Document:

Exhibit 4.9.6

 

 

 

HERTZ VEHICLE FINANCING LLC,

as Issuer

 

 

and

 

 

BNY MIDWEST TRUST COMPANY,

as Trustee and Securities Intermediary

 

 

 

 

AMENDED AND RESTATED SERIES 2004-1
SUPPLEMENT

 

dated as of December 21, 2005

 

 

to

 

 

AMENDED AND RESTATED BASE INDENTURE

 

dated as of December 21, 2005

 

 

 

$100,000,000 Series 2004-1 Floating Rate
Rental Car Asset Backed Notes, Class A-1

$165,000,000 Series 2004-1 2.38% Rental
Car Asset Backed Notes, Class A-2

$165,000,000 Series 2004-1 2.85% Rental
Car Asset Backed Notes, Class A-3

$170,000,000 Series 2004-1 3.23% Rental
Car Asset Backed Notes, Class A-4

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
  ARTICLE I

  
	
   

  
	
  Definitions

  
	
   

  
	
   

  
	
  ARTICLE II

  
	
   

  
	
  Series 2004-1
  Allocations

  
	
   

  
	
  SECTION 2.01.

  	
  Series 2004-1 Series Accounts

  	
  39

  
	
  SECTION 2.02.

  	
  Allocations with Respect to the Series 2004-1 Notes

  	
  41

  
	
  SECTION 2.03.

  	
  Application of Interest Collections

  	
  45

  
	
  SECTION 2.04.

  	
  Payment of Note Interest

  	
  51

  
	
  SECTION 2.05.

  	
  Payment of Note Principal

  	
  51

  
	
  SECTION 2.06.

  	
  The Administrator’s Failure to Instruct the Trustee to Make a Deposit
  or Payment

  	
  59

  
	
  SECTION 2.07.

  	
  Reserve Account

  	
  60

  
	
  SECTION 2.08.

  	
  Series 2004-1 Letters of Credit and Series 2004-1 Cash
  Collateral Account

  	
  61

  
	
  SECTION 2.09.

  	
  Series 2004-1 Distribution Account

  	
  69

  
	
  SECTION 2.10.

  	
  Trustee as Securities Intermediary

  	
  70

  
	
  SECTION 2.11.

  	
  Series 2004-1 Interest Rate Hedges

  	
  72

  
	
  SECTION 2.12.

  	
  Series 2004-1 Demand Note Constitutes Additional Collateral for Series 2004-1
  Notes

  	
  73

  
	
  SECTION 2.13.

  	
  Reimbursement Obligation

  	
  77

  
	
   

  
	
  ARTICLE III

  
	
   

  
	
  Amortization Events

  
	
   

  
	
   

  
	
  ARTICLE IV

  
	
   

  
	
  Right to Waive Purchase
  Restrictions

  

 

 

	
  ARTICLE V

  
	
   

  
	
  Form of Series 2004-1
  Notes

  
	
   

  
	
  SECTION 5.01.

  	
  Initial Issuance of Series 2004-1 Investor Notes

  	
  84

  
	
  SECTION 5.02.

  	
  Restricted Global Notes

  	
  84

  
	
  SECTION 5.03.

  	
  Regulation S Global Notes and Unrestricted Global Notes

  	
  84

  
	
  SECTION 5.04.

  	
  Definitive Notes

  	
  85

  
	
  SECTION 5.05.

  	
  Transfer Restrictions

  	
  85

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  General

  
	
   

  
	
  SECTION 6.01.

  	
  Optional Redemption of Series 2004-1 Notes

  	
  90

  
	
  SECTION 6.02.

  	
  Information

  	
  90

  
	
  SECTION 6.03.

  	
  Exhibits

  	
  92

  
	
  SECTION 6.04.

  	
  Ratification of Base Indenture

  	
  93

  
	
  SECTION 6.05.

  	
  Notice to Insurer Rating Agencies and Ford

  	
  93

  
	
  SECTION 6.06.

  	
  Insurer Deemed Series 2004-1 Noteholder and Secured Party

  	
  93

  
	
  SECTION 6.07.

  	
  Third Party Beneficiary

  	
  94

  
	
  SECTION 6.08.

  	
  Prior Notice by Trustee to Insurer

  	
  94

  
	
  SECTION 6.09.

  	
  Subrogation

  	
  94

  
	
  SECTION 6.10.

  	
  Counterparts

  	
  95

  
	
  SECTION 6.11.

  	
  Governing Law

  	
  95

  
	
  SECTION 6.12.

  	
  Amendments

  	
  95

  
	
  SECTION 6.13.

  	
  Termination of Series Supplement

  	
  95

  
	
  SECTION 6.14.

  	
  Discharge of Indenture

  	
  95

  
	
  SECTION 6.15.

  	
  Effect of Payment by Insurer

  	
  96

  
	
  SECTION 6.16.

  	
  Ford Covenants

  	
  96

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1-1:

  	
  Form of Restricted Global Class A-1 Note

  	
   

  
	
  Exhibit A-1-2:

  	
  Form of Regulation S Global Class A-1 Note

  	
   

  
	
  Exhibit A-1-3:

  	
  Form of Unrestricted Global Class A-1 Note

  	
   

  
	
  Exhibit A-2-1:

  	
  Form of Restricted Global Class A-2 Note

  	
   

  
	
  Exhibit A-2-2:

  	
  Form of Regulation S Global Class A-2 Note

  	
   

  
	
  Exhibit A-2-3:

  	
  Form of Unrestricted Global Class A-2 Note

  	
   

  
	
  Exhibit A-3-1:

  	
  Form of Restricted Global Class A-3 Note

  	
   

  
	
  Exhibit A-3-2:

  	
  Form of Regulation S Global Class A-3 Note

  	
   

  
	
  Exhibit A-3-3:

  	
  Form of Unrestricted Global Class A-3 Note

  	
   

  
	
  Exhibit A-4-1:

  	
  Form of Restricted Global Class A-4 Note

  	
   

  

 

2

 

	
  Exhibit A-4-2:

  	
  Form of Regulation S Global Class A-4 Note

  	
   

  
	
  Exhibit A-4-3:

  	
  Form of Unrestricted Global Class A-4 Note

  	
   

  
	
  Exhibit B-1-1:

  	
  Form of Series 2004-1 Letter of Credit

  	
   

  
	
  Exhibit B-1-2:

  	
  Form of Series 2004-1 Ford Letter of Credit

  	
   

  
	
  Exhibit C:

  	
  Form of Lease Payment Deficit Notice

  	
   

  
	
  Exhibit D-1-1:

  	
  Form of Reduction Notice

  	
   

  
	
  Exhibit D-1-2:

  	
  Form of Reduction Notice

  	
   

  
	
  Exhibit D-2-1:

  	
  Form of Termination Notice

  	
   

  
	
  Exhibit D-2-2:

  	
  Form of Termination Notice

  	
   

  
	
  Exhibit E:

  	
  Form of Consent

  	
   

  
	
  Exhibit F-1:

  	
  Form of Transfer Certificate

  	
   

  
	
  Exhibit F-2:

  	
  Form of Transfer Certificate

  	
   

  
	
  Exhibit F-3:

  	
  Form of Transfer Certificate

  	
   

  
	
  Exhibit G:

  	
  Form of Monthly Noteholders’ Statement

  	
   

  
	
  Exhibit H:

  	
  Form of Series 2004-1 Demand Note

  	
   

  

 

3

 

AMENDED AND RESTATED SERIES 2004-1
SUPPLEMENT dated as of December 21, 2005 (this “Series Supplement”),
between HERTZ VEHICLE FINANCING LLC, a special purpose limited liability
company established under the laws of Delaware (“HVF”), and BNY MIDWEST
TRUST COMPANY, an Illinois trust company, as trustee (together with its
successors in trust thereunder as provided in the Base Indenture referred to
below, the “Trustee”), and as securities intermediary, to the Amended
and Restated Base Indenture, dated as of December 21, 2005, between HVF
and the Trustee (as amended, modified or supplemented from time to time,
exclusive of Series Supplements, the “Base Indenture”).

 

WITNESSETH:

 

WHEREAS, HVF and the Trustee entered into the Series 2004-1
Supplement dated as of March 31, 2004 (the “Prior Series Supplement”);

 

WHEREAS, HVF and the Trustee desire to amend and
restate the Prior Series Supplement in its entirety as herein set forth;
and

 

WHEREAS, Sections 2.02 and 12.01 of the Base
Indenture provide, among other things, that HVF and the Trustee may at any
time and from time to time enter into a supplement to the Base Indenture for
the purpose of authorizing the issuance of one or more Series of Notes.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

There is hereby created a Series of Notes to be
issued pursuant to the Base Indenture and this Series Supplement and such Series of
Notes shall be designated as Rental Car Asset Backed Notes, Series 2004-1.
The Series 2004-1 Notes shall be issued in four classes:  the first of which shall be designated as the
Series 2004-1 Floating Rate Rental Car Asset Backed Notes, Class A-1,
and referred to herein as the Class A-1 Notes, the second of which shall
be designated as the Series 2004-1 2.38% Rental Car Asset Backed Notes, Class A-2,
and referred to herein as the Class A-2 Notes, the third of which shall be
designated as the Series 2004-1 2.85% Rental Car Asset Backed Notes, Class A-3,
and referred to herein as the Class A-3 Notes and the last of which shall
be designated as the Series 2004-1 3.23% Rental Car Asset Backed Notes, Class A-4,
and referred to herein as the Class A-4 Notes. The Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes
are referred to herein collectively as the “Series 2004-1 Notes”. The
Series 2004-1 Notes shall be issued in minimum denominations of $200,000
and integral multiples of $1,000 in excess thereof.

 

 

The net proceeds from the sale of the Series 2004-1
Notes shall be deposited in the Series 2004-1 Excess Collection Account
and used to make payments in reduction of the Principal Amount of other Series of
Notes or paid to HVF and used to acquire Eligible Vehicles from HGI pursuant to
the Purchase Agreement or for other purposes permitted under the Related
Documents.

 

ARTICLE I

Definitions

 

All capitalized terms not otherwise defined herein
shall have the meanings assigned thereto in the Definitions List attached to
the Base Indenture as Schedule I thereto, as amended, modified, restated
or supplemented from time to time in accordance with the terms of the Base Indenture.
All Article, Section or Subsection references herein shall refer to
Articles, Sections or Subsections of the Base Indenture, except as otherwise
provided herein. Unless otherwise stated herein, as the context otherwise
requires or if such term is otherwise defined in the Base Indenture, each
capitalized term used or defined herein shall relate only to the Series 2004-1
Notes and not to any other Series of Notes issued by HVF. All references
herein to the “Series 2004-1 Supplement” shall mean the Base
Indenture, as supplemented hereby.

 

The following words and phrases shall have the
following meanings with respect to the Series 2004-1 Notes and the
definitions of such terms are applicable to the singular as well as the plural form of
such terms and to the masculine as well as the feminine and neuter genders of
such terms:

 

“Adjusted Aggregate Asset Amount” means, as
of any day, the sum of (a) the Aggregate Asset Amount and (b) the sum
of (1) the amount of cash and Permitted Investments on deposit in the Series 2004-1
Collection Account and available for reduction of the Series 2004-1
Principal Amount and (2) the amount of cash and Permitted Investments on
deposit in the Series 2004-1 Excess Collection Account, in each case on
such day.

 

“Aggregate BMW/Lexus/Mercedes/Audi Amount”
means as of any date of determination, the sum of the BMW Amount, the Lexus
Amount, the Mercedes Amount and the Audi Amount, in each case, as of such date.

 

“Applicable Procedures” has the meaning
specified in Section 5.01 of this Series Supplement.

 

“Audi Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to Audi as of such date.

 

2

 

“Bankrupt Manufacturer” means, as of any day,
each Manufacturer for which an Event of Bankruptcy has occurred; provided
that any such Manufacturer for which an Event of Bankruptcy has occurred shall
cease to constitute a Bankrupt Manufacturer when it has satisfied the
Confirmation Condition.

 

“BMW Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to BMW as of such date.

 

“BNY MTC” means BNY Midwest Trust Company, an
Illinois trust company, and its successors and assigns.

 

“Calculation Agent” means BNY MTC, in its
capacity as calculation agent with respect to the Class A-1 Note Rate.

 

“Certificate of Credit Demand” means a
certificate in the form of Annex A to a Series 2004-1 Letter of
Credit.

 

“Certificate of Preference Payment Demand”
means a certificate in the form of Annex C to the Series 2004-1
Letter of Credit.

 

“Certificate of Termination Demand” means a
certificate in the form of Annex D to a Series 2004-1 Letter of
Credit.

 

“Certificate of Unpaid Demand Note Demand”
means a certificate in the form of Annex B to the Series 2004-1
Letter of Credit.

 

“Class” means a class of the Series 2004-1
Notes, which may be the Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes or the Class A-4 Notes.

 

“Class A-1 Carryover Controlled Amortization
Amount” means, with respect to the Class A-1 Notes for any Related
Month during the Three-Year Notes Controlled Amortization Period, the amount,
if any, by which the portion of the Monthly Total Principal Allocation
allocated to pay the Class A-1 Controlled Distribution Amount for the
previous Related Month was less than the Class A-1 Controlled Distribution
Amount for the previous Related Month; provided, however, that for the first Related Month in
the Three-Year Notes Controlled Amortization Period, the Class A-1
Carryover Controlled Amortization Amount shall be zero.

 

“Class A-1 Controlled Amortization Amount”
means (i) for any Related Month other than the last Related Month during
the Three-Year Notes Controlled Amortization Period, $16,666,666.66 and (ii) for
the last Related Month during the Three-Year Notes Controlled Amortization Period,
$16,666,666.70.

 

“Class A-1 Controlled Distribution Amount”
means, with respect to any Related Month during the Three-Year Notes Controlled
Amortization Period, an amount equal to the sum of the Class A-1
Controlled Amortization Amount for such Related

 

3

 

Month
and any Class A-1 Carryover Controlled Amortization Amount for such
Related Month.

 

“Class A-1 Deficiency Amount” has the
meaning specified in Section 2.03(g) of this Series Supplement.

 

“Class A-1 Initial Principal Amount”
means the aggregate initial principal amount of the Class A-1 Notes, which
is $100,000,000.

 

“Class A-1 Monthly Interest” means, with
respect to any Series 2004-1 Interest Period, an amount equal to the
product of (i) the Class A-1 Note Rate for such Series 2004-1
Interest Period, (ii) the Class A-1 Principal Amount on the first day
of such Series 2004-1 Interest Period, after giving effect to any
principal payments made on such date, or, in the case of the initial Series 2004-1
Interest Period, the Class A-1 Initial Principal Amount and (iii) a
fraction, the numerator of which is the number of days in such Series 2004-1
Interest Period and the denominator of which is 360.

 

“Class A-1 Note Rate” means, (i) with
respect to the initial Series 2004-1 Interest Period, 1.18% per annum and (ii) with
respect to each Series 2004-1 Interest Period thereafter, a rate per annum
equal to One-Month LIBOR for such Series 2004-1 Interest Period plus 0.09%
per annum.

 

“Class A-1 Noteholder” means the person
in whose name a Class A-1 Note is registered in the Note Register.

 

“Class A-1 Notes” means any one of the Series 2004-1
Floating Rate Rental Car Asset Backed Notes, Class A-1, executed by HVF
and authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit A-1-1, Exhibit A-1-2 or Exhibit A-1-3. Definitive Class A-1
Notes shall have such insertions and deletions as are necessary to give effect
to the provisions of Section 2.13 of the Base Indenture.

 

“Class A-1 Outstanding Principal Amount”
means, when used with respect to any date, an amount equal to (a) the Class A-1
Initial Principal Amount minus (b) the amount of principal payments made
to Class A-1 Noteholders on or prior to such date.

 

“Class A-1 Principal Amount” means when
used with respect to any date, an amount equal to the Class A-1
Outstanding Principal Amount plus the sum of (a) the amount of any
principal payments made to Class A-1 Noteholders on or prior to such date
with the proceeds of a demand on the Insurance Policy and (b) the amount
of any principal payments made to Class A-1 Noteholders, including any
principal payments made to the Insurer, that have been rescinded or otherwise
returned by the Class A-1 Noteholders or the Insurer for any reason.

 

“Class A-2 Carryover Controlled Amortization
Amount” means, with respect to the Class A-2 Notes for any Related
Month during the Three-Year Notes Controlled Amortization Period, the amount,
if any, by which the portion of the Monthly

 

4

 

Total
Principal Allocation allocated to pay the Class A-2 Controlled
Distribution Amount for the previous Related Month was less than the Class A-2
Controlled Distribution Amount for the previous Related Month; provided,
however, that for the first Related Month in the Three-Year Notes
Controlled Amortization Period, the Class A-2 Carryover Controlled
Amortization Amount shall be zero.

 

“Class A-2 Controlled Amortization Amount”
means, for any Related Month, $27,500,000.

 

“Class A-2 Controlled Distribution Amount”
means, with respect to any Related Month during the Three-Year Notes Controlled
Amortization Period, an amount equal to the sum of the Class A-2
Controlled Amortization Amount for such Related Month and any Class A-2
Carryover Controlled Amortization Amount for such Related Month.

 

“Class A-2 Deficiency Amount” has the
meaning specified in Section 2.03(g) of this Series Supplement.

 

“Class A-2 Initial Principal Amount”
means the aggregate initial principal amount of the Class A-2 Notes, which
is $165,000,000.

 

“Class A-2 Monthly Interest” means, (a) with
respect to the initial Series 2004-1 Interest Period, an amount equal to
the product of (i) the Class A-2 Note Rate, (ii) the Class A-2
Initial Principal Amount and (iii) 25/360 and (b) with respect to any
other Series 2004-1 Interest Period, an amount equal to the product of (i) one-twelfth
of the Class A-2 Note Rate and (ii) the Class A-2 Principal
Amount on the first day of such Series 2004-1 Interest Period, after
giving effect to any principal payments made on such date.

 

“Class A-2 Note Rate” means 2.38% per
annum.

 

“Class A-2 Noteholder” means the Person
in whose name a Class A-2 Note is registered in the Note Register.

 

“Class A-2 Notes” means any one of the Series 2004-1
Fixed Rate Rental Car Asset Backed Notes, Class A-2, executed by HVF and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit A-2-1, Exhibit A-2-2 or Exhibit A-2-3. Definitive Class A-2
Notes shall have such insertions and deletions as are necessary to give effect
to the provisions of Section 2.13 of the Base Indenture.

 

“Class A-2 Outstanding Principal Amount”
means, when used with respect to any date, an amount equal to (a) the Class A-2
Initial Principal Amount minus (b) the amount of principal payments made
to Class A-2 Noteholders on or prior to such date.

 

“Class A-2 Principal Amount” means when
used with respect to any date, an amount equal to the Class A-2
Outstanding Principal Amount plus the sum of (a) the

 

5

 

amount
of any principal payments made to Class A-2 Noteholders on or prior to
such date with the proceeds of a demand on the Insurance Policy and (b) the
amount of any principal payments made to Class A-2 Noteholders, including
any principal payments made to the Insurer, that have been rescinded or
otherwise returned by the Class A-2 Noteholders or the Insurer for any
reason.

 

“Class A-3 Carryover Controlled Amortization
Amount” means, with respect to the Class A-3 Notes for any Related
Month during the Class A-3 Controlled Amortization Period, the amount, if
any, by which the Monthly Total Principal Allocation for the previous Related
Month was less than the Class A-3 Controlled Distribution Amount for the
previous Related Month; provided, however, that for the first Related Month in
the Class A-3 Controlled Amortization Period, the Class A-3 Carryover
Controlled Amortization Amount shall be zero.

 

“Class A-3 Controlled Amortization Amount”
means, for any Related Month, $27,500,000.

 

“Class A-3 Controlled Amortization Period”
means the period commencing at the close of business on October 31, 2007
(or, if such day is not a Business Day, the Business Day immediately preceding
such day) and continuing to the earlier of (i) the commencement of the Series 2004-1
Rapid Amortization Period and (ii) the date on which the Class A-3
Notes are fully paid.

 

“Class A-3 Controlled Distribution Amount”
means, with respect to any Related Month during the Class A-3 Controlled
Amortization Period, an amount equal to the sum of the Class A-3
Controlled Amortization Amount for such Related Month and any Class A-3
Carryover Controlled Amortization Amount for such Related Month.

 

“Class A-3 Deficiency Amount” has the
meaning specified in Section 2.03(g) of this Series Supplement.

 

“Class A-3 Expected Final Payment Date”
means the May 2008 Payment Date.

 

“Class A-3 Initial Principal Amount”
means the aggregate initial principal amount of the Class A-3 Notes, which
is $165,000,000.

 

“Class A-3 Legal Final Payment Date”
means the May 2009 Payment Date.

 

“Class A-3 Monthly Interest” means, (a) with
respect to the initial Series 2004-1 Interest Period, an amount equal to
the product of (i) the Class A-3 Note Rate, (ii) the Class A-3
Initial Principal Amount and (iii) 25/360 and (b) with respect to any
other Series 2004-1 Interest Period, an amount equal to the product of (i) one-twelfth
of the Class A-3 Note Rate and (ii) the Class A-3 Principal
Amount on the first day of such Series 2004-1 Interest Period, after
giving effect to any principal payments made on such date.

 

6

 

“Class A-3 Note Rate” means 2.85% per
annum.

 

“Class A-3 Noteholder” means the Person
in whose name a Class A-3 Note is registered in the Note Register.

 

“Class A-3 Notes” means any one of the Series 2004-1
Fixed Rate Rental Car Asset Backed Notes, Class A-3, executed by HVF and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit A-3-1, Exhibit A-3-2 or Exhibit A-3-3. Definitive Class A-3
Notes shall have such insertions and deletions as are necessary to give effect
to the provisions of Section 2.13 of the Base Indenture.

 

“Class A-3 Outstanding Principal Amount”
means, when used with respect to any date, an amount equal to (a) the Class A-3
Initial Principal Amount minus (b) the amount of principal payments made
to Class A-3 Noteholders on or prior to such date.

 

“Class A-3 Principal Amount” means when
used with respect to any date, an amount equal to the Class A-3
Outstanding Principal Amount plus the sum of (a) the amount of any
principal payments made to Class A-3 Noteholders on or prior to such date
with the proceeds of a demand on the Insurance Policy and (b) the amount
of any principal payments made to Class A-3 Noteholders, including any
principal payments made to the Insurer, that have been rescinded or otherwise
returned by the Class A-3 Noteholders or the Insurer for any reason.

 

“Class A-4 Carryover Controlled Amortization
Amount” means, with respect to the Class A-4 Notes for any Related
Month during the Class A-4 Controlled Amortization Period, the amount, if
any, by which the Monthly Total Principal Allocation for the previous Related
Month was less than the Class A-4 Controlled Distribution Amount for the
previous Related Month; provided, however, that for the first Related Month in
the Class A-4 Controlled Amortization Period, the Class A-4 Carryover
Controlled Amortization Amount shall be zero.

 

“Class A-4 Controlled Amortization Amount”
means (i) for any Related Month other than the last Related Month during
the Class A-4 Controlled Amortization Period, $28,333,333.33 and (ii) for
the last Related Month during the Class A-4 Controlled Amortization
Period, $28,333,333.35.

 

“Class A-4 Controlled Amortization Period”
means the period commencing at the close of business on October 31, 2008
(or, if such day is not a Business Day, the Business Day immediately preceding
such day) and continuing to the earlier of (i) the commencement of the Series 2004-1
Rapid Amortization Period and (ii) the date on which the Class A-4
Notes are fully paid and the Insurer has been paid all Insurer Fees and all
other Insurer Reimbursement Amounts then due.

 

“Class A-4 Controlled Distribution Amount”
means, with respect to any Related Month during the Class A-4 Controlled
Amortization Period, an amount equal to

 

7

 

the
sum of the Class A-4 Controlled Amortization Amount for such Related Month
and any Class A-4 Carryover Controlled Amortization Amount for such
Related Month.

 

“Class A-4 Deficiency Amount” has the
meaning specified in Section 2.03(g) of this Series Supplement.

 

“Class A-4 Expected Final Payment Date”
means the May 2009 Payment Date.

 

“Class A-4 Initial Principal Amount”
means the aggregate initial principal amount of the Class A-4 Notes, which
is $170,000,000.

 

“Class A-4 Legal Final Payment Date”
means the May 2010 Payment Date.

 

“Class A-4 Monthly Interest” means, (a) with
respect to the initial Series 2004-1 Interest Period, an amount equal to
the product of (i) the Class A-4 Note Rate, (ii) the Class A-4
Initial Principal Amount and (iii) 25/360 and (b) with respect to any
other Series 2004-1 Interest Period, an amount equal to the product of (i) one-twelfth
of the Class A-4 Note Rate and (ii) the Class A-4 Principal
Amount on the first day of such Series 2004-1 Interest Period, after
giving effect to any principal payments made on such date.

 

“Class A-4 Note Rate” means 3.23% per
annum.

 

“Class A-4 Noteholder” means the Person
in whose name a Class A-4 Note is registered in the Note Register.

 

“Class A-4 Notes” means any one of the Series 2004-1
Fixed Rate Rental Car Asset Backed Notes, Class A-4, executed by HVF and
authenticated by or on behalf of the Trustee, substantially in the form of
Exhibit A-4-1, Exhibit A-4-2 or Exhibit A-4-3. Definitive Class A-4
Notes shall have such insertions and deletions as are necessary to give effect
to the provisions of Section 2.13 of the Base Indenture.

 

“Class A-4 Outstanding Principal Amount”
means, when used with respect to any date, an amount equal to (a) the Class A-4
Initial Principal Amount minus (b) the amount of principal payments made
to Class A-4 Noteholders on or prior to such date.

 

“Class A-4 Principal Amount” means when
used with respect to any date, an amount equal to the Class A-4
Outstanding Principal Amount plus the sum of (a) the amount of any
principal payments made to Class A-4 Noteholders on or prior to such date
with the proceeds of a demand on the Insurance Policy and (b) the amount
of any principal payments made to Class A-4 Noteholders, including any
principal payments made to the Insurer, that have been rescinded or otherwise
returned by the Class A-4 Noteholders or the Insurer for any reason.

 

8

 

“Confirmation Condition” with respect to any
Bankrupt Manufacturer means a condition that is satisfied when the bankruptcy
court having jurisdiction over the Bankrupt Manufacturer issues an order that
remains in effect approving: (i) the assumption of the Bankrupt
Manufacturer’s Manufacturer Program (and the related Assignment Agreements) by
the Bankrupt Manufacturer or the trustee in bankruptcy of the Bankrupt
Manufacturer under Section 365 of the Bankruptcy Code and, at the time of
the assumption, all amounts due from the Bankrupt Manufacturer under the
Manufacturer Program have been paid and all other defaults by the Bankrupt
Manufacturer under the Manufacturer Program have been cured or (ii) the
execution, delivery and performance by the Bankrupt Manufacturer of a new
post-petition Eligible Manufacturer Program (and the related Assignment
Agreements) on the same terms and covering the same Vehicles as the Bankrupt
Manufacturer’s Manufacturer Program (and the related Assignment Agreements) in
effect on the date the Bankrupt Manufacturer suffered an event of bankruptcy
and, at the time of the execution and delivery of the new post-petition
Eligible Manufacturer program, all amounts due and payable by the Bankrupt
Manufacturer under the Manufacturer Program have been paid and all other
defaults by the Bankrupt Manufacturer under the Manufacturer Program have been
cured.

 

“Consent” is defined in Article IV.

 

“Consent Period Expiration Date” is defined
in Article IV.

 

“Deficiency Amount” means a Class A-1
Deficiency Amount, a Class A-2 Deficiency Amount, a Class A-3
Deficiency Amount or a Class A-4 Deficiency Amount.

 

“Demand Notice” has the meaning specified in Section 2.12(d) of
this Series Supplement.

 

“Designated Amounts” is defined in Article IV.

 

“Disbursement” shall mean any LOC Credit
Disbursement, any LOC Preference Payment Disbursement, any LOC Termination
Disbursement or any LOC Unpaid Demand Note Disbursement under the Series 2004-1
Letters of Credit or any combination thereof, as the context may require.

 

“Downgrade Event” has the meaning specified
in Section 2.08(c) of this Series Supplement.

 

“Eligible Interest Rate Hedge Provider” means
a counterparty to a Series 2004-1 Interest Rate Hedge who is a bank or
other financial institution, which has (i) either (a) a short-term
senior and unsecured debt rating of at least “A-1” from Standard &
Poor’s or (b) a long-term senior and unsecured debt rating of at least “A+”
from Standard & Poor’s and (ii) a short-term senior and unsecured
debt rating of “P-1” from Moody’s and (a) on the date the Series 2004-1
Interest Rate Hedge is executed, a long-term senior and unsecured debt rating
of at least “Aa3” from Moody’s and (b) on any other date, a long-term
senior and unsecured debt rating of at least “A1” from Moody’s.

 

9

 

“Eligible Program Vehicle Amount” means, as
of any date of determination, an amount equal to the sum, rounded to the
nearest $100,000, of the following amounts to the extent that such amounts are
included in the definition of “Aggregate Asset Amount” for such date:  (i) the Net Book Value of all Eligible
Program Vehicles that are Eligible Vehicles as of such date and not turned in
to and accepted by the Manufacturer thereof pursuant to its Manufacturer
Program, not delivered and accepted for Auction pursuant to a Manufacturer
Program or not otherwise sold or deemed to be sold under the Related Documents,
plus (ii) the aggregate amount of Manufacturer Receivables (other than
Excluded Payments) payable to HVF or to the Intermediary pursuant to the Master
Exchange Agreement, in each case as of such date by Manufacturers which are
Eligible Program Manufacturers with respect to Vehicles that were Eligible Vehicles
and Eligible Program Vehicles when turned in to and accepted by such
Manufacturers or delivered and accepted for Auction, plus (iii) with
respect to Eligible Vehicles that were Eligible Program Vehicles that have been
delivered and accepted for Auction pursuant to a Manufacturer Program with a
Manufacturer which is an Eligible Program Manufacturer, all amounts receivable
(other than amounts specified in clause (ii) above) from any person
or entity in connection with the Auction of such Eligible Vehicles as of such
date, plus (iv) with respect to Eligible Vehicles that were Eligible
Program Vehicles that have been turned in to and accepted by the Manufacturer
thereof, delivered and accepted for Auction, otherwise sold or become a
Casualty, any accrued and unpaid Casualty Payments or Termination Payments with
respect to such Eligible Vehicles under the HVF Lease, plus (v) with
respect to Eligible Vehicles that were Eligible Program Vehicles that have been
turned in to and accepted by the Manufacturer thereof, delivered for Auction or
otherwise sold, any accrued and unpaid Monthly Base Rent with respect to such
Eligible Vehicles under the HVF Lease (net of amounts set forth in clauses
(ii), (iii) and (iv) above), plus (vi) with respect to Eligible
Vehicles that were Eligible Program Vehicles sold by HVF to a third party
pursuant to Section 2.05(a) of the HVF Lease, any non-return
incentives payable to HVF under a Manufacturer Program by an Eligible Program
Manufacturer in respect of the sale of such Vehicles outside of the related
Manufacturer Program as of such date, plus (vii) if such date is during
the period from and including a Determination Date to but excluding the next
Payment Date, accrued and unpaid Monthly Base Rent payable on the next Payment
Date with respect to all Eligible Vehicles that are Eligible Program Vehicles
as of such date and that have not been turned in to and accepted by the
Manufacturer thereof pursuant to its Manufacturer Program, not been delivered
and accepted for Auction pursuant to a Manufacturer Program and not otherwise
been sold or deemed to be sold under the Related Documents.

 

“Eligible Program Vehicle Percentage” means,
as of any date of determination, a fraction, expressed as a percentage, the
numerator of which is the excess, if any, of the Eligible Program Vehicle
Amount over the Non-Investment Grade Eligible Program Manufacturer Amount as of
such date and the denominator of which is the Aggregate Asset Amount as of such
date.

 

“Eligible Series Enhancement Account”
means any Series Account the amount on deposit in which is included in the
Enhancement Amount with respect to the

 

10

 

related
Series of Notes and the Series Supplement with respect to which
provides that, if there are any Ford Reimbursement Obligations outstanding,
amounts on deposit therein may only be applied to pay principal of, or
interest on, the related Series of Notes or to pay such Ford Reimbursement
Obligations.

 

“Financial Assets” has the meaning specified
in Section 2.10(b)(i) of this Series Supplement.

 

“Fixed Rate Payment” means, for any Payment
Date, an amount equal to the amount payable by HVF as the “Fixed Amount” under
any Series 2004-1 Interest Rate Hedge on such Payment Date after netting
the amounts payable to HVF as the “Floating Amount” under such Series 2004-1
Interest Rate Hedge on such Payment Date.

 

“Fleet Equity Amount” means, on any date of
determination, the amount, if any, by which the sum of (a) the Aggregate
Asset Amount on such date and (b) the amount of cash and Permitted
Investments on deposit in the (i) Series 2004-1 Reserve Account, (ii) the
Series 2004-1 Non-Ford Cash Collateral Account, (iii) the Series 2004-1
Excess Collection Account after the required application of such funds in
accordance with the priorities set forth in clauses (i) through (iv) of
Section 2.2(f) of this Series Supplement as of such date,
(vi) the Series 2004-1 Collection Account and available for reduction
of the Series 2004-1 Principal Amount as of such date, (vii) any
Series-Specific Excess Collection Account (other than the Series 2004-1
Excess Collection Account) after the required application of such funds in
accordance with the priorities set forth in the provisions of the related Series Supplement
governing the distribution of amounts on deposit in such Series-Specific Excess
Collection Account, other than amounts that are permitted to be released to
HVF, (viii) any Series-Specific Collection Account (other than the Series 2004-1
Collection Account) and available for reduction of the Principal Amount with
respect to the related Series as of such date and (ix) any other
Eligible Series Enhancement Account exceeds the aggregate Principal Amount
of each Outstanding Series of Notes on such date.

 

“Fleet Equity Condition” means, as of any
date of determination, a condition that is satisfied if the Fleet Equity Amount
as of such date equals or exceeds the Required Minimum Fleet Equity Amount as
of such date.

 

 “Ford
Letter of Credit” means an irrevocable letter of credit issued for the
account of Ford or an affiliate thereof in favor of the Trustee for the benefit
of a Series of Notes or a class of a Series of Notes.

 

“Ford LOC Disbursement” means any LOC Credit
Disbursement under a Series 2004-1 Ford Letter of Credit.

 

“Ford LOC Exposure Amount” means, on any date
of determination, the sum of (a) the aggregate amount available to be
drawn under all outstanding Ford Letters of Credit on such date, (b) the
stated amount of Ford Letters of Credit that Ford is committed to provide to
HVF on such date, after giving effect to the issuance of the Ford Letters of
Credit referenced in clause (a), (c) the aggregate amount of cash
and Permitted

 

11

 

Investments
on deposit in any Series 2004-1 Series Account (including the Series 2004-1
Ford Cash Collateral Account) funded by an amount drawn under a Ford Letter of
Credit on such date and (d) (without double counting any amount included
in the preceding clause (c)) any outstanding Ford Reimbursement Obligations on
such date.

 

“Ford Reimbursement Obligations” means any
and all obligations of HVF set forth in Section 2.13 of this Series Supplement
and any other payment obligation of HVF in respect of a Ford Letter of Credit
set forth in any other Series Supplement; provided, however,
that no Ford Reimbursement Obligation in respect of a disbursement made under a
Ford Letter of Credit shall arise until such time as Ford has reimbursed the
provider of such Ford Letter of Credit for such disbursement.

 

“Hyundai Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to Hyundai as of such date.

 

“Indenture Carrying Charges” means, as of any
day, any fees or other costs, fees and expenses and indemnity amounts, if any,
payable by HVF to the Trustee, the Administrator, the Intermediary under the
Master Exchange Agreement or the Nominee under the Indenture or the Related
Documents plus any other operating expenses of HVF then payable by HVF.

 

“Insurance Agreement” means the Insurance
Agreement, dated as March 31, 2004, among the Insurer, the Trustee and
HVF, which shall constitute an “Enhancement Agreement” with respect the Series 2004-1
Notes for all purposes under the Indenture.

 

“Insurance Policy” means the Note Guaranty
Insurance Policy No. 43613, dated March 31, 2004, issued by the
Insurer.

