinquished Property Proceeds
to the Joint Disbursement Accounts.


 


(d)  The Joint Disbursement Accounts are
intended to facilitate the orderly and efficient disbursement of funds to the
Sellers, including the disbursement of all funds relating to the acquisition of
Replacement Property under the LKE Program.


 


(e)  Pursuant to the Escrow Agreement,
Relinquished Property Proceeds held by the QI on behalf of a Legal Entity in (i) an
HVF Exchange Account or unless otherwise specified in Segregated Series Supplement
an HVF Segregated Exchange Account shall be invested in Permitted Investments, (ii) a
Hertz GE Exchange Account shall be invested in Cash Equivalents (as defined in
the GE Credit Agreement) or (iii) any other Exchange Account shall be
invested as directed by Hertz or HGI, in each case, until such funds are used,
in the case of Hertz or HVF, to fund an HGI Account upon the purchase of a
vehicle from HGI, and in the case of HGI, to fund a Joint Disbursement Account,
as the case may be.


 


(f)  All Relinquished Property Proceeds
(and any earnings thereon), whether in a Joint Collection Account, a Joint
Disbursement Account or an Exchange Account, shall be held subject to
Sections 1.1031(k)-1(g)(4)(ii) and 1.1031(k)-1(g)(6) of the
Treasury Regulations, including the restrictions on Exchangor’s right to
receive, pledge, borrow, or otherwise obtain the benefits of Relinquished
Property Proceeds and Qualified Earnings thereon held by the QI.  Subject to the limitation that each Legal
Entity shall have no right to receive, pledge, borrow, or otherwise obtain the
benefits of Relinquished Property Proceeds or the Qualified Earnings thereon
held by either the QI or the bank maintaining the account where such
Relinquished Property Proceeds are on deposit, Relinquished Property Proceeds
may be withdrawn from any Exchange Account or Joint Disbursement Account upon a
Disbursement Occurrence with respect to the related Relinquished Property.  Upon any Disbursement Occurrence, the QI
shall, at such time and in satisfaction of the QI’s remaining obligations under
this Agreement as to the related Exchange with respect to such Disbursement
Occurrence, have the bank maintaining the


 


16














 


Account where the applicable funds are on deposit pay any remaining
amount relating to such Exchange, including without limitation accumulated
interest as to such Exchange in any Exchange Account, to, or as directed by,
the Legal Entities; provided that if such funds relate to HVF Vehicles, such
amount shall be paid to the Collection Account and if such funds relate to the
HVF Segregated Vehicles constituting the Series-Specific Collateral for any
Segregated Series unless otherwise specified in a Segregated Series Supplement
such amount shall be paid to the collection account for such Segregated Series.


 


SECTION 4.02.  Separation and Application of Funds in
Joint Collection Accounts and Exchange Accounts; Proceeds from Transfer of
Relinquished Property by the QI.


 


(a)  Identification of Funds.  On each Business Day, (i) each Legal
Entity shall: (1) identify funds in the Joint Collection Accounts as of
such Business Day which constitute Non-Qualified Funds with respect to such
Legal Entity and direct the QI to immediately transfer such funds to (A) in
the case of Non-Qualified Funds of HVF with respect to HVF Vehicles, the
Collection Account and with respect to HVF Segregated Vehicles constituting the
Series-Specific Collateral for any Segregated Series unless otherwise
specified in the related Segregated Series Supplement the collection
account for such Segregated Series, (B) in the case of Non-Qualified Funds
of Hertz with respect to GE Financed Vehicles, the GE Collateral Account and (C) in
the case of other Non-Qualified Funds of Hertz or Non-Qualified Funds of HGI,
to such other account as shall be specified by the applicable Legal Entity; (2) initiate
on such Business Day proposed Electronic Funds Transfers from the Joint
Collection Accounts in order to transfer funds in the Joint Collection Accounts
as of such Business Day which constitute Relinquished Property Proceeds with
respect to Relinquished Property transferred by such Legal Entity to the
applicable Exchange Account and (3) notify the QI and (A) in the case
of transfers to the Collection Account, any collection account or other account
relating to a Segregated Series of Notes, an HVF Exchange Account or an
HVF Segregated Exchange Account, the Trustee or (B) in the case of
transfers to the GE Collateral Account or a Hertz GE Exchange Account, the GE
Collateral Agent of such proposed transfers and (ii) each Legal Entity
shall:  (1) identify funds in the
Exchange Accounts as of such Business Day which constitute Non-Qualified Funds
with respect to such Legal Entity and direct the QI to immediately transfer
such funds to (A) in the case of Non-Qualified Funds of HVF with respect
to HVF Vehicles, the Collection Account and with respect to HVF Segregated
Vehicles constituting the Series-Specific Collateral for any Segregated Series unless
otherwise specified in the related Segregated Series Supplement the
collection account or other account for such Segregated Series, (B) in the
case of Non-Qualified Funds of Hertz with respect to GE Financed Vehicles, the
GE Collateral Account and (C) in the case of other Non-Qualified Funds of
Hertz and Non-Qualified Funds of HGI, to such other account as shall be
specified by the applicable Legal Entity; (2) initiate on such Business
Day proposed Electronic Funds Transfers from (x) an Exchange Account in
order to transfer funds in such Exchange Account as of such Business Day which
constitute Relinquished Property Proceeds with respect to Relinquished Property
transferred by a Legal Entity (but which funds were previously transferred to
the Exchange Account of a different Legal Entity) to the applicable Exchange
Account, provided that, in the case of an HVF Exchange Account, no Aggregate
Asset Amount Deficiency (under the Base Indenture) exists or would result
therefrom and, in the case of an HVF Segregated Exchange Account, no Aggregate
Asset Amount Deficiency (under the applicable Segregated Series Supplement)
exists or would result therefrom, and (y) a Hertz Exchange Account, an HVF
Exchange Account or an HVF 


 


17

















 


Segregated Exchange Account in order to transfer funds in such Exchange
Account as of such Business Day which constitute Relinquished Property Proceeds
with respect to Relinquished Property transferred by such Legal Entity
hereunder to an HGI Exchange Account upon the purchase of a vehicle by Hertz or
HVF from HGI and (3) notify the QI and, in the case of a transfer from an
HVF Exchange Account or an HVF Segregated Exchange Account, the Trustee or, in
the case of a transfer from a Hertz GE Exchange Account, the GE Collateral
Agent of such proposed transfers.


 


(b)  Approval of Certain Transfers.  If upon notification to the QI of the
proposed Electronic Funds Transfers of Relinquished Property Proceeds pursuant
to clause (i)(2) or (ii)(2) of Section 4.02(a) hereof,
the QI approves of such proposed Electronic Funds Transfers, the QI agrees to
take, within one hour of the receipt of such notification of transfers, all
appropriate actions needed to approve and transmit such transfers.  If the QI does not approve of any of such
proposed Electronic Funds Transfers of Relinquished Property Proceeds, the QI
shall immediately notify (1) the applicable Legal Entity, and (A) in
the case of Relinquished Property Proceeds of HVF, the Trustee or (B) in
the case of Relinquished Property Proceeds of Hertz with respect to the GE
Financed Vehicles, the GE Collateral Agent, and (2) the banking
institution maintaining the applicable Joint Collection Account or Exchange
Account via telephone or fax (any such notice given by telephone to be
confirmed in writing), of the disapproval and the reasons for such
disapproval.  The QI shall cause the bank
maintaining the Joint Collection Accounts and Exchange Accounts to accept the
instructions of the applicable Legal Entity to make each Electronic Funds
Transfer described in Section 4.02(a) hereof that is subsequently
approved by the QI pursuant to this Section 4.02(b) hereof.


 


(c)  Ownership of Funds; Restricted
Transfers.  Each of the Legal Entities
and the QI hereby acknowledge and agree that it is the intent of the parties
hereto that funds deposited into the Joint Collection Accounts, Exchange
Accounts and Joint Disbursement Accounts and funds held in accounts maintained
by the Escrow Agent shall be used solely to enable the QI to perform its
obligations hereunder to acquire Replacement Property and shall not be
considered part of the QI’s general assets nor subject to claims by the QI’s
creditors.


 


(d)  Non-Qualified Funds.  The QI shall apply any Non-Qualified Funds,
or shall cooperate with each Legal Entity for purposes of executing any
authorization to cause any Non-Qualified Funds to be applied, as directed by
the applicable Legal Entity pursuant to clause (i)(1) or (ii)(1) of
Section 4.02(a) hereof.


