Document:

Exhibit 4.9.18

 

U.S. $200,000,000

 

LETTER OF CREDIT FACILITY
AGREEMENT,

 

dated
as of December 21, 2005

 

 

among

 

 

THE HERTZ CORPORATION

 

 

HERTZ VEHICLE FINANCING
LLC

and

FORD MOTOR COMPANY

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I.           DEFINITIONS
  AND ACCOUNTING TERMS

  	
  2

  
	
   

  	
   

  	
   

  
	
  Section 1.1.

  	
  Defined Terms

  	
  2

  
	
  Section 1.2.

  	
  Use of Defined Terms

  	
  6

  
	
  Section 1.3.

  	
  Cross-References

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE II.

  	
  COMMITMENTS, BORROWING PROCEDURES AND NOTES

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  Commitment

  	
  6

  
	
   

  	
  2.1.1.

  	
  Commitment to Issue Ford Letters of Credit

  	
  6

  
	
   

  	
  2.1.2.

  	
  Ford Not Required To Issue Ford Letters of Credit Under Certain
  Circumstances

  	
  6

  
	
  Section 2.2.

  	
  Issuance Procedure

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.

  	
  LETTERS OF CREDIT

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Issuance Requests

  	
  7

  
	
  Section 3.2.

  	
  Issuances

  	
  7

  
	
  Section 3.3.

  	
  Disbursements / Reimbursements

  	
  7

  
	
  Section 3.4.

  	
  No Bankruptcy Petition Against HVF

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.

  	
  CONDITIONS PRECEDENT

  	
  8

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  [INTENTIONALLY OMITTED.]

  	
  8

  
	
  Section 4.2.

  	
  All Credit Extensions

  	
  8

  
	
   

  	
  4.2.1.

  	
  Credit Request

  	
  8

  
	
   

  	
  4.2.2.

  	
  Form of Ford Letter of Credit

  	
  8

  
	
   

  	
  4.2.3.

  	
  Related Series of Notes

  	
  9

  
	
   

  	
  4.2.4.

  	
  Form of Series Supplement

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE V.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  HVF

  	
  9

  
	
  Section 5.2.

  	
  Hertz

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.

  	
  COVENANTS

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Covenants of HVF

  	
  10

  
	
  Section 6.2.

  	
  Covenants of Hertz

  	
  11

  
					

 

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE VII.

  	
  EVENTS OF DEFAULT

  	
  11

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Listing of Events of Default

  	
  11

  
	
   

  	
  7.1.1.

  	
  Non-Payment of Obligations

  	
  11

  
	
   

  	
  7.1.2.

  	
  Non-Performance of Covenants and Obligations

  	
  12

  
	
   

  	
  7.1.3.

  	
  Bankruptcy, Insolvency, etc

  	
  12

  
	
  Section 7.2.

  	
  Action if Bankruptcy

  	
  12

  
	
  Section 7.3.

  	
  Action if Other Event of Default

  	
  12

  
	
  Section 7.4.

  	
  Letter of Credit Commitment Termination Date

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.

  	
  MISCELLANEOUS PROVISIONS

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Waivers, Amendments, etc

  	
  12

  
	
  Section 8.2.

  	
  Notices

  	
  12

  
	
  Section 8.3.

  	
  Survival

  	
  12

  
	
  Section 8.4.

  	
  Severability

  	
  13

  
	
  Section 8.5.

  	
  Headings

  	
  13

  
	
  Section 8.6.

  	
  Execution in Counterparts, Effectiveness, etc

  	
  13

  
	
  Section 8.7.

  	
  Governing Law

  	
  13

  
	
  Section 8.8.

  	
  Successors and Assigns

  	
  13

  
	
  Section 8.9.

  	
  Independence of Covenants

  	
  13

  
	
  Section 8.10.

  	
  Forum Selection and Consent to Jurisdiction

  	
  13

  
	
  Section 8.11.

  	
  Waiver of Jury Trial

  	
  14

  
					

 

 

LETTER
OF CREDIT FACILITY AGREEMENT

 

THIS LETTER OF
CREDIT FACILITY AGREEMENT, dated as of December 21, 2005, among HERTZ VEHICLE FINANCING
LLC, a Delaware limited liability company (“HVF”), THE HERTZ
CORPORATION, a Delaware corporation (“Hertz” or the “Administrator”),
and FORD MOTOR COMPANY, a Delaware corporation, (“Ford”).