 

“Insured Principal Deficit Amount” means,
with respect to any Payment Date, the excess, if any, of (a) the Series 2004-1
Outstanding Principal Amount on such Payment Date (after giving effect to the
distribution of the Monthly Total Principal Allocation for the Related Month)
over (b) the sum on such Payment Date of (i) the Series 2004-1
Asset Amount, (ii) the Series 2004-1 Available Reserve Account
Amount,  and (iii) the Series 2004-1
Letter of Credit Amount.

 

“Insurer” means MBIA Insurance Corporation, a
New York corporation. The Insurer shall constitute an “Enhancement Provider”
with respect to the Series 2004-1 Notes for all purposes under the
Indenture and the other Related Documents.

 

“Insurer Default” means (i) any failure
by the Insurer to pay a demand for payment made in accordance with the
requirements of the Insurance Policy and such failure shall not have been cured
or (ii) the occurrence of an Insurer Insolvency Event with respect to the
Insurer.

 

12

 

“Insurer Insolvency Event” shall be deemed to
have occurred with respect to the Insurer if:

 

(a) a rehabilitation or
liquidation proceeding shall be commenced against the Insurer, without the
consent of the Insurer, seeking the rehabilitation or liquidation of the
Insurer, the appointment of a trustee, receiver, custodian, liquidator,
assignee, sequestrator or the like for the Insurer or all or any substantial part of
its assets, or any similar action with respect to the Insurer under any law
relating to rehabilitation, liquidation, insolvency, reorganization, winding up
or composition or adjustment of debts, and such proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive days; or

 

(b) the Insurer shall
commence a voluntary proceeding under any applicable rehabilitation, insolvency,
reorganization, debt arrangement, dissolution or other similar law now or
hereafter in effect, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) for the Insurer or for any substantial
part of its property, or shall make any general assignment for the benefit
of creditors; or

 

(c) the board of
directors of the Insurer shall vote to implement any of the actions set forth
in clause (b) above.

 

“Insurer Fee” has the meaning set forth in
the Insurance Agreement.

 

“Insurer Reimbursement Amounts” means, as of
any date of determination, (i) an amount equal to the aggregate of any
amounts due as of such date to the Insurer pursuant to the Insurance Agreement
in respect of unreimbursed draws under the Insurance Policy, including interest
thereon determined in accordance with the Insurance Agreement, and (ii) an
amount equal to the aggregate of any other amounts due as of such date to the
Insurer pursuant to the Insurance Agreement (other than the Insurer Fee).

 

“Interest Rate Hedge Provider” means HVF’s
counterparty under a Series 2004-1 Interest Rate Hedge.

 

“Jaguar Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to Jaguar as of such date.

 

“Kia Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to Kia as of such date.

 

“Land Rover Amount” means, as of any date of
determination, an amount equal to the sum of the Land Rover Program Amount and
the Land Rover Non-Program Amount as of such date.

 

13

 

“Land Rover Non-Program Amount”  means, as of any date of determination, an
amount equal to the Manufacturer Non-Eligible Vehicle Amount with respect to
Land Rover as of such date.

 

“Land Rover Program Amount:  means, as of any date of determination,
an amount equal to the Manufacturer Eligible Program Vehicle Amount with
respect to Land Rover as of such date.

 

“Lease Payment Deficit Notice” has the
meaning specified in Section 2.03(c) of this Series Supplement.

 

“Legal Final Payment Date” means the
Three-Year Notes Legal Final Payment Date, the Class A-3 Legal Final
Payment Date or the Class A-4 Legal Final Payment Date.

 

“Lexus Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to Lexus as of such date.

 

“LIBOR Determination Date” means, with
respect to any Series 2004-1 Interest Period, the second London Business
Day preceding the first day of such Series 2004-1 Interest Period.

 

“LOC Credit Disbursement” means an amount
drawn under a Series 2004-1 Letter of Credit pursuant to a Certificate of
Credit Demand.

 

“LOC Preference Payment Disbursement” means an
amount drawn under a Series 2004-1 Letter of Credit pursuant to a
Certificate of Preference Payment Demand.

 

“LOC Termination Disbursement” means an
amount drawn under a Series 2004-1 Letter of Credit pursuant to a
Certificate of Termination Demand.

 

“LOC Unpaid Demand Note Disbursement” means
an amount drawn under a Series 2004-1 Letter of Credit pursuant to a
Certificate of Unpaid Demand Note Demand.

 

“London Business Day” means any day on which
dealings in deposits in Dollars are transacted in the London interbank market
and banking institutions in London are not authorized or obligated by law or
regulation to close.

 

“Manufacturer Eligible Program Vehicle Amount”
means, as of any date of determination, with respect to any Manufacturer, an
amount equal to the sum, rounded to the nearest $100,000, of the following
amounts to the extent that such amounts are included in the definition of “Aggregate
Asset Amount” for such date:  (i) the
Net Book Value of all Eligible Program Vehicles that are Eligible Vehicles as
of such date that were manufactured by such Manufacturer or an Affiliate
thereof and not turned in to and accepted by such Manufacturer pursuant to its
Manufacturer Program, not delivered and

 

14

 

accepted
for Auction pursuant to its Manufacturer Program or not otherwise sold or
deemed to be sold under the Related Documents, plus (ii) the aggregate
amount of Manufacturer Receivables (other than Excluded Payments) payable to
HVF or to the Intermediary pursuant to the Master Exchange Agreement, in each
case as of such date by such Manufacturer with respect to Vehicles that were
Eligible Vehicles and Eligible Program Vehicles when turned in to and accepted
by such Manufacturer or delivered and accepted for Auction, plus (iii) with
respect to Eligible Vehicles that were Eligible Program Vehicles that have been
delivered and accepted for Auction pursuant to a Manufacturer Program with such
Manufacturer, all amounts receivable (other than amounts specified in clause (ii) above)
from any person or entity in connection with the Auction of such Eligible
Vehicles as of such date, plus (iv) with respect to Eligible Vehicles that
were Eligible Program Vehicles manufactured by such Manufacturer or an
Affiliate thereof that have been turned in to and accepted by such
Manufacturer, delivered and accepted for Auction, otherwise sold or become a
Casualty, any accrued and unpaid Casualty Payments or Termination Payments with
respect to such Eligible Vehicles as of such date under the HVF Lease, plus (v) with
respect to Eligible Vehicles that were Eligible Program Vehicles manufactured
by such Manufacturer or an Affiliate thereof that have been turned in to and
accepted by such Manufacturer, delivered and accepted for Auction or otherwise
sold, any accrued and unpaid Monthly Base Rent with respect to such Eligible
Vehicles under the HVF Lease (net of amounts set forth in clauses (ii), (iii),
and (iv) above) plus (vi) with respect to Eligible Vehicles that were
Eligible Program Vehicles sold by HVF to a third party pursuant to Section 2.05(a) of
the HVF Lease, any non-return incentives payable to HVF under a Manufacturer
Program by such Manufacturer in respect of the sale of such Vehicles outside of
the related Manufacturer Program as of such date, plus (vii) if such date
is during the period from and including a Determination Date to but excluding
the next Payment Date, accrued and unpaid Monthly Base Rent payable on the next
Payment Date with respect to all Eligible Vehicles that are Eligible Program
Vehicles as of such date that were manufactured by such Manufacturer or an
Affiliate thereof and that have not been turned in to and accepted by such
Manufacturer pursuant to its Manufacturer Program, not been delivered and
accepted for Auction pursuant to its Manufacturer Program and not otherwise
been sold or deemed to be sold under the Related Documents. For the purposes of
this definition, an Affiliate of a Manufacturer shall not include any Person
who is included as a Manufacturer hereunder.

 

“Manufacturer Non-Eligible Vehicle Amount”
means, as of any date of determination, with respect to any Manufacturer, an
amount equal to the sum, rounded to the nearest $100,000, of the following
amounts to the extent that such amounts are included in the definition of “Aggregate
Asset Amount” for such date:  (i) the
Net Book Value of all Non-Eligible Program Vehicles or Non-Program Vehicles
that are Eligible Vehicles as of such date that were manufactured by such
Manufacturer or an Affiliate thereof and not turned in to and accepted by such
Manufacturer thereof pursuant to its Manufacturer Program, not delivered and
accepted for Auction pursuant to its Manufacturer Program or not otherwise sold
or deemed to be sold under the Related Documents, plus (ii) the aggregate
amount of Manufacturer Receivables (other than Excluded Payments) payable to
HVF or to the Intermediary pursuant to the Master

 

15

 

Exchange
Agreement, in each case as of such date by such Manufacturer with respect to
Vehicles that were Eligible Vehicles and Non-Eligible Program Vehicles when
turned in to and accepted by such Manufacturer or delivered and accepted for
Auction, plus (iii) with respect to Eligible Vehicles that were Non-Eligible
Program Vehicles that have been delivered and accepted for Auction pursuant to
a Manufacturer Program with such Manufacturer, all amounts receivable (other
than amounts specified in clause (ii) above) from any Person in
connection with the Auction of such Eligible Vehicles as of such date, plus (iv) with
respect to Eligible Vehicles that were Non-Eligible Program Vehicles or
Non-Program Vehicles manufactured by such Manufacturer or an Affiliate thereof
that have been turned in to and accepted by such Manufacturer, delivered and
accepted for Auction, otherwise sold or become a Casualty, any accrued and
unpaid Casualty Payments or Termination Payments with respect to such Eligible
Vehicles as of such date under the HVF Lease, plus (v) with respect to Eligible
Vehicles that were Non-Eligible Program Vehicles or Non-Program Vehicles
manufactured by such Manufacturer or an Affiliate thereof that have been turned
in to and accepted by such Manufacturer, delivered and accepted for Auction or
otherwise sold, any accrued and unpaid Monthly Base Rent with respect to such
Eligible Vehicles under the HVF Lease (net of amounts set forth in clauses
(ii), (iii) and (iv) above), plus (vi) if such date is during
the period from and including a Determination Date to but excluding the next
Payment Date, accrued and unpaid Monthly Base Rent payable on the next Payment
Date with respect to all Eligible Vehicles as of such date that are
Non-Eligible Program Vehicles or Non-Program Vehicles manufactured by such
Manufacturer or an Affiliate thereof and that have not been turned in to and
accepted by such Manufacturer thereof pursuant to its Manufacturer Program, not
been delivered and accepted for Auction pursuant to a Manufacturer Program and
not otherwise been sold or deemed to be sold under the Related Documents. For
the purposes of this definition, an Affiliate of a Manufacturer shall not
include any Person who is included as a Manufacturer hereunder.

 

“Market Value Average” means, as of any day
on or after the third Determination Date, the percentage equivalent (not to
exceed 100%) of a fraction, the numerator of which is the average of the Non
Program Fleet Market Value as of such preceding Determination Date and the two
Determination Dates precedent thereto and the denominator of which is the
average of the aggregate Net Book Value of the Non Program Vehicles as of such
preceding Determination Date and the two Determination Dates precedent thereto.

 

“Mazda Amount” means, as of any date of
determination, an amount equal to the sum of the Mazda Program Amount and the
Mazda Non-Program Amount as of such date.

 

“Mazda Non-Program Amount” means, as of any
date of determination, an amount equal to the Manufacturer Non-Eligible Vehicle
Amount with respect to Mazda as of such date.

 

16

 

“Mazda Program Amount” means, as of any date
of determination, an amount equal to the Manufacturer Eligible Program Vehicle
Amount with respect to Mazda as of such date.

 

 

“Mercedes Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to Mercedes as of such date.

 

“Mitsubishi Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and the Manufacturer Eligible Program Vehicle Amount, in each case with respect
to Mitsubishi as of such date.

 

“Monthly Total Principal Allocation” means
for any Related Month the sum of all Series 2004-1 Principal Allocations
with respect to such Related Month.

 

“New York UCC” has the meaning specified in Section 2.10(b)(i) of
this Series Supplement.

 

“Non-Eligible Manufacturer Amount” means, as
of any date of determination, an amount equal to the sum, rounded to the
nearest $100,000, of the following amounts to the extent that such amounts are
included in the definition of “Aggregate Asset Amount” for such date:  (i) the Net Book Value of all HVF
Vehicles that are Eligible Vehicles as of such date that were manufactured by
Manufacturers other than Eligible Manufacturers and not turned in to and
accepted by the Manufacturer thereof pursuant to its Manufacturer Program, not
delivered and accepted for Auction pursuant to its Manufacturer Program or not
otherwise sold or deemed to be sold under the Related Documents, plus (ii) the
aggregate amount of Manufacturer Receivables (other than Excluded Payments)
payable to HVF or to the Intermediary pursuant to the Master Exchange
Agreement, in each case as of such date by Manufacturers other than Eligible
Manufacturers with respect to Vehicles that were Eligible Vehicles when turned
in to and accepted by such Manufacturers or delivered and accepted for Auction,
plus (iii) with respect to Eligible Vehicles that have been delivered and
accepted for Auction pursuant to a Manufacturer Program with a Manufacturer
other than an Eligible Manufacturer, all amounts receivable (other than amounts
specified in clause (ii) above) from any Person in connection with
the Auction of such Eligible Vehicles as of such date, plus (iv) with
respect to Eligible Vehicles that were manufactured by Manufacturers other than
Eligible Manufacturers that have been turned in to and accepted by the
Manufacturer thereof, delivered and accepted for Auction, otherwise sold or
become a Casualty, any accrued and unpaid Casualty Payments or Termination
Payments with respect to such Eligible Vehicles as of such date under the HVF
Lease, plus (v) with respect to Eligible Vehicles that were manufactured
by Manufacturers other than Eligible Manufacturers that have been turned in to
and accepted by the Manufacturer thereof, delivered and accepted for Auction or
otherwise sold, any accrued and unpaid Monthly Base Rent with respect to such
Eligible Vehicles under the HVF Lease (net of amounts set forth in clauses
(ii), (iii) and (iv) above), plus (vi) if such date is during
the period from and including a Determination Date to but excluding the next
Payment Date, accrued and

 

17

 

unpaid
Monthly Base Rent payable on the next Payment Date with respect to all Eligible
Vehicles as of such date that were manufactured by Manufacturers other than
Eligible Manufacturers and that have not been turned in to and accepted by the
Manufacturer thereof pursuant to its Manufacturer Program, not been delivered
and accepted for Auction pursuant to its Manufacturer Program and not otherwise
been sold or deemed to be sold under the Related Documents.

 

“Non-Eligible Vehicle Amount” means, as of
any date of determination, an amount equal to the sum, rounded to the nearest
$100,000, of the following amounts to the extent that such amounts are included
in the definition of “Aggregate Asset Amount” for such date:  (i) the Net Book Value of all
Non-Eligible Program Vehicles and Non-Program Vehicles that are Eligible
Vehicles as of such date and not turned in to and accepted by the Manufacturer
thereof pursuant to its Manufacturer Program, not delivered and accepted for
Auction pursuant to its Manufacturer Program or not otherwise sold or deemed to
be sold under the Related Documents, plus (ii) the aggregate amount of
Manufacturer Receivables (other than Excluded Payments) payable to HVF or to
the Intermediary pursuant to the Master Exchange Agreement, in each case as of
such date by Manufacturers with respect to Vehicles that were Eligible Vehicles
and Non-Eligible Program Vehicles when turned in to and accepted by such
Manufacturers or delivered and accepted for Auction, plus (iii) with
respect to Eligible Vehicles that were Non-Eligible Program Vehicles that have
been delivered and accepted for Auction pursuant to a Manufacturer Program with
a Manufacturer, all amounts receivable (other than amounts specified in
clause (ii) above) from any Person in connection with the Auction of
such Eligible Vehicles as of such date, plus (iv) with respect to Eligible
Vehicles that were Non-Eligible Program Vehicles or Non-Program Vehicles that
have been turned in to and accepted by the Manufacturer thereof, delivered and
accepted for Auction, otherwise sold or become a Casualty, any accrued and
unpaid Casualty Payments or Termination Payments with respect to such Eligible
Vehicles as of such date under the HVF Lease, plus (v) with respect to Eligible
Vehicles that were Non-Eligible Program Vehicles or Non-Program Vehicles that
have been turned in to and accepted by the Manufacturer thereof, delivered and
accepted for Auction or otherwise sold, any accrued and unpaid Monthly Base
Rent with respect to such Eligible Vehicles under the HVF Lease (net of amounts
set forth in clauses (ii), (iii) and (iv) above), plus (vi) if
such date is during the period from and including a Determination Date to but
excluding the next Payment Date, accrued and unpaid Monthly Base Rent payable
on the next Payment Date with respect to all Eligible Vehicles as of such date
that are Non-Eligible Program Vehicles or Non-Program Vehicles and that have
not been turned in to and accepted by the Manufacturer thereof pursuant to its
Manufacturer Program, not been delivered and accepted for Auction pursuant to a
Manufacturer Program and not otherwise been sold or deemed to be sold under the
Related Documents.

 

“Non-Investment Grade Eligible Program
Manufacturer” means, as of any date of determination, each Eligible Program
Manufacturer who as of such date does not have a long-term unsecured debt
rating of at least “BBB-” from Standard & Poor’s and at least “Baa3”
from Moody’s; provided that upon the withdrawal of the rating of a Manufacturer
by a Rating Agency or upon the downgrade of a Manufacturer by a Rating

 

18

 

Agency
to a rating that would require inclusion of such Manufacturer in this
definition, for purposes of this definition and each instance in which this
definition is used in this Series Supplement, such Manufacturer shall be
deemed to be rated “BBB-” and/or “Baa3”, as applicable, by the Rating Agency
which downgraded such Manufacturer for a period of 30 days following the earlier
of (i) the date on which any of the Administrator, HVF or the Servicer
obtains actual knowledge of such downgrade and (ii) the date on which the
Trustee or the Insurer notifies the Administrator of such downgrade.

 

“Non-Investment Grade Eligible Program
Manufacturer Amount” means, as of any date of determination, the sum for
all Non-Investment Grade Eligible Program Manufacturers an amount, with respect
to each Non-Investment Grade Eligible Program Manufacturer, equal to the sum,
rounded to the nearest $100,000, of the following amounts to the extent that
such amounts are included in the definition of “Aggregate Asset Amount”
for such date:  (i) the Net Book
Value of all Eligible Program Vehicles that are Eligible Vehicles as of such
date that were manufactured by such Non-Investment Grade Eligible Program
Manufacturer or an Affiliate thereof and not turned in to and accepted by such
Non-Investment Grade Eligible Program Manufacturer pursuant to its Manufacturer
Program, not delivered and accepted for Auction pursuant to its Manufacturer
Program or not otherwise sold or deemed to be sold under the Related Documents,
plus (ii) the aggregate amount of Manufacturer Receivables (other than
Excluded Payments) payable to HVF or to the Intermediary pursuant to the Master
Exchange Agreement, in each case as of such date by such Non-Investment Grade
Eligible Program Manufacturer with respect to Vehicles that were Eligible
Vehicles and Eligible Program Vehicles when turned in to and accepted by such
Non-Investment Grade Eligible Program Manufacturer or delivered and accepted
for Auction, plus (iii) with respect to Eligible Vehicles that were
Eligible Program Vehicles that have been delivered and accepted for Auction
pursuant to a Manufacturer Program with such Non-Investment Grade Eligible
Program Manufacturer, all amounts receivable (other than amounts specified in
clause (ii) above) from any person or entity in connection with the
Auction of such Eligible Vehicles as of such date, plus (iv) with respect
to Eligible Vehicles that were Eligible Program Vehicles manufactured by such
Non-Investment Grade Eligible Program Manufacturer or an Affiliate thereof that
have been turned in to and accepted by such Non-Investment Grade Eligible
Program Manufacturer, delivered and accepted for Auction, otherwise sold or
become a Casualty, any accrued and unpaid Casualty Payments or Termination
Payments with respect to such Eligible Vehicles as of such date under the HVF
Lease, plus (v) with respect to Eligible Vehicles that were Eligible
Program Vehicles manufactured by such Non-Investment Grade Eligible Program
Manufacturer or an Affiliate thereof that have been turned in to and accepted
by such Non-Investment Grade Eligible Program Manufacturer, delivered and
accepted for Auction or otherwise sold, any accrued and unpaid Monthly Base
Rent with respect to such Eligible Vehicles under the HVF Lease (net of amounts
set forth in clauses (ii), (iii), and (iv) above) plus (vi) with
respect to Eligible Vehicles that were Eligible Program Vehicles sold by HVF to
a third party pursuant to Section 2.05(a) of the HVF Lease, any
non-return incentives payable to HVF under a Manufacturer Program by such
Non-Investment Grade Eligible Program Manufacturer in respect of the sale of
such Vehicles outside of the related Manufacturer Program as of such date, plus
(vii) if such date is

 

19

 

during
the period from and including a Determination Date to but excluding the next
Payment Date, accrued and unpaid Monthly Base Rent payable on the next Payment
Date with respect to all Eligible Vehicles that are Eligible Program Vehicles
as of such date that were manufactured by such Non-Investment Grade Eligible
Program Manufacturer or an Affiliate thereof and that have not been turned in
to and accepted by such Non-Investment Grade Eligible Program Manufacturer
pursuant to its Manufacturer Program, not been delivered and accepted for
Auction pursuant to its Manufacturer Program and not otherwise been sold or
deemed to be sold under the Related Documents. For the purposes of this
definition, an Affiliate of a Manufacturer shall not include any Person who is
included as a Manufacturer hereunder.

 

“Non-Program Fleet Market Value” means, with
respect to all Non-Program Vehicles as of any date of determination, the sum of
the respective Third-Party Market Values of each Non-Program Vehicle, as the
context may require.

 

“Non-Program Vehicle Measurement Month Average”
means, with respect to any Measurement Month, the lesser of (a) the
percentage equivalent of a fraction, the numerator of which is the aggregate
amounts of Disposition Proceeds paid or payable in respect of all Non-Program
Vehicles that are sold to third parties, at auction or otherwise (excluding
salvage sales), during such Measurement Month and the two Measurement Months
preceding such Measurement Month and the denominator of which is the aggregate
Net Book Values of such Non-Program Vehicles on the dates of their respective
sales and (b) 100%.

 

“Notice of Reduction” means a notice in the form of
Annex E to a Series 2004-1 Letter of Credit.

 

“One-Month LIBOR” means, for each Series 2004-1
Interest Period, the rate per annum determined on the related LIBOR
Determination Date by the Calculation Agent to be the rate for Dollar deposits
having a maturity equal to one month, that appears on Telerate Page 3750
at approximately 11:00 a.m., London time, on such LIBOR Determination
Date; provided, however, that if such rate does not appear on Telerate Page 3750,
One-Month LIBOR will mean, for such 2004-1 Interest Period, the rate per annum
equal to the arithmetic mean (rounded to the nearest one-one-hundred-thousandth
of one percent) of the rates quoted by the Reference Banks to the Calculation
Agent as the rates at which deposits in Dollars are offered by the Reference
Banks at approximately 11:00 a.m., London time, on the LIBOR Determination
Date to prime banks in the London interbank market for a period equal to one
month; provided further, that if fewer than two quotations are provided
as requested by the Reference Banks, “One-Month LIBOR” for such Series 2004-1
Interest Period will mean the arithmetic mean (rounded to the nearest
one-one-hundred-thousandth of one percent) of the rates quoted by major banks
in New York, New York selected by the Calculation Agent, at approximately 10:00 a.m.,
New York City time, on the first day of such Series 2004-1 Interest Period
for loans in Dollars to leading European banks for a period equal to one month;
provided, finally that if no such quotes are provided, “One-Month LIBOR”
for

 

20

 

such
Series 2004-1 Interest Period will mean One-Month LIBOR as in effect with
respect to the preceding Series 2004-1 Interest Period.

 

“Outstanding” means with respect to the Series 2004-1
Notes, all Series 2004-1 Notes theretofore authenticated and delivered
under the Indenture, except (a) Series 2004-1 Notes theretofore
cancelled or delivered to the Registrar for cancellation, (b) Series 2004-1
Notes which have not been presented for payment but funds for the payment of
which are on deposit in the Series 2004-1 Distribution Account and are
available for payment of such Series 2004-1 Notes, and Series 2004-1
Notes which are considered paid pursuant to Section 8.01 of the Base
Indenture, or (c) Series 2004-1 Notes in exchange for or in lieu of
other Series 2004-1 Notes which have been authenticated and delivered
pursuant to the Indenture unless proof satisfactory to the Trustee is presented
that any such Series 2004-1 Notes are held by a purchaser for value.

 

“Past Due Rent Payment” has the meaning
specified in Section 2.02(d) of this Series Supplement.

 

“Preference Amount” means any amount
previously paid by Hertz pursuant to the Series 2004-1 Demand Note and
distributed to the Series 2004-1 Noteholders in respect of amounts owing
under the Series 2004-1 Notes that is recoverable or that has been
recovered as a voidable preference by the trustee in a bankruptcy proceeding of
Hertz pursuant to the Bankruptcy Code in accordance with a final nonappealable
order of a court having competent jurisdiction.

 

“Principal Deficit Amount” means, on any date
of determination, the excess, if any, of (a) the Series 2004-1
Principal Amount on such date (after giving effect to the distribution of the
Monthly Total Principal Allocation for the Related Month and any other amounts
to be paid to the Series 2004-1 Noteholders described in Section 2.05(a) of
this Series Supplement if such date is a Payment Date) over (b) the Series 2004-1
Asset Amount on such date; provided, however, the Principal Deficit Amount on any
date that is prior to the Class A-4 Legal Final Maturity Date occurring
during the period commencing on and including the date of the filing by Hertz
of a petition for relief under Chapter 11 of the Bankruptcy Code to but
excluding the date on which Hertz shall have resumed making all payments of
Monthly Variable Rent required to be made under the HVF Lease, shall mean the
excess, if any, of (x) the Series 2004-1 Principal Amount on such date
(after giving effect to the distribution of Monthly Total Principal Allocation
for the Related Month and any other amounts to be paid to the Series 2004-1
Noteholders described in Section 2.05(a) of this Series Supplement
if such date is a Payment Date) over (y) the sum of (1) the Series 2004-1
Asset Amount on such date and (2) the lesser of (a) the Series 2004-1
Liquidity Amount on such date and (b) the Series 2004-1 Required
Liquidity Amount on such date.

 

“Pro Rata Share” means, (a) with respect
to any Series 2004-1 Non-Ford Letter of Credit Provider, as of any date,
the fraction (expressed as a percentage) obtained by dividing (A) the
available amount under such Series 2004-1 Non-Ford Letter of Credit

 

21

 

Provider’s
Series 2004-1 Non-Ford Letter of Credit as of such date by (B) an
amount equal to the aggregate available amount under all Series 2004-1
Non-Ford Letters of Credit as of such date and (b) with respect to any Series 2004-1
Ford Letter of Credit Provider, as of any date, the fraction (expressed as a
percentage) obtained by dividing (A) the available amount under such Series 2004-1
Ford Letter of Credit Provider’s Series 2004-1 Ford Letter of Credit as of
such date by (B) an amount equal to the aggregate available amount under
all Series 2004-1 Ford Letters of Credit as of such date; provided
that only for purposes of calculating the Pro Rata Share with respect to any Series 2004-1
Letter of Credit Provider as of any date, if such Series 2004-1 Letter of
Credit Provider has not complied with its obligation to pay the Trustee the
amount of any draw under its Series 2004-1 Letter of Credit made prior to
such date, the available amount under such Series 2004-1 Letter of Credit
Provider’s Series 2004-1 Letter of Credit as of such date shall be treated
as reduced (for calculation purposes only) by the amount of such unpaid demand
and shall not be reinstated for purposes of such calculation unless and until
the date as of which such Series 2004-1 Letter of Credit Provider has paid
such amount to the Trustee and been reimbursed by the Lessee for such amount
(provided that the foregoing calculation shall not in any manner reduce the Series 2004-1
Letter of Credit Provider’s actual liability in respect of any failure to pay
any demand under its Series 2004-1 Letter of Credit).

 

“QIB” has the meaning specified in Section 5.01
of this Series Supplement.

 

“Rating Agencies” means, with respect to the Series 2004-1
Notes, Standard & Poor’s and Moody’s, and any other nationally
recognized rating agency rating the Series 2004-1 Notes at the request of
HVF.

 

“Record Date” means, with respect to any
Payment Date, the last day of the Related Month.

 

“Reference Banks” means four major banks in
the London interbank market selected by the Calculation Agent.

 

“Regulation S” means Regulation S
promulgated under the Securities Act.

 

“Regulation S Global Notes” has the
meaning specified in Section 5.03 of this Series Supplement.

 

“Required Minimum Fleet Equity Amount” means,
on any date of determination, an amount equal to four times the Ford LOC
Exposure Amount as of such date.

 

“Required Noteholders” means with respect to
the Series 2004-1 Notes, subject to Section 6.06 of this Series Supplement,
Series 2004-1 Noteholders holding more than 50% of the Series 2004-1
Principal Amount (excluding any Series 2004-1 Notes held by HVF or any
Affiliate of HVF).

 

22

 

“Restricted Global Notes” has the meaning
specified in Section 5.02 of this Series Supplement.

 

“Restricted Notes” means the Restricted
Global Notes and all other Series 2004-1 Notes evidencing the obligations,
or any portion of the obligations, initially evidenced by the Restricted Global
Notes, other than certificates transferred or exchanged upon certification as
provided in Section 5.05(h)(iv) of this Series Supplement.

 

“Restricted Period” means the period
commencing on the Series 2004-1 Closing Date and ending on the 40th day
after the Series 2004-1 Closing Date.

 

“Rule 144A” means Rule 144A
promulgated under the Securities Act.

 

“Series 2004-1 Accrued Amounts” means,
on any date of determination, the sum of (i) accrued and unpaid interest
on the Series 2004-1 Notes as of such date, (ii) the Insurer Fee, if
any, accrued to such date and payable by HVF on the next succeeding Payment
Date, (iii) any other amounts due or accrued as of such date and payable
to the Insurer pursuant to the Insurance Agreement (other than unreimbursed
amounts drawn under the Insurance Policy to pay the principal of the Series 2004-1
Notes) on or prior to the next succeeding Payment Date and (iv) the
product of (A) the Indenture Carrying Charges payable on the next
succeeding Payment Date times (B) the Series 2004-1 Percentage as of the
Determination Date immediately preceding such Payment Date.

 

“Series 2004-1 Accrued Interest Account”
has the meaning specified in Section 2.01(a) of this Series Supplement.

 

“Series 2004-1 Adjusted Monthly Interest”
means, (a) for the initial Payment Date, $1,065,812.49 and (b) for
any other Payment Date, the sum of (i) with respect to the Series 2004-1
Interest Period ending on the day preceding such Payment Date, the sum of (A) an
amount equal to the product of (1) the Class A-1 Note Rate for such Series 2004-1
Interest Period, (2) the Class A-1 Outstanding Principal Amount on
the first day of such Series 2004-1 Interest Period, after giving effect
to any principal payments made on such date, and (3) a fraction, the
numerator of which is the number of days in such Series 2004-1 Interest
Period and the denominator of which is 360, (B) an amount equal to the
product of (1) one-twelfth of the Class A-2 Note Rate and (2) the
Class A-2 Outstanding Principal Amount on the first day of such Series 2004-1
Interest Period, after giving effect to any principal payments made on such
date, (C) an amount equal to the product of (1) one-twelfth of the Class A-3
Note Rate and (2) the Class A-3 Outstanding Principal Amount on the
first day of such Series 2004-1 Interest Period, after giving effect to
any principal payments made on such date, and (D) an amount equal to the
product of (1) one-twelfth of the Class A-4 Note Rate and (2) the
Class A-4 Outstanding Principal Amount on the first day of such Series 2004-1
Interest Period, after giving effect to any principal payments made on such
date, and (ii) an amount equal to the amount of any unpaid Deficiency
Amounts, as of the preceding Payment Date (together with any accrued interest
on such Deficiency Amounts at the applicable Series 2004-1 Note Rate).

 

23

 

“Series 2004-1 Asset Amount” means, as
of any date of determination, the sum of (a) the product of (i) the Series 2004-1
Required Asset Amount Percentage as of such date and (ii) the Aggregate
Asset Amount as of such date and (b) the amounts on deposit in the Series 2004-1
Excess Collection Account and the Series 2004-1 Collection Account as of
such date (after giving effect to any deposits thereto and withdrawals and releases
therefrom on such date).

 

“Series 2004-1 Available Cash Collateral
Account Amount” means, as of any date of determination, the sum of (a) the
Series 2004-1 Available Ford Cash Collateral Account Amount and (b) the
Series 2004-1 Available Non-Ford Cash Collateral Account Amount.

 

“Series 2004-1 Available Ford Cash
Collateral Account Amount” means, as of any date of determination, the
amount on deposit in the Series 2004-1 Ford Cash Collateral Account (after
giving effect to any deposits thereto and withdrawals and releases therefrom on
such date).

 

“Series 2004-1 Available Non-Ford Cash
Collateral Account Amount” means, as of any date of determination, the
amount on deposit in the Series 2004-1 Non-Ford Cash Collateral Account
(after giving effect to any deposits thereto and withdrawals and releases
therefrom on such date).

 

“Series 2004-1 Available Reserve Account
Amount” means, as of any date of determination, the amount on deposit in
the Series 2004-1 Reserve Account.

 

“Series 2004-1 Cash Collateral Account”
means a Series 2004-1 Ford Cash Collateral Account and/or a Series 2004-1
Non-Ford Cash Collateral Account, as the context may require.

 

“Series 2004-1 Cash Collateral Account
Surplus” means, with respect to any Payment Date, the lesser of (a) the
sum of (x) the Series 2004-1 Available Ford Cash Collateral Account Amount
and (y) the Series 2004-1 Available Non-Ford Cash Collateral Account
Amount and (b) the lesser of (i) the excess, if any, of the Series 2004-1
Enhancement Amount (after giving effect to any withdrawal from the Series 2004-1
Reserve Account on such Payment Date) over the Series 2004-1 Required
Enhancement Amount on such Payment Date, and (ii) the excess, if any, of
the Series 2004-1 Liquidity Amount (after giving effect to any withdrawals
from the Series 2004-1 Reserve Account on such Payment Date) over the Series 2004-1
Required Liquidity Amount on such Payment Date.

 

“Series 2004-1 Closing Date” means March 31,
2004.

 

“Series 2004-1 Collateral” means the
Collateral, any Series 2004-1 Interest Rate Hedges, the 2004-1 Series Account
Collateral, the Series 2004-1 Cash Collateral Account Collateral, the Series 2004-1
Demand Note, the Series 2004-1 Distribution Account Collateral and the Series 2004-1
Reserve Account Collateral.

 

24

 

“Series 2004-1 Collection Account” has
the meaning specified in Section 2.01(a) of this Series Supplement.

 

“Series 2004-1 Controlled Amortization
Period” means the Three-Year Notes Controlled Amortization Period, the Class A-3
Controlled Amortization Period or the Class A-4 Controlled Amortization
Period, as the context requires.

 

“Series 2004-1 Demand Note” means each
demand note made by Hertz, substantially in the form of Exhibit H to
this Series Supplement, as amended, modified or restated from time to time
in accordance with its terms and the terms of this Series Supplement.

 

“Series 2004-1 Demand Note Payment Amount”
means, as of any date of determination, the excess, if any, of (a) the
aggregate amount of all proceeds of demands made on the Series 2004-1
Demand Note that were deposited into the Series 2004-1 Distribution
Account and paid to the Series 2004-1 Noteholders during the one year
period ending on such date of determination over (b) the amount of any Preference
Amount relating to such proceeds that has been repaid to the Issuer (or any
payee of the Issuer) with the proceeds of any LOC Preference Payment
Disbursement (or any withdrawal from the Series 2004-1 Cash Collateral
Account); provided, however, that if an Event of Bankruptcy (or the occurrence of an
event described in clause (a) of the definition thereof, without the
lapse of a period of 60 consecutive days) with respect to Hertz shall have
occurred on or before such date of determination, the Series 2004-1 Demand
Note Payment Amount shall equal (i) on any date of determination until the
conclusion or dismissal of the proceedings giving rise to such Event of
Bankruptcy without continuing jurisdiction by the court in such proceedings (or
on any earlier date upon which the statute of limitations in respect of
avoidance actions in such proceedings has run or when such actions otherwise
become unavailable to the bankruptcy estate), the Series 2004-1 Demand
Note Payment Amount as if it were calculated as of the date of the occurrence
of such Event of Bankruptcy and (ii) on any date of determination
thereafter, $0.

 

“Series 2004-1 Deposit Date” has the
meaning specified in Section 2.02 of this Series Supplement.

 

“Series 2004-1 Designated Account” has
the meaning specified in Section 2.10(a) of this Series Supplement.