 


(e)  Effectuation of Transfer.  On each Business Day, the QI shall cause the
bank maintaining each Joint Collection Account or Exchange Account to cause the
amount, if any, set forth in the instructions described in Section 4.02(a)(i) or
(a)(ii) hereof, to be transferred from such Joint Collection Account to
the applicable Exchange Account.  The QI
hereby agrees that it shall not approve any transfer of Relinquished Property
Proceeds from the Joint Collection Accounts to any account other than an
Exchange Account.  HVF shall provide
notice to the Trustee of any transfer from (i) a Joint Collection Account
to the Collection Account or any collection account or other account relating
to a Segregated Series of Notes, an HVF Exchange Account or an HVF
Segregated Exchange Account and (ii) an HVF Exchange Account or an HVF
Segregated Exchange Account to an HGI Exchange Account.


 


18





















 


SECTION 4.03.   Payment for Replacement Property.


 


(a)  Reports.  On each Business Day, HGI shall provide the
QI with a report with respect to each Joint Disbursement Account setting forth
for such day (1) the aggregate Replacement Property Acquisition Cost
expected to be disbursed from such Joint Disbursement Account, (2) the aggregate
amount to be transferred to such Joint Disbursement Account from an HGI
Exchange Account, if any, to fund such aggregate Replacement Property
Acquisition Cost, (3) the amount (if any) to be transferred to such Joint
Disbursement Account from any other source to fund such aggregate Replacement
Property Acquisition Cost, (4) the aggregate amount (if any) to be
transferred to such Joint Disbursement Account from any other account, to fund
disbursements not related to the LKE Program, and (5) adjustments, if any,
to amounts previously funded from an HGI Exchange Account.


 


(b)  Funding by the QI.  On each Business Day, HGI shall initiate a
series of proposed Electronic Funds Transfers in order to withdraw from an HGI
Exchange Account and transfer to one or more Joint Disbursement Accounts on
such day amounts to fund the aggregate Replacement Property Acquisition Cost on
such day in accordance with the report delivered pursuant to Section 4.03(a) hereof
and shall notify the QI of such proposed Electronic Funds Transfers.  If upon such notification of the proposed
Electronic Funds Transfers the QI approves of the proposed Electronic Funds
Transfers, the QI agrees to take, within one hour of the receipt of such
notification, all appropriate actions needed to approve and transmit such
transfers.  If the QI does not approve of
any of such proposed Electronic Funds Transfers, the QI shall immediately
notify HGI, via telephone or fax (any such notice given by telephone to be
confirmed in writing), of the disapproval and the reasons for such
disapproval.  The QI shall cause the bank
maintaining each Joint Disbursement Account to accept the instructions of HGI
to make each Electronic Funds Transfer described above that is subsequently
approved by the QI.


 


(c)  Shortfalls in Funding.  If, for any reason, the sum of the amounts
proposed to be transferred from an HGI Exchange Account to a Joint Disbursement
Account for the purchase of Replacement Property on any Business Day exceeds
the total amount of funds in such Exchange Account available for such purpose
on such Business Day, including any funds earned from the investment of funds
held in such Exchange Account pursuant to the Escrow Agreement, the QI shall
promptly notify HGI of such shortfall, and the amounts to be transferred to a
Joint Disbursement Account from such HGI Exchange Account on such Business Day
to fund the aggregate Replacement Property Acquisition Cost shall be reduced by
the amount of such shortfall.


 


(d)  Effectuation of Transfers.  On each Business Day, the QI shall cause the
bank maintaining each Exchange Account to cause the amounts, if any, set forth
in the instructions described in Section 4.03(b) hereof, reduced, if
necessary, as described in Section 4.03(c) hereof, to be transferred
from the applicable Exchange Account to the applicable Joint Disbursement
Account.


 


(e)  Funding by Exchangor.  In the event that the aggregate funds
transferred from an HGI Exchange Account to the Joint Disbursement Accounts on
any Business Day are insufficient to fund all Replacement Property Acquisition
Costs and Non-LKE Disbursements to be made from each Joint Disbursement Account
on such day, the QI shall promptly notify HGI 


 


19





















 


of such shortfall, and HGI may transfer Additional Subsidies to the
applicable Joint Disbursement Account in an amount sufficient for the QI to
acquire the Replacement Property and make such Non-LKE Disbursements.  The QI shall not be required to pay
Replacement Property Acquisition Costs or make Non-LKE Disbursements for which
sufficient funds are not available.


 


SECTION 4.04.  Investment of Funds in the Exchange
Account.


 


(a)  Investment of Funds.  On each Business Day, all funds in the
Exchange Accounts shall be invested in accordance with the terms of Section 4.01(e) and
the Escrow Agreement.  Each Legal Entity
shall provide the QI instructions from time to time in accordance with the
Escrow Agreement setting forth the manner in which such funds shall be
invested.


 


(b)  Interest Reporting.  Each Legal Entity and the QI acknowledge and
agree that the income earned on funds invested pursuant to the Escrow Agreement
will be attributed to Exchangor for income tax purposes.


 


SECTION 4.05.  Disbursements from Account.  All Relinquished Property Proceeds shall be
held subject to the terms of this Agreement (including, without limitation, the
terms of Section 4.01(f)) and, following any transfer of such Relinquished
Property Proceeds to an Exchange Account or a Joint Disbursement Account in
accordance with the terms hereof, the Escrow Agreement.


 


SECTION 4.06.  Disbursement Occurrence.  All Relinquished Property Proceeds and
Additional Subsidies shall be held subject to the terms of this Agreement, the
Escrow Agreement, the Collateral Agency Agreement or collateral agency
agreement relating to a Segregated Non-Collateral Agency Series, and, in the
case of Relinquished Property Proceeds and Additional Subsidies with respect to
GE Financed Vehicles, the GE Credit Agreement and the GE Collateral Agreement.  In particular, all Relinquished Property
Proceeds (and any Qualified Earnings thereon) shall be held subject to Treasury
Regulations Sections 1.1031(k)-1(g)(4)(ii) and (g)(6).  Without limiting the foregoing, Exchangor’s
rights to receive, pledge, borrow, or otherwise obtain the benefits of any
Relinquished Property Proceeds (whether in the form of money or other property)
and any Qualified Earnings thereon are expressly limited as provided in
Treasury Regulations Sections 1.1031(k)-1(g)(4)(ii) and 1.1031(k)-1(g)(6).  Exchangor shall have no right to receive,
pledge, borrow, or otherwise obtain the benefits of Relinquished Property
Proceeds or the Qualified Earnings thereon held in the Accounts except for
amounts withdrawn solely for one of the following occurrences (each a “Disbursement
Occurrence”):  (a) if Exchangor
has not identified, or has revoked an identification with respect to, any
Replacement Property on or before the end of the Identification Period, (b) after
identification and after the Identification Period has expired, Exchangor has
received all of the identified Replacement Property to which Exchangor is
entitled, (c) after the end of the Exchange Period for any Relinquished
Property or (d) HGI, HVF or Hertz receiving written notification from one
or more Manufacturers of Identified Replacement Vehicles with respect to
Relinquished Property, stating that Manufacturers of Identified Replacement
Vehicles will not be delivering, before the end of the applicable Exchange
Period or otherwise, Identified Replacement Vehicles with an aggregate purchase
price of at least 80% of the aggregate proceeds of the sale of such
Relinquished Property.  All funds held in
the Joint Collection 


 


20





















 


Accounts, Exchange Accounts and Joint Disbursement Accounts shall be
subject to such restrictions as are necessary for such accounts to satisfy the
requirements of Sections 5.02 and 5.03 of Rev. Proc. 2003-39.


 


ARTICLE
V


 


Indemnity By Each Legal
Entity


 


SECTION 5.01.  No Personal Liability.  The parties hereto agree that no director,
officer, employee, member, shareholder or agent of any party to this Agreement
shall have any personal liability under or in connection with this Agreement.