 

WITNESSETH :

 

WHEREAS, CCMG Acquisition Corp. (“CCMG
Acquisition”), directly or indirectly through one or more of its affiliates
will acquire all of the outstanding common stock of Hertz (such acquisition,
the “Acquisition”) from Ford Holdings LLC (“Ford Holdings”),
pursuant to that certain Stock Purchase Agreement, dated as of September 12,
2005, by and among CCMG Holdings, Inc. (“CCMG Holdings”) and Ford;

 

WHEREAS, Hertz is engaged in the business of renting
passenger automobiles and light-duty trucks to customers;

 

WHEREAS, Hertz has arranged for the financing of the majority of its
daily vehicle rental fleet through various vehicle financing facilities under a
rental car asset-backed program (the “ABS Program”);

 

WHEREAS, under the ABS Program HVF may from time to time issue Notes
under an Amended and Restated Base Indenture, dated as of December 21, 2005, by
and between HVF and BNY Midwest Trust Company (“BNY Midwest”), as
Trustee (in such capacity, the “Trustee”);

 

WHEREAS, HVF uses the proceeds of the issuance of the Notes to purchase
HVF Vehicles for lease to Hertz under that certain Amended and Restated Master
Motor Vehicle Lease and Servicing Agreement, dated as of December 21, 2005;

 

WHEREAS, in connection with the Acquisition, Ford has agreed, subject
to certain conditions set forth herein, to provide or cause to be provided from
time to time prior to the Letter of Credit Commitment Termination Date (as
defined herein), as credit and/or liquid enhancement under the ABS Program,
letters of credit issued for the account of Ford and in the form provided herein.

 

NOW, THEREFORE, for good and valid consideration, the sufficiency of
which is hereby acknowledged the parties hereto agree as follows:

 

 

ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.1.            Defined
Terms.  As used in this
Agreement and unless otherwise defined herein or the context requires a
different meaning, capitalized terms used but not defined herein (including the preamble and the recitals
hereto) shall have the meanings assigned to such terms in the Base
Indenture.  The following terms (whether
or not underscored) when used in this Agreement, including its preamble and
recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):

 

“Administrator”
is defined in the preamble.

 

“Agreement”
means, on any date, this Letter of Credit Facility Agreement as from time to
time amended, supplemented, amended and restated, or otherwise modified and in
effect on such date.

 

“Agreement
Related to Ford” means any clause or section of a Related Document which
grants a right to, or provides for a right of, Ford, requires Ford to receive
information, or requires Ford’s consent.

 

“Base Indenture”
means 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.

 

“Business Day”
means any day other than a Saturday, Sunday or other day on which banks are
authorized or required by law to be closed in New York City, New York.

 

“Commitment”
means, Ford’s obligation to cause to be issued by an Eligible Ford Letter of
Credit Provider, Ford Letters of Credit pursuant to Section 2.1.1.

 

“Commitment
Amount” means $200,000,000.

 

“Default”
means any Event of Default or any condition, occurrence or event which, after
notice or lapse of time or both, would constitute an Event of Default.

 

“Dollar”
and the symbol “$” mean the lawful currency of the United States.

 

“Eligible Ford
Letter of Credit Provider” means a Person having, at the time of the
issuance of the related Ford Letter of Credit, a long-term senior unsecured
debt rating (or the equivalent thereof in the case of Moody’s or Standard &
Poor’s, as applicable) of at least “A+” from Standard & Poor’s and, at
least “A1” 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.

 

 

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

 

“Event of
Default” is defined in Section 7.1.

 

“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 (i) any Series-Specific 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, (ii) any Series-Specific Collection
Account and available for reduction of
the Principal Amount with respect to the related Series as of such date and
(iii) any other Eligible Series Enhancement Account exceeds the aggregate
Principal Amount of each Outstanding Series of Notes on such date.

 

“Ford” is defined
in the preamble.

 

“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 Investments on deposit in any Series
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.

 

“herein”, “hereof”, “hereto”, “hereunder”
and similar terms contained in this Agreement refer to this Agreement as a
whole and not to any particular Section, paragraph or provision of this
Agreement.

 

“Hertz” is
defined in the preamble.

 

“HVF” is
defined in the preamble.

 

“including” and “include” means including without
limiting the generality of any description preceding such term, and, for
purposes of this Agreement, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.

 

 

“Initial Ford
Letters of Credit” means the Ford Letters of Credit issued on the date
hereof to support the Series 2004-1 Notes, the Series 2005-1 Notes and the
Series 2005-2 Notes.

 

“Issuance
Request” means a request and certificate duly executed by Hertz, as
Administrator on behalf of HVF, in substantially the form of Exhibit A
attached hereto (with such changes thereto as may be agreed upon from time to
time by the Administrator, HVF and Ford).