 

“Series 2004-1 Distribution Account” has
the meaning specified in Section 2.09(a) of this Series Supplement.

 

“Series 2004-1 Distribution Account
Collateral” has the meaning specified in Section 2.09(d) of this Series Supplement.

 

“Series 2004-1 Eligible Letter of Credit
Provider” means a Person having, at the time of the issuance of the related
Series 2004-1 Letter of Credit, a long-term senior unsecured debt rating
(or the equivalent thereof in the case of Moody’s or Standard

 

25

 

&
Poor’s, as applicable) of at least “A+” from Standard & Poor’s and at
least “Al” from Moody’s and a short-term senior unsecured debt rating of at
least “A-1” from Standard & Poor’s and “P-1” from Moody’s.

 

“Series 2004-1 Enhancement” means the Series 2004-1
Cash Collateral Account Collateral, the Series 2004-1 Letters of Credit,
the Series 2004-1 Overcollateralization Amount and the Series 2004-1
Reserve Account Collateral.

 

“Series 2004-1 Enhancement Amount”
means, as of any date of determination, the sum of (i) the Series 2004-1
Overcollateralization Amount as of such date, (ii) the Series 2004-1
Letter of Credit Amount as of such date, (iii) the Series 2004-1
Available Reserve Account Amount as of such date (after giving effect to any
deposits thereto and withdrawals and releases therefrom on such date) and (iv) on
any date on which no Aggregate Asset Amount Deficiency exists, the amount on
deposit in the Series 2004-1 Excess Collection Account as of such date.

 

“Series 2004-1 Enhancement Deficiency”
means, on any day, the amount by which the Series 2004-1 Enhancement
Amount is less than the Series 2004-1 Required Enhancement Amount.

 

“Series 2004-1 Excess Collection Account”
has the meaning specified in Section 2.01(a) of this Series Supplement.

 

“Series 2004-1 Ford Cash Collateral Account”
has the meaning specified in Section 2.08(g)(I) of this Series Supplement.

 

“Series 2004-1 Ford Cash Collateral Account
Collateral” has the meaning specified in Section 2.08(a)(I) of
this Series Supplement.

 

“Series 2004-1 Ford Cash Collateral
Percentage” means, as of any date of determination, the percentage
equivalent of a fraction, the numerator of which is the Series 2004-1 Available
Ford Cash Collateral Account Amount as of such date and the denominator of
which is the Series 2004-1 Ford Letter of Credit Liquidity Amount as of
such date.

 

“Series 2004-1 Ford Letter of Credit”
means an irrevocable letter of credit, substantially in the form of Exhibit B-1-2
to this Series Supplement and otherwise in form and substance
satisfactory to the Insurer, issued for the account of Ford or an affiliate
thereof by a Series 2004-1 Eligible Ford Letter of Credit Provider in
favor of the Trustee for the benefit of the Series 2004-1 Noteholders; provided,
however, that the Insurer agrees that any Series 2004-1 Letter of
Credit that is in the form and substance of the Series 2004-1 Letter
of Credit delivered to the Trustee on the date hereof is in form and
substance satisfactory to the Insurer.

 

“Series 2004-1 Ford Letter of Credit
Liquidity Amount” means, as of any date of determination, the sum of (a) the
aggregate amount available to be drawn on such date under each Series 2004-1
Ford Letter of Credit, as specified therein, and (b) if a

 

26

 

Series 2004-1
Ford Cash Collateral Account has been established and funded pursuant to Section 2.08
of this Series Supplement, the Series 2004-1 Available Ford Cash
Collateral Account Amount on such date.

 

“Series 2004-1 Ford Letter of Credit
Provider” means the issuer of a Series 2004-1 Ford Letter of Credit.

 

“Series 2004-1 Ford Letter of Credit
Termination Date” means the date on which (i) all Series 2004-1
Ford Letters of Credit have expired or been terminated and returned to the Series 2004-1
Ford Letter of Credit Provider thereof, (ii) no Ford Reimbursement
Obligations are outstanding and (iii) Ford has been paid all amounts
distributable to Ford hereunder from the Series 2004-1 Cash Collateral
Accounts.

 

“Series 2004-1 Global Note” means a
Regulation S Global Note, a Restricted Global Note or an Unrestricted
Global Note.

 

“Series 2004-1 Initial Principal Amount”
means the sum of the Class A-1 Initial Principal Amount, the Class A-2
Initial Principal Amount, the Class A-3 Initial Principal Amount and the Class A-4
Initial Principal Amount.

 

“Series 2004-1 Interest Period” means a
period commencing on and including a Payment Date and ending on and including
the day preceding the next succeeding Payment Date; provided, however, that the
initial Series 2004-1 Interest Period shall commence on and include the Series 2004-1
Closing Date and end on and include April 25, 2004.

 

“Series 2004-1 Interest Rate Hedge” is defined
in Section 2.11(a) of this Series Supplement.

 

“Series 2004-1 Invested Percentage”
means on any date of determination:

 

(a)  when used
with respect to Principal Collections, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction the numerator of which shall
be equal to the Series 2004-1 Required Asset Amount, determined during the
Series 2004-1 Revolving Period as of the end of the immediately preceding
Related Month (or, until the end of the initial Related Month after the Series 2004-1
Closing Date, on the Series 2004-1 Closing Date), or, during the Series 2004-1
Controlled Amortization Period and the Series 2004-1 Rapid Amortization
Period, as of the last day of the Series 2004-1 Revolving Period, and the
denominator of which shall be the greater of (I) the Aggregate Asset Amount as
of the end of the immediately preceding Related Month or, until the end of the
initial Related Month after the Series 2004-1 Closing Date, as of the Series 2004-1
Closing Date and (II) as of the same date as in clause (I), the Aggregate
Required Asset Amount;

 

(b)  when used
with respect to Interest Collections, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction the

 

27

 

numerator of which shall be the Series 2004-1
Accrued Amounts on such date of determination, and the denominator of which
shall be the aggregate Accrued Amounts with respect to all Series of Notes
on such date of determination.

 

“Series 2004-1 Lease Interest Payment
Deficit” means on any Payment Date an amount equal to the excess, if any,
of (a) the aggregate amount of Interest Collections which pursuant to Section 2.02(a),
(b) or (c) of this Series Supplement would have been deposited
into the Series 2004-1 Accrued Interest Account if all payments of Monthly
Variable Rent required to have been made under the HVF Lease from and excluding
the preceding Payment Date to and including such Payment Date were made in full
over (b) the aggregate amount of Interest Collections which pursuant to Section 2.02(a),
(b) or (c) of this Series Supplement have been received for
deposit into the Series 2004-1 Accrued Interest Account from and excluding
the preceding Payment Date to and including such Payment Date.

 

“Series 2004-1 Lease Payment Deficit”
means either a Series 2004-1 Lease Interest Payment Deficit or a Series 2004-1
Lease Principal Payment Deficit.

 

“Series 2004-1 Lease Principal Payment
Carryover Deficit” means (a) for the initial Payment Date, zero and (b) for
any other Payment Date, the excess, if any, of (x) the Series 2004-1 Lease
Principal Payment Deficit, if any, on the preceding Payment Date over (y) the
amount deposited in the Series 2004-1 Distribution Account pursuant to Section 2.05(d) of
this Series Supplement on such preceding Payment Date on account of such Series 2004-1
Lease Principal Payment Deficit.

 

“Series 2004-1 Lease Principal Payment
Deficit” means on any Payment Date the sum of (a) the Series 2004-1
Monthly Lease Principal Payment Deficit for such Payment Date and (b) the Series 2004-1
Lease Principal Payment Carryover Deficit for such Payment Date.

 

“Series 2004-1 Letter of Credit” means (i) a
Series 2004-1 Ford Letter of Credit; or (ii) an irrevocable letter of
credit, substantially in the form of Exhibit B to this Series Supplement
and otherwise in form and substance satisfactory to the Insurer, issued by
a Series 2004-1 Eligible Letter of Credit Provider in favor of the Trustee
for the benefit of the Series 2004-1 Noteholders; provided, however, that the
Insurer agrees that any Series 2004-1 Letter of Credit that is in the form and
substance of the Series 2004-1 Letter of Credit delivered to the Trustee
on the Series 2004-1 Closing Date is in form and substance
satisfactory to the Insurer.

 

“Series 2004-1 Letter of Credit Agreement”
means the Letter of Credit Reimbursement Agreement and any other agreement
pursuant to which a Series 2004-1 Letter of Credit is issued in favor of
the Trustee for the benefit of the Series 2004-1 Noteholders.

 

“Series 2004-1 Letter of Credit Amount”
means, as of any date of determination, the sum of the Series 2004-1 Ford
Letter of Credit Liquidity Amount on such date and the Series 2004-1
Non-Ford Letter of Credit Amount on such date.

 

28

 

“Series 2004-1 Letter of Credit Expiration
Date” means, with respect to any Series 2004-1 Letter of Credit, the
expiration date set forth in such Series 2004-1 Letter of Credit, as such
date may be extended in accordance with the terms of such Series 2004-1
Letter of Credit.

 

“Series 2004-1 Letter of Credit Liquidity
Amount” means, as of any date of determination, the sum of (a) the
aggregate amount available to be drawn on such date under each Series 2004-1
Letter of Credit, as specified therein, and (b) if a Series 2004-1
Cash Collateral Account has been established and funded pursuant to Section 2.08
of this Series Supplement, the Series 2004-1 Available Cash
Collateral Account Amount on such date.

 

“Series 2004-1 Letter of Credit Provider”
means the issuer of a Series 2004-1 Letter of Credit.

 

“Series 2004-1 Letter of Credit
Reimbursement Agreement” means any and each reimbursement agreement
providing for the reimbursement of a Series 2004-1 Letter of Credit
Provider for draws under its Series 2004-1 Letter of Credit, other than
any such reimbursement agreement between Ford and a Series 2004-1 Ford
Letter of Credit Provider, as the same may be amended, restated, modified
or supplemented from time to time in accordance with its terms.

 

“Series 2004-1 Limited Liquidation Event of
Default” means, so long as such event or condition continues, any event or
condition of the type specified in clauses (a) through (i) of Article III
of this Series Supplement that continues for thirty (30) days (without
double counting the cure period, if any, provided therein); provided however,
that any event or condition of the type specified in clauses (a) through (g) shall
cease to constitute a Series 2004-1 Limited Liquidation Event of Default
if (i) within such thirty (30) day period, such Amortization Event shall
have been cured and (ii) except for any period during which an Insurer
Default is continuing, the Trustee shall have received the written consent of
the Insurer waiving the occurrence of such Series 2004-1 Limited
Liquidation Event of Default.

 

“Series 2004-1 Liquidity Amount” means,
as of any date of determination, the sum of (a) the Series 2004-1
Letter of Credit Liquidity Amount and (b) the Series 2004-1 Available
Reserve Account Amount on such date (after giving effect to any deposits
thereto on such date).

 

“Series 2004-1 Liquidity Deficiency”
means, as of any date of determination, the amount by which the Series 2004-1
Liquidity Amount is less than the Series 2004-1 Required Liquidity Amount
as of such date.

 

“Series 2004-1 Maximum Aggregate
BMW/Lexus/Mercedes/Audi Amount” means as of any day, an amount equal to 6%
of the Adjusted Aggregate Asset Amount on such day (or such greater percentage
as may be agreed to by HVF, the Insurer (such consent not to be
unreasonably withheld or delayed) for so long as any Series 2004-1 Notes
are Outstanding, and the Rating Agencies, subject to satisfaction of the Series

 

29

 

2004-1
Rating Agency Condition; provided, that the consent of the Insurer shall
not be required to the extent such percentage is equal to or less than 15%).

 

“Series 2004-1 Maximum Amount” means any
of the Series 2004-1 Maximum Hyundai Amount, the Series 2004-1
Maximum Jaguar Amount, the Series 2004-1 Maximum Kia Amount, the Series 2004-1
Maximum Land Rover Amount, the Series 2004-1 Maximum Mazda Amount, the Series 2004-1
Maximum Mitsubishi Amount, the Series 2004-1 Maximum Subaru Amount, the Series 2004-1
Maximum Volvo Amount, the Series 2004-1 Maximum Manufacturer Non-Eligible
Vehicle Amount, the Series 2004-1 Maximum Non-Eligible Manufacturer
Amount, the Series 2004-1 Maximum Non-Eligible Vehicle Amount, the Series 2004-1
Maximum Audi Amount, the Series 2004-1 Maximum BMW Amount, the Series 2004-1
Maximum Lexus Amount, the Series 2004-1 Maximum Mercedes Amount and the Series 2004-1
Maximum Aggregate BMW/Lexus Mercedes Amount.

 

“Series 2004-1 Maximum Audi Amount”
means, as of any day, an amount equal to 3% of the Adjusted Aggregate Asset
Amount on such day (or such greater percentage as may be agreed to by HVF,
the Insurer (such consent not to be unreasonably withheld or delayed) for so
long as any Series 2004-1 Notes are Outstanding, and the Rating Agencies,
subject to satisfaction of the Series 2004-1 Rating Agency Condition; provided,
that the consent of the Insurer shall not be required to the extent such
percentage is equal to or less than 8%).

 

“Series 2004-1 Maximum BMW Amount”
means, as of any day, an amount equal to 3% of the Adjusted Aggregate Asset
Amount on such day (or such greater percentage as may be agreed to by HVF,
the Insurer (such consent not to be unreasonably withheld or delayed) for so
long as any Series 2004-1 Notes are Outstanding, and the Rating Agencies,
subject to satisfaction of the Series 2004-1 Rating Agency Condition;
provided, that the consent of the Insurer shall not be required to the extent
such percentage is equal to or less than 5%).

 

“Series 2004-1 Maximum Hyundai Amount”
means, as of any day, an amount equal to 13% of the Adjusted Aggregate Asset
Amount on such day.

 

“Series 2004-1 Maximum Jaguar Amount”
means, as of any day, an amount equal to 5% of the Adjusted Aggregate Asset
Amount on such day.

 

“Series 2004-1 Maximum Kia Amount”
means, as of any day, an amount equal to 10% of the Adjusted Aggregate Asset
Amount on such day.

 

“Series 2004-1 Maximum Land Rover Amount”
means, as of any day, an amount equal to 5% of the Adjusted Aggregate Asset
Amount on such day.

 

“Series 2004-1 Maximum Lexus Amount”
means, as of any day, an amount equal to 3% of the Adjusted Aggregate Asset
Amount on such day (or such greater percentage as may be agreed to by HVF,
the Insurer (such consent not to be unreasonably withheld or delayed) for so
long as any Series 2004-1 Notes are

 

30

 

Outstanding,
and the Rating Agencies, subject to satisfaction of the Series 2004-1
Rating Agency Condition; provided, that the consent of the Insurer shall
not be required to the extent such percentage is equal to or less than 5%).

 

“Series 2004-1 Maximum Manufacturer
Non-Eligible Vehicle Amount” means, as of any day, with respect to any
Manufacturer, an amount equal to 40% of the Non-Eligible Vehicle Amount
(excluding from the calculation thereof, to the extent that an Event of
Bankruptcy has occurred with respect to any of Ford, GM, Chrysler, Toyota and
Honda, the Net Book Value of the HVF Vehicles (other than Non-Program Vehicles
manufactured by any such Manufacturer as of the date of the occurrence of such
Event of Bankruptcy) manufactured by each such Manufacturer for which an Event
of Bankruptcy has occurred and any amounts related to such HVF Vehicles due
from such Manufacturer).

 

“Series 2004-1 Maximum Mazda Amount”
means, as of any day, an amount equal to 20% of the Adjusted Aggregate Asset
Amount on such day.

 

“Series 2004-1 Maximum Mercedes Amount”
means, as of any day, an amount equal to 3% of the Adjusted Aggregate Asset
Amount on such day (or such greater percentage as may be agreed to by HVF,
the Insurer (such consent not to be unreasonably withheld or delayed) for so
long as any Series 2004-1 Notes are Outstanding, and the Rating Agencies,
subject to satisfaction of the Series 2004-1 Rating Agency Condition; provided,
that the consent of the Insurer shall not be required to the extent such
percentage is equal to or less than 5%).

 

“Series 2004-1 Maximum Mitsubishi Amount”
means, as of any day, an amount equal to 10% of the Adjusted Aggregate Asset
Amount on such day.

 

“Series 2004-1 Maximum Non-Eligible
Manufacturer Amount” means, as of any day, an amount equal to 3% of the
Adjusted Aggregate Asset Amount on such day.

 

“Series 2004-1 Maximum Non-Eligible Vehicle
Amount” means, as of any day, an amount equal to 50% of the Adjusted Aggregate
Asset Amount (excluding from the calculation thereof, to the extent that an
Event of Bankruptcy has occurred with respect to any of Ford, GM, Chrysler,
Toyota and Honda, the Net Book Value of the HVF Vehicles (other than the
Non-Program Vehicles manufactured by any such Manufacturer as of the date of
the occurrence of such Event of Bankruptcy) manufactured by each such
Manufacturer for which an Event of Bankruptcy has occurred and any amounts
related to such HVF Vehicles due from such Manufacturer).

 

“Series 2004-1 Maximum Subaru Amount”
means, as of any day, an amount equal to 5% of the Adjusted Aggregate Asset
Amount on such day.

 

“Series 2004-1 Maximum Volvo Amount”
means, as of any day, an amount equal to 5% of the Adjusted Aggregate Asset
Amount on such day.

 

31

 

“Series 2004-1 Monthly Interest” means,
with respect to any Series 2004-1 Interest Period, the sum of Class A-1
Monthly Interest, Class A-2 Monthly Interest, Class A-3 Monthly
Interest and Class A-4 Monthly Interest for such Series 2004-1
Interest Period.

 

“Series 2004-1 Monthly Lease Principal
Payment Deficit” means on any Payment Date an amount equal to the excess,
if any, of (a) the aggregate amount of Principal Collections which
pursuant to Section 2.02(a), (b) or (c) of this Series Supplement
would have been deposited into the Series 2004-1 Collection Account if all
payments required to have been made under the HVF Lease from and excluding the
preceding Payment Date to and including such Payment Date were made in full
over (b) the aggregate amount of Principal Collections which pursuant to Section 2.02(a),
(b) or (c) of this Series Supplement have been received for
deposit into the Series 2004-1 Collection Account (without giving effect
to any amounts deposited into the Series 2004-1 Accrued Interest Account
pursuant to the proviso in Section 2.02(c)(ii) of this Series Supplement)
from and excluding the preceding Payment Date to and including such Payment
Date.

 

“Series 2004-1 Non-Ford Cash Collateral
Account” has the meaning specified in Section 2.08(g)(II) of
this Series Supplement.

 

“Series 2004-1 Non-Ford Cash Collateral
Account Collateral” has the meaning specified in Section 2.08(a)(II)
of this Series Supplement.

 

“Series 2004-1 Non-Ford Cash Collateral
Percentage” means, as of any date of determination, the percentage
equivalent of a fraction, the numerator of which is the Series 2004-1
Available Non-Ford Cash Collateral Account Amount as of such date and the
denominator of which is the Series 2004-1 Non-Ford Letter of Credit
Liquidity Amount as of such date.

 

“Series 2004-1 Non-Ford Letter of Credit”
means each Series 2004-1 Letter of Credit other than a Series 2004-1
Ford Letter of Credit.

 

“Series 2004-1 Non-Ford Letter of Credit
Amount” means, as of any date of determination, the lesser of (a) the
sum of (i) the aggregate amount available to be drawn on such date under
the Series 2004-1 Non-Ford Letters of Credit, as specified therein, and (ii) if
the Series 2004-1 Non-Ford Cash Collateral Account has been established
and funded pursuant to Section 2.08 of this Series Supplement,
the Series 2004-1 Available Non-Ford Cash Collateral Account Amount on
such date and (b) the outstanding principal amount of the Series 2004-1
Demand Note on such date.

 

“Series 2004-1 Non-Ford Letter of Credit
Liquidity Amount” means, as of any date of determination, the sum of (a) the
aggregate amount available to be drawn on such date under each Series 2004-1
Non-Ford Letter of Credit, as specified therein, and (b) if a Series 2004-1
Non-Ford Cash Collateral Account has been established and funded pursuant to Section 2.08
of this Series Supplement, the Series 2004-1 Available Non-Ford Cash
Collateral Account Amount on such date.

 

32

 

“Series 2004-1 Non-Ford Letter of Credit
Provider” means the issuer of a Series 2004-1 Non-Ford Letter of
Credit.

 

“Series 2004-1 Note Rate” means the Class A-1
Note Rate, the Class A-2 Note Rate, the Class A-3 Note Rate or the Class A-4
Note Rate, as the context may require.

 

“Series 2004-1 Note Owner” means, with
respect to a Series 2004-1 Global Note, the Person who is the beneficial
owner of an interest in such Series 2004-1 Global Note, as reflected on
the books of DTC, or on the books of a Person maintaining an account with DTC
(directly as a Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of DTC).

 

“Series 2004-1 Noteholders” means,
collectively, the Class A-1 Noteholders, the Class A-2 Noteholders,
the Class A-3 Noteholders and the Class A-4 Noteholders.

 

“Series 2004-1 Notes” means,
collectively, the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes.

 

“Series 2004-1 Outstanding Principal Amount”
means, as of any date of determination, the sum of the Class A-1
Outstanding Principal Amount, the Class A-2 Outstanding Principal Amount,
the Class A-3 Outstanding Principal Amount and the Class A-4
Outstanding Principal Amount as of such date.

 

“Series 2004-1 Overcollateralization Amount”
means (i) as of any date of determination on which no Aggregate Asset
Amount Deficiency exists, the Series 2004-1 Required Overcollateralization
Amount as of such date or (ii) on which an Aggregate Asset Amount
Deficiency exists, the excess, if any, of the Series 2004-1 Asset Amount
over the Series 2004-1 Principal Amount as of such date.

 

“Series 2004-1 Past Due Rent Payment”
has the meaning specified in Section 2.02(d) of this Series Supplement.

 

“Series 2004-1 Percentage” means, as of
any date of determination, a fraction, expressed as a percentage, the numerator
of which is the Series 2004-1 Principal Amount as of such date and the
denominator of which is the Aggregate Principal Amount as of such date.

 

“Series 2004-1 Principal Allocation” has
the meaning specified in Section 2.02 (a)(ii) of this Series Supplement.

 

“Series 2004-1 Principal Amount” means,
as of any date of determination, the sum of the Class A-1 Principal
Amount, the Class A-2 Principal Amount, the Class A-3 Principal Amount
and the Class A-4 Principal Amount as of such date.

 

33

 

“Series 2004-1 Rapid Amortization Period”
means the period beginning at the close of business on the Business Day
immediately preceding the day on which an Amortization Event is deemed to have
occurred with respect to the Series 2004-1 Notes and ending upon the
earlier to occur of (i) the date on which (A) the Series 2004-1
Notes are fully paid, (B) the Insurer has been paid all Insurer Fees and all
Insurer Reimbursement Amounts then due, (C) each Interest Rate Hedge
Provider has been paid all amounts payable to it by HVF under the related Series 2004-1
Interest Rate Hedge, and (D) the Series 2004-1 Ford Letter of Credit
Termination Date and (ii) the termination of the Indenture.

 

“Series 2004-1 Rating Agency Condition”
means, with respect to the Series 2004-1 Notes and any action, including
the issuance of an additional Series of Notes, that each Rating Agency
shall have notified HVF, the Insurer and the Trustee in writing that such
action will not result in a reduction or withdrawal of the ratings of the Series 2004-1
Notes.

 

“Series 2004-1 Required Asset Amount”
means, as of any date of determination, the sum of (i) the Series 2004-1
Principal Amount and (ii) the Series 2004-1 Required
Overcollateralization Amount as of such date.

 

“Series 2004-1 Required Asset Amount
Percentage” means, as of any date of determination, the percentage
equivalent of a fraction, the numerator of which is the Series 2004-1
Required Asset Amount and the denominator of which is the Aggregate Required
Asset Amount as of such date.

 

“Series 2004-1 Required Enhancement Amount”
means, as of any date of determination, the sum of (i) the product of the Series 2004-1
Required Enhancement Percentage as of such date and the Series 2004-1
Principal Amount as of such date and (ii) the Series 2004-1 Required
Enhancement Incremental Amount as of such date; provided, however, that, as of any date of
determination after the occurrence of a Series 2004-1 Limited Liquidation
Event of Default, the Series 2004-1 Required Enhancement Amount shall
equal the lesser of (x) the Series 2004-1 Principal Amount as of such date
and (y) the sum of (l) the product of the Series 2004-1 Required Enhancement
Percentage as of such date of determination and the Series 2004-1
Principal Amount as of the date of the occurrence of such Series 2004-1
Limited Liquidation Event of Default and (2) the Series 2004-1
Required Enhancement Incremental Amount as of such date of determination.

 

“Series 2004-1 Required Enhancement
Incremental Amount” means (i) as of the Series 2004-1 Closing
Date, $0;

 

(ii)                                  as of any date thereafter, $25,125,000 (or
such lesser amount as may be required from time to time for the Shadow
Rating for the Series 2004-1 Notes to be BBB- and Baa3 or higher, by
Standard & Poor’s and Moody’s, respectively); and

 

(iii) the product of (A) the Series 2004-1
Required Asset Amount Percentage as of the immediately preceding Business Day
and (B) the sum of (1) the

 

34

 

excess,
if any, of the Non-Eligible Vehicle Amount (excluding from the calculation
thereof, to the extent that an Event of Bankruptcy has occurred with respect to
any of Ford, GM, Chrysler, Toyota and Honda, the Net Book Value of the HVF
Vehicles (other than Non-Program Vehicles manufactured by any such Manufacturer
as of the date of the occurrence of such Event of Bankruptcy) manufactured by
each such Manufacturer for which an Event of Bankruptcy has occurred and any
amounts related to such HVF Vehicles due from such Manufacturer) over the Series 2004-1
Maximum Non-Eligible Vehicle Amount as of such immediately preceding Business
Day, (2) the excess, if any, of the Hyundai Amount over the Series 2004-1
Maximum Hyundai Amount as of such immediately preceding Business Day, (3) the
excess, if any, of the Jaguar Amount over the Series 2004-1 Maximum Jaguar
Amount as of such immediately preceding Business Day, (4) the excess, if
any, of the Kia Amount over the Series 2004-1 Maximum Kia Amount as of
such immediately preceding Business Day, (5) the excess, if any, of the
Land Rover Amount over the Series 2004-1 Maximum Land Rover Amount as of
such immediately preceding Business Day, (6) the excess, if any, of the
Mazda Amount over the Series 2004-1 Maximum Mazda Amount as of such
immediately preceding Business Day, (7) the excess, if any, of the
Mitsubishi Amount over the Series 2004-1 Maximum Mitsubishi Amount as of
such immediately preceding Business Day, (8) the excess, if any, of the
Subaru Amount over the Series 2004-1 Maximum Subaru Amount as of such
immediately preceding Business Day, (9) the excess, if any, of the Volvo
Amount over the Series 2004-1 Maximum Volvo Amount as of such immediately
preceding Business Day, (10) the excess, if any, of the Non-Eligible
Manufacturer Amount over the Series 2004-1 Maximum Non-Eligible
Manufacturer Amount as of such immediately preceding Business Day, (11) the
excess, if any, of the Manufacturer Non-Eligible Vehicle Amount with respect to
any Manufacturer (excluding from the calculation thereof, to the extent that an
Event of Bankruptcy has occurred with respect to any of Ford, GM, Chrysler,
Toyota and Honda, the Net Book Value of the HVF Vehicles (other than Non-Program
Vehicles manufactured by any such Manufacturer as of the date of the occurrence
of such Event of Bankruptcy) manufactured by each such Manufacturer for which
an Event of Bankruptcy has occurred and any amounts related to such HVF
Vehicles due from such Manufacturer) over the Series 2004-1 Maximum
Manufacturer Non-Eligible Vehicle Amount as of such immediately preceding
Business Day, (12) the excess, if any, of the Audi Amount over the Series 2004-1
Maximum Audi Amount as of such immediately preceding Business Day, (13) the
excess, if any of the BMW Amount over the Series 2004-1 Maximum BMW Amount
as of such immediately preceding Business Day, (14) the excess, if any of the
Lexus Amount over the Series 2004-1 Maximum Lexus Amount as of such
immediately preceding Business Day, (15) the excess, if any of the Mercedes
Amount over the Series 2004-1 Maximum Mercedes Amount as of such
immediately preceding Business Day and (16) the excess, if any of the Aggregate
BMW/Lexus/Mercedes/Audi Amount over the Series 2004-1 Maximum Aggregate
BMW/Lexus/Mercedes/Audi Amount as of such immediately preceding Business Day. The
Manufacturer Non-Eligible Vehicle Amounts with respect to Ford, Volvo, Jaguar
and Land Rover shall be calculated on an aggregate basis so that they will be
considered as one Manufacturer for the purpose of the calculation of the Series 2004-1
Maximum Manufacturer Non-Eligible Vehicle Amount for so long as each of Volvo,
Jaguar and Land Rover is an Affiliate of Ford.

 

35

 

“Series 2004-1 Required Enhancement
Percentage” means, as of any date of determination, the sum of (i) the
product of (A) the Series 2004-1 Required Program Vehicle Enhancement
Percentage as of such date times (B) the Series 2004-1 Eligible
Program Vehicle Percentage as of such date, (ii) the product of (A) the
Series 2004-1 Required Non-Eligible Vehicle Enhancement Percentage as of
such date times (B) the Non-Eligible Vehicle Percentage as of such date.

 

“Series 2004-1 Required Liquidity Amount”
means, as of any date of determination, an amount equal to the product of the Series 2004-1
Required Liquidity Percentage as of such date times the Series 2004-1
Principal Amount on such date.

 

“Series 2004-1 Required Liquidity Percentage”
means, as of any date of determination, (i) the sum of (A) the
product of (1) 6.10% times (2) the Class A-1 Principal Amount on
such date, (B) the product of (1) 2.25% times (2) the Class A-2
Principal Amount on such date, (C) the product of (1) 2.50% times (2) the
Class A-3 Principal Amount on such date and (D) the product of (1) 2.75%
times (2) the Class A-4 Principal Amount on such date divided by (ii) the
Series 2004-1 Principal Amount on such date.

 

“Series 2004-1 Required Non-Eligible Vehicle
Enhancement Percentage” means, as of any date of determination, the greater
of (a) the Series 2004-1 Weighted Average Required Non-Eligible
Vehicle Enhancement Percentage as of such date and (b) the sum of (i) the
Series 2004-1 Weighted Average Required Non-Eligible Vehicle Enhancement
Percentage as of such date and (ii) an amount equal to 100% minus the
lower of (x) the lowest Non-Program Vehicle Measurement Month Average for any
Measurement Month within the preceding 12 calendar months (or such fewer number
of months as have elapsed since the Series 2004-1 Closing Date) and (y)
the lowest Market Value Average as of any Determination Date within the
preceding 12 calendar months (or such fewer number of months as have elapsed
since the Series 2004-1 Closing Date).

 

“Series 2004-1 Required
Overcollateralization Amount” means, as of any date of determination, the
excess, if any, of (a) the Series 2004-1 Required Enhancement Amount
over (b) the sum of (i) the Series 2004-1 Available Reserve
Account Amount as of such date (after giving effect to any deposits thereto and
withdrawals and releases therefrom on such date), (ii) the Series 2004-1
Letter of Credit Amount as of such date and (iii) the amount of cash and
Permitted Investments on deposit in the Series 2004-1 Excess Collection
Account on such date.

 

“Series 2004-1 Required Program Vehicle
Enhancement Percentage”
means, as of any date of determination, (i) the sum of (A) the
product of (1) 17.00% times (2) the Class A-1 Principal Amount
on such date, (B) the product of (1) 13.00% times (2) the Class A-2
Principal Amount on such date, (C) the product of (1) 13.25% times (2) the
Class A-3 Principal Amount on such date and (D) the product of (1) 13.50%
times (2) the Class A-4 Principal Amount on such date divided by (ii) the
Series 2004-1 Principal Amount on such date.

 

36

 

“Series 2004-1 Required Reserve Account Amount” means, with respect to any date of
determination, an amount equal to the greater of (a) the excess, if any,
of the Series 2004-1 Required Liquidity Amount on such date over the Series 2004-1
Letter of Credit Liquidity Amount on such date and (b) the excess, if any,
of the Series 2004-1 Required Enhancement Amount over the Series 2004-1
Enhancement Amount (excluding therefrom the Series 2004-1 Available
Reserve Account Amount) on such date.

 

“Series 2004-1 Reserve Account” has the
meaning specified in Section 2.07(a) of this Series Supplement.

 

“Series 2004-1 Reserve Account Collateral”
has the meaning specified in Section 2.07(d) of this Series Supplement.

 

“Series 2004-1 Reserve Account Surplus”
means, with respect to any date of determination, the excess, if any, of the Series 2004-1
Available Reserve Account Amount (after giving effect to any deposits thereto
and withdrawals therefrom on such date) over the Series 2004-1 Required
Reserve Account Amount on such date.

 

“Series 2004-1 Revolving Period” means
the period from and including the Series 2004-1 Closing Date to the
earlier of (i) the commencement of the Series 2004-1 Rapid
Amortization Period and (ii) the commencement of the Three-Year Notes
Controlled Amortization Period.

 

“Series 2004-1 Series Account
Collateral” has the meaning specified in Section 2.01(d) of this Series Supplement.

 

“Series 2004-1 Series Accounts” has
the meaning specified in Section 2.01(a) of this Series Supplement.

 

“Series 2004-1 Weighted Average Required
Non-Eligible Vehicle Enhancement Percentage” means, as of any date of
determination, (i) the sum of (A) the product of (1) 23.25%
times (2) the Class A-1 Principal Amount on such date, (B) the
product of (1) 18.00% times (2) the Class A-2 Principal Amount
on such date, (C) the product of (1) 18.25% times (2) the Class A-3
Principal Amount on such date and (D) the product of (1) 18.50% times
(2) the Class A-4 Principal Amount on such date divided by (ii) the
Series 2004-1 Principal Amount on such date.

 

“Series-Specific Collection Account” means
the collection account established pursuant to a Series Supplement for the
benefit of a Series of Notes, which Series Supplement provides for
the distribution of funds allocated to such collection account to the payment
of Ford Reimbursement Obligations, after the payment of principal of such Series of
Notes and prior to any distribution or other release of such funds to HVF and
prior to any payment of termination payments under the Swap Agreements, and
which provides that for so long as the Ford LOC Exposure Amount is greater than
zero no such funds will be distributed to HVF or applied to make termination
payments under the Swap Agreements if, after giving effect to such distribution
or

 

37

 

application,
the Fleet Equity Amount would be less than the Required Minimum Fleet Equity
Amount.

 

“Series-Specific Excess Collection Account”
means the excess collection account established pursuant to a Series Supplement
for the benefit of a Series of Notes, which Series Supplement
provides for the distribution of funds allocated to such excess collection
account to the payment of Ford Reimbursement Obligations after the payment of
principal of such Series of Notes or any other Series of Notes and
prior to any distribution or other release of such funds to HVF and prior to
any payment of termination payments under the Swap Agreements, and which
provides that for so long as the Ford LOC Exposure Amount is greater than zero
no such funds will be distributed to HVF or applied to make termination
payments under the Swap Agreements if, after giving effect to such distribution
or application, the Fleet Equity Amount would be less than the Required Minimum
Fleet Equity Amount.

 

“Series Supplement” has the meaning set
forth in the preamble.

 

“Shadow Rating” means the rating of the Series 2004-1
Notes without giving effect to the Insurance Policy.

 

“Subaru Amount” means, as of any date of
determination, an amount equal to the Manufacturer Non-Eligible Vehicle Amount
and Manufacturer Eligible Program Vehicle Amount, in each case with respect to
Subaru as of such date.

 

“Telerate Page 3750” has the meaning set
forth in the International Swaps Derivatives Association, Inc. 1991
Interest Rate and Currency Exchange Definitions.

 

“Third-Party Market Value” means, with
respect to any HVF Vehicle as of any date of determination, the market value of
such HVF Vehicle as specified in the Related Month’s published NADA Guide for
the model class and model year of such HVF Vehicle based on the average
equipment and the average mileage of each HVF Vehicle of such model class and
model year; provided that if the NADA Guide is being published but such
HVF Vehicle is not included therein, the Third-Party Market Value shall mean
the Net Book Value of such HVF Vehicle; provided further that if the
NADA Guide was not published in the Related Month, the Third-Party Market Value
of such HVF Vehicle shall be based on the market value specified in the Finance
Guide for the model class and model year of such HVF Vehicle based on the
average equipment and the average mileage of each HVF Vehicle of such model class and
model year; provided that if the Finance Guide is being published but
such HVF Vehicle is not included therein, the Third-Party Market Value shall
mean the Net Book Value of such HVF Vehicle; provided further that if
the Finance Guide was not published in the Related Month, the Third-Party
Market Value of such HVF Vehicle shall be based on an independent third-party
data source approved by each Rating Agency that is rating any Series of
Notes at the request of HVF based on the average equipment and average mileage
of each HVF Vehicle of such model class and model year or based upon such
other methodology approved by each such Rating Agency.