 


SECTION 5.02.  Indemnity.  (a)  Hertz agrees to indemnify, hold
harmless, and defend the QI, its respective agents, officers, directors,
employees, members and affiliates (each a “QI Indemnitee”) from and
against any and all losses, liabilities, costs and expenses suffered in
connection with any claims or actions to the extent directly related to the QI’s
involvement under this Agreement as a “Qualified Intermediary”, pursuant to
Treasury Regulation Section 1.1031(k)-1(g)(4)(iii), unless such losses,
liabilities, costs or expenses resulted from the gross negligence or willful
misconduct of a QI Indemnitee.  This
indemnity shall include losses, liabilities and claims resulting from payments,
withdrawals or orders made or purported to be made in accordance with, or from
actions taken in good faith and in reliance upon the provisions of this
Agreement.  This indemnity shall include
any and all claims arising from or in connection with the presence, release,
threat of release, generation, analysis, storage, transportation, discharge or
disposal of hazardous substances or hazardous materials (as such terms or
similar terms may be defined in the provisions of applicable federal, state or
local laws, irrespective of whether such laws, regulations, directives or
ordinances are in existence at the date of this Agreement) to, in, under,
about, adjacent, or from any Relinquished Property or Replacement Property, and
all costs of investigation, soil and water sampling, drilling, testing,
reporting, repair, removal, remediation, clean-up, closure, decontamination and
detoxification of any property, including the rental and use of any equipment
used in connection therewith; and including the cost of any professionals and
persons performing any services in connection with any environmental clean-up,
in each case, to the extent related to the QI’s involvement under this
Agreement.


 


(b)  If the QI Indemnitee seeks
indemnification for any loss, liability, cost, expense, claim or action
described in Section 5.02(a) above, Hertz shall defend the claim at
its expense and shall pay any settlements approved by the QI Indemnitee and any
judgments which may be finally awarded, provided that Hertz shall have the
right to control the defense of such third party claims or actions. The QI
Indemnitee agrees to consult and cooperate to the extent reasonably deemed
necessary by Hertz in such defense.


 


SECTION 5.03.  Survival.  The indemnities in this Article V shall
survive the expiration or sooner termination of this Agreement and shall not
merge into any document executed in conjunction herewith.  It is intended that the provisions of this Article V
take precedence over the provisions of any other agreements between the parties
entered into pursuant to this Agreement, and the parties agree that the
provisions of this Article V may not be amended 


 


21





















 


or modified except by a written agreement between the parties making
express reference to this Article V.


 


ARTICLE
VI


 


Representations, Warranties
And Covenants


 


SECTION 6.01.  Representations and Warranties of the QI.  The QI hereby represents and warrants to each
Legal Entity as of the date hereof and throughout the term of this Agreement
and covenants, where applicable, with each Legal Entity as follows:


 


(a)  Organization, Power, Standing,
and Qualification.  The QI has been
duly organized and is in good standing and validly existing under the laws of
the state of Delaware.  Except as
otherwise required by applicable law, the QI will only qualify to do business
or register as a sales and use tax vendor in those states requested in writing
by a Legal Entity, and all costs and expenses of same shall be paid solely by
such Legal Entity.  The QI shall at all
times operate in a manner consistent with its certificate of incorporation and
its bylaws.


 


(b)  Corporate Power and Authority.  The QI has all necessary power and authority
to execute and deliver this Agreement and to perform its obligations under this
Agreement.  The QI has duly authorized,
executed and delivered this Agreement.  This Agreement is a valid and binding
obligation of the QI, enforceable in accordance with its terms.


 


(c)  Validity of Contemplated
Transactions.  The execution and
delivery of this Agreement by the QI and the performance of the QI’s
obligations hereunder (i) will not violate the certificate of
incorporation or bylaws of the QI, (ii) will not conflict with, violate,
result in a breach of or constitute a default under any provision of applicable
law, (iii) will not violate any order known to be issued by any court or
government agency having jurisdiction over the QI and (iv) will not
conflict with, violate, result in a breach of or constitute a default under or
result in the imposition of any lien upon any of the properties or assets of
the QI under the terms of, any agreement to which the QI is a party, which in
the case of clauses (ii), (iii) and (iv) above, would, in the
aggregate, reasonably be expected to have a material adverse effect on the
legality, validity or enforceability of this Agreement or the QI’s ability to
perform its obligations hereunder.


 


(d)  Indebtedness and Liens.  Except as expressly provided in this
Agreement and the Escrow Agreement, neither the QI, nor any Person acting on
behalf of or as an agent for the QI, has incurred or will incur any
indebtedness for borrowed money, or guarantee any obligations of any other
Person, or pledge, assign, transfer, or otherwise encumber (or permit or suffer
to exist any Lien or any other of the foregoing encumbrances with respect to)
its assets or any aspect of this Agreement whatsoever, including the Rights
assigned herein to the QI by each Legal Entity.


 


(e)  Litigation and Compliance.  There is no action, suit, investigation or
proceeding against the QI pending or threatened before any court, governmental
agency or arbitrator that challenges, or would reasonably be expected to have a
material adverse effect on, the legality, validity or enforceability of this
Agreement.


 


22





















 


(f)  Tax Advice.  The QI represents that, except as expressly
stated in this Agreement, at no time has it or its officers, directors,
employees, agents or affiliates made any representation or rendered any advice
with respect to the legal or tax aspects of the Exchanges contemplated herein.


 


(g)  No Consent.  No consent of, action by or in respect of,
approval or other authorization of, or registration, declaration or filing
with, any Governmental Authority or other Person is required for the valid
execution and delivery of this Agreement by the QI or for the performance of
any of the QI’s obligations hereunder.


 


(h)  Solvency.  Before and after giving effect to the
transactions contemplated by this Agreement, the QI is solvent within the
meaning of the Bankruptcy Code and the QI is not the subject of any voluntary
or involuntary case or proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debt under any bankruptcy or insolvency
law and no Event of Bankruptcy has occurred with respect to the QI.


 


(i)  Ownership.  All of the issued and outstanding shares of
the QI are owned by Owner, and have been validly issued, are fully paid and
non-assessable.  The QI has no
subsidiaries and owns no capital stock or any interest in any other Person.


 


(j)  No Other Agreements.  Other than as contemplated by this Agreement
and the Escrow Agreement, (i) the QI is not a party to any contract or any
agreement of any kind or nature and (ii) the QI is not subject to any
obligations or liabilities of any kind or nature in favor of any third party.


 


(k)  Not a Disqualified Person.  Prior to, as of and after the date hereof and
all of the time that this Agreement is in force and effect, the QI is not a
disqualified person within the meaning of such term as set forth in Section 1.1031(k)-1(k) of
the Treasury Regulations (a “Disqualified Person”), taking into account
all exceptions and exclusions therefrom. 
The QI shall not become a Disqualified Person during the period
commencing on the execution date hereof through the Termination Date and, if
any Exchange is pending after the Termination Date, including the Exchange
Period relating to the same.


 


SECTION 6.02.  Representations and Warranties of Owner.  Owner hereby represents and warrants to each
Legal Entity as of the date hereof and throughout the term of this Agreement
and covenants, where applicable, with each Legal Entity as follows:


 


(a)  Organization, Power, Standing,
and Qualification.  Owner has been
duly organized and is in good standing and validly existing under the laws of
the state of its organization.


 


(b)  Corporate Power and Authority.  Owner has all necessary power and authority
to execute and deliver this Agreement and to perform its obligations under this
Agreement.  Owner has duly authorized,
executed and delivered this Agreement. 
This Agreement is a valid and binding obligation of Owner, enforceable
in accordance with its terms.


 


(c)  Validity of Contemplated
Transactions.  The execution and
delivery of this Agreement by Owner and the performance of Owner’s obligations
hereunder (i) will not violate 


 


23

















 


the organizational documents of Owner, (ii) will not conflict
with, violate, result in a breach of or constitute a default under any
provision of applicable law, (iii) will not violate any order known to be
issued by any court or government agency having jurisdiction over Owner and (iv) will
not conflict with, violate, result in a breach of or constitute a default under
or result in the imposition of any lien upon any of the properties or assets of
Owner under the terms of, any material indenture other material agreement to
which Owner is a party, which in the case of clauses (ii), (iii) and (iv) above,
either would, in the aggregate, reasonably be expected to have a Material
Adverse Effect or would, in the aggregate, reasonably be expected to have a
material adverse effect on the legality, validity or enforceability of this
Agreement or Owner’s ability to perform its obligations hereunder.


 


(d)  Litigation and Compliance.  There is no action, suit, investigation,
litigation or proceeding against Owner pending or threatened before any court,
governmental agency or arbitrator that challenges, or would reasonably be
expected to have a material adverse effect on, the legality, validity or
enforceability of this Agreement.