 

“Letter of
Credit Commitment Termination Date” means the earlier of

 

(a)           the first
Business Day prior to the Stated Maturity Date; and

 

(b)           the date on
which the Commitment Amount is terminated in full pursuant to Section 7.3.

 

Upon the
occurrence of any event described in clause (a) or (b) above, the
Commitment shall terminate automatically and without any further action.

 

“Letter of
Credit Document” means this Agreement, the Base Indenture, each Series
Supplement and each Ford Letter of Credit.

 

“Letter of
Credit Expiration Date” is defined in Section 3.1.

 

“Letter of
Credit Termination Date” means December 21, 2010,
or such other date as may be agreed to in writing by the parties hereto.

 

“Permitted
Letters of Credit” means a Ford Letter of Credit issued with a Stated
Amount which, when included in the Ford LOC Exposure Amount at the time of such
issuance, does not result in the Ford LOC Exposure Amount exceeding the
Commitment Amount.

 

“Person” means any natural person,
corporation, business trust, joint venture, association, company, partnership,
limited liability company, joint stock company, corporation, trust,
unincorporated organization or governmental agency.

 

“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.

 

“Series 2004-1
Notes” means the Series 2004-1 Medium Term Rental Car Asset Backed Notes
issued by HVF on March 31, 2004 under that certain Amended and Restated Series
Supplement to the Base Indenture, dated as of the date hereof (as amended,
modified, restated or supplemented from time to time in accordance with the
terms thereof), by and between HVF and the Trustee.

 

“Series 2005-1
Notes” means the Series 2005-1 Medium Term Rental Car Asset Backed Notes
issued by HVF on the date hereof under that certain Series

 

 

Supplement
to the Base Indenture, dated as of the date hereof (as amended, modified,
restated or supplemented from time to time in accordance with the terms
thereof), by and between HVF and the Trustee.

 

“Series 2005-2
Notes” means the Series 2005-2 Medium Term Rental Car Asset Backed Notes
issued by HVF on the date hereof under that certain Series Supplement to the
Base Indenture, dated as of the date hereof (as amended, modified, restated or
supplemented from time to time in accordance with the terms thereof), by and
between HVF and the Trustee.

 

“Series 2005-3
Notes” means the Series 2005-3 Variable Funding Rental Car Asset Backed
Notes issued by HVF on the date hereof under that certain Series Supplement to
the Base Indenture, dated as of the date hereof (as amended, modified, restated
or supplemented from time to time in accordance with the terms thereof), by and
between HVF and the Trustee.

 

“Series 2005-4
Notes” means the Series 2005-4 Variable Funding Rental Car Asset Backed
Notes issued by HVF on the date hereof under that certain Series Supplement to
the Base Indenture, dated as of the date hereof (as amended, modified, restated
or supplemented from time to time in accordance with the terms thereof), by and
between HVF and the Trustee.

 

“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 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-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 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
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.

 

 

“Stated Amount”
of each Ford Letter of Credit means the maximum amount available for drawing
thereunder (whether or not any conditions to drawing can then be met).

 

“Stated
Maturity Date” means December 21, 2010.

 

“Trustee”
is defined in the recitals.

 

“United States”
or “U.S.” means the United States of America, its fifty states and the
District of Columbia.

 

Section 1.2.            Use of Defined
Terms.  Unless otherwise
defined or the context otherwise requires, terms for which meanings are provided
in this Agreement shall have such meanings when used in the Issuance Request
notice and other communication delivered from time to time in connection with
this Agreement.

 

Section 1.3.            Cross-References.  Unless otherwise specified, references in this
Agreement to any Article or Section are references to such Article or Section
of this Agreement, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references
to such clause of such Article, Section or definition.

 

ARTICLE II.

COMMITMENT, BORROWING PROCEDURES AND NOTES

 

Section 2.1.            Commitment.  On the terms and subject to the conditions of
this Agreement (including Article IV), Ford hereby agrees as follows:

 

2.1.1.          Commitment to Issue Ford Letters of
Credit.  From time to time on any
Business Day prior to the Letter of Credit Commitment Termination Date, Ford
will cause to be issued by an Eligible Ford Letter of Credit Provider, a Ford
Letter of Credit in accordance with Article III.

 

2.1.2.          Ford Not Required To Issue Ford
Letters of Credit Under Certain Circumstances.  Ford shall not be required to cause to be
issued by an Eligible Ford Letter of Credit Provider any Ford Letter of Credit
to the extent that, after giving effect thereto.

 

(a)           the Ford LOC
Exposure Amount would exceed the Commitment Amount or

 

(b)           the Required
Minimum Fleet Equity Amount would exceed the Fleet Equity Amount.