 

38

 

“Three-Year Notes” means, collectively, the Class A-1
Notes and the Class A-2 Notes.

 

“Three-Year Notes Controlled Amortization Period”
means the period commencing at the close of business on October 31, 2006
(or, if such day is not a Business Day, the Business Day immediately preceding
such day) and continuing to the earlier of (i) the commencement of the Series 2004-1
Rapid Amortization Period and (ii) the date on which the Three-Year Notes
are fully paid.

 

“Three-Year Notes Expected Final Payment Date”
means the May 2007 Payment Date.

 

“Three-Year Notes Legal Final Payment Date”
means the May 2008 Payment Date.

 

“Unrestricted Global Notes” has the meaning
specified in Section 5.03 of this Series Supplement.

 

“Volvo Amount” means, as of any date of
determination, an amount equal to the sum of the Volvo Program Amount and the
Volvo Non-Program Amount as of such date.

 

“Volvo Non-Program Amount” means, as of any
date of determination, an amount equal to the Manufacturer Non-Eligible Vehicle
Amount with respect to Volvo as of such date.

 

“Volvo Program Amount” means, as of any date
of determination, an amount equal to the Manufacturer Eligible Program Vehicle
Amount with respect to Volvo as of such date.

 

“Waivable Amount” is defined in Article IV.

 

“Waiver Event” means the occurrence of the
delivery of a Waiver Request and the subsequent waiver of any Series 2004-1
Maximum Amount.

 

“Waiver Request” is defined in Article IV.

 

ARTICLE II

Series 2004-1 Allocations

 

With respect to the Series 2004-1 Notes only,
the following shall apply:

 

SECTION 2.01. Series 2004-1
Series Accounts. (a)  Establishment of Series 2004-1 Series Accounts.
HVF shall establish and maintain in the name of the Trustee for the benefit of
the Series 2004-1 Noteholders, the Insurer and Ford three

 

39

 

accounts: 
the Series 2004-1 Collection Account (such account, the “Series 2004-1
Collection Account”), the Series 2004-1 Accrued Interest Account (such
account, the “Series 2004-1 Accrued Interest Account”) and the Series 2004-1
Excess Collection Account (such account, the “Series 2004-1 Excess
Collection Account” and, together with the Series 2004-1 Collection
Account and the Series 2004-1 Accrued Interest Account, the “Series 2004-1
Series Accounts”). Each Series 2004-1 Series Account shall
bear a designation clearly indicating that the funds deposited therein are held
for the benefit of the Series 2004-1 Noteholders, the Insurer and Ford. Each
Series 2004-1 Series Account shall be an Eligible Deposit Account. If
a Series 2004-1 Series Account is at any time no longer an Eligible
Deposit Account, HVF shall, within 10 Business Days of obtaining knowledge that
such Series 2004-1 Series Account is no longer an Eligible Deposit
Account, establish a new Series 2004-1 Series Account that is an
Eligible Deposit Account. If a new Series 2004-1 Series Account is
established, HVF shall instruct the Trustee in writing to transfer all cash and
investments from the non-qualifying Series 2004-1 Series Account into
the new Series 2004-1 Series Account. Initially, each of the Series 2004-1
Series Accounts will be established with The Bank of New York.

 

(b)  Administration
of the Series 2004-1 Series Accounts. HVF may instruct (by
standing instructions or otherwise) the institution maintaining each of the Series 2004-1
Series Accounts to invest funds on deposit in such Series 2004-1 Series Account
from time to time in Permitted Investments; provided, however, that (x) any such investment in the Series 2004-1
Excess Collection Account shall mature not later than the Business Day
following the date on which such funds were received and (y) any such
investment in the Series 2004-1 Collection Account or the Series 2004-1
Accrued Interest Account shall mature not later than the Business Day prior to
the first Payment Date following the date on which such funds were received,
unless any such Permitted Investment is held with the Trustee, then such
investment may mature on such Payment Date so long as such funds shall be
available for withdrawal on or prior to such Payment Date. HVF shall not direct
the Trustee to dispose of (or permit the disposal of) any Permitted Investments
prior to the maturity thereof to the extent such disposal would result in a
loss of the initial purchase price of such Permitted Investment. In the absence
of written investment instructions hereunder, funds on deposit in the Series 2004-1
Series Accounts shall remain uninvested.

 

(c)  Earnings from Series 2004-1
Series Accounts. All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Series 2004-1 Series Accounts
shall be deemed to be on deposit therein and available for distribution.

 

(d)  Series 2004-1
Series Accounts Constitute Additional Collateral for Series 2004-1
Notes. In order to secure and provide for the repayment and payment of the
Note Obligations with respect to the Series 2004-1 Notes, HVF hereby
grants a security interest in and assigns, pledges, grants, transfers and sets
over to the Trustee, for the benefit of the Series 2004-1 Noteholders, the
Insurer and Ford, all of HVF’s right, title and interest in and to the
following (whether now or hereafter existing or acquired):

 

40

 

(i) the Series 2004-1 Series Accounts,
including any security entitlement thereto; (ii) all funds on deposit
therein from time to time; (iii) all certificates and instruments, if any,
representing or evidencing any or all of the Series 2004-1 Series Accounts
or the funds on deposit therein from time to time; (iv) all investments
made at any time and from time to time with monies in the Series 2004-1 Series Accounts,
whether constituting securities, instruments, general intangibles, investment
property, financial assets or other property; (v) all interest, dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for the Series 2004-1 Series Accounts,
the funds on deposit therein from time to time or the investments made with
such funds; and (vi) all proceeds of any and all of the foregoing,
including, without limitation, cash (the items in the foregoing clauses (i) through
(vi) are referred to, collectively, as the “Series 2004-1 Series Account
Collateral”).

 

SECTION 2.02. Allocations
with Respect to the Series 2004-1 Notes. The net proceeds from the
initial sale of the Series 2004-1 Notes will be deposited into the Series 2004-1
Excess Collection Account. All amounts payable to HVF under any Series 2004-1
Interest Rate Hedges will be deposited into the Series 2004-1 Collection
Account. On each Business Day on which Collections are deposited into the
Collection Account (each such date, a “Series 2004-1 Deposit Date”),
the Administrator will direct the Trustee in writing pursuant to the
Administration Agreement to apply all amounts deposited into the Collection
Account in accordance with the provisions of this Section 2.02:

 

(a)  Allocations of
Collections During the Series 2004-1 Revolving Period. During the Series 2004-1
Revolving Period, the Administrator will direct the Trustee in writing pursuant
to the Administration Agreement, prior to 1:00 p.m. (New York City time)
on each Series 2004-1 Deposit Date, to apply all amounts deposited into
the Collection Account as set forth below:

 

(i) deposit into the Series 2004-1
Collection Account an amount equal to the sum of (A) the Series 2004-1
Invested Percentage (as of such day) of the aggregate amount of Interest
Collections on such day and (B) any amounts received by the Trustee in
respect of the Series 2004-1 Interest Rate Hedges. All such amounts
deposited into the Series 2004-1 Collection Account shall thereafter be
deposited into the Series 2004-1 Accrued Interest Account; and

 

(ii) deposit into the Series 2004-1 Excess
Collection Account an amount equal to the Series 2004-1 Invested
Percentage (as of such day) of the aggregate amount of Principal Collections on
such day (for any such day, the “Series 2004-1 Principal Allocation”);
provided,
however, if a Waiver Event shall have occurred, then such application shall
be modified as provided in Article IV.

 

(b)  Allocations of
Collections During any Series 2004-1 Controlled Amortization Period. During
any Series 2004-1 Controlled Amortization Period, the Administrator will
direct the Trustee in writing pursuant to the Administration

 

41

 

Agreement, prior to 1:00 p.m. (New York
City time) on each Series 2004-1 Deposit Date, to apply all amounts
deposited into the Collection Account as set forth below:

 

(i) deposit into the Series 2004-1
Collection Account an amount determined as set forth in Section 2.02(a)(i) above
for such day, which amount shall thereafter be deposited into the Series 2004-1
Accrued Interest Account; and

 

(ii) (A) with respect to the Three-Year
Notes Controlled Amortization Period, deposit into the Series 2004-1
Collection Account an amount equal to the Series 2004-1 Principal
Allocation for such day, which amount shall be used to make principal payments
on a pro rata basis in respect of the Three-Year Notes; provided, however, that if the
Monthly Total Principal Allocation for the current Related Period exceeds the
sum of the Class A-1 Controlled Distribution Amount and the Class A-2
Controlled Distribution Amount, then the amount of such excess shall be
deposited into the Series 2004-1 Excess Collection Account; and provided
further that if a Waiver Event shall have occurred, then such application
shall be modified as provided in Article IV, (B) with respect to the Class A-3
Controlled Amortization Period, deposit into the Series 2004-1 Collection
Account an amount equal to the Series 2004-1 Principal Allocation for such
day, which amount shall be used to make principal payments in respect of the Class A-3
Notes; provided, however, that if the Monthly Total Principal Allocation for the
current Related Period exceeds the Class A-3 Controlled Distribution
Amount, then the amount of such excess shall be deposited into the Series 2004-1
Excess Collection Account; and provided further that if a Waiver Event
shall have occurred, then such application shall be modified as provided in Article IV,
and (C) with respect to the Class A-4 Controlled Amortization Period,
deposit into the Series 2004-1 Collection Account an amount equal to the Series 2004-1
Principal Allocation for such day, which amount shall be used to make principal
payments in respect of the Class A-4 Notes; provided, however, that if the Monthly Total Principal
Allocation for the current Related Period exceeds the Class A-4 Controlled
Distribution Amount, then the amount of such excess shall be deposited into the
Series 2004-1 Excess Collection Account; and provided further that
if a Waiver Event shall have occurred, then such application shall be modified
as provided in Article IV.

 

(c)  Allocations of
Collections During the Series 2004-1 Rapid Amortization Period. During
the Series 2004-1 Rapid Amortization Period, the Administrator will direct
the Trustee in writing pursuant to the Administration Agreement, prior to 1:00 p.m.
(New York City time) on any Series 2004-1 Deposit Date, to apply all
amounts deposited into the Collection Account as set forth below:

 

(i) deposit into the Series 2004-1
Collection Account an amount determined as set forth in Section 2.02(a)(i) above
for such day, which amount shall be thereafter deposited into the Series 2004-1
Accrued Interest Account; and

 

42

 

(ii) deposit into the Series 2004-1
Collection Account an amount equal to the Series 2004-1 Principal
Allocation for such day, which amount shall be used to make principal payments
(I) on a pro rata basis in respect of the Series 2004-1 Notes until the Series 2004-1
Notes have been paid in full; and (II) once the Series 2004-1 Notes
have been paid in full, to Ford, all unpaid Ford Reimbursement Obligations
until Ford has been paid in full, provided that if on any Determination Date (A) the
Administrator determines that the amount anticipated to be available from
Interest Collections allocable to the Series 2004-1 Notes, any amounts
payable to the Trustee in respect of any Series 2004-1 Interest Rate
Hedges and other amounts available pursuant to Section 2.03 of this Series Supplement
to pay Series 2004-1 Adjusted Monthly Interest on the next succeeding
Payment Date will be less than the sum of the Series 2004-1 Adjusted
Monthly Interest and any Fixed Rate Payments for such Payment Date and (B) the
Series 2004-1 Enhancement Amount is greater than zero, then the
Administrator shall direct the Trustee in writing to withdraw from the Series 2004-1
Collection Account a portion of the Principal Collections allocated to the Series 2004-1
Notes during the Related Month equal to the lesser of such insufficiency and
the Series 2004-1 Enhancement Amount and deposit such amount into the Series 2004-1
Accrued Interest Account to be treated as Interest Collections on such Payment
Date.

 

(d)  Past Due Rental
Payments. Notwithstanding the foregoing, if, after the occurrence of a Series 2004-1
Lease Payment Deficit, the Lessee shall make a payment of Rent or other amount
payable by the Lessee under the HVF Lease on or prior to the fifth Business Day
after the occurrence of such Series 2004-1 Lease Payment Deficit (a “Past
Due Rent Payment”), the Administrator shall direct the Trustee in writing
pursuant to the Administration Agreement to deposit into the Series 2004-1
Collection Account an amount equal to the Series 2004-1 Invested
Percentage as of the date of the occurrence of such Series 2004-1 Lease
Payment Deficit of the Collections attributable to such Past Due Rent Payment
(the “Series 2004-1 Past Due Rent Payment”). The Administrator
shall instruct the Trustee in writing pursuant to the Administration Agreement
to withdraw from the Series 2004-1 Collection Account and apply the Series 2004-1
Past Due Rent Payment in the following order:

 

(i) if the occurrence of the related Series 2004-1
Lease Payment Deficit resulted in a demand for payment being made under the
Insurance Policy, pay to the Insurer an amount equal to the lesser of (x) the unreimbursed
amount of the payment made by the Insurer under the Insurance Policy in respect
of such demand and (y) the amount of the Series 2004-1 Past Due Rent
Payment;

 

(ii) if the occurrence of the related Series 2004-1
Lease Payment Deficit resulted in one or more LOC Credit Disbursements being
made under the Series 2004-1 Ford Letters of Credit, pay to Ford an amount
equal to the lesser of (x) the unreimbursed amount of such LOC Credit
Disbursement and (y) the amount of the Series 2004-1 Past Due Rent
Payment remaining after any payment pursuant to clause (i) above;

 

43

 

(iii) if the occurrence of such Series 2004-1
Lease Payment Deficit resulted in a withdrawal being made from the Series 2004-1
Ford Cash Collateral Account, deposit in the Series 2004-1 Ford Cash
Collateral Account an amount equal to the lesser of (x) the amount of the Series 2004-1
Past Due Rent Payment remaining after any payments pursuant to clauses (i) and
(ii) above and (y) the amount withdrawn from the Series 2004-1
Ford Cash Collateral Account on account of such Series 2004-1 Lease
Payment Deficit;

 

(iv) if the occurrence of the related Series 2004-1
Lease Payment Deficit resulted in one or more LOC Credit Disbursements being
made under the Series 2004-1 Non-Ford Letters of Credit, pay to each Series 2004-1
Non-Ford Letter of Credit Provider who made such a LOC Credit Disbursement for
application in accordance with the provisions of the applicable Letter of
Credit Reimbursement Agreement an amount equal to the lesser of (x) the
unreimbursed amount of such Series 2004-1 Non-Ford Letter of Credit
Provider’s LOC Credit Disbursement and (y) such Series 2004-1 Non-Ford
Letter of Credit Provider’s pro rata share, calculated on the basis of the
unreimbursed amount of each such Series 2004-1 Non-Ford Letter of Credit
Provider’s LOC Credit Disbursement, of the amount of the Series 2004-1
Past Due Rent Payment remaining after any payment pursuant to clauses (i) through
(iii) above;

 

(v) if the occurrence of such Series 2004-1
Lease Payment Deficit resulted in a withdrawal being made from the Series 2004-1
Non-Ford Cash Collateral Account, deposit in the Series 2004-1 Non-Ford
Cash Collateral Account an amount equal to the lesser of (x) the amount of the Series 2004-1
Past Due Rent Payment remaining after any payments pursuant to clauses (i) through
(iv) above and (y) the amount withdrawn from the Series 2004-1
Non-Ford Cash Collateral Account on account of such Series 2004-1 Lease
Payment Deficit;

 

(vi) if the occurrence of such Series 2004-1
Lease Payment Deficit resulted in a withdrawal being made from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) of this Series Supplement,
deposit in the Series 2004-1 Reserve Account an amount equal to the lesser
of (x) the amount of the Series 2004-1 Past Due Rent Payment remaining
after any payments pursuant to clauses (i) through (v) above
and (y) the excess, if any, of the Series 2004-1 Required Reserve Account
Amount over the Series 2004-1 Available Reserve Account Amount on such
day;

 

(vii) deposit into the Series 2004-1
Accrued Interest Account the amount, if any, by which the Series 2004-1
Lease Interest Payment Deficit, if any, relating to such Series 2004-1
Lease Payment Deficit exceeds the amount of the Series 2004-1 Past Due
Rent Payment applied pursuant to clauses (i) through (vi) above; and

 

44

 

(viii) deposit into the Series 2004-1
Excess Collection Account and treat as Principal Collections the remaining
amount of the Series 2004-1 Past Due Rent Payment.

 

(e)  Amounts
Allocated from Other Series. Amounts allocated to other Series of
Notes that have been reallocated by HVF to the Series 2004-1 Notes (i) during
the Series 2004-1 Revolving Period shall be deposited into the Series 2004-1
Excess Collection Account and applied in accordance with Section 2.02(f) of
this Series Supplement and (ii) during the Series 2004-1
Controlled Amortization Period or the Series 2004-1 Rapid Amortization
Period shall be deposited into the Series 2004-1 Collection Account and
applied in accordance with Section 2.02(b) or 2.02(c), as the case may be,
of this Series Supplement to make principal payments in respect of the Series 2004-1
Notes and after the Series 2004-1 Notes have been paid in full, to pay
Ford all unpaid Ford Reimbursement Obligations.

 

(f)  Series 2004-1
Excess Collection Account. Amounts deposited into the Series 2004-1
Excess Collection Account on any Series 2004-1 Deposit Date will be (i) first,
withdrawn and deposited in the Series 2004-1 Reserve Account in an amount
up to the excess, if any, of the Series 2004-1 Required Reserve Account
Amount for such date over the Series 2004-1 Available Reserve Account
Amount for such date, (ii) second, used to pay the principal amount
of other Series of Notes that are then required to be paid or, at the
option of HVF, to pay the principal amount of other Series of Notes that may be
paid under the Indenture, in each case, only to the extent that no Aggregate
Asset Amount Deficiency, Series 2004-1 Enhancement Deficiency or other
Amortization Event with respect to the Series 2004-1 Notes would result
therefrom or exist immediately thereafter, (iii) third, used to pay
Ford all unpaid Ford Reimbursement Obligations, and (iv) fourth,
any remaining funds may be released to HVF, in the cases of clauses (ii) through
(iv), only to the extent that no Aggregate Asset Amount Deficiency, Series 2004-1
Enhancement Deficiency or other Amortization Event with respect to the Series 2004-1
Notes would result therefrom or exist immediately thereafter and in the case of
clause (iv), only for so long as the Ford LOC Exposure Amount is greater than
zero, solely to the extent that after giving effect to such payment or release
or immediately after such payment or release, the Fleet Equity Condition would
be satisfied. Notwithstanding the foregoing, on the earlier of the first day of
the Series 2004-1 Controlled Amortization Period and the Series 2004-1
Rapid Amortization Period, all funds on deposit in the Series 2004-1
Excess Collection Account will be withdrawn from the Series 2004-1 Excess
Collection Account and deposited into the Series 2004-1 Collection Account
and applied in accordance with Section 2.02(b)(ii) or 2.02(c)(ii), as
the case may be, of this Series Supplement.

 

SECTION 2.03. Application
of Interest Collections. On the fourth Business Day prior to each Payment
Date, as provided below, the Administrator shall instruct the Trustee in
writing pursuant to the Administration Agreement to withdraw, and on such
Payment Date the Trustee, acting in accordance with such instructions, shall
withdraw the amounts required to be withdrawn from the Series 2004-1
Accrued Interest Account pursuant to Section 2.03(b) below in respect
of all funds available from any

 

45

 

Series 2004-1 Interest Rate Hedges and
Interest Collections processed since the preceding Payment Date and allocated
to the holders of the Series 2004-1 Notes.

 

(a)  Appointment of
Calculation Agent. BNY MTC is hereby appointed Calculation Agent for the
purpose of determining the Class A-1 Note Rate for each Series 2004-1
Interest Period. On each LIBOR Determination Date, the Calculation Agent shall
determine the Class A-1 Note Rate for the next succeeding Series 2004-1
Interest Period and deliver notice of the Class A-1 Note Rate to the
Trustee and the Administrator.

 

(b)  Note Interest
with respect to the Series 2004-1 Notes. On the fourth Business Day
prior to each Payment Date, the Administrator shall instruct the Trustee in
writing pursuant to the Administration Agreement as to the amount to be
withdrawn from the Series 2004-1 Accrued Interest Account to the extent
funds are anticipated to be available from Interest Collections allocable to
the Series 2004-1 Notes processed from but not including the preceding
Payment Date through the succeeding Payment Date and any amounts payable to HVF
under any Series 2004-1 Interest Rate Hedge during that period in respect
of (w) first, an amount equal to the Series 2004-1 Monthly Interest
for the Series 2004-1 Interest Period ending on the day preceding such
succeeding Payment Date, (x) second, an amount equal to the Fixed Rate
Payments, if any, for the next succeeding Payment Date, (y) third, an
amount equal to the amount of any unpaid Deficiency Amounts, as of the
preceding Payment Date (together with any accrued interest on such Deficiency
Amounts) and (z) fourth, an amount equal to the Insurer Fee for such Series 2004-1
Interest Period plus any Insurer Reimbursement Amounts then due and owing. On
or before 10:00 a.m. (New York City time) on the following Payment Date,
the Trustee shall withdraw the amounts described in the first sentence of this Section 2.03(b) from
the Series 2004-1 Accrued Interest Account and deposit such amounts into
the Series 2004-1 Distribution Account.

 

(c)  Lease Payment
Deficit Notice. On or before 10:00 a.m. (New York City time) on each
Payment Date, the Administrator shall notify the Trustee of the amount of any Series 2004-1
Lease Payment Deficit, such notification to be in the form of Exhibit C
to this Series Supplement (each a “Lease Payment Deficit Notice”).

 

(d)  Withdrawals
from the Series 2004-1 Reserve Account. If the Administrator
determines on any Payment Date that the amounts available from the Series 2004-1
Accrued Interest Account are insufficient to pay the sum of the amounts
described in clauses (w), (x), (y) and (z) of Section 2.03(b) of this
Series Supplement on such Payment Date, the Administrator shall instruct
the Trustee in writing to withdraw from the Series 2004-1 Reserve Account
and deposit in the Series 2004-1 Distribution Account on such Payment Date
an amount equal to the lesser of the Series 2004-1 Available Reserve
Account Amount and such insufficiency. The Trustee shall withdraw such amount
from the Series 2004-1 Reserve Account and deposit such amount in the Series 2004-1
Distribution Account. During the continuance of an Insurer Default, no amounts
in respect of the Insurer Fee shall be withdrawn from the Series 2004-1
Reserve Account.

 

46

 

(e)  Draws on Series 2004-1
Letters of Credit. (X) If the Administrator determines on any Payment Date
that there exists a Series 2004-1 Lease Interest Payment Deficit, the
Administrator shall instruct the Trustee in writing to draw on the Series 2004-1
Non-Ford Letters of Credit, if any, and, upon receipt of such notice by the
Trustee on or prior to 10:30 a.m. (New York City time) on such Payment Date,
the Trustee shall, by 12:00 p.m. (New York City time) on such Payment Date
draw an amount, as set forth in such notice, equal to the least of (i) such
Series 2004-1 Lease Interest Payment Deficit, (ii) the excess, if
any, of the sum of the amounts described in clauses (w), (x), (y) and (z) of Section 2.03(b) above
on such Payment Date over the amounts available from the Series 2004-1
Accrued Interest Account plus the amount withdrawn from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) of this Series Supplement
on such Payment Date and (iii) the Series 2004-1 Non-Ford Letter of
Credit Liquidity Amount on the Series 2004-1 Non-Ford Letters of Credit by
presenting to each Series 2004-1 Non-Ford Letter of Credit Provider a
draft accompanied by a Certificate of Credit Demand and shall cause the LOC
Credit Disbursements to be deposited in the Series 2004-1 Distribution
Account on such Payment Date; provided, however that if the Series 2004-1
Non-Ford Cash Collateral Account has been established and funded, the Trustee
shall withdraw from the Series 2004-1 Non-Ford Cash Collateral Account and
deposit in the Series 2004-1 Distribution Account an amount equal to the
lesser of (x) the Series 2004-1 Non-Ford Cash Collateral Percentage on
such Payment Date of the least of the amounts described in clauses (i), (ii) or
(iii) above and (y) the Series 2004-1 Available Non-Ford Cash
Collateral Account Amount on such Payment Date and draw an amount equal to the
remainder of such amount on the Series 2004-1 Non-Ford Letters of Credit. During
the continuance of an Insurer Default, no amounts in respect of the Insurer Fee
shall be drawn on the Series 2004-1 Non-Ford Letters of Credit or
withdrawn from the Series 2004-1 Non-Ford Cash Collateral Account.

 

(Y) If the Administrator determines on any Payment
Date that the sum of the amounts described in clauses (w), (x), (y) and (z) of Section 2.03(b) of
this Series Supplement on such Payment Date exceeds the sum of the amounts
available from the Series 2004-1 Accrued Interest Account, the amount
withdrawn from the Series 2004-1 Reserve Account pursuant to Section 2.03(d) of
this Series Supplement plus the amounts to be drawn on the Series 2004-1
Non-Ford Letters of Credit (and/or withdrawn from the Series 2004-1 Non-Ford
Cash Collateral Account) pursuant to clause (X) above on such Payment
Date, the Administrator shall instruct the Trustee in writing to draw on the Series 2004-1
Ford Letters of Credit, if any, and, upon receipt of such notice by the Trustee
on or prior to 10:30 a.m. (New York City time) on such Payment Date, the
Trustee shall, by 12:00 p.m. (New York City time) on such Payment Date
draw an amount, as set forth in such notice, equal to the lesser of (i) the
excess, if any, of the sum of the amounts described in clauses (w), (x), (y)
and (z) of Section 2.03(b) of this Series Supplement on
such Payment Date over the amounts available from the Series 2004-1
Accrued Interest Account plus the amount withdrawn from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) of this Series Supplement
on such Payment Date plus the amounts to be drawn on the Series 2004-1
Non-Ford Letters of Credit (and/or withdrawn from the Series 2004-1
Non-Ford Cash Collateral Account) pursuant to clause (X) above on such
Payment Date and (ii) the Series 2004-1 Ford Letter of Credit

 

47

 

Liquidity
Amount on the Series 2004-1 Ford Letters of Credit by presenting to each Series 2004-1
Ford Letter of Credit Provider a draft accompanied by a Certificate of Credit
Demand and shall cause the LOC Credit Disbursements to be deposited in the Series 2004-1
Distribution Account on such Payment Date; provided, however that
if the Series 2004-1 Ford Cash Collateral Account has been established and
funded, the Trustee shall withdraw from the Series 2004-1 Ford Cash
Collateral Account and deposit in the Series 2004-1 Distribution Account
an amount equal to the lesser of (x) the Series 2004-1 Ford Cash
Collateral Percentage on such Payment Date of the lesser of the amounts
described in clauses (i) and (ii) above and (y) the Series 2004-1
Available Ford Cash Collateral Account Amount on such Payment Date and draw an
amount equal to the remainder of such amount on the Series 2004-1 Ford
Letters of Credit. During the continuance of an Insurer Default, no amounts in
respect of the Insurer Fee shall be drawn on the Series 2004-1 Ford
Letters of Credit or withdrawn from the Series 2004-1 Ford Cash Collateral
Account.

 

(f)  Insurance
Policy. If the Administrator determines on any Payment Date that the sum of
the amounts available from the Series 2004-1 Accrued Interest Account plus
the amount, if any, to be withdrawn from the Series 2004-1 Reserve Account
pursuant to Section 2.03(d) of this Series Supplement plus the
amount, if any, to be drawn under the Series 2004-1 Letters of Credit
and/or withdrawn from the Series 2004-1 Cash Collateral Account pursuant
to Section 2.03(e) of this Series Supplement is insufficient to
pay the Series 2004-1 Adjusted Monthly Interest for such Payment Date, the
Administrator shall instruct the Trustee in writing to make a demand on the
Insurance Policy and, upon receipt of such notice by the Trustee on or prior to
11:00 a.m. (New York City time) on such Payment Date, the Trustee shall,
by 12:00 noon (New York City time) on such Payment Date, make a demand on the
Insurance Policy in an amount equal to such insufficiency in accordance with
the terms thereof and shall cause the proceeds thereof to be deposited in the Series 2004-1
Distribution Account.

 

(g)  Deficiency
Amounts. If the amounts described in Sections 2.03(b), (c), (d),  (e) and (f) of this Series Supplement
are insufficient to pay the Series 2004-1 Adjusted Monthly Interest for
any Payment Date, payments of interest to the Series 2004-1 Noteholders
will be reduced on a pro rata basis by the amount of such deficiency. The
aggregate amount, if any, of such deficiency on any Payment Date allocable to
the Class A-1 Notes shall be referred to as the “Class A-1
Deficiency Amount”, the aggregate amount, if any, of such deficiency on any
Payment Date allocable to the Class A-2 Notes shall be referred to as the “Class A-2
Deficiency Amount”, the aggregate amount, if any, of such deficiency on any
Payment Date allocable to the Class A-3 Notes shall be referred to as the “Class A-3
Deficiency Amount” and the aggregate amount, if any, of such deficiency on
any Payment Date allocable to the Class A-4 Notes shall be referred to as
the “Class A-4 Deficiency Amount”. Interest shall accrue on the
Deficiency Amount for each Class of Series 2004-1 Notes at the
applicable Series 2004-1 Note Rate.

 

(h)  Balance. On
the fourth Business Day prior to each Payment Date, the Administrator shall
instruct the Trustee in writing pursuant to the Administration

 

48

 

Agreement to pay, on such Payment Date, the
balance (after making the payments required in Section 2.04 of this Series Supplement),
if any, of the amounts available from the Series 2004-1 Accrued Interest
Account plus the amount, if any, withdrawn from the Series 2004-1 Reserve
Account pursuant to Section 2.03(d) of this Series Supplement
plus the amount, if any, drawn under the Series 2004-1 Letters of Credit
and/or withdrawn from the Series 2004-1 Cash Collateral Account pursuant
to Section 2.03(e) of this Series Supplement as follows:

 

(i) first, to any Interest Rate Hedge
Provider, in an amount equal to the portion, if any, of the Fixed Rate Payments
for such Payment Date payable to such Interest Rate Hedge Provider;

 

(ii) second, to the Insurer, in an
amount equal to the sum of (x) the Insurer Fee for the Series 2004-1
Interest Period ending on the day preceding such Payment Date and (y) any
other Insurer Reimbursement Amounts then due and payable to the Insurer
(excluding therefrom any amounts included in Series 2004-1 Monthly
Interest for such Series 2004-1 Interest Period); provided that during the continuance of an Insurer Default, no
amounts in respect of the Insurer Fee shall be paid with the proceeds of a draw
on a Series 2004-1 Letter of Credit or a withdrawal from a Series 2004-1
Cash Collateral Account;

 

(iii) third, to the Administrator, in an
amount equal to the Series 2004-1 Percentage as of the beginning of the Series 2004-1
Interest Period ending on the day preceding such Payment Date of the Monthly
Administration Fee for such Series 2004-1 Interest Period;

 

(iv) fourth, to the Trustee, in an
amount equal to the Series 2004-1 Percentage as of the beginning of the Series 2004-1
Interest Period ending on the day preceding such Payment Date of the Trustee’s
fees for such Series 2004-1 Interest Period;

 

(v) fifth, to pay any Indenture Carrying
Charges (other than Indenture Carrying Charges provided for above) to the
Persons to whom such amounts are owed, in an amount equal to the Series 2004-1
Percentage as of the beginning of the Series 2004-1 Interest Period ending
on the day preceding such Payment Date of such Indenture Carrying Charges
(other than Indenture Carrying Charges provided for above) for such Series 2004-1
Interest Period; and

 

(vi) sixth, the balance, if any, shall
be withdrawn from the Series 2004-1 Accrued Interest Account by the
Trustee and (A) during the Series 2004-1 Revolving Period, deposited
into the Series 2004-1 Excess Collection Account or (B) during the Series 2004-1
Controlled Amortization Period or the Series 2004-1 Rapid Amortization
Period, (I) so long as the Series 2004-1 Principal Amount is greater
than the Monthly Total Principal Allocation for the Related Month, deposited
into the Series 2004-1 Collection Account and treated as Principal
Collections and (II) if the Series 2004-1 Principal Amount is zero or
less than the Monthly Total Principal Allocation for the Related Month, paid to
any Interest

 

49

 

Rate
Hedge Provider in respect of any amounts owing pursuant to its Series 2004-1
Interest Rate Hedge, other than any Fixed Rate Payment.

 

(i)  Trustee Fees.
If, on any Payment Date after the occurrence and during the continuance of a
Liquidation Event of Default or a Series 2004-1 Limited Liquidation Event
of Default, (x) the funds available to pay the Trustee fees pursuant to Section 2.03(h)(iv) of
this Series Supplement on such Payment Date are less than the amount
payable to the Trustee thereunder on such Payment Date or (y) the funds
available to pay the portion of the Indenture Carrying Charges payable to the
Trustee pursuant to Section 2.03(h)(v) of this Series Supplement
on such Payment Date are less than the amount payable to the Trustee thereunder
on such Payment Date, the Administrator shall instruct the Trustee in writing
to withdraw from the Series 2004-1 Reserve Account and pay to itself on
such Payment Date an amount equal to the least of (A) the Series 2004-1
Available Reserve Account Amount on such Payment Date (after giving effect to
all other withdrawals therefrom pursuant to this Series Supplement on such
Payment Date), (B) an amount equal to the excess, if any, of (i) 1.1%
of the Series 2004-1 Required Asset Amount as of the date of the
occurrence of such Liquidation Event of Default or Series 2004-1 Limited
Liquidation Event of Default over (ii) the aggregate of the amounts
previously withdrawn from the Series 2004-1 Reserve Account under this Sections
2.03(i) in respect of fees and other amounts due and owing to the Trustee
and (C) such insufficiency. The Trustee shall withdraw such amount from
the Series 2004-1 Reserve Account and pay or reimburse itself.

 

(j)  Listing Information Requirement. Until
the Administrator shall give the Trustee written notice that the Class A-1
Notes are not listed on the Luxembourg Stock Exchange, the Trustee shall, or
shall instruct the Paying Agent to, cause the Class A-1 Note Rate for the
next succeeding Series 2004-1 Interest Period, the number of days in such Series 2004-1
Interest Period, the Payment Date for such Series 2004-1 Interest Period
and the amount of interest payable on the Class A-1 Notes on such Payment
Date to be (A) communicated to DTC, the Paying Agent in Luxembourg and the
Luxembourg Stock Exchange no later than 11:00 a.m. (London time) on the
Business Day immediately following each LIBOR Determination Date and (B) notify
the Luxembourg Stock Exchange if, based solely on the information contained in
the Monthly Noteholders’ Statement, the amount of interest to be paid on the Class A-1
Notes on any Payment Date is less than the amount payable thereon on such
Payment Date, the amount of such deficit and the amount of interest that will
accrue on such deficit during the next succeeding Series 2004-1 Interest
Period by the Business Day prior to such Payment Date. So long as the Class A-1
Notes are listed on the Luxembourg Stock Exchange and the rules of that
stock exchange so require, notices to Class A-1 Noteholders will be
published in a leading newspaper having general circulation in Luxembourg
(which is expected to be the Luxemburger
Wort), it being understood that the term “notices” as it is used
in this clause shall not include communications of the Class A-1 Note Rate.
Upon HVF’s request, and at HVF’s expense, the Trustee shall cause the Paying
Agent in Luxembourg to publish such notice.

 

50

 

SECTION 2.04. Payment
of Note Interest. On each Payment Date, the Trustee shall, in accordance
with Section 6.01 of the Base Indenture, pay to the Series 2004-1
Noteholders from the Series 2004-1 Distribution Account the amount
deposited in the Series 2004-1 Distribution Account for the payment of
interest pursuant to Section 2.03 of this Series Supplement.