 


(e)  Not a Disqualified Person.  Owner shall not cause the QI to become a
Disqualified Person during the period commencing on the execution date hereof
through and including the date of transfer of any Replacement Property to such
Legal Entity as part of the LKE Program.


 


(f)  No Consents.  No consent of, action by or in respect of,
approval or other authorization of, or registration, declaration or filing
with, any Governmental Authority or other Person is required for the valid
execution and delivery of this Agreement by Owner or for the performance of
Owner’s obligations hereunder, other than such consents, approvals,
authorizations, registrations, declarations or filings as shall have been previously
obtained by such Owner.


 


(g)  Ownership of QI.  The QI is wholly owned directly by Owner.


 


SECTION 6.03.  Representations and Warranties of Each
Legal Entity.  Each Legal Entity,
separately and not jointly, hereby represents and warrants to the QI as of the
date hereof and on the date of each of the transactions described in Article II,
Article III and Article IV hereof and covenants, where applicable,
with the QI as follows:


 


(a)  Organization, Power, Standing,
and Qualification.  Such Legal Entity
has been duly organized and is in good standing and validly existing under the
laws of the state of Delaware.


 


(b)  Corporate Power and Authority.  Such Legal Entity has all necessary power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement.  Such Legal Entity
has duly authorized, executed and delivered this Agreement.  This Agreement is a valid and binding
obligation of such Legal Entity, enforceable in accordance with its terms.


 


(c)  Validity of Contemplated
Transactions.  The execution and
delivery of this Agreement by such Legal Entity and the performance of such
Legal Entity’s obligations hereunder (i) will not violate the certificate
of incorporation or bylaws or limited liability 


 


24





















 


company agreement, as applicable, of such Legal Entity, (ii) will
not conflict with, violate, result in a breach of or constitute a default under
any provision of applicable law, (iii) will not violate any order known to
be issued by any court or government agency having jurisdiction over such Legal
Entity and (iv) will not conflict with, violate, result in a breach of or
constitute a default under or result in the imposition of any lien upon any of
the properties or assets of such Legal Entity under the terms of, any material
indenture other material agreement to which such Legal Entity is a party, which
in the case of clauses (ii), (iii) and (iv) above, either would, in
the aggregate, reasonably be expected to have a Material Adverse Effect or
would, in the aggregate, reasonably be expected to have a material adverse
effect on the legality, validity or enforceability of this Agreement or such
Legal Entity’s ability to perform its obligations hereunder.


 


(d)  Litigation and Compliance.  There is no action, suit, investigation,
litigation or proceeding against such Legal Entity pending or threatened before
any court, governmental agency or arbitrator that challenges, or would
reasonably be expected to have a material adverse effect on, the legality,
validity or enforceability of this Agreement.


 


(e)  Legal or Tax Advice.  Such Legal Entity acknowledges that neither
the QI nor any officer, director, employee, agent or affiliate of the QI has
made representation or rendered any advice with respect to the legal or tax
aspects of the Exchanges contemplated hereby. 
Such Legal Entity further acknowledges that it has been advised to seek
independent legal and tax advice regarding the LKE Program, regarding whether
any Relinquished Property and Replacement Property are like-kind under
Sections 1.1031(a)-2 and 1.1031(k)-1 of the Treasury Regulations and to
have this Agreement reviewed and approved by independent counsel.


 


(f)  Not a Disqualified Person.  Such Legal Entity hereby represents and
warrants to the QI that, to the best of such Legal Entity’s knowledge, as of
the date hereof, the QI is not a Disqualified Person.  Such Legal Entity shall not cause the QI to
become a Disqualified Person during the period commencing on the execution date
hereof through and including the date of transfer of any Replacement Property
to such Legal Entity as part of the LKE Program.


 


(g)  No Consents.  No consent of, action by or in respect of,
approval or other authorization of, or registration, declaration or filing
with, any Governmental Authority or other Person is required for the valid
execution and delivery of this Agreement by such Legal Entity or for the
performance of any of such Legal Entity’s obligations hereunder, other than
such consents, approvals, authorizations, registrations, declarations or
filings as shall have been previously obtained by such Legal Entity.


 


SECTION 6.04.  Survival of Representations and
Warranties.  All representations and
warranties made herein by the parties shall survive the execution, delivery,
performance and termination of this Agreement.


 


SECTION 6.05.  Maintenance of Separate Existence.  The QI covenants and agrees that it shall do
all things necessary to continue to be readily distinguishable from Owner and
its affiliates and maintain its corporate existence separate and apart from
that of Owner and its affiliates including, without limitation, (i) practicing
and adhering to organizational formalities, such as maintaining appropriate
books and records; (ii) observing all organizational formalities in
connection with all dealings between itself and Owner, and the affiliates or
any 


 


25





















 


unaffiliated entity with respect to Owner; (iii) observing all
procedures required by its certificate of incorporation, its by-laws and the
laws of the state of its incorporation; (iv) acting solely in its name and
through its duly authorized officers or agents in the conduct of its
businesses; (v) managing its business and affairs by or under the
direction of its board of directors; (vi) ensuring that its board of
directors duly authorizes all of its actions; (vii) maintaining at least
two directors who are Independent Directors and maintaining the requirement in
its organic documents that no Material Action may be taken without the
affirmative vote of its Independent Directors; (viii) owning or leasing
(including through shared arrangements with affiliates) all office furniture
and equipment necessary to operate its business; (ix) not (A) having
or incurring any indebtedness to Owner or its affiliates or any other Person; (B) guaranteeing
or otherwise becoming liable for any obligations of Owner or its affiliates or
any other Person; (C) having obligations guaranteed by Owner or its
affiliates or any other Person; (D) holding itself out as responsible for
debts of Owner or its affiliates or any other Person or for decisions or
actions with respect to the affairs of Owner or its affiliates or any other
Person; (E) operating or purporting to operate as an integrated, single
economic unit with respect to Owner, its affiliates or any other Person; (F) seeking
to obtain credit or incur any obligation to any third party based upon the
assets of Owner, its affiliates or any other Person; (G) inducing any such
third party to reasonably rely on the creditworthiness of Owner, its affiliates
or any other Person; and (H) being directly or indirectly named as a
direct or contingent beneficiary or loss payee on any insurance policy of
Owner, its affiliates or any other Person; (x) maintaining its deposit and
other bank accounts and all of its assets separate from those of any other
Person; (xi) maintaining its financial records separate and apart from
those of any other Person; (xii) not suggesting in any way, within its
financial statements, that its assets are available to pay the claims of
creditors of Owner, its affiliates or any other Person;
(xiii) compensating all its employees, officers, consultants and agents
for services provided to it by such Persons out of its own funds;
(xiv) maintaining office space separate and apart from that of Owner, its
affiliates and any other Person and a telephone number separate and apart from
that of Owner, its affiliates and any other Person; (xv) conducting all
oral and written communications, including, without limitation, letters,
invoices, purchase orders, contracts, statements, and applications solely in
its own name; (xvi) having separate stationery from Owner, its affiliates
or any other Person; (xvii) accounting for and managing all of its
liabilities separately from those of Owner, its affiliates and any other
Person; (xviii) allocating, on an arm’s-length basis, all shared corporate
operating services, leases and expenses, including those associated with the
services of shared consultants and agents and shared computer and other office
equipment and software; and otherwise maintaining an arm’s-length relationship
with each of Owner, its affiliates and any other Person; (xix) refraining
from filing or otherwise initiating or supporting the filing of a motion in any
bankruptcy or other insolvency proceeding involving Owner to substantively
consolidate Owner with an affiliate or any other Person; (xx) remaining
solvent and assuring adequate capitalization for the business in which it is
engaged; (xxi) conducting all of its business (whether written or oral)
solely in its own name so as not to mislead others as to the identity of Owner
or its affiliates; and (xxii) not taking any Material Action without the affirmative
vote of its Independent Directors.


 


SECTION 6.06.  Ownership by Owner; Mergers.  Other than pursuant to Section 6.10
hereof, Owner will not sell, assign, pledge or otherwise transfer any of its
interest in the QI.  The QI will not
merge or consolidate with or into any other Person unless the QI complies with Section 8.04.