 

Section 2.2.            Issuance
Procedure.  By delivering an
Issuance Request, in the form of Exhibit A, to Ford on or before 1:00
p.m. (New York City, New York

 

 

time) on a Business Day, HVF, or
the Administrator on behalf of HVF, may from time to time irrevocably request
the Issuance of a Ford Letter of Credit as provided in Article III.

 

ARTICLE III.

LETTERS OF CREDIT

 

Section 3.1.            Issuance
Requests.  By delivering to
Ford an Issuance Request, in the form of Exhibit A, HVF or Hertz as
Administrator on behalf of HVF may request, from time to time prior to the
Letter of Credit Commitment Termination Date and, not less than five (5) nor
more than fifteen 15 Business Days’ notice, that Ford cause to be issued a Ford
Letter of Credit by an Eligible Ford Letter of Credit Provider as described in
such Issuance Request.  Any Issuance
Request not delivered on or before 1:00 p.m. (New York City, New York time) on
a Business Day shall be deemed to have been delivered on the immediately
succeeding Business Day.  Each Ford
Letter of Credit shall by its terms:

 

(a)           be
issued in a Stated Amount denominated in Dollars as set forth in the related
Issuance Request which

 

(i)            is at least $ 100,000; and

 

(ii)           does
not exceed (or would not exceed) an amount equal to the excess, if any, of (x)
the Commitment Amount over (y) the Ford LOC Exposure Amount on the date of the
issuance of such Ford Letter of Credit;

 

(b)           be stated to expire
on a date (its “Letter of Credit Expiration Date”) no later than the
Letter of Credit Termination Date; and

 

(c)           be
substantially in the form as of the date hereof of Exhibit B-1-2 or B-2-2 to
the Series Supplement relating to the Series 2004-1 Notes, the Series 2005-1
Notes, the Series 2005-2 Notes, the Series 2005-3 Notes or the Series 2005-4
Notes.

 

Section 3.2.            Issuances.  On the terms and subject to the conditions of
this Agreement (including Article IV), Ford shall cause Ford Letters of
Credit to be issued by an Eligible Ford Letter of Credit Provider, in
accordance with the Issuance Requests made therefore.  Ford will make available the original of each
Ford Letter of Credit in accordance with the Issuance Request to the
Trustee.  Notwithstanding anything to the
contrary herein, no Ford Letter of Credit may be issued other than Permitted
Letters of Credit.

 

Section 3.3.            Disbursements /
Reimbursements.  Ford will
promptly notify HVF and Hertz of the payment by Ford of any reimbursement
amounts owing from Ford in respect of any disbursements under a Ford Letter of
Credit to the issuing bank of such Ford Letter of Credit.

 

Section 3.4.            No Bankruptcy Petition Against HVF.  Ford
hereby covenants and agrees that, prior to the date which is one year and one
day after the payment in full of the latest maturing Note issued under the Base
Indenture, it will not institute against, or join with any other Person in
instituting against, HVF any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any federal
or state bankruptcy or similar law; provided, however, that
nothing in this Section 3.4 shall constitute a waiver of any right to
indemnification, reimbursement or other payment from HVF pursuant to this
Agreement or any other Letter of Credit Document.  In the event that Ford takes action in
violation of this Section 3.4, HVF agrees, for the benefit of the
holders of the Notes issued under the Base Indenture, that it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such a petition by Ford against HVF or the commencement of such action and
raise the defense that Ford has agreed in writing not to take such action and
should be estopped and precluded therefrom and such other defenses, if any, as
its counsel advises that it may assert; and Ford shall be liable for and pay
any costs and expenses incurred by HVF in connection therewith.  The provisions of this Section 3.4
shall survive the termination of this Agreement.

 

ARTICLE IV.

CONDITIONS PRECEDENT

 

Section 4.1.            [INTENTIONALLY
OMITTED.]

 

Section 4.2.            All
Credit Extensions.  The
obligation of Ford to cause to be issued a Ford Letter of Credit by an Eligible
Ford Letter of Credit Provider shall be
subject to the satisfaction of each of the conditions precedent set forth in
this Section 4.2.

4.2.1.          Credit Request.  Ford shall have received an Issuance Request
for such Ford Letter of Credit.  Each of
the delivery of an Issuance Request, and the acceptance by the Trustee on behalf of HVF of a Ford Letter of
Credit, shall constitute a representation and warranty by HVF that on the date
of the issuance of the Ford Letter of Credit:

 

(a)           its representations and
warranties made for the benefit of Ford in this Agreement shall be true and
correct in all material respects
and with the same effect as if then made (unless stated to relate solely to an
earlier date, in which case such representations and warranties shall be true
and correct as of such earlier date);

 

(b)           no Event of
Default shall have then occurred and be continuing.