 

SECTION 2.05. Payment
of Note Principal. (a)  Monthly Payments During Series 2004-1
Controlled Amortization Period or Series 2004-1 Rapid Amortization Period.
Commencing on the second Determination Date during the Three-Year Notes
Controlled Amortization Period or the first Determination Date after the
commencement of the Series 2004-1 Rapid Amortization Period and on each
Determination Date thereafter, the Administrator shall instruct the Trustee in
writing pursuant to the Administration Agreement as to (i) the amount
allocated to the Series 2004-1 Notes during the Related Month pursuant to Section 2.02(b)(ii) or
(c)(ii) of this Series Supplement, as the case may be, (ii) any
amounts to be withdrawn from the Series 2004-1 Reserve Account and
deposited into the Series 2004-1 Distribution Account, (iii) any
amounts to be drawn on the Series 2004-1 Letters of Credit (or withdrawn
from the Series 2004-1 Cash Collateral Account), (iv) the amount of
proceeds received in respect of a demand made under the Series 2004-1
Demand Note and (v) the amount of any demand on the Insurance Policy in
accordance with the terms thereof. On the Payment Date following each such
Determination Date, the Trustee shall withdraw the amount allocated to the Series 2004-1
Notes of each Class during the Related Month pursuant to Section 2.02(b)(ii) or
(c)(ii) of this Series Supplement, as the case may be, from the Series 2004-1
Collection Account and deposit such amount, together with the proceeds of any
demand on the Series 2004-1 Demand Note received during the period from
and excluding the immediately preceding Payment Date to and including such
Payment Date into the Series 2004-1 Distribution Account which amount
shall be paid (x) first, to the Series 2004-1 Noteholders holding
such Class of Series 2004-1 Notes and (y) second, once
the Series 2004-1 Notes have been paid in full, to Ford all unpaid Ford
Reimbursement Obligations; provided, however, that with respect to the Three-Year
Notes Legal Final Payment Date and the Class A-3 Legal Final Payment Date,
the Trustee shall withdraw from the Series 2004-1 Collection Account an
amount which is no greater than the sum of the Class A-1 Principal Amount
and the Class A-2 Principal Amount, or Class A-3 Principal Amount, as
the case may be, as of the end of the day on the immediately preceding
day.

 

(b)  Principal
Deficit Amount. If the Principal Deficit Amount is greater than zero on any
date, the Administrator shall promptly provide written notice thereof to the
Insurer and the Trustee. On each Payment Date on which the Principal Deficit
Amount is greater than zero, amounts shall be transferred to the Series 2004-1
Distribution Account as follows:

 

(i) Reserve Account Withdrawal. On each
Payment Date on which the Principal Deficit Amount is greater than zero, the
Administrator shall instruct the Trustee in writing prior to 12:00 noon (New
York City time) on such Payment Date, in the case of a Principal Deficit Amount
resulting from a Series 2004-1

 

51

 

Lease
Payment Deficit, or prior to 12:00 noon (New York City time) on the second
Business Day prior to such Payment Date, in the case of any other Principal
Deficit Amount, to withdraw from the Series 2004-1 Reserve Account, an
amount equal to the lesser of (x) the Series 2004-1 Available Reserve
Account Amount (after giving effect to any withdrawals from the Series 2004-1
Reserve Account on such Payment Date pursuant to Section 2.03(d) of
this Series Supplement) and (y) such Principal Deficit Amount on such
Payment Date and deposit it in the Series 2004-1 Distribution Account on
such Payment Date.

 

(ii) Principal Draws on Series 2004-1
Letters of Credit. If the Administrator determines on any Payment Date,
that the Principal Deficit Amount on such Payment Date, after giving effect to
the distribution of amounts to be deposited in the Series 2004-1
Distribution Account in accordance with clause (i) of Section 2.05(b) on
such Payment Date, will be greater than zero (A) in the case of a Payment
Date that is not a Legal Final Payment Date, the Administrator shall instruct
the Trustee in writing to draw on:

 

(X) the Series 2004-1 Non-Ford Letters of
Credit, if any, to the extent that on such Payment Date there exists a Series 2004-1
Lease Principal Payment Deficit, in an amount equal to the lesser of:

 

(1) the Series 2004-1 Lease Principal Payment Deficit;

 

(2) the amount by which the Principal Deficit Amount on such
Payment Date exceeds the sum of the amount to be deposited in the Series 2004-1
Distribution Account in accordance with clause (i) of this Section 2.05(b) and
the amount, if any, paid under the Series 2004-1 Demand Note in respect of
such Principal Deficit Amount on such Payment Date; and

 

(3) the Series 2004-1 Non-Ford Letter of Credit Liquidity
Amount (after giving effect to any drawings on the Series 2004-1 Non-Ford
Letters of Credit on such Payment Date pursuant to Section 2.03(e)(X) of
this Series Supplement);

 

(Y) the Series 2004-1 Ford Letters of Credit,
if any, in an amount equal to the lesser of:

 

(1) the amount by which the Principal Deficit
Amount on such Payment Date exceeds the sum of the amount to be deposited in
the Series 2004-1 Distribution Account in accordance with Section 2.05(b)(i) of
this Series Supplement, and the amounts to be drawn on the Series 2004-1
Non-Ford Letters of Credit pursuant to clause (X) above and Section 2.12(d) of
the Series Supplement, on such Payment Date, and

 

(2) the Series 2004-1 Ford Letter of
Credit Liquidity Amount (after giving effect to any drawings on the Series 2004-1
Ford Letters of Credit on such Payment Date pursuant to Section 2.03(e)(Y)
of this Series Supplement);

 

52

 

(B) in the case of the Three-Year Notes Legal Final Payment Date:

 

(X) the Series 2004-1 Non-Ford Letters of
Credit, if any, to the extent that on the Three-Year Notes Legal Final Payment
Date there exists a Series 2004-1 Lease Principal Payment Deficit, in an
amount equal to the lesser of:

 

(1) the Series 2004-1 Lease Principal Payment Deficit;

 

(2) the amount, if any, by which the Series 2004-1 Liquidity
Amount (after giving effect to any withdrawals from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) and Section 2.5(b)(i) of
this Series Supplement and any drawings under the Series 2004-1
Letters of Credit pursuant to Section 2.03(e) of this Series Supplement
on the Three-Year Notes Legal Final Payment Date) will exceed the Series 2004-1
Required Liquidity Amount (after giving effect to all anticipated reductions in
the Series 2004-1 Principal Amount on the Three-Year Notes Legal Final
Payment Date); and

 

(3) the Series 2004-1 Non-Ford Letter of Credit Liquidity
Amount (after giving effect to any drawings on the Series 2004-1 Non-Ford
Letters of Credit on the Three-Year Notes Legal Final Payment Date pursuant to Section 2.03(e)(X)
of this Series Supplement);

 

(Y) the Series 2004-1 Ford Letters of Credit,
if any, in an amount equal to the lesser of:

 

(1) the Series 2004-1 Ford Letter of
Credit Liquidity Amount (after giving effect to any draws to be made on the Series 2004-1
Ford Letters of Credit on the Three-Year Notes Legal Final Payment Date
pursuant to Section 2.03(e)(Y) of this Series Supplement), and

 

(2) the sum of (Aa) the amount by which the
Principal Deficit Amount on the Three-Year Notes Legal Final Payment Date
exceeds the sum of the amount to be deposited in the Series 2004-1
Distribution Account in accordance with Section 2.05(b)(i) of
this Series Supplement and the amounts to be drawn on the Series 2004-1
Non-Ford Letters of Credit pursuant to clause (X) above, each on such
Three-Year Notes Legal Final Payment Date, and the amounts to be drawn on the Series 2004-1
Non-Ford Letters of Credit pursuant to Section 2.12(d) of this
Series Supplement, on the Business Day immediately preceding such
Three-Year Notes Legal Final Payment Date, and (Ab) the lesser of (x) the
amount by which the Series 2004-1 Liquidity Amount (after giving effect to
any withdrawals to be made from the Series 2004-1 Reserve Account pursuant
to Section 2.03(d) and Section 2.05(b)(i) of
this Series Supplement and any drawings to be made under the Series 2004-1
Letters of Credit pursuant to Section 2.03(e) of this Series Supplement
on the Three-Year Notes Legal Final Payment Date) will exceed the Series 2004-1
Required Liquidity Amount (after giving effect to all anticipated reductions in
the Series 2004-1 Principal Amount on the Three-Year Notes Legal Final
Payment Date) and (y) an amount equal to the excess, if any, of (a) the Series 2004-1
Required Liquidity

 

53

 

Amount
on the earlier of (i) the date of the first occurrence of a Series 2004-1
Lease Interest Payment Deficit (other than any Series 2004-1 Lease
Interest Payment Deficit resulting from a failure to pay Rent or any other
amount payable by the Lessee under the HVF Lease that is cured in full on or
prior to the fifth Business Day after the occurrence of such failure) and (ii) the
Three-Year Notes Legal Final Payment Date over (b) the aggregate amount,
as of the Three-Year Notes Legal Final Payment Date, of all withdrawals from
the Series 2004-1 Reserve Account made since the date set forth in clause
(2)(Ab)(y)(a) of this Section 2.05(b)(ii)(B)(Y) or to be
made in respect of the Three-Year Notes Legal Final Payment Date pursuant to Section 2.03(d)(i) of
this Series Supplement and all drawings made since such date or to be made
in respect of the Three-Year Notes Legal Final Payment Date under the Series 2004-1
Letters of Credit pursuant to Section 2.03(e) of this Series Supplement;
provided, however, that any such withdrawals from the Series 2004-1
Reserve Account and/or drawings made under the Series 2004-1 Letters of
Credit on account of a Series 2004-1 Lease Interest Payment Deficit
resulting from a failure to pay Rent or other amount payable by the Lessee
under the HVF Lease that is cured in full on or prior to the fifth Business Day
after the occurrence of such failure shall be excluded from this clause (b);

 

(C) in the case of the Class A-3 Legal Final Payment Date:

 

(X)
the Series 2004-1 Non-Ford Letters of Credit, if any, to the extent that
on the Class A-3 Notes Legal Final Payment Date there exists a Series 2004-1
Lease Principal Payment Deficit in an amount equal to the least of:

 

(1) the Series 2004-1 Lease Principal Payment Deficit;

 

(2) the amount, if any, by which the Series 2004-1 Liquidity
Amount (after giving effect to any withdrawals from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) and Section 2.05(b)(i) of
this Series Supplement and any drawings under the Series 2004-1
Letters of Credit pursuant to Section 2.03(e) of this Series Supplement
on the Class A-3 Legal Final Payment Date) will exceed the Series 2004-1
Required Liquidity Amount (after giving effect to all anticipated reductions in
the Series 2004-1 Principal Amount on the Class A-3 Legal Final
Payment Date); and

 

(3) the Series 2004-1 Non-Ford Letter of Credit Liquidity
Amount (after giving effect to any drawings on the Series 2004-1 Non-Ford
Letters of Credit on the Class A-3 Legal Final Payment Date pursuant to Section 2.03(e)(X)
of this Series Supplement);

 

(Y)
the Series 2004-1 Ford Letters of Credit, if any, in an amount equal to
the lesser of:

 

(1) the Series 2004-1 Ford Letter of Credit Liquidity Amount
(after giving effect to any draws to be made on the Series 2004-1 Ford
Letters of

 

54

 

Credit
on the Class A-3 Legal Final Payment Date pursuant to Section 2.03(e)(Y)
of this Series Supplement); and

 

(2) the sum of (Aa) the amount by which the Principal Deficit
Amount on the Class A-3 Legal Final Payment Date exceeds the sum of the
amount to be deposited in the Series 2004-1 Distribution Account in
accordance with Section 2.05(b)(i) of this Series Supplement
and the amounts to be drawn on the Series 2004-1 Non-Ford Letters of
Credit pursuant to clause (X) above, each on such Class A-3 Legal
Final Payment Date, and the amounts to be drawn on the Series 2004-1
Non-Ford Letters of Credit pursuant to Section 2.12(d) of this
Series Supplement, on the Business Day immediately preceding such Class A-3
Legal Final Payment Date, and (Ab) the lesser of (x) the amount by which the Series 2004-1
Liquidity Amount (after giving effect to any withdrawals to be made from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) and Section 2.05(b)(i) of
this Series Supplement and any drawings to be made under the Series 2004-1
Letters of Credit pursuant to Section 2.03(e) of this Series Supplement
on the Class A-3 Legal Final Payment Date) will exceed the Series 2004-1
Required Liquidity Amount (after giving effect to all anticipated reductions in
the Series 2004-1 Principal Amount on the Class A-3 Legal Final
Payment Date) and (y) an amount equal to the excess, if any, of (a) the Series 2004-1
Required Liquidity Amount on the earlier of (i) the date of the first
occurrence of a Series 2004-1 Lease Interest Payment Deficit (other than
any Series 2004-1 Lease Interest Payment Deficit resulting from a failure
to pay Rent or any other amount payable by the Lessee under the HVF Lease that
is cured in full on or prior to the fifth Business Day after the occurrence of
such failure) and (ii) the Class A-3 Legal Final Payment Date over (b) the
aggregate amount, as of the Class A-3 Legal Final Payment Date, of all
withdrawals from the Series 2004-1 Reserve Account made since the date set
forth in clause (2)(Ab)(y)(a) of this Section 2.05(b)(ii)(C)(Y)
or to be made in respect of the Class A-3 Legal Final Payment Date
pursuant to Section 2.03(d)(i) of this Series Supplement
and all drawings made since such date or to be made in respect of the Class A-3
Legal Final Payment Date under the Series 2004-1 Letters of Credit
pursuant to Section 2.03(e) of this Series Supplement; provided,
however, that any such withdrawals from the Series 2004-1 Reserve
Account and/or drawings made under the Series 2004-1 Letters of Credit on
account of a Series 2004-1 Lease Interest Payment Deficit resulting from a
failure to pay Rent or other amount payable by the Lessee under the HVF Lease
that is cured in full on or prior to the fifth Business Day after the
occurrence of such failure shall be excluded from this clause (b);

 

(D) in the case of the Class A-4 Legal Final Payment Date:

 

55

 

(X)
the Series 2004-1 Non-Ford Letters of Credit, if any, to the extent that
on the Class A-4 Notes Legal Final Payment Date there exists a Series 2004-1
Lease Principal Payment Deficit in an amount equal to the lesser of:

 

(1) the Series 2004-1 Lease Principal Payment Deficit; and

 

(2) the Series 2004-1 Non-Ford Letter of Credit Liquidity
Amount (after giving effect to any drawings on the Series 2004-1 Non-Ford
Letters of Credit on the Class A-4 Legal Final Payment Date pursuant to Section 2.03(e)(X)
of this Series Supplement).

 

(Y) the Series 2004-1 Ford Letters of Credit,
if any, in an amount equal to the lesser of:

 

(1)          the Series 2004-1 Ford Letter of Credit
Liquidity Amount (after giving effect to any draws to be made on the Series 2004-1
Ford Letters of Credit on the Class A-4 Notes Legal Final Payment Date pursuant
to Section 2.3(e)(Y) of this Series Supplement), and

 

(2) the sum of (Aa) the amount by which the
Principal Deficit Amount on the Class A-4 Legal Final Payment Date exceeds
the sum of the amount to be deposited in the Series 2004-1 Distribution
Account in accordance with Section 2.05(b)(i) of this Series Supplement
and the amounts to be drawn on the Series 2004-1 Non-Ford Letters of
Credit pursuant to clause (X) above, each on such Class A-4 Legal
Final Payment Date, and the amounts to be drawn on the Series 2004-1
Non-Ford Letters of Credit pursuant to Section 2.12(d) of this
Series Supplement, on the Business Day immediately preceding such Class A-4
Legal Final Payment Date, and (Ab) an amount equal to the excess, if any, of
(x) the Series 2004-1 Required Liquidity Anount on the earlier of (I) the
date of the first ocurrence of a Series 2004-1 Lease Interest Payment
Deficit (other than any Series 2004-1 Lease Interest Payment Deficit
resulting from a failure to pay Rent or any other amount payable by the Lessee
under the HVF Lease that is cured in full on or prior to the fifth Business Day
after the occurrence of such failure) and (ii) the Class A-4 Legal
Final Payment Date over (y) the aggregate amount, as of the Class A-4
Legal Final Payment Date, of all withdrawals from the Series 2004-1
Reserve Account made since the date set forth in clause (2)(Ab)(x) of
this Section 2.05(b)(ii)(D)(Y) or to be made in respect of the Class A-4
Legal Final Payment Date pursuant to Section 2.03(d)(i) of
this Series Supplement and all drawings made since such date or to be made
in respect of the Class A-4 Legal Final Payment Date under the Series 2004-1
Letters of Credit pursuant to Section 2.03(e) of this Series Supplement;
provided, however, that any such withdrawals from the Series 2004-1
Reserve Account and/or drawings made under the Series 2004-1 Letters of
Credit on account of a Series 2004-1 Lease Interest Payment Deficit
resulting from a failure to pay Rent or other amount payable by the Lessee
under the HVF Lease that is cured in full on or prior to the fifth Business Day
after the occurrence of such failure shall be excluded from this clause (y);

 

56

 

Upon
receipt of a notice by the Trustee from the Administrator in respect of a
Principal Deficit Amount on or prior to 10:30 a.m. (New York City time) on
a Payment Date, the Trustee shall, by 12:00 p.m. (New York City time) on
such Payment Date draw an amount as set forth in such notice equal to the
applicable amount set forth above on:

 

(X)
the Series 2004-1 Non-Ford Letters of Credit by presenting to each Series 2004-1
Non-Ford Letter of Credit Provider a draft accompanied by a Certificate of
Credit Demand and shall cause the LOC Credit Disbursements to be deposited in
the Series 2004-1 Distribution Account on such Payment Date; provided,
however, that if the Series 2004-1 Non-Ford Cash Collateral Account
has been established and funded, the Trustee shall withdraw from the Series 2004-1
Non-Ford Cash Collateral Account and deposit in the Series 2004-1
Distribution Account an amount equal to the lesser of (x) the Series 2004-1
Non-Ford Cash Collateral Percentage on such Payment Date of the amount set
forth in the notice provided to the Trustee by the Administrator and (y) the Series 2004-1
Available Non-Ford Cash Collateral Account Amount on such Payment Date and draw
an amount equal to the remainder of such amount on the Series 2004-1
Non-Ford Letters of Credit.

 

(Y)
the Series 2004-1 Ford Letters of Credit by presenting to each Series 2004-1
Ford Letter of Credit Provider a draft accompanied by a Certificate of Credit
Demand and shall cause the LOC Credit Disbursements to be deposited in the Series 2004-1
Distribution Account on such Payment Date; provided, however, that if the Series 2004-1
Ford Cash Collateral Account has been established and funded, the Trustee shall
withdraw from the Series 2004-1 Ford Cash Collateral Account and deposit
in the Series 2004-1 Distribution Account an amount equal to the lesser of
(x) the Series 2004-1 Ford Cash Collateral Percentage on such Payment Date
of the amount set forth in the notice provided to the Trustee by the
Administrator and (y) the Series 2004-1 Available Ford Cash Collateral
Account Amount on such Payment Date and draw an amount equal to the remainder
of such amount on the Series 2004-1 Ford Letters of Credit.

 

(iii) Demand on Insurance Policy. If the
sum of the Series 2004-1 Letter of Credit Amount and the Series 2004-1
Available Reserve Account Amount on any Payment Date on which the Principal
Deficit Amount will be greater than zero will be less than such Principal
Deficit Amount, the Trustee shall make a demand on the Insurance Policy by
12:00 noon (New York City time) on the second Business Day preceding such
Payment Date in an amount equal to the Insured Principal Deficit Amount and
shall cause the proceeds thereof to be deposited in the Series 2004-1
Distribution Account.

 

(c)  Legal Final
Payment Dates. The Class A-1 Principal Amount and the Class A-2
Principal Amount shall be due and payable on the Three-Year Notes Legal Final
Payment Date. If the amount to be deposited in the Series 2004-1
Distribution Account in accordance with Section 2.05(a) of this Series Supplement
with respect to the Three-Year Notes Legal Final Payment Date together with any
amounts to be deposited therein in accordance Section 2.05(b) of this
Series Supplement on the Three-Year Notes Legal Final Payment Date is less
than the sum of the Class A-1 Outstanding Principal

 

57

 

Amount and the Class A-2 Outstanding
Principal Amount on the Three-Year Notes Legal Final Payment Date, prior to
10:00 a.m. (New York City time) on the second Business Day prior to the
Three-Year Notes Legal Final Payment Date, the Administrator shall instruct the
Trustee to withdraw from the Series 2004-1 Reserve Account, an amount
equal to the least of (i) the Series 2004-1 Available Reserve Account
Amount (after giving effect to any withdrawals from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) and Section 2.05(b)(i) of
this Series Supplement), (ii) the amount by which the Series 2004-1
Liquidity Amount (after giving effect to any withdrawals from the Series 2004-1
Reserve Account pursuant to Section 2.03(d) and Section 2.05(b)(i) of
this Series Supplement and any drawings under the Series 2004-1
Letters of Credit pursuant to Section 2.03(e) of this Series Supplement
on the Three-Year Notes Legal Final Payment Date) will exceed the Series 2004-1
Required Liquidity Amount (after giving effect to all anticipated reductions in
the Series 2004-1 Principal Amount on the Three-Year Notes Legal Final
Payment Date) and (iii) such insufficiency and deposit it in the Series 2004-1
Distribution Account on the Three-Year Notes Legal Final Payment Date. The
Trustee shall withdraw such amount from the Series 2004-1 Reserve Account
and deposit such amount in the Series 2004-1 Distribution Account on or
prior to the Three-Year Notes Legal Final Payment Date. The Class A-3
Principal Amount shall be due and payable on the Class A-3 Legal Final
Payment Date. If the amount to be deposited in the Series 2004-1
Distribution Account in accordance with Section 2.05(a) of this Series Supplement
with respect to the Class A-3 Legal Final Payment Date together with any
amounts to be deposited therein in accordance Section 2.05(b) of this
Series Supplement on the Class A-3 Legal Final Payment Date is less
than the Class A-3 Outstanding Principal Amount on the Class A-3
Legal Final Payment Date, prior to 10:00 a.m. (New York City time) on the
second Business Day prior to the Class A-3 Legal Final Payment Date, the
Administrator shall instruct the Trustee to withdraw from the Series 2004-1
Reserve Account, an amount equal to the least of (i) the Series 2004-1
Available Reserve Account Amount, (after giving effect to any withdrawals from
the Series 2004-1 Reserve Account pursuant to Section 2.03(d) and
Section 2.05(b)(i) of this Series Supplement), (ii) the
amount by which the Series 2004-1 Liquidity Amount (after giving effect to
any withdrawals from the Series 2004-1 Reserve Account pursuant to Section 2.03(d) and
Section 2.05(b)(i) of this Series Supplement and any drawings
under the Series 2004-1 Letters of Credit pursuant to Section 2.03(e) of
this Series Supplement on the Class A-3 Legal Final Payment Date)
will exceed the Series 2004-1 Required Liquidity Amount (after giving
effect to all anticipated reductions in the Series 2004-1 Principal Amount
on the Class A-3 Legal Final Payment Date) and (iii) such
insufficiency and deposit it in the Series 2004-1 Distribution Account on
the Class A-3 Legal Final Payment Date. The Trustee shall withdraw such
amount from the Series 2004-1 Reserve Account and deposit such amount in
the Series 2004-1 Distribution Account on or prior to the Class A-3
Legal Final Payment Date. The Class A-4 Principal Amount shall be due and
payable on the Class A-4 Legal Final Payment Date. If the amount to be
deposited in the Series 2004-1 Distribution Account in accordance with Section 2.05(a) of
this Series Supplement with respect to the Class A-4 Legal Final
Payment Date together with any amounts to be deposited therein in accordance Section 2.05(b) of
this Series Supplement on the Class A-4 Legal Final Payment Date is
less than the Class A-4 Outstanding Principal Amount on the Class A-4

 

58

 

Legal Final Payment Date, prior to 10:00 a.m.
(New York City time) on the second Business Day prior to the Class A-4
Legal Final Payment Date, the Administrator shall instruct the Trustee to
withdraw from the Series 2004-1 Reserve Account, an amount equal to the
lesser of the Series 2004-1 Available Reserve Account Amount (after giving
effect to any withdrawals from the Series 2004-1 Reserve Account pursuant
to Section 2.03(d) and Section 2.05(b)(i) of this Series Supplement)
and such insufficiency and deposit it in the Series 2004-1 Distribution
Account on the Class A-4 Legal Final Payment Date. The Trustee shall
withdraw such amount from the Series 2004-1 Reserve Account and deposit
such amount in the Series 2004-1 Distribution Account on or prior to the Class A-4
Legal Final Payment Date. If, after giving effect to any such deposits into the
Series 2004-1 Distribution Account, the amount to be deposited in the Series 2004-1
Distribution Account with respect to the Three-Year Notes Legal Final Payment
Date, the Class A-3 Legal Final Payment Date or the Class A-4 Legal
Final Payment Date, as the case may be, is or will be less than the sum of
the Class A-1 Outstanding Principal Amount and the Class A-2
Outstanding Principal Amount, the Class A-3 Outstanding Principal Amount
or the Class A-4 Outstanding Principal Amount, as the case may be,
the Administrator shall instruct the Trustee in writing to make a demand on the
Insurance Policy on the second Business Day preceding such Legal Final Payment
Date and, upon receipt of such notice, the Trustee shall make a demand on the
Insurance Policy on the second Business Day preceding such Legal Final Payment
Date in an amount equal to such insufficiency in accordance with the terms
thereof and shall cause the proceeds thereof to be deposited in the Series 2004-1
Distribution Account.

 

(d)  Distribution.
On each Payment Date occurring on or after the date a withdrawal is made
pursuant to Section 2.05(a) of this Series Supplement, the
Trustee shall, in accordance with Section 6.01 of the Base Indenture, pay (i) first,
to the Series 2004-1 Noteholders of each Class of Series 2004-1
Notes the amount deposited in the Series 2004-1 Distribution Account for
the payment of principal of such Class of Series 2004-1 Notes
pursuant to Section 2.05(a) of this Series Supplement and any
amounts deposited in the Series 2004-1 Distribution Account for the
payment of principal of such Class of Series 2004-1 Notes pursuant to
Section 2.05(b) of this Series Supplement and, to the extent
necessary to pay the Class A-1 Outstanding Principal Amount and the Class A-2
Outstanding Principal Amount on the Three-Year Notes Legal Final Payment Date,
the Class A-3 Outstanding Principal Amount on the Class A-3 Legal
Final Payment or the Class A-4 Outstanding Principal Amount on the Class A-4
Legal Final Payment Date, amounts deposited in the Series 2004-1
Distribution Account pursuant to Section 2.05(c) of this Series Supplement
and (ii) second, once the Series 2004-1 Notes have been paid
in full, to Ford the amounts deposited in the Series 2004-1 Distribution
Account for the payment of all unpaid Ford Reimbursement Obligations pursuant
to Section 2.05(a) of this Series Supplement.

 

SECTION 2.06. The
Administrator’s Failure to Instruct the Trustee to Make a Deposit or Payment.
If the Administrator fails to give notice or instructions to make any payment
from or deposit into the Collection Account or any Series 2004-1 Series Account
required to be given by the Administrator, at the time specified in the

 

59

 

Administration Agreement or any other Related
Document (including applicable grace periods), the Trustee shall make such
payment or deposit into or from the Collection Account or such Series 2004-1
Series Account without such notice or instruction from the Administrator,
provided that the Administrator or, in the case of any payment from a Series 2004-1
Series Account, the Insurer, upon request of the Trustee or the Insurer,
promptly provides the Trustee with all information necessary to allow the
Trustee to make such a payment or deposit. When any payment or deposit
hereunder or under any other Related Document is required to be made by the
Trustee at or prior to a specified time, the Administrator shall deliver any
applicable written instructions with respect thereto reasonably in advance of
such specified time. If the Administrator fails to give instructions to draw on
the Series 2004-1 Letters of Credit required to be given by the
Administrator, at the time specified in this Series Supplement, the
Trustee shall draw on the Series 2004-1 Letters of Credit without such
instruction from the Administrator, provided that the Administrator or the
Insurer, upon request of the Trustee or the Insurer, promptly provides the
Trustee with all information necessary to allow the Trustee to draw on the Series 2004-1
Letters of Credit.

 

SECTION 2.07. Reserve
Account. (a)  Establishment of Series 2004-1 Reserve Account. HVF
shall establish and maintain in the name of the Trustee for the benefit of the Series 2004-1
Noteholders, the Insurer and Ford an account (the “Series 2004-1
Reserve Account”), bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Series 2004-1
Noteholders, the Insurer and Ford. The Series 2004-1 Reserve Account shall
be an Eligible Deposit Account. If the Series 2004-1 Reserve Account is at
any time no longer an Eligible Deposit Account, HVF shall, within 10 Business
Days of obtaining knowledge that the Series 2004-1 Reserve Account is no
longer an Eligible Deposit Account, establish a new Series 2004-1 Reserve
Account that is an Eligible Deposit Account. If a new Series 2004-1
Reserve Account is established, HVF shall instruct the Trustee in writing to
transfer all cash and investments from the non-qualifying Series 2004-1
Reserve Account into the new Series 2004-1 Reserve Account. Initially, the
Series 2004-1 Reserve Account will be established with the Trustee.

 

(b)  Administration
of the Series 2004-1 Reserve Account. HVF may instruct (by
standing instructions or otherwise) the institution maintaining the Series 2004-1
Reserve Account to invest funds on deposit in the Series 2004-1 Reserve
Account from time to time in Permitted Investments; provided, however, that any such
investment shall mature not later than the Business Day prior to the first
Payment Date following the date on which such funds were received, unless any
Permitted Investment held in the Series 2004-1 Reserve Account is held
with the Trustee, then such investment may mature on such Payment Date so
long as such funds shall be available for withdrawal on or prior to such
Payment Date. HVF shall not direct the Trustee to dispose of (or permit the
disposal of) any Permitted Investments prior to the maturity thereof to the
extent such disposal would result in a loss of the initial purchase price of
such Permitted Investment. In the absence of written investment instructions
hereunder, funds on deposit in the Series 2004-1 Reserve Account shall remain
uninvested.

 

60

 

(c)  Earnings from Series 2004-1
Reserve Account. All interest and earnings (net of losses and investment
expenses) paid on funds on deposit in the Series 2004-1 Reserve Account
shall be deemed to be on deposit therein and available for distribution.

 

(d)  Series 2004-1
Reserve Account Constitutes Additional Collateral for Series 2004-1 Notes.
In order to secure and provide for the repayment and payment of the Note
Obligations with respect to the Series 2004-1 Notes, HVF hereby grants a
security interest in and assigns, pledges, grants, transfers and sets over to
the Trustee, for the benefit of the Series 2004-1 Noteholders, the Insurer
and Ford all of HVF’s right, title and interest in and to the following
(whether now or hereafter existing or acquired):  (i) the Series 2004-1 Reserve
Account, including any security entitlement thereto; (ii) all funds on
deposit therein from time to time; (iii) all certificates and instruments,
if any, representing or evidencing any or all of the Series 2004-1 Reserve
Account or the funds on deposit therein from time to time; (iv) all
investments made at any time and from time to time with monies in the Series 2004-1
Reserve Account, whether constituting securities, instruments, general
intangibles, investment property, financial assets or other property; (v) all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Series 2004-1 Reserve Account, the funds on deposit therein from time
to time or the investments made with such funds; and (vi) all proceeds of
any and all of the foregoing, including, without limitation, cash (the items in
the foregoing clauses (i) through (vi) are referred to, collectively,
as the “Series 2004-1 Reserve Account Collateral”).

 

(e)  Series 2004-1
Reserve Account Surplus. In the event that the Series 2004-1 Reserve
Account Surplus on any Payment Date is greater than zero, the Trustee, acting
in accordance with the written instructions of the Administrator (with a copy
to the Insurer), shall withdraw from the Series 2004-1 Reserve Account an
amount equal to the Series 2004-1 Reserve Account Surplus and (i) pay
to Ford the lesser of (x) such Series 2004-1 Reserve Account Surplus and
(y) all unpaid Ford Reimbursement Obligations and (ii) for so long as the
Ford LOC Exposure Amount is greater than zero, solely to the extent that after
giving effect to any such payment, the Fleet Equity Condition would be
satisfied, pay to HVF any portion of such Series 2004-1 Reserve Account
Surplus remaining after any required payment pursuant to clause (i) above.

 

(f)  Termination of Series 2004-1
Reserve Account. On or after the date on which the Series 2004-1 Notes
are fully paid, the Insurer has been paid all Insurer Fees and all other
Insurer Reimbursement Amounts due, and Ford has been paid all Ford
Reimbursement Obligations, the Trustee, acting in accordance with the written
instructions of the Administrator, for so long as the Ford LOC Exposure Amount
is greater than zero, solely to the extent that after giving effect to any such
withdrawal, the Fleet Equity Condition would be satisfied, shall withdraw from
the Series 2004-1 Reserve Account all amounts on deposit therein for
payment to HVF.

 

SECTION 2.08. Series 2004-1
Letters of Credit and Series 2004-1 Cash Collateral Account. (a) 
(I) Series 2004-1 Ford Cash Collateral Account Constitutes

 

61

 

Additional Collateral for Series 2004-1
Notes. In order to
secure and provide for the repayment and payment of the Note Obligations with
respect to the Series 2004-1 Notes, HVF hereby grants a security interest
in and assigns, pledges, grants, transfers and sets over to the Trustee, for
the benefit of the Series 2004-1 Noteholders, the Insurer and Ford, all of
HVF’s right, title and interest in and to the following (whether now or
hereafter existing or acquired):  (i) the
Series 2004-1 Ford Cash Collateral Account, including any security
entitlement thereto; (ii) all funds on deposit in the Series 2004-1
Ford Cash Collateral Account from time to time; (iii) all certificates and
instruments, if any, representing or evidencing any or all of the Series 2004-1
Ford Cash Collateral Account or the funds on deposit therein from time to time;
(iv) all investments made at any time and from time to time with monies in
the Series 2004-1 Ford Cash Collateral Account, whether constituting
securities, instruments, general intangibles, investment property, financial
assets or other property; (v) all interest, dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for the Series 2004-1 Ford Cash
Collateral Account, the funds on deposit therein from time to time or the
investments made with such funds; and (vi) all proceeds of any and all of
the foregoing, including, without limitation, cash (the items in the foregoing
clauses (i) through (vi) are referred to, collectively, as the “Series 2004-1
Ford Cash Collateral Account Collateral”).

 

(II)                                Series 2004-1 Non-Ford Cash Collateral
Account Constitutes Additional Collateral for Series 2004-1 Notes. In order to secure and provide for the
repayment and payment of the Note Obligations with respect to the Series 2004-1
Notes, HVF hereby grants a security interest in and assigns, pledges, grants,
transfers and sets over to the Trustee, for the benefit of the Series 2004-1
Noteholders, the Insurer and Ford, all of HVF’s right, title and interest in
and to the following (whether now or hereafter existing or acquired):  (i) the Series 2004-1 Non-Ford Cash
Collateral Account, including any security entitlement thereto; (ii) all
funds on deposit in the 2004-1 Non-Ford Cash Collateral Account from time to
time; (iii) all certificates and instruments, if any, representing or
evidencing any or all of the Series 2004-1 Non-Ford Cash Collateral
Account or the funds on deposit therein from time to time; (iv) all investments
made at any time and from time to time with monies in the Series 2004-1
Non-Ford Cash Collateral Account, whether constituting securities, instruments,
general intangibles, investment property, financial assets or other property; (v) all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
the Series 2004-1 Non-Ford Cash Collateral Account, the funds on deposit
therein from time to time or the investments made with such funds; and (vi) all
proceeds of any and all of the foregoing, including, without limitation, cash
(the items in the foregoing clauses (i) through (vi) are referred to,
collectively, as the “Series 2004-1 Non-Ford Cash Collateral Account
Collateral”).