 


26


















 


SECTION 6.07.  Organizational Documents.  The QI will not amend any of its
organizational documents, including its certificate of incorporation and
by-laws, unless (i) such amendment is approved by all of its directors,
including its Independent Directors, (ii) prior to such amendment, the
Rating Agency Condition with respect to each Series of Indenture Notes
Outstanding will be met and (iii) in the case of its certificate of
incorporation, the amended certificate of incorporation provides that the QI
will not take any Material Action without the affirmative vote of its
Independent Directors.


 


SECTION 6.08.  No Other Agreements.  The QI will not enter into or be a party to
any agreement or instrument other than this Agreement, the Escrow Agreement and
any documents and agreements incidental thereto or entered into as contemplated
herein.


 


SECTION 6.09.  Other Business.  The QI will not engage in any business or
enterprise or enter into any transaction other than the making of Exchanges
pursuant to this Agreement, the related exercise of its rights as Qualified
Intermediary hereunder, the incurrence and payment of ordinary course operating
expenses and other activities related to or incidental to either of the
foregoing.


 


SECTION 6.10.  QI Sale.


 


(a)  Hertz may deliver a written notice
(a “Sale Notice”) to Owner at any time. If Hertz delivers a Sale Notice
and does not deliver another written notice to the Owner withdrawing such sale
Notice before the QI Sale is consummated, then the Owner shall transfer all of
the capital stock of the QI to such purchaser as may be designated by Hertz in
such Sale Notice (the “QI Sale”) on the date specified for such transfer
in the Sale Notice, which date shall not be less than five days (or such
shorter period as may be agreed upon by Hertz and Owner) after the delivery of
such Sale Notice.  Any such purchaser
shall not be Hertz or a Disqualified Person.


 


(b)  In the event of a QI Sale, Owner
shall:


 


(i) transfer
all of the capital stock of the QI to the purchaser designated in the related
Sale Notice for such consideration (which may be nominal) as may be designated
by Hertz in such Sale Notice;


 


(ii) execute
and deliver all documents, instruments and consents as may be specified by
Hertz as reasonably necessary or desirable to effectuate the QI Sale;


 


(iii) make
representations and warranties as to its title to the capital stock of the QI
being sold, the absence of any liens thereon and its power, authority and right
to consummate the QI Sale without contravention of law or contract;


 


(iv) make
such further representations and warranties that are reasonable, customary and
appropriate and that the purchaser of the capital stock of the QI reasonably
requests; and


 


(v) be
liable for any breach of the representations and warranties made by it in
connection with such QI Sale.


 


27

















 


(c)  All expenses incurred by Owner in
connection with any QI Sale shall be borne by the Owner.


 


(d)  Upon the consummation of a QI Sale,
(i) the rights, duties and obligations of the transferring Owner shall be
assigned and delegated to the new Owner and the transferring Owner shall be
released from its obligations under this Agreement, except to the extent such
obligations relate to periods prior to the QI Sale, and (ii) the new Owner
shall become a party to this Agreement pursuant to an agreement in
substantially the form of Exhibit A hereto (an “Accession Agreement”).


 


SECTION 6.11.  Trademark License.  (a)  Subject to the terms of this Section 6.11,
Hertz grants the QI a non-exclusive, royalty-free license to use the service
mark “Hertz”, as evidenced by Certificate of Registration No. 0614123 (the
“Licensed Trademark”) with respect only to the QI’s service as Qualified
Intermediary pursuant to this Agreement (the “Licensed Services”), and
in connection therewith, in the QI’s trade name and company name.


 


(b)  The QI agrees to provide, at Hertz’s
request, specimens showing use of the Licensed Trademark with respect to the
Licensed Services for Hertz’s inspection and approval and as needed by Hertz to
file in the United States Patent and Trademark office evidencing use of the
Licensed Trademark in commerce by the QI.


 


(c)  The QI acknowledges that Hertz owns
the Licensed Trademark, and that it has no rights with respect thereto other
than the licenses set forth in this Section 6.11.  Any rights in the Licensed Trademark arising
from the use of the Licensed Trademark by the QI shall inure and accrue
exclusively to Hertz.


 


(d)  The QI shall only use the Licensed
Trademark in a manner previously approved by Hertz.


 


(e)  The QI agrees to provide the
Licensed Services in accordance with standards of quality approved by
Hertz.  Hertz’s designee shall have the
right, at all reasonable times, during normal business hours, to enter the QI’s
premises to inspect any documents or records relating to the Licensed Services,
for the purpose of enabling Hertz to assess whether the Licensed Services
comply with the standards of quality submitted or approved by Hertz.  If the Licensed Services supplied by the QI
do not conform with the standards of quality approved by Hertz in any respect,
Hertz shall so inform the QI in writing of such failure to conform, and the QI
shall immediately cease use of the Licensed Trademark.


 


(f)  The QI agrees to inform Hertz of
the use of any marks similar to the Licensed Trademark and any potential
infringements of the Licensed Trademark which come to its attention.


 


(g)  In the event the QI is named as
defendant in any action based on its use of the Licensed Trademark, the QI
agrees to immediately notify Hertz, and Hertz shall have the right to intervene
in any such action and to control and direct the defense thereof, including the
right to select defense counsel, provided that in the event Hertz chooses to
exercise control Hertz agrees to reimburse the QI for the cost of the QI’s
defense and to indemnify the QI against all damages 


 


28





















 


arising therefrom, provided that the QI has complied with all its
obligations under this Section 6.11 and has cooperated with Hertz in the
defense of such action.


 


(h)  Upon termination of this Agreement,
the QI agrees to discontinue all use of the Licensed Trademark in any manner
whatsoever, including use and registration of the Licensed Trademark in the QI’s
trade name and company name.  Upon
termination of this Agreement, all rights granted to the QI under this Section 6.11
shall revert to Hertz.


 


SECTION 6.12.  Confidentiality.  (a)  The QI shall keep confidential, and
cause its affiliates and its and their officers, directors, employees and
advisors to keep confidential, all information relating to each Legal Entity
(the “Confidential Information”), except as required by law or
administrative process or as provided for in this Agreement and except for
information that is available to the public as of the date of this Agreement or
thereafter becomes available to the public other than as a result of a breach
of this Section 6.12.


 


(b)  Notwithstanding anything to the contrary
set forth in Section 6.12(a), (i) the QI may disclose any of the
Confidential Information provided by a Legal Entity to any bank or other
governmental regulatory authority having jurisdiction over the QI upon the
request of the regulatory authority without having to provide such Legal Entity
with notice of any kind and (ii) in the event that the QI is requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any Confidential Information, it is agreed that the QI will, if reasonably
practicable and to the extent permitted by law, provide Hertz with prompt
notice of such request or requirement so that Hertz may seek an appropriate
protective order or waive compliance by the QI with the provisions of this
Agreement, and if, in the absence of such protective order or the receipt of
such waiver hereunder, the QI is nonetheless, in the opinion of the QI’s
counsel, legally required to disclose such Confidential Information or else
stand liable for contempt or suffer other censure or penalty, the QI may
disclose such information without liability hereunder, provided, however, that
the QI shall disclose only that portion of such Confidential Information which
it is legally required to disclose.


 


ARTICLE
VII


 


Term And Compensation;
Escrow Agreement Termination


 


SECTION 7.01.  Term. 
(a)  The term of this Agreement shall begin on December 21,
2005, and shall continue for thirty-six (36) months from December 21,
2005.  This Agreement shall be
automatically renewed for successive thirty-six (36) month terms, unless the QI
notifies each of the Legal Entities, the Trustee and each Enhancement Provider
(or, if there is an agent for two or more Enhancement Providers, such agent) in
writing at least one-hundred-twenty (120) days prior to the end of a term of
its desire to terminate this Agreement. 
In addition, (i) a Legal Entity may terminate this Agreement at any
time with respect to such Legal Entity (or, in the case of HVF, the portion of
this Agreement relating to HVF Vehicles or HVF Segregated Vehicles relating to
any Segregated Series), by providing not less than sixty (60) days’ prior
written notice to the QI, the Trustee and each Enhancement Provider (or, if
there is an agent for two or more Enhancement Providers, such agent) and (ii) this
Agreement shall automatically terminate (w) with respect to the HVF
Vehicles, at 11:59 p.m. on the 45th calendar 


 