 

(b)  Series 2004-1
Letter of Credit Expiration Date. If prior to the date which is sixteen
(16) Business Days prior to the then scheduled Series 2004-1 Letter of
Credit Expiration Date with respect to any Series 2004-1 Letter of Credit,
excluding the amount available to be drawn under such Series 2004-1 Letter
of Credit but taking into account each substitute Series 2004-1 Letter of
Credit which has been obtained from a

 

62

 

Series 2004-1 Eligible Letter of Credit
Provider, and is in full force and effect on such date, (i) the Series 2004-1
Enhancement Amount would be equal to or greater than the Series 2004-1
Required Enhancement Amount, (ii) the Series 2004-1 Liquidity Amount
would be equal to or greater than the Series 2004-1 Required Liquidity
Amount, and (iii) if the expiring Series 2004-1 Letter of Credit is a
Series 2004-1 Non-Ford Letter of Credit, the Series 2004-1 Non-Ford
Letter of Credit Liquidity Amount would be equal to or greater than the Series 2004-1
Demand Note Payment Amount, then the Administrator shall notify the Trustee and
the Insurer in writing no later than fifteen (15) Business Days prior to such Series 2004-1
Letter of Credit Expiration Date of such determination. If prior to the date
which is sixteen (16) Business Days prior to the then scheduled Series 2004-1
Letter of Credit Expiration Date with respect to any Series 2004-1 Letter
of Credit, excluding such Series 2004-1 Letter of Credit but taking into
account any substitute Series 2004-1 Letter of Credit which has been
obtained from a Series 2004-1 Eligible Letter of Credit Provider and is in
full force and effect on such date, (i) the Series 2004-1 Enhancement
Amount would be less than the Series 2004-1 Required Enhancement Amount, (ii) the
Series 2004-1 Liquidity Amount would be less than the Series 2004-1
Required Liquidity Amount or (iii) if the expiring Series 2004-1
Letter of Credit is a Series 2004-1 Non-Ford Letter of Credit, the Series 2004-1
Non-Ford Letter of Credit Liquidity Amount would be less than the Series 2004-1
Demand Note Payment Amount, then the Administrator shall notify the Trustee and
the Insurer in writing no later than fifteen (15) Business Days prior to such Series 2004-1
Letter of Credit Expiration Date of (x) the greatest of (A) the excess, if
any, of the Series 2004-1 Required Enhancement Amount over the Series 2004-1
Enhancement Amount, excluding such Series 2004-1 Letter of Credit but
taking into account any substitute Series 2004-1 Letter of Credit which
has been obtained from a Series 2004-1 Eligible Letter of Credit Provider,
and is in full force and effect on such date, (B) the excess, if any, of
the Series 2004-1 Required Liquidity Amount over the Series 2004-1
Liquidity Amount, excluding such Series 2004-1 Letter of Credit but taking
into account each substitute Series 2004-1 Letter of Credit which has been
obtained from a Series 2004-1 Eligible Letter of Credit Provider, as
applicable, and is in full force and effect on such date and (C) if the
expiring Series 2004-1 Letter of Credit is a Series 2004-1 Non-Ford
Letter of Credit, the excess, if any, of the Series 2004-1 Demand Note
Payment Amount over the Series 2004-1 Non-Ford Letter of Credit Liquidity
Amount, excluding such Series 2004-1 Non-Ford Letter of Credit but taking
into account each substitute Series 2004-1 Non-Ford Letter of Credit which
has been obtained from a Series 2004-1 Eligible Letter of Credit Provider
and is in full force and effect on such date, and (y) the amount available to
be drawn on such expiring Series 2004-1 Letter of Credit on such date. Upon
receipt of such notice by the Trustee on or prior to 10:00 a.m. (New York
City time) on any Business Day, the Trustee shall, by 1:00 p.m. (New York
City time) on such Business Day (or, in the case of any notice given to the
Trustee after 10:00 a.m. (New York City time), by 1:00 p.m. (New York
City time) on the next following Business Day), draw the lesser of the amounts
set forth in clauses (x) and (y) above on such Series 2004-1 Letter
of Credit by presenting a draft accompanied by a Certificate of Termination
Demand and shall cause the LOC Termination Disbursement to be deposited in the Series 2004-1
Non-Ford Cash Collateral Account, in the case of a LOC Termination Disbursement
under a Series 2004-1 Non-Ford Letter of Credit, and the Series 2004-1
Ford Cash Collateral

 

63

 

Account, in the case of a LOC Termination
Disbursement under a Series 2004-1 Ford Letter of Credit. If the Trustee
does not receive the notice from the Administrator described above on or prior
to the date that is fifteen (15) Business Days prior to each Series 2004-1
Letter of Credit Expiration Date, the Trustee shall, by 1:00 p.m. (New
York City time) on such Business Day draw the full amount of such Series 2004-1
Letter of Credit by presenting a draft accompanied by a Certificate of
Termination Demand and shall cause the LOC Termination Disbursements to be
deposited in the applicable Series 2004-1 Cash Collateral Account.

 

(c)  Series 2004-1
Letter of Credit Providers. The Administrator shall notify the Trustee and
the Insurer in writing within one Business Day of becoming aware that the
short-term debt credit rating of any Series 2004-1 Letter of Credit
Provider has fallen below “A-1” as determined by Standard & Poor’s or “P-1”
as determined by Moody’s or the long-term debt credit rating of any Series 2004-1
Letter of Credit Provider has fallen below “A+” as determined by Standard &
Poor’s or “A1” as determined by Moody’s (with respect to any Series 2004-1
Letter of Credit Provider, a “Downgrade Event”). On the thirtieth (30th)
day after the occurrence of a Downgrade Event with respect to any Series 2004-1
Letter of Credit Provider, the Administrator shall notify the Trustee and the
Insurer in writing on such date of (i) the greatest of (A) the
excess, if any, of the Series 2004-1 Required Enhancement Amount over the Series 2004-1
Enhancement Amount, excluding the available amount under the Series 2004-1
Letter of Credit issued by such Series 2004-1 Letter of Credit Provider,
on such date, (B) the excess, if any, of the Series 2004-1 Required
Liquidity Amount over the Series 2004-1 Liquidity Amount, excluding the
available amount under such Series 2004-1 Letter of Credit, on such date,
and (C) if the Downgrade Event affects a Series 2004-1 Non-Ford
Letter of Credit, the excess, if any, of the Series 2004-1 Demand Note
Payment Amount over the Series 2004-1 Non-Ford Letter of Credit Liquidity
Amount, excluding the available amount under such Series 2004-1 Non-Ford
Letter of Credit, on such date, and (ii) the amount available to be drawn
on such Series 2004-1 Letter of Credit on such date. Upon receipt of such
notice by the Trustee on or prior to 10:00 a.m. (New York City time) on
any Business Day, the Trustee shall, by 1:00 p.m. (New York City time) on
such Business Day (or, in the case of any notice given to the Trustee after
10:00 a.m. (New York City time), by 1:00 p.m. (New York City time) on
the next following Business Day), draw on such Series 2004-1 Letter of
Credit in an amount equal to the lesser of the amount in clause (i) or
clause (ii) of the immediately preceding sentence on such Business
Day by presenting a draft accompanied by a Certificate of Termination Demand
and shall cause the LOC Termination Disbursement to be deposited in a Series 2004-1
Non-Ford Cash Collateral Account, in the case of a LOC Termination Disbursement
under a Series 2004-1 Non-Ford Letter of Credit, and the Series 2004-1
Ford Cash Collateral Account, in the case of a LOC Termination Disbursement
under a Series 2004-1 Ford Letter of Credit.

 

(d)  Preference
Amount Demands on the Series 2004-1 Non-Ford Letters of Credit. If the
Insurer notifies the Trustee in writing that the Insurer shall have made a
payment under the Insurance Policy in respect of a Preference Amount, subject
to the satisfaction of the conditions set forth in the next succeeding
sentence, the Trustee shall

 

64

 

draw an amount equal to the lesser of (i) such
Preference Amount and (ii) the Series 2004-1 Non-Ford Letter of
Credit Liquidity Amount on the Series 2004-1 Non-Ford Letters of Credit by
presenting to each Series 2004-1 Non-Ford Letter of Credit Provider (with
a copy to the Insurer) a draft accompanied by a Certificate of Preference
Payment Demand and shall cause the LOC Preference Payment Disbursements to be
paid to the Insurer; provided, however, that if the Series 2004-1
Non-Ford Cash Collateral Account has been established and funded, the Trustee
shall draw an amount equal to the product of (a) 100% minus the Series 2004-1
Non-Ford Cash Collateral Percentage and (b) the lesser of the amounts
referred to in clause (i) and (ii) on such Business Day on the Series 2004-1
Non-Ford Letters of Credit as calculated by the Administrator, at the request
of the Trustee, and provided in writing to the Trustee and the Insurer. Prior
to any draw on the Series 2004-1 Non-Ford Letters of Credit or withdrawal
from the Series 2004-1 Non-Ford Cash Collateral Account pursuant to this Section 2.08(d),
the Trustee shall have received a certified copy of the order requiring the
return of such Preference Amount.

 

(e)  (I) Reductions
in Stated Amounts of the Series 2004-1 Ford Letters of Credit. If the
Trustee receives a written notice from the Lessee, substantially in the form of
Exhibit D-1-1, requesting a reduction in the stated amount of any Series 2004-1
Ford Letter of Credit, the Trustee shall within two Business Days of the receipt
of such notice deliver to the Series 2004-1 Ford Letter of Credit Provider
who issued such Series 2004-1 Ford Letter of Credit, with a copy to Ford,
a Notice of Reduction requesting a reduction in the stated amount of such Series 2004-1
Ford Letter of Credit in the amount requested in such notice effective on the
date set forth in such notice provided that on such effective date, after
giving effect to the requested reduction in the stated amount of such Series 2004-1
Ford Letter of Credit, (i) the Series 2004-1 Enhancement Amount will
equal or exceed the Series 2004-1 Required Enhancement Amount, (ii) the
Series 2004-1 Liquidity Amount will equal or exceed the Series 2004-1
Required Liquidity Amount and (iii) the Series 2004-1 Letter of
Credit Liquidity Amount will equal or exceed the Series 2004-1 Demand Note
Payment Amount. If the Trustee receives a written notice from Ford,
substantially in the form of Exhibit D-1-2, requesting the
replacement of any Series 2004-1 Ford Letter of Credit, the Trustee shall
within two Business Days of the receipt of such notice and upon receipt of a
substitute Series 2004-1 Ford Letter of Credit having a stated amount
equal to the available amount of the Series 2004-1 Ford Letter of Credit
being replaced issued by a Series 2004-1 Eligible Ford Letter of Credit
Provider deliver to the Series 2004-1 Letter of Credit Provider who issued
the Series 2004-1 Ford Letter of Credit being replaced a written notice in
the form provided in such Series 2004-1 Ford Letter of Credit confirming
cancellation of such Series 2004-1 Ford Letter of Credit and shall deliver
such cancelled Series 2004-1 Ford Letter of Credit to such Series 2004-1
Letter of Credit Provider as soon as practicable.

 

(II)                                Reductions in Stated Amounts of the Series 2004-1
Non-Ford Letters of Credit. If
the Trustee receives a written notice from the Lessee, substantially in the form of
Exhibit D-1-1, requesting a reduction in the stated amount of any Series 2004-1
Non-Ford Letter of Credit, the Trustee shall within two Business Days of the
receipt of such notice deliver to the Series 2004-1 Non-Ford Letter of
Credit Provider

 

65

 

who
issued such Series 2004-1 Non-Ford Letter of Credit a Notice of Reduction
requesting a reduction in the stated amount of such Series 2004-1 Non-Ford
Letter of Credit in the amount requested in such notice effective on the date
set forth in such notice provided that on such effective date, after giving
effect to the requested reduction in the stated amount of such Series 2004-1
Non-Ford Letter of Credit, (i) the Series 2004-1 Enhancement Amount
will equal or exceed the Series 2004-1 Required Enhancement Amount, (ii) the
Series 2004-1 Adjusted Liquidity Amount will equal or exceed the Series 2004-1
Required Liquidity Amount, and (iii) the Series 2004-1 Non-Ford
Letter of Credit Liquidity Amount will equal or exceed the Series 2004-1
Demand Note Payment Amount.

 

(f)  (I) Draws on
the Series 2004-1 Ford Letters of Credit. If there is more than one Series 2004-1
Ford Letter of Credit on the date of any draw on the Series 2004-1 Ford
Letters of Credit pursuant to the terms of this Series Supplement (other
than pursuant to Sections 2.08(b) and (c) with this Series Supplement),
the Administrator shall instruct the Trustee, in writing, to draw on each Series 2004-1
Ford Letter of Credit in an amount equal to the Pro Rata Share of the Series 2004-1
Ford Letter of Credit Provider issuing such Series 2004-1 Ford Letter of
Credit of the amount of such draw on the Series 2004-1 Ford Letters of
Credit.

 

(II)                                Draws on the Series 2004-1 Non-Ford
Letters of Credit. If there
is more than one Series 2004-1 Non-Ford Letter of Credit on the date of
any draw on the Series 2004-1 Non-Ford Letters of Credit pursuant to the terms
of this Series Supplement (other than pursuant to Sections 2.08(b) and
(c) of this Series Supplement), the Administrator shall
instruct the Trustee, in writing, to draw on each Series 2004-1 Non-Ford
Letter of Credit in an amount equal to the Pro Rata Share of the Series 2004-1
Non-Ford Letter of Credit Provider issuing such Series 2004-1 Non-Ford
Letter of Credit of the amount of such draw on the Series 2004-1 Non-Ford
Letters of Credit.

 

(g)  (I) Establishment
of Series 2004-1 Ford Cash Collateral Account. On or prior to the date
of any drawing under a Series 2004-1 Ford Letter of Credit pursuant to Section 2.08(b) or
(c) of this Series Supplement, HVF shall establish and maintain in
the name of the Trustee for the benefit of the Series 2004-1 Noteholders,
the Insurer and Ford, an account (the “Series 2004-1 Ford Cash
Collateral Account”), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 2004-1
Noteholders, the Insurer and Ford. The Series 2004-1 Ford Cash Collateral
Account shall be an Eligible Deposit Account. If the Series 2004-1 Ford
Cash Collateral Account is at any time no longer an Eligible Deposit Account,
HVF shall, within 10 Business Days of obtaining knowledge that the Series 2004-1
Ford Cash Collateral Account is no longer an Eligible Deposit Account,
establish a new Series 2004-1 Ford Cash Collateral Account that is an
Eligible Deposit Account. If a new Series 2004-1 Ford Cash Collateral
Account is established, HVF shall instruct the Trustee in writing to transfer
all cash and investments from the non-qualifying Series 2004-1 Ford Cash
Collateral Account into the new Series 2004-1 Ford Cash Collateral
Account.

 

66

 

(II)                                Establishment of Series 2004-1 Non-Ford
Cash Collateral Account. On
or prior to the date of any drawing under a Series 2004-1 Non-Ford Letter
of Credit pursuant to Section 2.08(b) or (c) of this Series Supplement,
HVF shall establish and maintain in the name of the Trustee for the benefit of
the Series 2004-1 Noteholders, the Insurer and Ford, an account (the “Series 2004-1
Non-Ford Cash Collateral Account”), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the Series 2004-1
Noteholders, the Insurer and Ford. The Series 2004-1 Non-Ford Cash
Collateral Account shall be an Eligible Deposit Account. If the Series 2004-1
Non-Ford Cash Collateral Account is at any time no longer an Eligible Deposit
Account, HVF shall, within 10 Business Days of obtaining knowledge that the Series 2004-1
Non-Ford Cash Collateral Account is no longer an Eligible Deposit Account,
establish a new Series 2004-1 Non-Ford Cash Collateral Account that is an
Eligible Deposit Account. If a new Series 2004-1 Non-Ford Cash Collateral
Account is established, HVF shall instruct the Trustee in writing to transfer
all cash and investments from the non-qualifying Series 2004-1 Non-Ford
Cash Collateral Account into the new Series 2004-1 Non-Ford Cash
Collateral Account.

 

(h)  Administration
of the Series 2004-1 Cash Collateral Account. HVF may instruct
(by standing instructions or otherwise) the institution maintaining a Series 2004-1
Cash Collateral Account to invest funds on deposit in such Series 2004-1
Cash Collateral Account from time to time in Permitted Investments. Any
investment of funds on deposit in a Series 2004-1 Cash Collateral Account
shall mature not later than the Business Day prior to the first Payment Date
following the date on which such funds were received, unless any Permitted
Investment held in a Series 2004-1 Cash Collateral Account is held with
the Trustee, in which case such investment may mature on such Payment Date
so long as such funds shall be available for withdrawal on or prior to such
Payment Date. HVF shall not direct the Trustee to dispose of (or permit the
disposal of) any Permitted Investments prior to the maturity thereof to the
extent such disposal would result in a loss of the initial purchase price of
such Permitted Investment. In the absence of written investment instructions
hereunder, funds on deposit in a Series 2004-1 Cash Collateral Account
shall remain uninvested.

 

(i)  Earnings from Series 2004-1
Cash Collateral Account. All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Series 2004-1 Cash
Collateral Account shall be deemed to be on deposit therein and available for
distribution.

 

(j)  Series 2004-1 Cash Collateral Account
Surplus. (X) In the event that the Series 2004-1 Cash Collateral
Account Surplus on any Payment Date is greater than zero, the Administrator may direct
the Trustee to, and the Trustee, acting in accordance with the written
instructions of the Administrator (with a copy to the Insurer), shall, subject
to the limitations set forth in this Section 2.08(j)(X), withdraw
the amount specified by the Administrator from the Series 2004-1 Cash
Collateral Account specified by the Administrator and apply such amount in
accordance with the terms of this Section 2.08(j)(X). The amount of
any such withdrawal from the Series 2004-1 Ford Cash Collateral Account
shall be limited to the lesser of (a) the Series 2004-1 Available
Ford

 

67

 

Cash Collateral Account Amount on such
Payment Date and (b) the Series 2004-1 Cash Collateral Account
Surplus (after giving effect to any withdrawal from the Series 2004-1
Non-Ford Cash Collateral Account) on such Payment Date. The amount of any such
withdrawal from the Series 2004-1 Non-Ford Cash Collateral Account shall
be limited to the least of (a) the Series 2004-1 Available Non-Ford
Cash Collateral Account Amount on such Payment Date, (b) the Series 2004-1
Cash Collateral Account Surplus (after giving effect to any withdrawal from the
Series 2004-1 Ford Cash Collateral Account) on such Payment Date and (c) the
excess, if any, of the Series 2004-1 Non-Ford Letter of Credit Liquidity
Amount on such Payment Date over the Series 2004-1 Demand Note Payment
Amount on such Payment Date. Any amounts withdrawn from the Series 2004-1
Ford Cash Collateral Account pursuant to this Section 2.08(j)(X)
shall be paid to Ford. Any amounts withdrawn from the Series 2004-1
Non-Ford Cash Collateral Account shall be paid: 
first, to Ford to the extent that there are unpaid Ford
Reimbursement Obligations due and owing to Ford, the lesser of the amount
withdrawn from the Series 2004-1 Non-Ford Cash Collateral Account and the
amount of such unpaid Ford Reimbursement Obligations, second, only for
so long as the Ford LOC Exposure Amount is greater than zero, solely to the
extent that after giving effect to any such withdrawal, the Fleet Equity
Condition would be satisfied, to the Series 2004-1 Non-Ford Letter of
Credit Providers, to the extent that there are unreimbursed Disbursements due
and owing to such Series 2004-1 Non-Ford Letter of Credit Providers in
respect of the Series 2004-1 Non-Ford Letters of Credit, for application
in accordance with the provisions of the respective Series 2004-1 Non-Ford
Letter of Credit Reimbursement Agreement, and third, only for so long as
the Ford LOC Exposure Amount is greater than zero, solely to the extent that
after giving effect to any such withdrawal, the Fleet Equity Condition would be
satisfied, to HVF any remaining amounts. (Y) Irrespective of whether there is a
Series 2004-1 Cash Collateral Account Surplus, in the event that the Series 2004-1
Ford Cash Collateral Account has been established pursuant to Section 2.08(g)(I)
of this Series Supplement, the proceeds of one or more LOC Termination
Disbursements have been deposited therein pursuant to Section 2.08(b) or
Section 2.08(c) of this Series Supplement and Ford
delivers to the Trustee a Series 2004-1 Ford Letter of Credit from a Series 2004-1
Eligible Letter of Credit Provider the Administrator shall direct the Trustee
to, and the Trustee, acting in accordance with the written instructions of the
Administrator shall withdraw from the Series 2004-1 Ford Cash Collateral
Account an amount equal to the stated amount of such Series 2004-1 Ford
Letter of Credit and pay such amount to Ford.

 

(k)  Termination of Series 2004-1 Cash
Collateral Accounts. (X)  Upon the
earlier of the termination of this Series Supplement in accordance with Section 6.13
of this Series Supplement and the Class A-4 Legal Final Payment Date,
the Trustee, acting in accordance with the written instructions of the
Administrator, shall withdraw from the Series 2004-1 Ford Cash Collateral
Account and (i) pay to Ford an amount equal to the lesser of (x) the Series 2004-1
Available Ford Cash Collateral Account Amount and (y) the excess, if any, of (A) the
aggregate amount of LOC Termination Disbursements deposited into the Series 2004-1
Ford Cash Collateral Account pursuant to Section 2.08(b) or Section 2.08(c) of
this Series Supplement over (B) the aggregate amount withdrawn from
the Series 2004-1 Ford Cash Collateral Account pursuant to Section 2.03(e)(Y)
or Section 2.05(b)(ii) of this Series Supplement that has
not be

 

68

 

reimbursed by HVF in accordance with Section 2.13
of this Series Supplement on or prior to such date, (ii) pay to Ford,
an amount equal to the lesser of (x) the amount of unpaid Ford Reimbursement
Obligations due and owing to Ford and (y) the excess, if any, of the Series 2004-1
Available Ford Cash Collateral Account Amount over the amount paid to Ford
pursuant to clause (i) above and (iii) pay to HVF, any funds
remaining in the Series 2004-1 Ford Cash Collateral Account.

 

(Y)  Upon the
termination of this Series Supplement in accordance with its terms, the
Trustee, acting in accordance with the written instructions of the
Administrator, after the prior payment of all amounts due and owing to the Series 2004-1
Noteholders, the Insurer and Ford and payable from the Series 2004-1
Non-Ford Cash Collateral Account as provided herein, shall withdraw from such Series 2004-1
Non-Ford Cash Collateral Account all amounts on deposit therein (to the extent
not withdrawn pursuant to Section 2.08(d) above) and shall pay
such amounts, first, to Ford to the extent that there are unpaid Ford
Reimbursement Obligations due and owing to Ford, second, only for so
long as the Ford LOC Exposure Amount is greater than zero, solely to the extent
that after giving effect to any such withdrawal, the Fleet Equity Condition
would be satisfied, pro  rata to the Series 2004-1 Non-Ford
Letter of Credit Providers, to the extent that there are unreimbursed
Disbursements due and owing to such Series 2004-1 Non-Ford Letter of
Credit Providers, for application in accordance with the provisions of the
respective Series 2004-1 Non-Ford Letters of Credit, and third,
only for so long as the Ford LOC Exposure Amount is greater than zero, solely
to the extent that after giving effect to any such withdrawal, the Fleet Equity
Condition would be satisfied, to HVF any remaining amounts.

 

SECTION 2.09. Series 2004-1
Distribution Account. (a)  Establishment of Series 2004-1
Distribution Account. The Trustee shall establish and maintain in the name of
the Trustee for the benefit of the Series 2004-1 Noteholders and Ford an
account (the “Series 2004-1 Distribution Account”), bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Series 2004-1 Noteholders and Ford. The Series 2004-1
Distribution Account shall be an Eligible Deposit Account. If the Series 2004-1
Distribution Account is at any time no longer an Eligible Deposit Account, HVF
shall, within 10 Business Days of obtaining knowledge that the Series 2004-1
Distribution Account is no longer an Eligible Deposit Account, establish a new Series 2004-1
Distribution Account that is an Eligible Deposit Account. If a new Series 2004-1
Distribution Account is established, HVF shall instruct the Trustee in writing
to transfer all cash and investments from the non-qualifying Series 2004-1
Distribution Account into the new Series 2004-1 Distribution Account. Initially,
the Series 2004-1 Distribution Account will be established with the
Trustee.

 

(b)  Administration
of the Series 2004-1 Distribution Account. The Administrator may instruct
the institution maintaining the Series 2004-1 Distribution Account in
writing to invest funds on deposit in the Series 2004-1 Distribution
Account from time to time in Permitted Investments; provided, however, that any such
investment shall mature not later than the Business Day prior to the Payment
Date following the date on which such funds were received, unless any Permitted
Investment held in the

 

69

 

Series 2004-1 Distribution Account is
held with the Trustee, then such investment may mature on such Payment
Date and such funds shall be available for withdrawal on or prior to such
Payment Date. All such Permitted Investments will be credited to the Series 2004-1
Distribution Account. In the absence of written investment instructions
hereunder, funds on deposit in the Series 2004-1 Distribution Account
shall remain uninvested.

 

(c)  Earnings from Series 2004-1
Distribution Account. All interest and earnings (net of losses and
investment expenses) paid on funds on deposit in the Series 2004-1
Distribution Account shall be deemed to be on deposit and available for
distribution.

 

(d)  Series 2004-1
Distribution Account Constitutes Additional Collateral for Series 2004-1
Notes. In order to secure and provide for the repayment and payment of the
Note Obligations with respect to the Series 2004-1 Notes, HVF hereby
grants a security interest in and assigns, pledges, grants, transfers and sets
over to the Trustee, for the benefit of the Series 2004-1 Noteholders and
Ford all of HVF’s right, title and interest in and to the following (whether
now or hereafter existing or acquired):  (i) the
Series 2004-1 Distribution Account, including any security entitlement
thereto; (ii) all funds on deposit therein from time to time; (iii) all
certificates and instruments, if any, representing or evidencing any or all of
the Series 2004-1 Distribution Account or the funds on deposit therein from
time to time; (iv) all investments made at any time and from time to time
with monies in the Series 2004-1 Distribution Account, whether
constituting securities, instruments, general intangibles, investment property,
financial assets or other property; (v) all interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for the Series 2004-1
Distribution Account, the funds on deposit therein from time to time or the
investments made with such funds; and (vi) all proceeds of any and all of
the foregoing, including, without limitation, cash (the items in the foregoing
clauses (i) through (vi) are referred to, collectively, as the “Series 2004-1
Distribution Account Collateral”).

 

SECTION 2.10. Trustee
as Securities Intermediary. (a)  The Trustee or other Person holding
the Series 2004-1 Collection Account, the Series 2004-1 Excess
Collection Account, the Series 2004-1 Accrued Interest Account, the Series 2004-1
Reserve Account, the Series 2004-1 Cash Collateral Account, or the Series 2004-1
Distribution Account (each a “Series 2004-1 Designated Account”)
shall be the “Securities Intermediary”. If the Securities Intermediary
in respect of any Series 2004-1 Designated Account is not the Trustee, HVF
shall obtain the express agreement of such Person to the obligations of the
Securities Intermediary set forth in this Section 2.10.

 

(b)  The Securities
Intermediary agrees that:

 

(i) The Series 2004-1 Designated Accounts
are accounts to which “financial assets” within the meaning of Section 8-102(a)(9) (“Financial
Assets”)

 

70

 

of
the UCC in effect in the State of New York (the “New York UCC”) will be
credited;

 

(ii) All securities or other property
underlying any Financial Assets credited to any Series 2004-1 Designated
Account shall be registered in the name of the Securities Intermediary,
indorsed to the Securities Intermediary or in blank or credited to another
securities account maintained in the name of the Securities Intermediary and in
no case will any Financial Asset credited to any Series 2004-1 Designated
Account be registered in the name of HVF, payable to the order of HVF or
specially endorsed to HVF;

 

(iii) All property delivered to the Securities
Intermediary pursuant to this Series Supplement will be promptly credited
to the appropriate Series 2004-1 Designated Account;

 

(iv) Each item of property (whether investment
property, security, instrument or cash) credited to a Series 2004-1
Designated Account shall be treated as a Financial Asset;

 

(v) If at any time the Securities Intermediary
shall receive any order from the Trustee directing transfer or redemption of
any Financial Asset relating to the Series 2004-1 Designated Accounts, the
Securities Intermediary shall comply with such entitlement order without
further consent by HVF or the Administrator;

 

(vi) The Series 2004-1 Designated Accounts
shall be governed by the laws of the State of New York, regardless of any provision
of any other agreement. For purposes of the UCC, New York shall be deemed to
the Securities Intermediary’s jurisdiction and the Series 2004-1
Designated Accounts (as well as the “securities entitlements” (as
defined in Section 8-102(a)(17) of the New York UCC) related thereto)
shall be governed by the laws of the State of New York;

 

(vii) The Securities Intermediary has not
entered into, and until termination of this Series Supplement, will not
enter into, any agreement with any other Person relating to the Series 2004-1
Designated Accounts and/or any Financial Assets credited thereto pursuant to
which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of
the New York UCC) of such other Person and the Securities Intermediary has not
entered into, and until the termination of this Series Supplement will not
enter into, any agreement with HVF purporting to limit or condition the
obligation of the Securities Intermediary to comply with entitlement orders as
set forth in Section 2.10(b)(v) of this Series Supplement; and

 

(viii) Except for the claims and interest of
the Trustee and HVF in the Series 2004-1 Designated Accounts, the
Securities Intermediary knows of no claim to, or interest, in the Series 2004-1
Designated Accounts or in any Financial Asset credited thereto. If the
Securities Intermediary has actual knowledge of the assertion by any other
person of any lien, encumbrance, or adverse claim

 

71

 

(including
any writ, garnishment, judgment, warrant of attachment, execution or similar
process) against any Series 2004-1 Designated Account or in any Financial
Asset carried therein, the Securities Intermediary will promptly notify the
Trustee, the Administrator and HVF thereof.

 

(c)  The Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Series 2004-1 Designated Accounts and in all proceeds thereof, and
shall be the only person authorized to originate entitlement orders in respect
of the Series 2004-1 Designated Accounts.

 

SECTION 2.11. Series 2004-1
Interest Rate Hedges. (a)  If One-Month LIBOR for any Series 2004-1
Interest Period exceeds 8.90% per annum, HVF shall acquire one or more interest
rate caps or swaps, in form and substance acceptable to the Insurer (each
a “Series 2004-1 Interest Rate Hedge”), from an Eligible Interest
Rate Hedge Provider with funds available to it pursuant to Section 2.02(f) or
2.03(h)(v) of this Series Supplement on or prior to the first day of the
next succeeding Series 2004-1 Interest Period. The aggregate initial
notional amount of all Series 2004-1 Interest Rate Hedges shall equal the Class A-1
Principal Amount on the first day of such next succeeding Series 2004-1
Interest Period, and, thereafter, the aggregate notional amount of all Series 2004-1
Interest Rate Hedges may be reduced pursuant to the related Series 2004-1
Interest Rate Hedge but shall not at any time be less than the Class A-1
Principal Amount. The strike rate of each Series 2004-1 Interest Rate
Hedge in the form of a cap shall not be greater than 9.90%. The fixed rate
of each Series 2004-1 Interest Rate Hedge in the form of a swap shall
not be greater than 9.90%. HVF shall satisfy the Series 2004-1 Rating
Agency Condition in connection with its acquisition of any Series 2004-1
Interest Rate Hedge.

 

(b)  If, at any time,
an Interest Rate Hedge Provider is not an Eligible Interest Rate Hedge
Provider, then HVF shall cause such Interest Rate Hedge Provider within 30 days
following such occurrence, at such Interest Rate Hedge Provider’s expense, to
do either of the following (i) obtain a replacement interest rate cap or
swap on the same terms as the Series 2004-1 Interest Rate Hedge to which
such Interest Rate Hedge Provider is a party from an Eligible Interest Rate
Hedge Provider and simultaneously with such replacement HVF shall terminate the
Series 2004-1 Interest Rate Hedge being replaced or (ii) enter into
any arrangement satisfactory to Standard & Poor’s and Moody’s and
consented to by the Insurer, which consent, during any period when an Insurer
Default is continuing, shall not be unreasonably withheld, which is sufficient
to maintain or restore the immediately prior ratings of the Series 2004-1
Notes by Standard & Poor’s and Moody’s without giving effect to the
Insurance Policy; provided, however, that no termination of a Series 2004-1
Interest Rate Hedge shall occur until HVF shall have entered into a replacement
Series 2004-1 Interest Rate Hedge.

 

(c)  Each Series 2004-1
Interest Rate Hedge shall provide that if the Interest Rate Hedge Provider
thereunder is required to take any of the actions described in clause (i) or
(ii) of Section 2.11(b) of this Series Supplement and such
action is not taken within 30 days, then such Interest Rate Hedge Provider
shall be obligated, until a

 

72

 

replacement Series 2004-1 Interest Rate
Hedge is executed and in effect, to collateralize its obligations under such Series 2004-1
Interest Rate Hedge in an amount equal to the greatest of (i) the marked
to market value of such Series 2004-1 Interest Rate Hedge, (ii) the
next payment due from such Interest Rate Hedge Provider and (iii) 1% of
the notional amount of such Series 2004-1 Interest Rate Hedge.

 

(d)  Each Series 2004-1
Interest Rate Hedge shall provide that if the long-term senior unsecured debt
rating of the Interest Rate Hedge Provider providing such Series 2004-1
Interest Rate Hedge is withdrawn or falls below “A3” by Moody’s or “BBB-”
by Standard & Poor’s, then HVF shall terminate such Series 2004-1
Interest Rate Hedge, provided, however, that such Series 2004-1
Interest Rate Hedge shall not be terminated until either:  (i) such Interest Rate Hedge Provider,
at the expense of such Interest Rate Hedge Provider, has obtained a replacement
Series 2004-1 Interest Rate Hedge on the same terms as the Series 2004-1
Interest Rate Hedge terminated from an Eligible Interest Rate Hedge Provider,
or (ii) such Interest Rate Hedge Provider at its expense has entered into
an arrangement satisfactory to Standard & Poor’s, Moody’s and the
Insurer. The Series 2004-1 Rating Agency Condition shall be satisfied in
connection with the acquisition of any replacement Series 2004-1 Interest
Rate Hedge.

 

(e)  To secure payment
of the Note Obligations with respect to the Series 2004-1 Notes, HVF
hereby grants a security interest in, and assigns, pledges, grants, transfers
and sets over to the Trustee, for the benefit of the Series 2004-1
Noteholders and the Insurer, all of HVF’s right, title and interest, whether
now or hereafter existing or acquired, in the Series 2004-1 Interest Rate
Hedges and all proceeds thereof. HVF shall require all proceeds of the Series 2004-1
Interest Rate Hedges to be paid to, and the Trustee shall deposit all proceeds
of the Series 2004-1 Interest Rate Hedges into, the Series 2004-1
Collection Account.

 

SECTION 2.12. Series 2004-1
Demand Note Constitutes Additional Collateral for Series 2004-1 Notes.
(a)  In order to secure and provide for the repayment and payment of the
Note Obligations with respect to the Series 2004-1 Notes, HVF hereby
grants a security interest in and assigns, pledges, grants, transfers and sets
over to the Trustee, for the benefit of the Series 2004-1 Noteholders, the
Insurer, and Ford all of HVF’s right, title and interest in and to the
following (whether now or hereafter existing or acquired):  (i) the Series 2004-1 Demand Note; (ii) all
certificates and instruments, if any, representing or evidencing the Series 2004-1
Demand Note; and (iii) all proceeds of any and all of the foregoing,
including, without limitation, cash. On the date hereof, HVF shall deliver to
the Trustee, for the benefit of the Series 2004-1 Noteholders and the
Insurer, the Series 2004-1 Demand Note, endorsed in blank. The Trustee,
for the benefit of the Series 2004-1 Noteholders and the Insurer, shall be
the only Person authorized to make a demand for payment on the Series 2004-1
Demand Note.

 

(b)  Other than
pursuant to a payment made upon a demand thereon by the Trustee, HVF shall not
reduce the amount of the Series 2004-1 Demand Note or forgive amounts
payable thereunder so that the outstanding principal amount of the Series 2004-1
Demand Note after such reduction or forgiveness is less than the Series 2004-1
Letter of

 

73

 

Credit Liquidity Amount. HVF shall not agree,
to any amendment of the Series 2004-1 Demand Note without first satisfying
the Series 2004-1 Rating Agency Condition.

 

(c)  HVF agrees that on
the Series 2004-1 Closing Date it will have capitalization in an amount
equal to or greater than 4.17% of the sum of (x) the Series 2004-1
Principal Amount and (y) the maximum outstanding principal amount of the Series 2002-1
Notes.

 

(d)  Upon the occurrence
and during the continuance of an Amortization Event with respect to the Series 2004-1
Notes, the Trustee may and, at the written direction of the Insurer or the
Required Noteholders with respect to the Series 2004-1 Notes shall, make
one or more demands (each a “Demand Notice”) on Hertz for payment under
the Series 2004-1 Demand Note, in each case, in an amount equal to the
lesser of (i) the principal amount of the Series 2004-1 Demand Note
and (ii) on any Business Day (A) prior to the second Business Day
immediately preceding the Three-Year Notes Legal Final Payment Date, the amount
of any Principal Deficit Amount on such date, (B) on or after the second
Business Day immediately preceding the Three-Year Notes Legal Final Payment
Date but prior to the second Business Day immediately preceding the Class A-3
Legal Final Payment Date, the greater of (x) the Principal Deficit Amount
on such date and (y) the sum of the Class A-1 Principal Amount and
the Class A-2 Principal Amount (on or prior to the Three-Year Notes Legal
Final Payment Date, calculated after giving effect to the distribution of all
amounts on account of principal that will be available to be distributed to the
Class A-1 Noteholders and the Class A-2 Noteholders (other than under
the Insurance Policy) in accordance with this Series Supplement on the
Three-Year Notes Legal Final Payment Date (including, but not limited to,
amounts to be withdrawn from the Series 2004-1 Reserve Account pursuant to
Section 2.05(c) of this Series Supplement)), (C) on or
after the second Business Day immediately preceding the Class A-3 Legal
Final Payment Date but prior to the second Business Day immediately preceding
the Class A-4 Legal Final Payment Date, the greater of (x) the
Principal Deficit Amount on such Business Day and (y) the sum of the Class A-1
Principal Amount, the Class A-2 Principal Amount and the Class A-3
Principal Amount (on or prior to the Class A-3 Legal Final Payment Date,
calculated after giving effect to the distribution of all amounts on account of
principal that will be available to be distributed to the Class A-3
Noteholders (other than under the Insurance Policy) in accordance with this Series Supplement
on the Class A-3 Legal Final Payment Date (including, but not limited to,
amounts to be withdrawn from the Series 2004-1 Reserve Account pursuant to
Section 2.05(c) of this Series Supplement)) and (D) on or
after the second Business Day immediately preceding the Class A-4 Legal
Final Payment Date, the Series 2004-1 Principal Amount  (on or prior to the Class A-4 Legal
Final Payment Date, calculated after giving effect to the distribution of all
amounts that will be available to be distributed to the Class A-4
Noteholders (other than under the Insurance Policy) in accordance with this Series Supplement
on the Class A-4 Legal Final Payment Date (including, but not limited to,
amounts to be withdrawn from the Series 2004-1 Reserve Account pursuant to
Section 2.05(c) of this Series Supplement)). If (i) the
Trustee shall have made such a Demand Notice and Hertz shall have failed to pay
to the Trustee or deposit into the Series 2004-1 Distribution Account the
amount specified in such Demand Notice in

 

74

 

whole or in part by 12:00 noon (New York
City time) on the Business Day following the making of the Demand Notice or (ii) due
to the occurrence of an Event of Bankruptcy (or the occurrence of an event
described in clause (a) of the definition thereto, without the lapse
of a period of 60 consecutive days) with respect to Hertz, the Trustee shall
not have delivered such Demand Notice to Hertz, the Trustee shall draw on the Series 2004-1
Non-Ford Letters of Credit, if any, by 12:00 p.m. (New York City time) on
such Business Day an amount equal to the lesser of:

 

(A) the amount that Hertz failed to pay under the Series 2004-1
Demand Note (or the amount that the Trustee failed to demand for payment
thereunder);

 

(B) the Series 2004-1 Non-Ford Letter of Credit Amount on
such Business Day; and

 

(C) on any Business Day:

 

(i) other than the Business Day
immediately preceding a Legal Final Payment Date, the Principal Deficit Amount
on such Business Day;

 

(ii) on the Business Day immediately
preceding the Three-Year Notes Legal Final Payment Date, the sum of (x) the
Principal Deficit Amount on such Business Day, and (y) the lesser of (1) the
amount by which the Series 2004-1 Liquidity Amount (after giving effect to
any withdrawals to be made from the Series 2004-1 Reserve Account pursuant
to Section 2.03(d) and Section 2.05(b)(i) of this Series Supplement
and any drawings to be made under the Series 2004-1 Letters of Credit
pursuant to Section 2.03(e) of this Series Supplement on the
Three-Year Notes Legal Final Payment Date) will exceed the Series 2004-1
Required Liquidity Amount (after giving effect to all anticipated reductions in
the Series 2004-1 Principal Amount on the Three-Year Notes Legal Final
Payment Date) and (2) an amount equal to the excess, if any, of (a) the
Series 2004-1 Required Liquidity Amount on the earlier of (I) the date of
the first occurrence of a Series 2004-1 Lease Interest Payment Deficit
(other than any Series 2004-1 Lease Interest Payment Deficit resulting
from a failure to pay Rent or other amount payable by the Lessee under the HVF
Lease that is cured in full on or prior to the fifth Business Day after the
occurrence of such failure) and (II) the Three-Year Notes Legal Final Payment
Date over (b) the aggregate amount, as of the Three-Year Notes Legal Final
Payment Date, of all withdrawals from the Series 2004-1 Reserve Account
made since the date set forth in clause (a) of this subparagraph (C)(ii) or
to be made in respect of the Three-Year Notes Legal Final Payment Date pursuant
to Section 2.03(d) of this Series Supplement and all drawings
made since such date or to be made in respect of the Three-Year Notes Legal
Final Payment Date under the Series 2004-1 Letters of Credit pursuant to Section 2.03(e) of
this Series Supplement; provided, however, that any such withdrawals from the

 

75

 

Series 2004-1 Reserve Account and/or drawings made under the Series 2004-1
Letters of Credit on account of a Series 2004-1 Lease Interest Payment
Deficit resulting from a failure to pay Rent or other amount payable by the
Lessee under the HVF Lease that is cured in full on or prior to the fifth
Business Day after the occurrence of such failure shall be excluded from this
clause (b);

 

(iii) on the Business Day immediately
preceding the Class A-3 Legal Final Payment Date, the sum of (x) the
Principal Deficit Amount on such Business Day and (y) the lesser of (1) the
amount by which the Series 2004-1 Liquidity Amount (after giving effect to
any withdrawals to be made from the Series 2004-1 Reserve Account pursuant
to Section 2.03(d) and Section 2.5(b)(i) of this Series Supplement
and any drawings to be made under the Series 2004-1 Letters of Credit
pursuant to Section 2.03(e) of this Series Supplement on the Class A-3
Legal Final Payment Date) will exceed the Series 2004-1 Required Liquidity
Amount (after giving effect to all anticipated reductions in the Series 2004-1
Principal Amount on the Class A-3 Legal Final Payment Date) and (2) an
amount equal to the excess, if any, of (a) the Series 2004-1 Required
Liquidity Amount on the earlier of (I) the date of the first occurrence of a Series 2004-1
Lease Interest Payment Deficit (other than any Series 2004-1 Lease
Interest Payment Deficit resulting from a failure to pay Rent or other amount
payable by the Lessee under the HVF Lease that is cured in full on or prior to
the fifth Business Day after the occurrence of such failure) and (II) the Class A-3
Legal Final Payment Date over (b) the aggregate amount, as of the Class A-3
Legal Final Payment Date, of all withdrawals from the Series 2004-1
Reserve Account made since the date set forth in clause (a) of this
subparagraph (C)(iii) or to be made in respect of the Class A-3 Legal
Final Payment Date pursuant to Section 2.03(d) of this Series Supplement
and all drawings made since such date or to be made in respect of the Class A-3
Legal Final Payment Date under the Series 2004-1 Letters of Credit
pursuant to Section 2.03(e) of this Series Supplement; provided,
however, that any such withdrawals from the Series 2004-1 Reserve
Account and/or drawings made under the Series 2004-1 Letters of Credit on
account of a Series 2004-1 Lease Interest Payment Deficit resulting from a
failure to pay Rent or other amount payable by the Lessee under the HVF Lease
that is cured in full on or prior to the fifth Business Day after the
occurrence of such failure shall be excluded from this clause (b); and

 

(iv) on the Business Day immediately
preceding the Class A-4 Legal Final Payment Date, the sum of (x) the
Principal Deficit Amount on such Business Day and (y) an amount equal to
the excess, if any, of (a) the Series 2004-1 Required Liquidity
Amount on the earlier of (I) the date of the first occurrence of a Series 2004-1
Lease Interest Payment Deficit (other than any Series 2004-1 Lease
Interest Payment Deficit resulting

 

76

 

from a failure to pay Rent or other amount payable by the Lessee under
the HVF Lease that is cured in full on or prior to the fifth Business Day after
the occurrence of such failure) and (II) the Class A-4 Legal Final Payment
Date over (b) the aggregate amount, as of the Class A-4 Legal Final
Payment Date, of all withdrawals from the Series 2004-1 Reserve Account
made since the date set forth in clause (a) of this subparagraph (C)(iv) or
to be made in respect of the Class A-4 Legal Final Payment Date pursuant
to Section 2.03(d) of this Series Supplement and all drawings
made since such date and to be made in respect of the Class A-4 Legal
Final Payment Date under the Series 2004-1 Letters of Credit pursuant to Section 2.03(e) of
this Series Supplement; provided, however, that any such withdrawals from the Series 2004-1
Reserve Account and/or drawings made under the Series 2004-1 Letters of
Credit on account of a Series 2004-1 Lease Interest Payment Deficit
resulting from a failure to pay Rent or other amount payable by the Lessee
under the HVF Lease that is cured in full on or prior to the fifth Business Day
after the occurrence of such failure shall be excluded from this clause (b),

 

by
presenting to each Series 2004-1 Non-Ford  Letter of Credit Provider
a draft accompanied by a Certificate of Unpaid Demand Note Demand; provided,
however that if the Series 2004-1 Non-Ford Cash Collateral Account has
been established and funded, the Trustee shall withdraw from the Series 2004-1
Non-Ford Cash Collateral Account and deposit in the Series 2004-1
Distribution Account an amount equal to the lesser of (x) the Series 2004-1
Non-Ford Cash Collateral Percentage on such Business Day of the least of the
amounts set forth in clause (A), (B) or (C) above and (y) the Series 2004-1
Available Non-Ford Cash Collateral Account Amount on such Business Day and draw
an amount equal to the remainder of such amount on the Series 2004-1
Non-Ford Letters of Credit. The Trustee shall deposit, or cause the deposit of,
the proceeds of any such draw on the Series 2004-1 Non-Ford Letters of
Credit and the proceeds of any such withdrawal from the Series 2004-1
Non-Ford Cash Collateral Account, into the Series 2004-1 Collection
Account and such proceeds shall be treated as Principal Collections for the
Related Month.

 

SECTION 2.13. Reimbursement
Obligation. (A)  HVF agrees to pay to Ford in accordance with, and
solely to the extent of funds available therefore under, the Indenture:

 

(i) on and after each date on which a Series 2004-1
Ford Letter of Credit Provider shall pay any Ford LOC Disbursement under a Series 2004-1
Ford Letter of Credit, an amount equal to such Ford LOC Disbursement; and

 

(ii) on and after each date on which any amount
is withdrawn from the Series 2004-1 Ford Cash Collateral Account pursuant
to Section 2.03(e)(Y) or Section 2.05(b)(ii) of
this Series Supplement, an amount equal to the amount of such withdrawal.

 

77

 

(B) Notwithstanding the foregoing, prior to the
earlier of (i) the Class A-4 Legal Final Payment Date and (ii) the
termination of this Series Supplement in accordance with Section 6.13
of this Series Supplement, any amount payable by HVF to Ford pursuant to Section 2.13(A)(ii) of
this Series Supplement shall be paid by HVF by depositing such amount in
the Series 2004-1 Ford Cash Collateral Account.

 

(C) HVF agrees that Ford shall be deemed a “Secured
Party” under the Base Indenture and the Related Documents to the extent of Ford
Reimbursement Obligations payable by HVF to Ford. Ford Reimbursement
Obligations shall be absolute, unconditional and irrevocable, and shall be paid
under all circumstances, including, without limitation, the following circumstances:

 

(i) any lack of validity or enforceability of
this Series Supplement, the Indenture, any Related Document or any Series 2004-1
Ford Letter of Credit;

 

(ii) the existence of any claim, set-off,
defense or other right which HVF may have at any time against Ford, the
Trustee or any other beneficiary or any transferee of any Series 2004-1
Ford Letter of Credit (or any persons or entities for whom the Trustee, any
such beneficiary or any such transferee may be acting), whether in
connection with this Series Supplement, the transactions contemplated
hereby or by the Related Documents or any unrelated transaction;

 

(iii) any statement or any other document
presented under any Series 2004-1 Ford Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect;

 

(iv)  any statement or any other document
presented under any Series 2004-1 Ford Letter of Credit proving to be
insufficient in any respect;

 

(v)  payment by a Series 2004-1 Ford
Letter of Credit Provider under a Series 2004-1 Ford Letter of Credit
against presentation of a draft or certificate which does not strictly comply
with the terms of such Series 2004-1 Ford Letter of Credit;

 

(vi)  any non-application or misapplication by
the Trustee of the proceeds of any Ford LOC Disbursement or any withdrawal from
the Series 2004-1 Ford Cash Collateral Account; or

 

(vii)  any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute a defense
available to, or a discharge of, HVF.

 

78

 

ARTICLE III

Amortization Events

 

In addition to the Amortization Events set forth in Section 9.01
of the Base Indenture, the following shall be Amortization Events with respect
to the Series 2004-1 Notes and shall constitute the Amortization Events
set forth in Section 9.01(j) of the Base Indenture with respect to the Series 2004-1
Notes:

 

(a)  HVF defaults in the payment of any interest on, or other
amount payable in respect of, the Series 2004-1 Notes when the same
becomes due and payable and such default continues for a period of five (5) Business
Days;

 

(b)  HVF defaults in the payment of any principal of the Series 2004-1
Notes when the same becomes due and payable on the applicable Legal Final
Payment Date;

 

(c)  a Series 2004-1 Enhancement Deficiency shall occur and
continue for at least three (3) Business Days or the Series 2004-1
Enhancement Amount, excluding from the calculation thereof one or more of the
following amounts, shall be less than the Series 2004-1 Required
Enhancement Amount for at least three (3) Business Days:

 

(i) any cash or Permitted Investments on deposit in the Series 2004-1
Excess Collection Account, the Series 2004-1 Cash Collateral Account or
the Series 2004-1 Reserve Account if at the time of such calculation (A) such
cash or Permitted Investments on deposit in the Series 2004-1 Excess
Collection Account, the Series 2004-1 Cash Collateral Account or the Series 2004-1
Reserve Account, as the case may be, cannot be withdrawn by the Trustee
and applied as provided herein because the Series 2004-1 Excess Collection
Account, the Series 2004-1 Cash Collateral Account or the Series 2004-1
Reserve Account, as the case may be, shall be subject to an injunction,
estoppel or other stay or (B) the Series 2004-1 Excess Collection
Account, the Series 2004-1 Cash Collateral Account or the Series 2004-1
Reserve Account, as the case may be, shall be subject to a Lien (other
than a Permitted Lien) (each, a “Restrictive Action”); or

 

(ii) the amount available to be drawn under any Series 2004-1
Letter of Credit if at the time of such calculation (A) such Series 2004-1
Letter of Credit shall not be in full force and effect, (B) an Event of
Bankruptcy shall have occurred with respect to the Series 2004-1 Letter of
Credit Provider of such Series 2004-1 Letter of Credit or (C) such Series 2004-1
Letter of Credit Provider shall have repudiated such Series 2004-1 Letter
of Credit or failed to honor a draw thereon made in accordance with the terms
thereof;

 

(d)  the Series 2004-1 Liquidity Amount shall be less than
the Series 2004-1 Required Liquidity Amount for at least three (3) Business
Days or

 

79

 

the
Series 2004-1 Liquidity Amount, excluding from the calculation thereof one
or more of the following amounts, shall be less than the Series 2004-1
Required Liquidity Amount for at least three (3) Business Days:

 

(i) any cash or Permitted Investments on deposit in the Series 2004-1
Reserve Account or the Series 2004-1 Cash Collateral Account if at the
time of such calculation the Series 2004-1 Reserve Account or the Series 2004-1
Cash Collateral Account, as the case may be, shall be subject to a
Restrictive Action; or

 

(ii) the amount available to be drawn under any Series 2004-1
Letter of Credit if at the time of such calculation (A) such Series 2004-1
Letter of Credit shall not be in full force and effect, (B) an Event of
Bankruptcy shall have occurred with respect to the Series 2004-1 Letter of
Credit Provider of such Series 2004-1 Letter of Credit or (C) such Series 2004-1
Letter of Credit Provider shall have repudiated such Series 2004-1 Letter
of Credit or failed to honor a draw thereon made in accordance with the terms
thereof;

 

(e)  all principal of and interest on the Class A-1 Notes and
the Class A-2 Notes is not paid in full on or before the Three-Year
Notes  Expected Final Payment Date, all
principal of and interest on the Class A-3 Notes is not paid in full on or
before the Class A-3 Expected Final Payment Date or all principal of and
interest on the Class A-4 Notes is not paid in full on or before the Class A-4
Expected Final Payment Date;

 

(f)  any one of the following occurs:

 

(i) the Series 2004-1 Asset Amount shall
be less than the Series 2004-1 Required Asset Amount for at least three (3) Business
Days or the Series 2004-1 Asset Amount, excluding from the calculation
thereof any cash or Permitted Investments on deposit in any HVF Exchange
Account, the Series 2004-1 Excess Collection Account or the Series 2004-1
Collection Account if at the time of such calculation such HVF Exchange
Account, the Series 2004-1 Excess Collection Account or the Series 2004-1
Collection Account, as the case may be, shall be subject to a Restrictive
Action, shall be less than the Series 2004-1 Required Asset Amount for at
least three (3) Business Days;

 

(ii) the Series 2004-1 Asset Amount shall
be less than the Series 2004-1 Principal Amount for at least three (3) Business
Days or the Series 2004-1 Asset Amount, excluding from the calculation
thereof any cash or Permitted Investments on deposit in any HVF Exchange
Account, the Series 2004-1 Excess Collection Account or the Series 2004-1
Collection Account if at the time of such calculation such HVF Exchange
Account, the Series 2004-1 Excess Collection Account or the Series 2004-1
Collection Account, as the case may be, shall be subject to a Restrictive
Action, shall be less than the Series 2004-1 Principal Amount for at least
three (3) Business Days; or

 

80

 

(iii) the Insured Principal Deficit Amount
shall be greater than zero;

 

(g)  the Trustee shall make a demand for payment under the
Insurance Policy;

 

(h)  the occurrence of an Event of Bankruptcy with respect to the
Insurer;

 

(i)  the Insurer fails to honor a demand for payment made in
accordance with the requirements of the Insurance Policy;

 

(j)  the Trustee shall for any
reason cease to have a valid and perfected first priority security interest in
the Series 2004-1 Collateral or any of the Lessee, HVF or any Affiliate of
either so asserts in writing;

 

(k)  One-Month LIBOR for any Series 2004-1
Interest Rate Period exceeds 8.90% per annum and HVF fails to acquire Series 2004-1
Interest Rate Hedges satisfying the requirements of Section 2.11 of this Series Supplement
on or prior to the first day of the next succeeding Series 2004-1 Interest
Rate Period;

 

(l)  HVF fails to comply with any
of its other agreements or covenants in, or provisions of, the Series 2004-1
Notes or the Indenture and the failure to so comply materially and adversely
affects the interests of the Series 2004-1 Noteholders or the Insurer and
continues to materially and adversely affect the interests of the Series 2004-1
Noteholders or the Insurer for a period of thirty (30) days after the earlier
of (i) the date on which HVF obtains knowledge thereof or (ii) the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to HVF by the Trustee or to HVF and the Trustee
by the Required Noteholders with respect to the Series 2004-1 Notes; or

 

(m)  any representation made by
HVF in the Indenture or any Related Document is false and such false
representation materially and adversely affects the interests of the Series 2004-1
Noteholders or the Insurer and such false representation is not cured for a
period of thirty (30) days after the earlier of (i) the date on which HVF
obtains knowledge thereof or (ii) the date that written notice thereof is
given to HVF by the Trustee or to HVF and the Trustee by the Required
Noteholders with respect to the Series 2004-1 Notes.

 

In
the case of

 

(i) any event described in clauses (a) through
(i) above, an Amortization Event with respect to the Series 2004-1
Notes will immediately occur without any notice or other action on the part of
the Trustee or any Series 2004-1 Noteholder or

 

(ii) any event described in clauses (j) through
(m) above, either the Trustee may, by written notice to HVF or the Required
Noteholders with respect to the Series 2004-1 Notes may, by written notice
to HVF and the Trustee declare that

 

81

 

an
Amortization Event with respect to the Series 2004-1 Notes has occurred as
of the date of the notice.

 

Amortization
Events with respect to the Series 2004-1 Notes described in clauses (h) and
(i) above will not be subject to waiver. An Amortization Event with
respect to the Series 2004-1 Notes described in clauses (a) through (g) and
clauses (j) through (m) above will be subject to waiver in accordance with Section 9.04
of the Base Indenture.

 

ARTICLE IV

Right to Waive Purchase Restrictions

 

Notwithstanding any provision to the contrary in the
Indenture or the Related Documents, upon the Trustee’s receipt of notice from
HVF (i) to the effect that a Manufacturer Program is no longer an Eligible
Manufacturer Program and that, as a result, the Series 2004-1 Maximum
Non-Eligible Vehicle Amount is or will be exceeded or (ii) that HVF and
the Lessee have determined to increase any Series 2004-1 Maximum Amount,
(each such notice, a “Waiver Request”), each Series 2004-1
Noteholder may, at its option, waive the Series 2004-1 Maximum
Non-Eligible Vehicle Amount or any other Series 2004-1 Maximum Amount
(collectively, a “Waivable Amount”) if (i) no Amortization Event
exists, (ii) the Required Noteholders with respect to the Series 2004-1
Notes and the  Insurer consent to such
waiver and (iii) 30 days’ prior written notice of such proposed waiver is
provided to the Rating Agencies by the Trustee.

 

Upon receipt by the Trustee of a Waiver Request (a
copy of which the Trustee shall promptly provide to the Rating Agencies), all
amounts which would otherwise be deposited into the Series 2004-1 Excess
Collection Account (collectively, the “Designated Amounts”) from the
date the Trustee receives a Waiver Request through the Consent Period
Expiration Date will be held by the Trustee in the Series 2004-1
Collection Account for ratable distribution as described below.

 

Within ten (10) Business Days after the Trustee
receives a Waiver Request, the Trustee shall furnish notice thereof to the Series 2004-1
Noteholders and the Insurer, which notice shall be accompanied by a form of
consent (each a “Consent”) in the form of Exhibit E by which
the Series 2004-1 Noteholders may, on or before the Consent Period
Expiration Date, consent to waive the applicable Waivable Amount. If the
Trustee receives Consents from the Required Noteholders with respect to the Series 2004-1
Notes agreeing to waive the applicable Waivable Amount and the consent of the
Insurer and within forty-five (45) days after the Trustee notifies the Series 2004-1
Noteholders of a Waiver Request (the day on which such forty-five (45) day
period expires, the “Consent Period Expiration Date”), (i) the
applicable Waivable Amount shall be deemed waived by the consenting Series 2004-1
Noteholders, (ii) the Trustee will distribute the Designated Amounts as
set forth below and (iii) the Trustee shall promptly (but in any event
within two days) provide the Rating Agency with notice of such waiver. Any Series 2004-1
Noteholder from whom the Trustee has not received a Consent on or

 

82

 

before
the Consent Period Expiration Date will be deemed not to have consented to such
waiver.

 

If the Trustee receives Consents from the Required
Noteholders with respect to the Series 2004-1 Notes and the consent of the
Insurer on or before the Consent Period Expiration Date, then on the
immediately following Payment Date, the Trustee will pay the Designated Amounts
as follows:

 

(i) to the non-consenting Series 2004-1
Noteholders, if any, pro rata up to the amount required to pay all Series 2004-1
Notes held by such non-consenting Series 2004-1 Noteholders in full; and

 

(ii) any remaining Designated Amounts to the Series 2004-1
Excess Collection Account.

 

If the amount paid pursuant to clause (i) of
the preceding paragraph is not paid in full on the date specified therein, then
on each day following such Payment Date, the Administrator will deposit into
the Series 2004-1 Collection Account on a daily basis all Designated
Amounts collected on such day. On each following Payment Date, the Trustee will
withdraw a portion of such Designated Amounts from the Series 2004-1
Collection Account and deposit the same in the Series 2004-1 Distribution
Account for distribution as follows:

 

(A) to the non-consenting Series 2004-1 Noteholders, if any,
pro rata an amount equal to the Designated Amounts in the Series 2004-1
Collection Account as of the applicable Determination Date up to the aggregate
outstanding principal balance of the Series 2004-1 Notes held by the
non-consenting Series 2004-1 Noteholders; and

 

(B) any remaining Designated Amounts to the Series 2004-1
Excess Collection Account.

 

If the Required Noteholders with respect to the Series 2004-1
Notes or the Insurer does not timely consent to such waiver, the Designated
Amounts will be withdrawn from the Series 2004-1 Collection Account and
deposited into the Series 2004-1 Excess Collection Account for
distribution in accordance with the terms of the Indenture and the Related
Documents.

 

In the event that the Series 2004-1 Rapid
Amortization Period shall commence after receipt by the Trustee of a Waiver
Request, all such Designated Amounts will thereafter be considered Principal
Collections allocated to the Series 2004-1 Noteholders.

 

83

 

ARTICLE V

Form of Series 2004-1 Notes

 

SECTION 5.01. Initial
Issuance of Series 2004-1 Investor Notes. The Series 2004-1 Notes
are being offered and sold by HVF pursuant to a Purchase Agreement, dated March 24,
2004, among HVF, Hertz and Lehman Brothers Inc., as the initial purchaser. The Series 2004-1
Notes will be resold initially only to (A) qualified institutional buyers
(as defined in Rule 144A ) (“QIBs”) in reliance on Rule 144A
and (B) Persons other than U.S. Persons (as defined in Regulation S)
in reliance on Regulation S. Such Series 2004-1 Notes may thereafter
be transferred to QIBs and purchasers in reliance on Regulation S in
accordance with the procedure described herein. The Series 2004-1 Notes
will be Book-Entry Notes and DTC will be the Depository for the Series 2004-1
Notes. The provisions of the rules and procedures of DTC, the “Operating
Procedures of the Euroclear System” and “Terms and Conditions Governing
Use of Euroclear” and the “General Terms and Conditions of Clearstream
Banking” and “Customer Handbook” of Clearstream (the “Applicable
Procedures”) shall be applicable to transfers of beneficial interests in
the Series 2004-1 Global Notes.

 

SECTION 5.02. Restricted
Global Notes. Each Class of the Series 2004-1 Notes offered and
sold in their initial distribution in reliance upon Rule 144A will be
issued in the form of one or more global notes in fully registered form,
without coupons, substantially in the forms set forth in Exhibits A-1-1, A-2-1,
A-3-1 and A-4-1, respectively, registered in the name of Cede, as nominee of
DTC, and deposited with BNY MTC, as custodian of DTC (collectively, the “Restricted
Global Notes”). The aggregate initial principal amount of the Restricted
Global Notes may from time to time be increased or decreased by
adjustments made on the records of BNY MTC, as custodian for DTC, in connection
with a corresponding decrease or increase in the aggregate initial principal
amount of the corresponding class of Regulation S Global Notes or the
Unrestricted Global Notes, as hereinafter provided.

 

SECTION 5.03. Regulation S
Global Notes and Unrestricted Global Notes. Each Class of the Series 2004-1
Notes offered and sold on the Series 2004-1 Closing Date in reliance upon
Regulation S will be issued in the form of one or more global notes
in fully registered form, without coupons, substantially in the forms set forth
in Exhibits A-1-2, A-2-2, A-3-2 and A-4-2, registered in the name of Cede, as
nominee of DTC, and deposited with BNY MTC, as custodian of DTC, for credit to
the respective accounts at DTC of the designated agents holding on behalf of
Euroclear and Clearstream. Until such time as the Restricted Period shall have
terminated, such Series 2004-1 Notes shall be referred to herein
collectively as the “Regulation S Global Notes”. After such time as
the Restricted Period shall have terminated, such Series 2004-1 Notes
shall be exchangeable, in whole or in part, for interests in one or more
permanent global notes in registered form without interest coupons,
substantially in the forms set forth in Exhibits A-1-3, A-2-3, A-3-3 and A-4-3,
as hereinafter provided (collectively, the “Unrestricted Global Notes”).
The aggregate principal amount of the Regulation S Global Notes or the
Unrestricted Global Notes may from time to time be

 

84

 

increased or decreased by adjustments made on
the records of BNY MTC, as custodian for DTC, in connection with a
corresponding decrease or increase of aggregate principal amount of the
corresponding Restricted Global Notes, as hereinafter provided.

 

SECTION 5.04. Definitive
Notes. No Series 2004-1 Note Owner will receive a Definitive Note
representing such Series 2004-1 Note Owner’s interest in the Series 2004-1
Notes other than in accordance with Section 2.13 of the Base Indenture.

 

SECTION 5.05. Transfer
Restrictions. (a)  A Series 2004-1 Global Note may not be
transferred, in whole or in part, to any Person other than DTC or a nominee
thereof, or to a successor Depository or to a nominee of a successor
Depository, and no such transfer to any such other Person may be
registered; provided, however, that this Section 5.05(a) shall not prohibit any
transfer of a Series 2004-1 Note that is issued in exchange for a Series 2004-1
Global Note in accordance with Section 2.13 of the Base Indenture and
shall not prohibit any transfer of a beneficial interest in a Series 2004-1
Global Note effected in accordance with the other provisions of this Section 5.05.

 

(b)  The transfer by a Series 2004-1
Note Owner holding a beneficial interest in a Restricted Global Note to a
Person who wishes to take delivery thereof in the form of a beneficial
interest in the Restricted Global Note shall be made upon the deemed
representation of the transferee that it is purchasing for its own account or
an account with respect to which it exercises sole investment discretion and
that it and any such account is a QIB, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding HVF as such transferee has requested pursuant to Rule 144A
or has determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

 

(c)  If a Series 2004-1
Note Owner holding a beneficial interest in a Restricted Global Note wishes at
any time to exchange its interest in such Restricted Global Note for an
interest in the Regulation S Global Note, or to transfer such interest to
a Person who wishes to take delivery thereof in the form of a beneficial
interest in the Regulation S Global Note, such exchange or transfer may be
effected, subject to the Applicable Procedures, only in accordance with the
provisions of this Section 5.05(c). Upon receipt by the Registrar, at the
office of the Registrar, of (i) written instructions given in accordance
with the Applicable Procedures from a Clearing Agency Participant directing the
Registrar to credit or cause to be credited to a specified Clearing Agency
Participant’s account a beneficial interest in the Regulation S Global
Note, in a principal amount equal to that of the beneficial interest in such
Restricted Global Note to be so exchanged or transferred, (ii) a written
order given in accordance with the Applicable Procedures containing information
regarding the account of the Clearing Agency Participant (and the Euroclear or
Clearstream account, as the case may be) to be credited with, and the account
of the Clearing Agency Participant to be debited for, such beneficial interest
and (iii) a certificate in substantially the form set forth in Exhibit F-1
given by the Series 2004-1 Note Owner holding such beneficial interest in
such Restricted Global Note, the Registrar shall instruct BNY MTC, as custodian
of DTC, to

 

85

 

reduce the principal amount of the Restricted
Global Note, and to increase the principal amount of the Regulation S
Global Note, by the principal amount of the beneficial interest in such
Restricted Global Note to be so exchanged or transferred, and to credit or
cause to be credited to the account of the Person specified in such
instructions (which shall be the Clearing Agency Participant for Euroclear or
Clearstream or both, as the case may be) a beneficial interest in the
Regulation S Global Note having a principal amount equal to the amount by
which the principal amount of such Restricted Global Note was reduced upon such
exchange or transfer.

 

(d)  If a Series 2004-1
Note Owner holding a beneficial interest in a Restricted Global Note wishes at
any time to exchange its interest in such Restricted Global Note for an
interest in the Unrestricted Global Note, or to transfer such interest to a
Person who wishes to take delivery thereof in the form of a beneficial
interest in the Unrestricted Global Note, such exchange or transfer may be
effected, subject to the Applicable Procedures, only in accordance with the
provisions of this Section 5.05(d). Upon receipt by the Registrar, at the
office of the Registrar, of (A) written instructions given in accordance
with the Applicable Procedures from a Clearing Agency Participant directing the
Registrar to credit or cause to be credited to a specified Clearing Agency
Participant’s account a beneficial interest in the Unrestricted Global Note in
a principal amount equal to that of the beneficial interest in such Restricted
Global Note to be so exchanged or transferred, (ii) a written order given
in accordance with the Applicable Procedures containing information regarding
the account of the Clearing Agency Participant (and the Euroclear or
Clearstream account, as the case may be) to be credited with, and the
account of the Clearing Agency Participant to be debited for, such beneficial
interest and (iii) a certificate in substantially the form of Exhibit F-2
given by the Series 2004-1 Note Owner holding such beneficial interest in
such Restricted Global Note, the Registrar shall instruct BNY MTC, as custodian
of DTC, to reduce the principal amount of such Restricted Global Note, and to
increase the principal amount of the Unrestricted Global Note, by the principal
amount of the beneficial interest in such Restricted Global Note to be so
exchanged or transferred, and to credit or cause to be credited to the account
of the Person specified in such instructions (which shall be the Clearing
Agency Participant for Euroclear or Clearstream or both, as the case may be)
a beneficial interest in the Unrestricted Global Note having a principal amount
equal to the amount by which the principal amount of such Restricted Global
Note was reduced upon such exchange or transfer.

 

(e)  If a Series 2004-1
Note Owner holding a beneficial interest in a Regulation S Global Note or an
Unrestricted Global Note wishes at any time to exchange its interest in such
Regulation S Global Note or such Unrestricted Global Note for an interest
in the Restricted Global Note, or to transfer such interest to a Person who
wishes to take delivery thereof in the form of a beneficial interest in
the Restricted Global Note, such exchange or transfer may be effected,
subject to the Applicable Procedures, only in accordance with the provisions of
this Section 5.05(e). Upon receipt by the Registrar, at the office of the
Registrar, of (i) written instructions given in accordance with the
Applicable Procedures from a Clearing Agency Participant directing the
Registrar to credit or cause to be credited to a specified Clearing Agency
Participant’s account a

 

86

 

beneficial interest in the Restricted Global
Note in a principal amount equal to that of the beneficial interest in such
Regulation S Global Note or such Unrestricted Global Note, as the case may be,
to be so exchanged or transferred, (ii) a written order given in
accordance with the Applicable Procedures containing information regarding the
account of the Clearing Agency Participant (and the Euroclear or Clearstream
account, as the case may be) to be credited with, and the account of the
Clearing Agency Participant to be debited for, such beneficial interest and (iii) with
respect to a transfer of a beneficial interest in such Regulation S Global
Note (but not such Unrestricted Global Note), a certificate in substantially
the form set forth in Exhibit F-3 given by such Series 2004-1
Note Owner holding such beneficial interest in such Regulation S Global
Note, the Registrar shall instruct BNY MTC, as custodian of DTC, to reduce the
principal amount of such Regulation S Global Note or such Unrestricted
Global Note, as the case may be, and to increase the principal amount of
the Restricted Global Note, by the principal amount of the beneficial interest
in such Regulation S Global Note or such Unrestricted Global Note to be so
exchanged or transferred, and to credit or cause to be credited to the account
of the Person specified in such instructions (which shall be the Clearing
Agency Participant for DTC) a beneficial interest in the Restricted Global Note
having a principal amount equal to the amount by which the principal amount of
such Regulation S Global Note or such Unrestricted Global Note, as the
case may be, was reduced upon such exchange or transfer.

 

(f)  In the event that
a Series 2004-1 Global Note or any portion thereof is exchanged for Series 2004-1
Notes other than Series 2004-1 Global Notes, such other Series 2004-1
Notes may in turn be exchanged (upon transfer or otherwise) for Series 2004-1
Notes that are not Series 2004-1 Global Notes or for a beneficial interest
in a Series 2004-1 Global Note (if any is then outstanding) only in
accordance with such procedures, which shall be substantially consistent with
the provisions of Sections 5.05(a) through Section 5.05(e) and Section 5.05(g) of
this Series Supplement (including the certification requirement intended
to ensure that transfers and exchanges of beneficial interests in a Series 2004-1
Global Note comply with Rule 144A or Regulation S under the
Securities Act, as the case may be) and any Applicable Procedures, as may be
adopted from time to time by HVF and the Registrar.