29





















 


day after the occurrence of a QI Parent Downgrade Event that continues
unremedied at such time, (x) with respect to the HVF Segregated
Vehicles which constitute Series-Specific Collateral for any Segregated Series which
has one or more Rating Agencies rating the Segregated Notes related to such
Segregated Series at HVF’s request at 11:59 p.m. on the 45th calendar
day after the occurrence of a QI Parent Downgrade Event that continues
unremedied at such time, (y) with respect to the HVF Vehicles, the first
date on which an Amortization Event is continuing with respect to each Series of
Notes Outstanding and (z) with respect to the HVF Segregated Vehicles
constituting Series-Specific Collateral for any Segregated Series, on the date
of the occurrence of an Amortization Event with respect to such Segregated
Series.  The date which is (x) the
end of a thirty-six (36) month term (as may be renewed), (y) sixty (60)
days after a Legal Entity’s notice as provided herein, solely with respect to
such Legal Entity, or (z) (i) the 45th calendar day following the
occurrence of a QI Parent Downgrade Event that continues unremedied at such
time, solely with respect to the HVF Vehicles and the HVF Segregated Vehicles
which constitute Series-Specific Collateral for any Segregated Series (other
than any Segregated Series which does not have one or more Rating Agencies
rating the related Segregated Notes at the request of the Issuer), (ii) the
first date on which one or more Amortization Events are continuing as specified
in clause (y) above, solely with respect to the HVF Vehicles or (iii) the
date of the occurrence of an Amortization Event as specified as specified in
clause (z) above, solely with respect to the HVF Segregated Vehicles which
constitute Series-Specific Collateral for such Segregated Series, shall be
called the “Termination Date”. 
Upon any such termination, (i) this Agreement shall remain in
effect with respect to Relinquished Property Proceeds relating to a sale to a
Buyer prior to the Termination Date and for which no Disbursement Occurrence
has taken place, (ii) any indemnities and obligations owing to the QI
under this Agreement as of the Termination Date shall survive until satisfied
or otherwise terminated, (iii) if such Termination Date relates to the HVF
Vehicles no further Relinquished Property Proceeds, Qualified Earnings thereon
or other amounts attributable to the transfer of an HVF Vehicle or other HVF
Vehicle Collateral shall be transferred from an HVF Exchange Account to any
Escrow Account, Joint Disbursement Account or any account other than the
Collection Account and (iv) if such Termination Date relates to the HVF
Segregated Vehicles constituting Series-Specific Collateral for any Segregated Series no
further Relinquished Property Proceeds, Qualified Earnings thereon or other
amounts attributable to the transfer of an HVF Segregated Vehicle or other HVF
Segregated Vehicle Collateral, in each case relating to such Segregated Series,
shall be transferred from an HVF Segregated Exchange Account relating to such
Segregated Series to any Escrow Account relating to such Segregated
Series, Joint Disbursement Account relating to such Segregated Series or
any account other than the collection account or other account designated as
relating to such Segregated Series.  
Termination of this Agreement pursuant to this Section 7.01(a) shall
not affect any rights or obligations of the parties hereto under an Exchange
that has not yet been completed as of the Termination Date, and in the event
that this Agreement terminates with respect to any party hereto pursuant to
this Section 7.01(a), such party shall not take any action that causes a
pending Exchange not to qualify under Section 1031 of the Code or in a
manner that would violate Sections 1.1031(k)-1(g)(4)(ii) or (g)(6) of
the Treasury Regulations or Revenue Procedure 2003-39.  Subject to the restrictions above, upon the
Termination Date, the QI shall, at such time, and in satisfaction of the QI’s
remaining obligations under this Agreement with respect to the portion of this
Agreement so terminated, pay all funds in any Account to the applicable Legal
Entity or such Legal Entity’s designee or, in the case of (i) funds in an
HVF Exchange Account or 


 


30





















 


otherwise arising from or attributable to the disposition of HVF
Vehicles, to the Collection Account or (ii) funds in an HVF Segregated
Exchange Account relating to a particular Segregated Series or otherwise
arising from or attributable to the disposition of HVF Segregated Vehicles
comprising Series-Specific Collateral for such Segregated Series, to the
collection account or other account designated as relating to such Segregated
Series.  The Servicer will provide notice
of any Termination Date to each Rating Agency. 
Notwithstanding the foregoing, if any such Termination Date has occurred
but the event which directly caused such Termination Date has been waived,
cured or is otherwise no longer continuing, the parties hereto may reinstate
this Agreement in full by written instrument executed by each such party and,
upon satisfaction of the Rating Agency Condition with respect to each Series of
Indenture Notes Outstanding, this Agreement shall be reinstated in full and
such Termination Date shall be deemed not to have occurred for all purposes on
and after such reinstatement.


 


(b)  Special Termination.  Notwithstanding the provisions of Section 7.01(a),
this Agreement shall automatically terminate at 11:59 p.m. on the 90th
calendar day after the occurrence of a QI Parent Downgrade Event that continues
unremedied at such time.  The 90th
calendar day following the occurrence of a QI Parent Downgrade Event that
continues unremedied at such time shall be called the “Special Termination Date”.  Upon any such termination, (i) this
Agreement shall remain in effect with respect to Relinquished Property Proceeds
relating to a sale to a Buyer prior to the Special Termination Date and for
which no Disbursement Occurrence has taken place, (ii) any indemnities and
obligations owing to the QI under this Agreement as of the Special Termination
Date shall survive until satisfied or otherwise terminated, (iii) no
further Relinquished Property Proceeds, Qualified Earnings thereon or other
amounts attributable to the transfer of an HVF Vehicle or other HVF Vehicle
Collateral or an HVF Segregated Vehicle or other HVF Segregated Vehicle
Collateral shall be transferred from an HVF Exchange Account or an HVF
Segregated Exchange Account to any Escrow Account, Joint Disbursement Account
or any account other than the Collection Account (in the case of such amounts
attributable to the transfer of an HVF Vehicle or other HVF Vehicle Collateral)
or the applicable collection account or other account designated (in the case
of such amounts attributable to the transfer of such an HVF Segregated Vehicle
or such other HVF Segregated Vehicle Collateral relating to any Segregated
Series) and (iv) no further Relinquished Property Proceeds, Qualified
Earnings thereon or other amounts attributable to the transfer of a GE Financed
Vehicle or any related collateral shall be transferred from a Hertz GE Exchange
Account to any Escrow Account, Joint Disbursement Account or any account other
than the GE Collateral Account. 
Termination of this Agreement pursuant to this Section 7.01(b) shall
not affect any rights or obligations of the parties hereto under an Exchange
that has not yet been completed as of the Special Termination Date, and in the
event that this Agreement terminates pursuant to this Section 7.01(b), no
party shall take any action that causes a pending Exchange not to qualify under
Section 1031 of the Code or in a manner that would violate Sections
1.1031(k)-1(g)(4)(ii) or (g)(6) of the Treasury Regulations or
Revenue Procedure 2003-39.  Subject to
the restrictions above, upon the Special Termination Date, the QI shall, at
such time, and in satisfaction of the QI’s remaining obligations under this
Agreement, pay all funds in any Account to the applicable Legal Entity or such
Legal Entity’s designee or, in the case of funds in an HVF Exchange Account
relating to or otherwise arising from or attributable to the disposition of HVF
Vehicles owned by HVF, to the Collection Account or, in the case of funds in an
HVF Exchange Account relating to or otherwise arising from or attributable to
the disposition of HVF Segregated Vehicles owned by HVF comprising
Series-Specific Collateral for any Segregated 


 


31





















 


Series, to the collection account or other account designated for such
Segregated Series or, in the case of funds in a Hertz GE Exchange Account
or otherwise arising from or attributable to the disposition of GE Financed
Vehicles, to the GE Collateral Account. 
On the Special Termination Date, the name of the QI shall be removed from
the Joint Collection Accounts.  The
Servicer will provide notice of the Special Termination Date to each Rating
Agency.  Notwithstanding the foregoing,
if any such Special Termination Date has occurred but the event which directly
caused such Special Termination Date has been waived, cured or is otherwise no
longer continuing, the parties hereto may reinstate this Agreement in full by
written instrument executed by each such party and, upon satisfaction of the
Rating Agency Condition with respect to each Series of Indenture Notes
Outstanding, this Agreement shall be reinstated in full and such Termination
Date shall be deemed not to have occurred for all purposes on and after such
reinstatement.


 


SECTION 7.02.  Compensation.  The Legal Entities agree to pay the QI in a
timely manner after receipt of a quarterly invoice therefor and any reasonably
required supporting documentation, the fees and other amounts as set forth in Exhibit A
hereto.  If this Agreement is terminated
for any reason, the QI will continue to be compensated with respect to all
Exchanges being made by the QI until all such Exchanges are completed.