 

(g)  Until the
termination of the Restricted Period, interests in the Regulation S Global
Notes may be held only through Clearing Agency Participants acting for and
on behalf of Euroclear and Clearstream; provided, that this Section 5.05(g) shall
not prohibit any transfer in accordance with Section 5.05(d) of this Series Supplement.
After the expiration of the Restricted Period, interests in the Unrestricted
Global Notes may be transferred without requiring any certifications.

 

87

 

(h)  The Series 2004-1
Notes shall bear the following legends to the extent indicated:

 

(i) The Restricted Notes shall bear the
following legend:

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY
STATE SECURITIES LAWS. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE ONLY (A) TO HVF, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A
PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED
IN RULE 144A (A “QIB”) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF HVF,
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT.

 

(ii) The Regulation S Global Notes shall
bear the following legend:

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES. UNTIL 40 DAYS AFTER THE ORIGINAL ISSUE DATE OF THE NOTES (THE “RESTRICTED
PERIOD”) IN CONNECTION WITH THE OFFERING OF THE NOTES IN THE UNITED STATES FROM
OUTSIDE OF THE UNITED STATES, THE SALE, PLEDGE OR TRANSFER OF THIS NOTE IS
SUBJECT TO CERTAIN CONDITIONS AND RESTRICTIONS. THE HOLDER HEREOF, BY
PURCHASING OR OTHERWISE ACQUIRING THIS NOTE, ACKNOWLEDGES THAT THIS NOTE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT AND AGREES FOR THE BENEFIT OF
HERTZ VEHICLE FINANCING LLC (“HVF”) THAT THIS NOTE MAY BE TRANSFERRED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES
ACT AND OTHER APPLICABLE LAWS OF THE STATES, TERRITORIES AND POSSESSIONS OF THE
UNITED STATES GOVERNING THE OFFER AND SALE OF SECURITIES, AND PRIOR TO THE
EXPIRATION OF THE RESTRICTED PERIOD, ONLY (1) IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH REGULATION S UNDER THE

 

88

 

SECURITIES
ACT, (2) PURSUANT TO AND IN ACCORDANCE WITH RULE 144A UNDER THE
SECURITIES ACT OR (3) TO HVF.

 

(iii) The Series 2004-1 Global Notes shall
bear the following legends:

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (“DTC”), A NEW YORK CORPORATION, 55 WATER
STREET, NEW YORK, NEW YORK 10004, OR A NOMINEE THEREOF. THIS NOTE MAY NOT
BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN DTC OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO HVF OR THE REGISTRAR, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER, CEDE &
CO., HAS AN INTEREST HEREIN.

 

(iv) The required legends set forth above shall
not be removed from the applicable Series 2004-1 Notes except as provided
herein. The legend required for a Restricted Note may be removed from such
Restricted Note if there is delivered to HVF and the Registrar such
satisfactory evidence, which may include an Opinion of Counsel as may be
reasonably required by HVF that neither such legend nor the restrictions on
transfer set forth therein are required to ensure that transfers of such Series 2004-1
Note will not violate the registration requirements of the Securities Act. Upon
provision of such satisfactory evidence, the Trustee at the direction of HVF
shall authenticate and deliver in exchange for such Restricted Note a Series 2004-1
Note or Series 2004-1 Notes having an equal aggregate principal amount
that does not bear such legend. If such a legend required for a Restricted Note
has been removed from a Series 2004-1 Note as provided above, no other Series 2004-1
Note issued in exchange for all or any part of such Series 2004-1
Note shall bear such legend, unless HVF has reasonable cause to believe that
such other Series 2004-1 Note is a “restricted  security”
within the meaning of Rule 144 under the Securities Act and instructs the
Trustee to cause a legend to appear thereon.

 

89

 

ARTICLE VI

General

 

SECTION 6.01. Optional
Redemption of Series 2004-1 Notes. (a)  HVF may, at its option,
redeem the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes or the Class A-4 Notes as a whole on any Payment Date on which the Class A-1
Outstanding Principal Amount, the Class A-2 Outstanding Principal Amount,
the Class A-3 Outstanding Principal Amount or the Class A-4
Outstanding Principal Amount, as the case may be, is equal to or less than
10% of the Initial Class A-1 Principal Amount, the Initial Class A-2
Principal Amount, the Initial Class A-3 Principal Amount or the Initial Class A-4
Principal Amount, as the case may be, with funds deposited in the Series 2004-1
Distribution Account pursuant to Section 2.02 of this Series Supplement,
at 100% of the principal amount thereof, plus accrued and unpaid interest
thereon; provided, however, as a condition precedent to any redemption, HVF shall pay
to the Insurer all Insurer Fees and all other Insurer Reimbursement Amounts due
and payable and to Ford, all unpaid Ford Reimbursement Obligations.

 

(b)  If HVF elects to
redeem any Class of the Series 2004-1 Notes pursuant to the
provisions of Section 6.01(a), it shall notify the Trustee in writing at
least 30 days prior to the intended date of redemption of (i) such
intended date of redemption, (ii) the Series 2004-1 Notes subject to
redemption and (iii) the principal amount of the Series 2004-1 Notes
to be redeemed. Upon receipt of a notice of redemption from HVF, the Trustee
shall give notice of such redemption in the manner provided in Section 13.01
of the Base Indenture to the Series 2004-1 Noteholders of the Series 2004-1
Notes to be redeemed. Such notice shall be given not less than ten (10) days
prior to the intended date of redemption.

 

SECTION 6.02. Information.
On or before the fourth Business Day prior to each Payment Date (unless
otherwise agreed to by the Trustee), HVF shall cause the Administrator to
furnish to the Trustee a Monthly Noteholders’ Statement with respect to the Series 2004-1
Notes, substantially in the form of Exhibit G, setting forth, inter
alia, the following information:

 

(i) the total amount available to be
distributed to Series 2004-1 Noteholders on such Payment Date;

 

(ii) the amount of such distribution allocable
to the payment of principal of each Class of the Series 2004-1 Notes;

 

(iii) the amount of such distribution allocable
to the payment of interest on each Class of the Series 2004-1 Notes;

 

(iv) the Class A-1 Carryover Controlled
Amortization Amount, the Class A-2 Carryover Controlled Amortization
Amount, the Class A-3 Carryover Controlled Amortization Amount or the Class A-4
Carryover Controlled Amortization Amount, if any, for the Related Month;

 

90

 

(v) the Series 2004-1 Invested Percentage
with respect to Interest Collections and with respect to Principal Collections
for the period from and including the second Determination Date preceding such
Payment Date to but excluding the Determination Date immediately preceding such
Payment Date;

 

(vi) the Series 2004-1 Enhancement Amount
and the Series 2004-1 Liquidity Amount, in each case, as of the close of
business on the last day of the Related Month;

 

(vii) whether, to the knowledge of the
Administrator, any Lien exists on any of the Collateral (other than Permitted
Liens);

 

(viii) whether, to the knowledge of the
Administrator, any Operating Lease Event of Default has occurred;

 

(ix) whether, to the knowledge of the
Administrator, any Amortization Event or Potential Amortization Event with
respect to the Series 2004-1 Notes has occurred;

 

(x) the Aggregate Asset Amount and the amount of the
Aggregate Asset Amount Deficiency, if any, as of the close of business on the
last day of the Related Month;

 

(xi) the Non-Eligible Vehicle Amount and the
Non-Eligible Vehicle Percentage as of the close of business on the last day of
the Related Month;

 

(xii) the Non-Eligible Manufacturer Amount as of the
close of business on the last day of the Related Month;

 

(xiii) the Series 2004-1 Required Non-Eligible
Vehicle Enhancement Percentage as of the close of business on the last day of
the Related Month and the Non-Program Vehicle Measurement Month Average, if any,
included in the calculation of such Series 2004-1 Required Non-Eligible
Vehicle Enhancement Percentage;

 

(xiv) the Series 2004-1 Required Enhancement
Incremental Amount, if any, as of the close of business on the last day of the
Related Month;

 

(xv) the Series 2004-1 Required Liquidity
Amount as of the close of business on the last day of the Related Month and
whether the Series 2004-1 Liquidity Amount was less than the Series 2004-1
Required Liquidity Amount as of the close of business on the last day of the
Related Month;

 

(xvi) the Series 2004-1 Required Enhancement
Amount as of the close of business on the last day of the Related Month and
whether a Series 2004-1 Enhancement Deficiency existed and the amount
thereof;

 

91

 

(xvii) the Series 2004-1 Required
Overcollateralization Amount and the Series 2004-1 Overcollateralization
Amount, in each case, as of the close of business on the last day of the
Related Month;

 

(xviii) the Series 2004-1 Required Reserve
Account Amount and the Series 2004-1 Available Reserve Account Amount, in
each case, as of the close of business on the last day of the Related Month;

 

(xix) the percentage of all HVF Vehicles, with
respect to each Manufacturer, as of the close of business on the last day of
the Related Month which were Eligible Program Vehicles manufactured by such
Manufacturer;

 

(xx) the percentage of all HVF Vehicles, with
respect to each Manufacturer which is not an Eligible Program Manufacturer, as
of the close of business on the last day of the Related Month which were
Program Vehicles manufactured by such Manufacturer; and

 

(xxi) the percentage of all HVF Vehicles, with
respect to each Manufacturer, as of the close of business on the last day of
the Related Month which were Non-Program Vehicles manufactured by such
Manufacturer.

 

The Trustee shall provide to the Series 2004-1
Noteholders, or their designated agent, and the Insurer copies of each Monthly
Noteholders’ Statement.

 

SECTION 6.03. Exhibits.
The following exhibits attached hereto supplement the exhibits included in the
Indenture.

 

	
  Exhibit A-1-1:

  	
  Form of Restricted Global Class A-1 Note

  
	
  Exhibit A-1-2:

  	
  Form of Regulation S Global Class A-1 Note

  
	
  Exhibit A-1-3:

  	
  Form of Unrestricted Global Class A-1 Note

  
	
  Exhibit A-2-1:

  	
  Form of Restricted Global Class A-2 Note

  
	
  Exhibit A-2-2:

  	
  Form of Regulation S Global Class A-2 Note

  
	
  Exhibit A-2-3:

  	
  Form of Unrestricted Global Class A-2 Note

  
	
  Exhibit A-3-1:

  	
  Form of Restricted Global Class A-3 Note

  
	
  Exhibit A-3-2:

  	
  Form of Regulation S Global Class A-3 Note

  
	
  Exhibit A-3-3:

  	
  Form of Unrestricted Global Class A-3 Note

  
	
  Exhibit A-4-1:

  	
  Form of Restricted Global Class A-4 Note

  
	
  Exhibit A-4-2:

  	
  Form of Regulation S Global Class A-4 Note

  
	
  Exhibit A-4-3:

  	
  Form of Unrestricted Global Class A-4 Note

  
	
  Exhibit B-1-1:

  	
  Form of Series 2004-1 Letter of Credit

  
	
  Exhibit B-1-2:

  	
  Form of Series 2004-1 Ford Letter of Credit

  
	
  Exhibit C:

  	
  Form of Lease Payment Deficit Notice

  
	
  Exhibit D-1-1:

  	
  Form of Reduction Notice

  
	
  Exhibit D-1-2:

  	
  Form of Reduction Notice

  
	
  Exhibit D-2-1:

  	
  Form of Termination Notice

  
	
  Exhibit D-2-2:

  	
  Form of Termination Notice

  
	
  Exhibit E:

  	
  Form of Consent

  

 

92

 

	
  Exhibit F-1:

  	
  Form of Transfer Certificate

  
	
  Exhibit F-2:

  	
  Form of Transfer Certificate

  
	
  Exhibit F-3:

  	
  Form of Transfer Certificate

  
	
  Exhibit G:

  	
  Form of Monthly Noteholders’ Statement

  
	
  Exhibit H:

  	
  Form of Series 2004-1 Demand Note

  

 

SECTION 6.04. Ratification
of Base Indenture. As supplemented by this Series Supplement, the Base
Indenture is in all respects ratified and confirmed and the Base Indenture as
so supplemented by this Series Supplement shall be read, taken, and
construed as one and the same instrument.

 

SECTION 6.05. Notice
to Insurer Rating Agencies and Ford. The Trustee shall provide to the
Insurer and each Rating Agency a copy of each notice to the Series 2004-1
Noteholders, Opinion of Counsel and Officer’s Certificate delivered to the
Trustee pursuant to this Series Supplement or any other Related Document. Each
such Opinion of Counsel to be delivered to the Insurer shall be addressed to
the Insurer, shall be from counsel reasonably acceptable to the Insurer and
shall be in form and substance reasonably acceptable to the Insurer. The
Trustee shall provide notice to each Rating Agency of any consent by the
Insurer to the waiver of the occurrence of any Series 2004-1 Limited
Liquidation Event of Default. In addition, only for so long as the Ford LOC
Exposure Amount is greater than zero, the Trustee shall provide to Ford a copy
of each report, notice and other information provided to the Series 2004-1
Noteholders pursuant to this Series Supplement or any other Related
Document. All such notices, opinions, certificates or other items to be
delivered to the Insurer shall be forwarded to MBIA Insurance Corporation, 113
King Street, Armonk, New York 10504, Attention: 
Insured Portfolio Management – Structured Finance (IPM-SF) (Hertz
Vehicle Financing LLC Series 2004-1 Rental Car Asset Backed Notes),
Facsimile No.:  (914) 765-3810,
Confirmation No.:  (914) 765-3781. All
such notices, opinions, certificates or other items to be delivered to Ford
shall be forwarded to Ford Motor Company, 1 American Road, Dearborn, MI 48126
Attention: Director – Global Banking, Facsimile No. (313) 594-0110.

 

SECTION 6.06. Insurer
Deemed Series 2004-1 Noteholder and Secured Party. Except for any
period during which an Insurer Default is continuing, the Insurer shall be
deemed to be the holder of 100% of the Series 2004-1 Notes for the
purposes of giving any consents, waivers, approvals, instructions, directions,
declarations, notices and/or taking any other action pursuant to the Base
Indenture, this Series Supplement and the other Related Documents, other
than the right to waive purchase restrictions pursuant to Article IV of
this Series Supplement. Any reference in the Base Indenture or the Related
Documents to materially, adversely, or detrimentally affecting the rights or
interests of the Noteholders, or words of similar meaning, shall be deemed, for
purposes of the Series 2004-1 Notes, to refer to the rights or interests
of the Insurer. In addition, the Insurer shall constitute an “Enhancement
Provider” with respect to the Series 2004-1 Notes for all purposes under
the Base Indenture, the other Related Documents and the Insurance Agreement
shall constitute an “Enhancement Agreement” with respect to the Series 2004-1
Notes for all purposes under the Base Indenture and the other Related

 

93

 

Documents. Furthermore, the Insurer shall be
deemed to be a “Secured Party” under the Base Indenture and the Related
Documents to the extent of amounts payable to the Insurer pursuant to this Series Supplement.
Moreover, wherever in the Related Documents money or other property is assigned,
conveyed, granted or held for, a filing is made for, action is taken for or
agreed to be taken for, or a representation or warranty is made for, the
benefit of the Series 2004-1 Noteholders, the Insurer shall be deemed to
be the Series 2004-1 Noteholders with respect to 100% of the Series 2004-1
Notes for such purposes.

 

SECTION 6.07. Third
Party Beneficiary. Each of the Insurer and Ford in its capacity as
accountholder of a Series 2004-1 Ford Letter of Credit is an express third
party beneficiary of (i) the Base Indenture to the extent of provisions
relating to any Enhancement Provider, in the case of the Insurer, or to the
extent of the provisions relating to Ford, in the case of Ford and (ii) this
Series Supplement.

 

SECTION 6.08. Prior
Notice by Trustee to Insurer. Subject to Section 10.01 of the Base
Indenture, except for any period during which an Insurer Default is continuing,
the Trustee agrees that so long as no Amortization Event shall have occurred
and be continuing with respect to any Series of Notes, other than the Series 2004-1
Notes, it shall not exercise any rights or remedies available to it as a result
of the occurrence of an Amortization Event with respect to the Series 2004-1
Notes (except those set forth in clauses (h) and (i) of Article III
of this Series Supplement) until after the Trustee has given prior written
notice thereof to the Insurer and obtained the direction of the Insurer. The
Trustee agrees to notify the Insurer promptly following any exercise of rights
or remedies available to it as a result of the occurrence of an Amortization
Event with respect to the Series 2004-1 Notes.

 

SECTION 6.09. Subrogation.
In furtherance of and not in limitation of the Insurer’s equitable right of
subrogation, each of the Trustee and HVF acknowledge that, to the extent of any
payment made by the Insurer under the Insurance Policy with respect to interest
on or principal of the Series 2004-1 Notes, the Insurer is to be fully
subrogated to the extent of such payment and any additional interest due on any
late payment to the rights of the Series 2004-1 Noteholders under the
Indenture. Each of HVF and the Trustee agree to such subrogation and, further,
agree to take such actions as the Insurer may reasonably request to
evidence such subrogation.

 

Furthermore, in furtherance of and not in limitation
of Ford’s equitable right of subrogation, each of the Trustee and HVF
acknowledge that, to the extent that Ford LOC Disbursements or amounts on
deposit in the Series 2004-1 Ford Cash Collateral Account are applied to
pay interest on or principal of the Series 2004-1 Notes and Ford has
reimbursed the applicable Series 2004-1 Letter of Credit Providers for
such Ford LOC Disbursements or such amounts deposited in the Series 2004-1
Ford Cash Collateral Account, Ford is to be fully subrogated to the extent of
such payment under the Indenture; provided such rights shall be
subordinated in all respects to the rights of subrogation of the Insurer set
forth in the preceding paragraph and to the rights of the Noteholders to the
payment in full of all amounts owing to them under the Indenture.

 

94

 

Each
of HVF and the Trustee agree to such subrogation and, further, agree to take
such actions as Ford may reasonably request to evidence such subrogation.

 

SECTION 6.10. Counterparts.
This Series Supplement may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.

 

SECTION 6.11. Governing
Law. This Series Supplement shall be construed in accordance with the
law of the State of New York, and the obligations, rights and remedies of the
parties hereto shall be determined in accordance with such law.

 

SECTION 6.12. Amendments.
This Series Supplement may be modified or amended from time to time
in accordance with the terms of the Base Indenture, provided that if, pursuant
to the terms of the Base Indenture or this Series Supplement, the consent
of the Required Noteholders is required for an amendment or modification of
this Series Supplement, such requirement shall be satisfied if such
amendment or modification is consented to by the Required Noteholders with
respect to the Series 2004-1 Notes; provided, further that, if the consent
of the Required Noteholders with respect to the Series 2004-1 Notes is
required for a proposed amendment or modification of this Series Supplement
that does not affect in any material respect one or more Classes of the Series 2004-1
Notes (as evidenced by an Officer’s Certificate to such effect), then such
requirement shall be satisfied if such amendment or modification is consented
to by the Series 2004-1 Noteholders representing more than 50% of the
aggregate outstanding principal amount of the Classes of the Series 2004-1
Notes affected by such amendment or modification (without the necessity of
obtaining the consent of the Series 2004-1 Noteholders holding the Classes
of the Series 2004-1 Notes not affected by such amendment or modification).
Only for so long as the Ford LOC Exposure Amount is greater than zero, any
amendment to any provision of this Series Supplement shall be subject to Section 6.16
of this Series Supplement.

 

SECTION 6.13. Termination
of Series Supplement. This Series Supplement shall cease to be of
further effect when (i) all Outstanding Series 2004-1 Notes
theretofore authenticated and issued have been delivered (other than destroyed,
lost, or stolen Series 2004-1 Notes which have been replaced or paid) to
the Trustee for cancellation, (ii) HVF has paid all sums payable
hereunder, (iii) the Insurer has been paid all Insurer Fees and all other
Insurer Reimbursement Amounts due under the Insurance Agreement, (iv) Ford
has been paid all amounts payable to it hereunder and no amounts are required
hereby to be retained in any Series Account with respect to the Series 2004-1
Notes and (v) the Series 2004-1 Demand Note Payment Amount is equal
to zero or the Series 2004-1 Non-Ford Letter of Credit Liquidity Amount is
equal to zero.

 

SECTION 6.14. Discharge
of Indenture. Notwithstanding anything to the contrary contained in the
Base Indenture, so long as this Series Supplement shall be in effect in
accordance with Section 6.13 of this Series Supplement, no discharge
of the Indenture pursuant to Section 11.01(b) of the Base Indenture
shall be effective as to the

 

95

 

Series 2004-1 Notes without the consent
of the Required Noteholders with respect to the Series 2004-1 Notes.

 

SECTION 6.15. Effect
of Payment by Insurer. Anything in this Series Supplement to the
contrary notwithstanding, any payments of principal of or interest on the Series 2004-1
Notes that is made with moneys received pursuant to the terms of the Insurance
Policy shall not (except for the purpose of calculating the Class A-1
Outstanding Principal Amount, the Class A-2 Outstanding Principal Amount,
the Class A-3 Outstanding Principal Amount and the Class A-4
Outstanding Principal Amount) be considered payment of the Series 2004-1
Notes by the Issuer. The Trustee acknowledges that, without the need for any
further action on the part of the Insurer, (i) to the extent the
Insurer makes payments, directly or indirectly, on account of principal of or
interest on, the Series 2004-1 Notes to the Trustee for the benefit of the
Series 2004-1 Noteholders or to the Series 2004-1 Noteholders
(including any Preference Amounts as defined in the Insurance Policy), the
Insurer will be fully subrogated to the rights of such Series 2004-1
Noteholders to receive such principal and interest and will be deemed to the
extent of the payments so made to be a Series 2004-1 Noteholder and (ii) the
Insurer shall be paid principal and interest in its capacity as a Series 2004-1
Noteholder until all such payments by the Insurer have been fully reimbursed,
but only from the sources and in the manner provided in this Series Supplement
for payment of such principal and interest and, in each case, only after the Series 2004-1
Noteholders have received all payments of principal and interest due to them
under this Series Supplement on the related Payment Date.

 

SECTION 6.16. Ford
Covenants. HVF hereby covenants and agrees with Ford that, only for so long
as the Ford LOC Exposure Amount is greater than zero:

 

(a)  Distributions
to HVF. No amounts will be distributed to HVF pursuant to any provision of
the Indenture if, after giving effect to that distribution, the Fleet Equity
Amount would be less than the Required Minimum Fleet Equity Amount.

 

(b)  Inspection of
Property, Books and Records. It will permit representatives of Ford to
visit and inspect any of its properties and to examine any of its books and
records, and to discuss its affairs, finances and accounts with the Servicer
and its officers, directors, employees and independent public accountants all
at such reasonable times and on reasonable notice and as often as may reasonably
be requested (but, prior to the occurrence of a Potential Amortization Event or
an Amortization Event, not more than twice in any year).

 

(c)  Other Series Supplements.
Each Series Supplement will provide for the payment of Ford Reimbursement
Obligations prior to any distribution or other release of funds to HVF
thereunder and prior to any payment of any termination payments under Swap
Agreements; provided, however, that on or prior to January 6, 2006, the Series 2002-1
Supplement, dated as of September 18, 2002, by and between HVF and the
Trustee, as amended, supplemented or otherwise modified from time to time, will
not be required to provide for any payment of Ford Reimbursement Obligations.

 

96

 

(d)  No Amendments.
It will not, without the prior written consent of Ford (which consent shall not
be unreasonably withheld or delayed), (i) extend or otherwise modify the
Three-Year Notes Expected Final Payment Date, the Three-Year Notes Legal Final
Payment Date, the Class A-3 Expected Final Payment Date, the Class A-3
Legal Final Payment Date, the Class A-4 Expected Final Payment Date or the
Class A-4 Legal Final Payment Date, (ii) amend, modify or waive Sections
2.02(d), (e) and (f), 2.03(d) and (e),
2.05(a), (b), and (d), 2.07(e) and (f),
2.08(b), (c), (e), (f)(I), (g), (h), (i),
(j) and (k), 2.12 and 2.13, 6.05, 6.07,
6.09  6.12, 6.13 and 6.16 of this Series Supplement
or any other provision of the Series 2004-1 Supplement providing for
drawings on the Series 2004-1 Letters of Credit or withdrawals from the Series 2004-1
Reserve Account or the payment by HVF of Ford Reimbursement Obligations or any
terms used in such provisions, (iii) amend, modify or waive the
definitions of Fleet Equity Amount, Fleet Equity Condition or Required Minimum
Fleet Equity Amount, or the effect of the use of those terms to prohibit
certain payments; (iv) amend, modify or waive any of the provisions of any
other Series Supplement providing for the payment by HVF of Ford
Reimbursement Obligations, (v) amend, modify or waive the provisions of
Sections 5.2(b) or 5.2(d) of the Base Indenture or (vi) amend,
modify or waive the Base Indenture, enter into any Series Supplement or
amend, modify or waive any Series Supplement in a manner that provides for
an invested percentage calculation that is different than that contained in the
Series Supplements relating to the Series of Notess being issued on
the date hereof.

 

97

 

IN WITNESS WHEREOF, HVF and the Trustee have caused
this Series Supplement to be duly executed by their respective officers
hereunto duly authorized as of the day and year first above written.

 

	
   

  	
  HERTZ
  VEHICLE FINANCING LLC,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/ Robert
  H. Rillings 

  
	
   

  	
   

  	
  Name:

  	
  Robert H.
  Rillings

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY MIDWEST
  TRUST COMPANY,

  as Trustee, 

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/ Eric A.
  Lindahl 

  
	
   

  	
   

  	
  Name:

  	
  Eric A.
  Lindahl 

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President 

  

 

 

98Exhibit
4.9.7

 

 

 

AMENDED AND RESTATED MASTER MOTOR VEHICLE OPERATING LEASE AND SERVICING
AGREEMENT

 

Dated as of December 21, 2005

 

between

 

HERTZ VEHICLE FINANCING LLC

 

as Lessor

 

and

 

THE HERTZ CORPORATION

 

as Lessee and Servicer

 

 

 

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
  1.

  	
  DEFINITIONS

  	
  2

  
	
  2.

  	
  GENERAL AGREEMENT

  	
  2

  
	
   

  	
  2.1.

  	
  Lease of Vehicles

  	
  2

  
	
   

  	
  2.2.

  	
  Non-Liability of Lessor

  	
  2

  
	
   

  	
  2.3.

  	
  Return

  	
  3

  
	
   

  	
  2.4.

  	
  Lessee’s Right to Purchase
  Vehicles

  	
  3

  
	
   

  	
  2.5.

  	
  Lessor’s Right to Cause
  Vehicles to be Sold

  	
  4

  
	
   

  	
  2.6.

  	
  Redesignation of Vehicles

  	
  5

  
	
   

  	
  2.7.

  	
  Limitations on the Leasing
  or Redesignation of Certain Vehicles

  	
  6

  
	
   

  	
  2.8.

  	
  Conditions to Each Lease
  of Vehicle

  	
  6

  
	
   

  	
  2.9.

  	
  Compliance with Master
  Exchange Agreement

  	
  7

  
	
  3.

  	
  TERM

  	
  7

  
	
   

  	
  3.1.

  	
  Vehicle Term

  	
  7

  
	
   

  	
  3.2.

  	
  Term

  	
  8

  
	
  4.

  	
  RENT AND CHARGES

  	
  8

  
	
   

  	
  4.1.

  	
  Monthly Base Rent

  	
  8

  
	
   

  	
  4.2.

  	
  Monthly Variable Rent

  	
  9

  
	
   

  	
  4.3.

  	
  Rent

  	
  9

  
	
   

  	
  4.4.

  	
  Monthly Base Rent
  Adjustments

  	
  9

  
	
   

  	
  4.5.

  	
  Payment of Monthly Base
  Rent

  	
  10

  
	
   

  	
  4.6.

  	
  Payment of Monthly
  Variable Rent

  	
  10

  
	
   

  	
  4.7.

  	
  Rejected Vehicles

  	
  10

  
	
   

  	
  4.8.

  	
  Making of Payments

  	
  10

  
	
   

  	
  4.9.

  	
  Billing Process

  	
  10

  
	
   

  	
  4.10.

  	
  Casualty Payments

  	
  11

  
	
   

  	
  4.11.

  	
  Late Payment

  	
  11

  
	
   

  	
  4.12.

  	
  Prepayments

  	
  11

  
	
   

  	
  4.13.

  	
  Net Lease

  	
  11

  
	
  5.

  	
  INSURANCE

  	
  12

  
	
   

  	
  5.1.

  	
  Comprehensive Public
  Liability, Property Damage, and Catastrophic Physical Damage

  	
  12

  
	
   

  	
  5.2.

  	
  Delivery of Certificate of
  Insurance

  	
  13

  
	
  6.

  	
  RISK OF LOSS; CASUALTY AND
  INELIGIBLE VEHICLE OBLIGATIONS

  	
  13

  
	
   

  	
  6.1.

  	
  Risk of Loss Borne by
  Lessees

  	
  13

  
	
   

  	
  6.2.

  	
  Casualty; Ineligible
  Vehicles

  	
  13

  
	
  7.

  	
  VEHICLE USE

  	
  13

  
	
  8.

  	
  LIENS

  	
  14

  
	
  9.

  	
  NON-DISTURBANCE

  	
  14

  
	
  10.

  	
  FEES; TRAFFIC SUMMONSES;
  PENALTIES AND FINES

  	
  15

  
	
  11.

  	
  MAINTENANCE AND REPAIRS

  	
  15

  
	
  12.

  	
  VEHICLE WARRANTIES

  	
  15

  
	
   

  	
  12.1.

  	
  No Lessor Warranties

  	
  15

  
	
   

  	
  12.2.

  	
  Manufacturer’s Warranties

  	
  16

  
							

 

i

 

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

  	
  16

  
	
   

  	
  13.1.

  	
  Usage

  	
  16

  
	
   

  	
  13.2.

  	
  Return

  	
  16

  
	
   

  	
  13.3.

  	
  Special Default Payments

  	
  16

  
	
   

  	
  13.4.

  	
  Early Termination Payments

  	
  17

  
	
  14.

  	
  DISPOSITION PROCEDURE

  	
  17

  
	
  15.

  	
  ODOMETER DISCLOSURE
  REQUIREMENT

  	
  17

  
	
  16.

  	
  ASSIGNMENT

  	
  18

  
	
   

  	
  16.1.

  	
  Right of the Lessor to
  Assign this Agreement

  	
  18

  
	
   

  	
  16.2.

  	
  Limitations on the Right
  of the Lessee to Assign this Agreement

  	
  18

  
	
  17.

  	
  DEFAULT AND REMEDIES
  THEREFOR

  	
  18

  
	
   

  	
  17.1.

  	
  Events of Default

  	
  18

  
	
   

  	
  17.2.

  	
  Effect of Operating Lease
  Event of Default

  	
  19

  
	
   

  	
  17.3.

  	
  Rights of Lessor Upon
  Operating Lease Event of Default

  	
  19

  
	
   

  	
  17.4.

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

  	
  20

  
	
   

  	
  17.5.

  	
  Measure of Damages

  	
  21

  
	
   

  	
  17.6.

  	
  Vehicle Return Default

  	
  22

  
	
   

  	
  17.7.

  	
  Servicer Default

  	
  23

  
	
   

  	
  17.8.

  	
  Application of Proceeds

  	
  23

  
	
  18.

  	
  MANUFACTURER EVENTS OF
  DEFAULT

  	
  23

  
	
  19.

  	
  CERTIFICATION OF TRADE OR
  BUSINESS USE

  	
  24

  
	
  20.

  	
  TITLE TO VEHICLES

  	
  24

  
	
  21.

  	
  RIGHTS OF LESSOR ASSIGNED
  TO TRUSTEE

  	
  24

  
	
  22.

  	
  MODIFICATION AND
  SEVERABILITY

  	
  24

  
	
  23.

  	
  SERVICER ACTING AS AGENT
  OF THE LESSOR

  	
  25

  
	
  24.

  	
  MINIMUM DEPRECIATION RATE

  	
  25

  
	
  25.

  	
  CERTAIN REPRESENTATIONS
  AND WARRANTIES

  	
  25

  
	
   

  	
  25.1.

  	
  Organization; Power;
  Qualification

  	
  25

  
	
   

  	
  25.2.

  	
  Authorization;
  Enforceability

  	
  25

  
	
   

  	
  25.3.

  	
  Compliance

  	
  26

  
	
   

  	
  25.4.

  	
  Other

  	
  26

  
	
   

  	
  25.5.

  	
  Financial Statements

  	
  26

  
	
   

  	
  25.6.

  	
  Investment Company Act

  	
  27

  
	
   

  	
  25.7.

  	
  Supplemental Documents
  True and Correct

  	
  27

  
	
   

  	
  25.8.

  	
  Manufacturer Programs

  	
  27

  
	
   

  	
  25.9.

  	
  ERISA

  	
  27

  
	
   

  	
  25.10.

  	
  Indemnification Agreement

  	
  27

  
	
   

  	
  25.11.

  	
  Eligible Vehicles

  	
  27

  
	
  26.

  	
  CERTAIN AFFIRMATIVE
  COVENANTS

  	
  27

  
	
   

  	
  26.1.

  	
  Corporate Existence; Foreign
  Qualification

  	
  28

  
	
   

  	
  26.2.

  	
  Books, Records and
  Inspections

  	
  28

  

 

ii

 

	
   

  	
  26.3.

  	
  ERISA

  	
  28

  
	
   

  	
  26.4.

  	
  Merger

  	
  28

  
	
   

  	
  26.5.

  	
  Reporting Requirements

  	
  28

  
	
   

  	
  26.6.

  	
  Indemnification Agreement

  	
  30

  
	
  27.

  	
  NO PETITION

  	
  30

  
	
  28.

  	
  SUBMISSION TO JURISDICTION

  	
  31

  
	
  29.

  	
  GOVERNING LAW

  	
  31

  
	
  30.

  	
  JURY TRIAL

  	
  31

  
	
  31.

  	
  NOTICES

  	
  31

  
	
  32.

  	
  SURVIVABILITY

  	
  32

  
	
  33.

  	
  HEADINGS

  	
  32

  
	
  34.

  	
  EXECUTION IN COUNTERPARTS

  	
  32

  

 

iii

 

AMENDED AND RESTATED MASTER MOTOR VEHICLE OPERATING LEASE AND SERVICING
AGREEMENT

 

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

 

W I T N E S S E T H:

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

3.  TERM.

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

14

 

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

 

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

 

12.  VEHICLE WARRANTIES.

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

16.  ASSIGNMENT.

 

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

 

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

 

17.  DEFAULT AND REMEDIES THEREFOR.

 

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

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

17.1.8.  a Servicer Default occurs; or

 

17.1.9.  a Liquidation Event of Default occurs.

 

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

 

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

 

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

 

19

 

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

 

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

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

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

 

23

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

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

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

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

 

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

 

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

 

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

 

31

 

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

 

TRUSTEE:

 

BNY Midwest Trust Company

2 North LaSalle Street

Chicago, IL 60602

Attention:  Corporate Trust Administration
Structured

Finance

Telephone:  (312) 827-8569

Fax:  (312) 827-8562

 

LESSOR:

 

225 Brae Boulevard

Park Ridge, NJ 07656

Attention:  Treasury Department

Telephone:  (201) 307-2000

Fax:  (201) 307-2746

 

LESSEE:

 

225 Brae Boulevard

Park Ridge, NJ 07656

Attention:  Treasury Department

Telephone:  (201) 307-2000

Fax:  (201) 307-2746

 

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

 

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

 

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

 

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

 

32

 

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

 

	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  HERTZ
  VEHICLE FINANCING LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  225 Brae Boulevard

  
	
   

  	
   

  	
  Park Ridge, NJ 07656

  
	
   

  	
  Attention:

  	
  Treasury Department

  
	
   

  	
  Telephone:

  	
  (201) 307-2000

  
	
   

  	
  Fax:

  	
  (201) 307-2746

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LESSEE
  AND SERVICER:

  
	
   

  	
   

  
	
   

  	
  THE
  HERTZ CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  225 Brae Boulevard

  
	
   

  	
   

  	
  Park Ridge, NJ 07656

  
	
   

  	
  Attention:

  	
  Treasury Department

  
	
   

  	
  Telephone:

  	
  (201) 307-2000

  
	
   

  	
  Fax:

  	
  (201) 307-2746

  

 

33

 

Acknowledging its obligations under
Section 27 hereof:

 

 

	
   

  	
  NOMINEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ VEHICLES LLC,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  	
   

  
	
   

  	
  HFC NOMINEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ FUNDING CORPORATION,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Title:

  	
  Vice President and
  Treasurer

  

 

34

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