 


SECTION 7.03.  Escrow Agreement Termination.  If (i) the Legal Entities terminate the
Escrow Agreement or any portion thereof pursuant to Section 6.14 thereof
or (ii) the Escrow Agent terminates the Escrow Agreement pursuant to Section 6.10
thereof, and a new escrow holder is not appointed prior to the termination of
the Escrow Agreement, the QI shall, at such time, pay all funds in any Account
relating to such termination to the applicable Legal Entity or such Legal
Entity’s designee or, in the case of funds in an HVF Exchange Account relating
to or otherwise arising from or attributable to the disposition of HVF Vehicles
owned by HVF, to the Collection Account or, in the case of funds in an HVF
Segregated Exchange Account relating to or otherwise arising from or
attributable to the disposition of HVF Segregated Vehicles owned by HVF
comprising Series-Specific Collateral for any Segregated Series, to the
collection account or other account designated for such Segregated Series or,
in the case of funds in a Hertz GE Exchange Account or otherwise arising from
or attributable to the disposition of GE Financed Vehicles, to the GE
Collateral Account.


 


ARTICLE
VIII


 


Miscellaneous


 


SECTION 8.01.  Pending Litigation.  If any party hereto receives any written
notice that there is, or may be, a pending or threatened litigation against
such party in any manner relating to this Agreement, the LKE Program or such
party’s ability to perform under this Agreement or that may adversely affect
any other party hereto, then the party receiving said notice shall immediately
notify the other parties hereto pursuant to Section 8.02 hereof and shall
notify the Trustee at the address set forth in the Base Indenture; provided
that HVF upon obtaining knowledge, or receipt of notice, of any such pending or
threatened litigation shall also notify each Enhancement Provider.


 


SECTION 8.02.  Notices.  All notices, requests, demands, waivers,
consents, 


 


32

















 


approvals or other communications required or
permitted hereunder will be in writing, will be deemed given when actually
received and will be given by personal delivery, by facsimile transmission with
receipt acknowledged, by means of electronic mail, by same day or overnight
courier services or by registered or certified mail, postage prepaid, return
receipt requested, to the following addresses:


 


If to the QI or the Owner:


DB Services Tennessee, Inc.


[        
]


 


If to Hertz, HGI, or HVF:


 


c/o The Hertz Corporation


225 Brae Boulevard


Park Ridge, NJ 07656


Attention:   Treasurer


Fax:  (201) 307-2476


 


with a copy to the
Administrator at:


 


The Hertz Corporation


225 Brae Boulevard


Park Ridge, NJ 07656


Attention:   Treasurer


Fax:  (201) 307-2476


 


If to Trustee:


 


The Bank of New York Mellon,
N.A.


2 North LaSalle


Chicago, IL 60602


Attn: Corporate Trust
Administrator-Structured Finance


Phone: (312) 827-8569


Fax: (312) 827-8562


 


If to the GE Collateral
Agent:


 


c/o GE Corporate Financial
Services


201 Merritt 7


Norwalk, CT 06856-5201


Attention: Operations Site
Leader-2nd Floor


Tel: 203-956-4146


Fax: 203-229-5788


 


Notice of any change in any
such address, facsimile number or e-mail address will also be given in the
manner set forth above.  Whenever the
giving of notice is required, the party entitled to receive such notice may
waive the giving of such notice.


 


33

















 


SECTION 8.03.  Amendments.  Subject to Section 7.01, this Agreement
may be amended and supplemented only by a written instrument duly executed by
all the parties hereto upon satisfaction of the Rating Agency Condition with
respect to each Series of Indenture Notes Outstanding; provided that an
Accession Agreement may be entered into pursuant to Section 6.10(d) subject
only to the consent of Owner and each Legal Entity.


 


SECTION 8.04.  Successors and Assigns; No Third-Party
Beneficiaries.  This Agreement shall
be binding upon and inure to the benefit of each party and its successors in
interest and permitted assigns.  Except
as expressly otherwise allowed herein (including Section 6.01(d)), no
party may assign or otherwise transfer any of its rights or delegate any of its
duties or obligations under this Agreement without the prior written consent of
each other party, which consent shall not be unreasonably withheld; provided, however,
that no assignment by the QI shall be effective without satisfaction of the
Rating Agency Condition with respect to each Series of Indenture Notes
Outstanding; provided further, however, that (1) each
Legal Entity may pledge all of its right, title and interest in this Agreement
to the extent not otherwise prohibited by the Related Documents and (2) any
party hereto may assign (subject to the Rating Agency Condition with respect to
each Series of Indenture Notes Outstanding in the case of the QI) this
Agreement, without such written consent, to a successor or surviving entity
resulting from a merger or acquisition involving substantially all of a party’s
stock or assets; provided further that any assignment by the QI or any
transfer of any interest in this Agreement by the QI, whether by merger or
acquisition or otherwise, shall only be effective if (i) the successor or
surviving entity (x) is a bankruptcy-remote, special purpose entity
organized under the laws of any state of the United States, is not an affiliate
of Hertz, HVF or HGI and has organic documents that provide that it will not
take any Material Action without the affirmative vote of its Independent
Directors and (y) expressly agrees in writing to abide by the terms of
this Agreement and the Escrow Agreement and (ii) HVF and Hertz consent to
such assignment or transfer.  To secure
the payment of the Note Obligations from time to time owing by HVF under the
Indenture, HVF has pledged and assigned to the Collateral Agent for the benefit
of the HVF Secured Parties a security interest in all of its right, title and
interest in, to and under this Agreement as it relates to the HVF Vehicles, and
the QI hereby consents to such assignment. 
To secure the payment of the Segregated Series Note Obligations
from time to time owing by HVF under any Segregated Series Supplement, HVF
has pledged and assigned to the Collateral Agent (or any collateral agent
relating to a Segregated Non-Collateral Agency Series) for the benefit of the
applicable HVF Segregated Secured Party a security interest in all of its
right, title and interest in, to and under this Agreement as it relates to the
HVF Segregated Vehicles pledged as Series-Specific Collateral for such
Segregated Series, and the QI hereby consents to such assignment.  To secure HGI’s obligations under the HGI
Credit Facility and all other liabilities of HGI from time to time owing by HGI
to Hertz thereunder, HGI has pledged and assigned, to the Collateral Agent, for
the benefit of the HGI Secured Parties, a security interest in all right, title
and interest in, to and under this Agreement and the QI hereby consents to such
assignment.  To secure Hertz’s
obligations under the GE Credit Agreement, the GE Collateral Agreement and the
other GE Loan Documents, Hertz has pledged and assigned to the GE Collateral
Agent for the secured parties under the GE Collateral Agreement a security
interest in all right, title and interest in, to and under this Agreement
insofar as it relates to GE Financed Vehicles and the QI consents to such
assignment.  Except as provided in this
paragraph, nothing contained in this Agreement is intended, or will be
construed, to confer upon or give to any Person, other than the 


 


34

















 


parties hereto and their respective successors and permitted assigns,
any rights or remedies under or by reason of this Agreement.


 


SECTION 8.05.  Governing Law, Venue, Jury Trial Waiver,
and Attorneys’ Fees.


 


(a)  GOVERNING LAW AND VENUE. 
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.  VENUE SHALL BE IN ANY STATE OR FEDERAL COURT
WITHIN THE STATE OF NEW YORK.


 


(b)  JURY TRIAL WAIVER.  EACH
LEGAL ENTITY AND THE QI HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ITS RIGHT
TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING FROM THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING ANY COUNTERCLAIM THERETO.


 


SECTION 8.06.  Indebtedness.  The QI shall not assume any secured loan or
other obligation on any Replacement Property or execute any promissory note or
other evidence of indebtedness in connection with the acquisition of any
Replacement Property, including any of the foregoing that would impose any
personal liability upon the QI for repayment of such obligation.  The QI shall not execute any agreement nor
participate in any transaction which, in the reasonable opinion of the QI or
its counsel, would require the QI to engage in any unlawful or fraudulent
action.


 


SECTION 8.07.  Strict Performance.  The failure of any party to insist upon
strict performance of any of the terms or conditions of this Agreement will not
constitute a waiver of any of its rights hereunder, provided that any
provision may be waived by the party intended to benefit therefrom by a written
instrument signed by such party.


 


SECTION 8.08.  Severability; Interpretation.  If any provision of this Agreement is held
illegal, invalid or unenforceable in a jurisdiction, this Agreement will, in
such circumstances, be deemed modified in such jurisdiction to the extent
necessary to render enforceable the provisions hereof, and such illegality,
invalidity or unenforceability will not affect any other provision of this
Agreement in any other jurisdiction.  It
is the intent of the parties hereto that this Agreement comply with the
requirements for like-kind exchanges pursuant to Section 1031 of the Code
and the regulations thereunder and for a like-kind exchange program pursuant to
Revenue Procedure 2003-39.  To the
greatest extent possible, the provisions of this Agreement shall be interpreted
in a manner consistent with such intent.


 


SECTION 8.09.  Dates, Descriptions, Values, and Matching.  Each Legal Entity shall be ultimately and
solely responsible for the accuracy of any transfer dates, the Relinquished
Property and the Replacement Property descriptions, the Relinquished Property
and the Replacement Property values and the Relinquished Property and the
Replacement Property matching with respect to each Exchange performed pursuant
to its LKE Program.


 


35














 


SECTION 8.10.  Counterparts.  This Agreement may be executed in any number
of counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered will be deemed to be an original and all of
which counterparts when taken together will constitute but one and the same
instrument.  The execution of this
Agreement by any party hereto will not become effective until counterparts
hereof have been executed and delivered by each other party hereto.  It will not be necessary in making proof of
this Agreement or any counterpart hereof to produce or account for any other
counterparts.


 


SECTION 8.11.  Entire Agreement.  This Agreement, as supplemented by the Escrow
Agreement, constitutes the entire understanding and agreement among the parties
with respect to the subject matter contained herein and supersedes and merges
any prior understandings and agreements (whether written or oral) respecting
such subject matter.


 


SECTION 8.12.  Electronic Signature.  In the satisfaction of their respective
obligations and the exercise of their respective rights under this Agreement
and any related documents and/or agreements, to include bills of sale, each
party hereto is, and hereby agrees to be, bound (as though duly authorized,
notarized, and sealed original signatures were affixed to a document) by any
evidence of consent, approval, authorization and/or agreement such party
transmits or causes to be transmitted by electronic means, including but not
limited to: downloading and/or transmitting of information via e-mail;
facsimile; and the internet or similar electronic transmission.


 


SECTION 8.13.  Acknowledgment of Independent
Relationship.  Each Legal Entity and
the QI mutually acknowledge and agree that, pursuant to this Agreement, the QI will
solely acquire Rights in contracts to both the Relinquished Property and the
Replacement Property in accordance with the provisions of Section 1031 of
the Code and the Treasury Regulations thereunder and that legal title to the
Relinquished Property will be transferred to one or more Buyers and legal title
to the Replacement Property will be transferred to the applicable Legal
Entity.  The QI and each Legal Entity
desire to maintain an independent relationship, therefore, the QI and each
Legal Entity hereby acknowledge that in engaging in the activities contemplated
by this Agreement, the QI is acting as a Qualified Intermediary.  In no event shall the QI or any of the QI’s
directors, officers, employees, agents or shareholders be deemed to be acting
as an agent of any Legal Entity (except as expressly provided in this Agreement
and the Treasury Regulations), nor shall the QI have any fiduciary relationship
to any Legal Entity.


 


SECTION 8.14.  Headings.  The headings in this Agreement are for
convenience of reference only and do not affect its interpretation.


 


SECTION 8.15.  Force Majeure.  No party to this Agreement is liable to any
other party for losses due to, or if it is unable to perform its obligations
under the terms of this Agreement if such inability to perform is caused by,
circumstances reasonably beyond a party’s control, such as natural disasters,
fire, floods, third party strikes, failure of public utilities or
telecommunications infrastructure or any other causes reasonably beyond its
control.


 


SECTION 8.16.  Consequential Damages.  Notwithstanding anything to the contrary in
this Agreement, in no event shall the QI or any director, officer, employee,
member, shareholder or agent of the QI be liable for, and each Legal Entity
releases the QI and each 


 


36

















 


director, officer, employee, member, shareholder or agent of the QI
from, any and all liability for special, indirect, incidental or consequential
damages of any kind whatsoever (including lost profits) even if the QI or any
director, officer, employee, member, shareholder or agent of the QI is advised
of such loss or damage and regardless of the form of action.  The aforesaid is not intended to and shall in
no way diminish or bar Hertz’s obligation to indemnify the QI Indemnitees for
third party claims for such damages.


 


SECTION 8.17.  Investment Losses.  In no event shall the QI be liable for, and
each Legal Entity hereby releases the QI from, any and all liability from any
damages resulting from, any loss of principal, interest or other earnings which
may be incurred as a result of the investment of any funds or in redeeming any
investment held by the QI in any Account pursuant to the terms of this
Agreement or the Escrow Agreement.


 


SECTION 8.18.  Treasury Regulations Disclosure
Requirements.  Each Legal Entity
represents that it does not intend to treat any transaction contemplated by
this Agreement as a reportable transaction within the meaning of Section 1.6011-4
of the Treasury Regulations, and without limiting the foregoing, will fully
comply with the filing and reporting requirements applicable to like-kind
exchanges, including any requirement in any applicable regulations or
forms.  In the event that any Legal
Entity determines to take any action inconsistent with such intention, such
Legal Entity will promptly notify the QI, and each Legal Entity acknowledges
that in this event any other party to this Agreement may treat the transaction
as subject to Section 301.6112-1 of the Treasury Regulations, and maintain
the investor list and other records required by such Treasury Regulation.


 


SECTION 8.19.  No Petitions.  (a)  Each Legal Entity 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 Indenture Notes and all obligations of Hertz
under the GE Credit Agreement, the GE Collateral Agreement and the other GE
Loan Documents, it will not institute against, or join with, encourage or
cooperate with any other Person in instituting against, the QI, 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 any
Legal Entity takes action in violation of this Section 8.19(a), the QI
agrees, for the benefit of the HVF Secured Parties and the secured parties
under the GE Collateral Agreement, that it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such a petition by
any Legal Entity against the QI or the commencement of such action and raise
the defense that such Legal Entity has agreed in writing not to take such
action and should be estopped and precluded therefrom and such other defenses,
if any, as its counsel advises that it may assert.


 


(b)  The QI 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 Indenture Notes, it will not institute against, or join with,
encourage or cooperate with any other Person in instituting against, HVF, 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
QI takes action in violation of this Section 8.19(b), HVF agrees, for the
benefit of the HVF Secured Parties, that it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such a petition by
the QI against HVF or the commencement of such action and raise the defense
that the QI has agreed in writing not to take such action and should be 


 


37





















 


estopped and precluded therefrom and such other defenses, if any, as
its counsel advises that it may assert.


 


(c)  The provisions of this Section 8.19
shall survive the termination of this Agreement.


 


SECTION 8.20.  Servicer.  The parties to this Agreement acknowledge and
agree that Hertz acts as Servicer of HVF and HGI pursuant to this Agreement,
and, in such capacity, as the agent of HVF and HGI, for purposes of performing
certain duties of HVF and HGI under this Agreement.  The parties to this Agreement acknowledge and
agree that Hertz, as Servicer, may take any action to be taken by HVF or HGI
under this Agreement, subject to the assignment of HVF’s or HGI’s interest
hereunder to the Collateral Agent.


 


[signature page follows]


 


38

















 


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


 


	
   

  	
  THE
  HERTZ CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:
  R. Scott Massengill

  
	
   

  	
   

  	
  Title:
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERTZ
  VEHICLE FINANCING LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:
  R. Scott Massengill

  
	
   

  	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERTZ
  GENERAL INTEREST LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:
  R. Scott Massengill

  
	
   

  	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERTZ
  CAR EXCHANGE INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Daniel Feehan

  
	
   

  	
   

  	
  Name:
  Daniel Feehan

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Vickie Chaplin

  
	
   

  	
   

  	
  Name:
  Vickie Chaplin

  
	
   

  	
   

  	
  Title:
  Associate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DB
  SERVICES TENNESSEE, INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Alec Singh

  
	
   

  	
   

  	
  Name:
  Alec Singh

  
	
   

  	
   

  	
  Title:
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  Christopher J. Edwards

  
	
   

  	
   

  	
  Name:
  Christopher J. Edwards

  
	
   

  	
   

  	
  Title:
  Vice President

  



 


39