 

(c)           after giving
effect to the issuance of such Ford Letter of Credit and any other transactions
under the Related Documents on the date of such issuance, the Required Minimum
Fleet Equity Amount shall be less than the Fleet Equity Amount.

 

4.2.2.          Form of Ford Letter of Credit.  Each Ford Letter of Credit shall be
substantially the form as of the date hereof of Exhibit B-1-2 or B-2-2 to the
Series 

 

 

Supplement relating to any of the Series 2004-1 Notes,
the Series 2005-1 Notes, the Series 2005-2 Notes, the Series 2005-3 Notes or
the Series 2005-4 Notes.

 

4.2.3.          Related Series of Notes.  The Series of Notes being supported by such
Ford letter of Credit shall have an Expected Final Payment Date that is on or
prior to December 21, 2010 and a maturity date that is on or prior to December
21, 2011.

 

4.2.4.          Form of Series Supplement.  The Series Supplement pursuant to which the
Series of Notes being supported by such Ford Letter of Credit was issued shall
be substantially in the form as of the date hereof of the Series Supplement
relating to the Series 2004-1 Notes, the Series 2005-1 Notes, the Series 2005-2
Notes, the Series 2005-3 Notes or the Series 2005-4 Notes.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

 

In order to induce
Ford to enter into this Agreement and to cause an Eligible Ford Letter of
Credit Provider to issue Ford Letters of Credit from time to time hereunder,
HVF represents and warrants unto Ford as set forth in this Article V.

 

Section 5.1.            HVF.

 

(a)           HVF has been duly organized and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware;

 

(b)           This Agreement has been duly
authorized, executed and delivered by a duly authorized officer of HVF;

 

(c)           This Agreement is a legal, valid and
binding obligation of HVF enforceable against HVF 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);

 

(d)           The execution, delivery and
performance by HVF of this Agreement (a) is within HVF’s limited liability
company powers and has been duly authorized by all necessary limited liability
company action, (b) requires no action by or in respect of, or filing with, any
Governmental Authority which has not been obtained and (c) does not contravene,
or constitute a default under, any Requirements of Law with respect to HVF or
any Contractual Obligation with respect to HVF; and

 

(e)           Each of the representations and warranties
of HVF contained in the Base Indenture is true and correct in all material
respects, and HVF makes each such representation and warranty to, and for the
benefit of, Ford as if the same were set forth in full herein.

 

 

Section 5.2.            Hertz.

 

(a)           Hertz has been duly organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware;

 

(b)           This Agreement has been duly
authorized, executed and delivered by a duly authorized officer of Hertz;

 

(c)           This Agreement is a legal, valid and
binding obligation of Hertz enforceable against Hertz 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);

 

(d)           The execution, delivery and
performance by Hertz of this Agreement (a) is within Hertz’s corporate powers
and has been duly authorized by all necessary corporate action, and (b)
requires no action by or in respect of, or filing with, any Governmental
Authority which has not been obtained, or the absence of which would materially
affect, the execution, delivery and performance of this Agreement and (c) does
not contravene, or constitute a default under, any Requirements of Law with
respect to Hertz or any Contractual Obligation with respect to Hertz (except to
the extent that such contravention or default is not reasonably likely to have
a Material Adverse Effect); and

 

(e)           Each of the representations and
warranties of Hertz contained in Section 25.1 and 25.2 of the Lease is true and
correct in all material respects, and Hertz makes each such representation and
warranty to, and for the benefit of, Ford as if the same were set forth in full
herein.

ARTICLE VI.

COVENANTS

 

Section 6.1.            Covenants of
HVF.  During the term of this
Agreement and until the Commitment has been terminated or expired, no Ford
Letters of Credit are outstanding and all Ford Reimbursement Obligations have
been paid in full, unless compliance shall have been waived in writing by Ford,
HVF agrees with Ford that:

 

(a)           Compliance with
Related Documents.  It will comply
with all of its obligations under the Related Documents in accordance with the
terms of the Related Documents for the benefit of Ford.

 

(b)           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.

 

 

(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 any 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.

 

(d)           Third Party
Beneficiary.  Ford shall be a third
party beneficiary to each Agreement Related to Ford in the Related Documents.

 

Section 6.2.            Covenants of
Hertz.  During the term of
this Agreement and until the Commitment has been terminated or has expired, no
Ford Letters of Credit are outstanding and all Ford Reimbursement Obligations
have been paid in full, unless compliance shall have been waived in writing by
Ford, Hertz, as Administrator agrees with Ford that:

 

(a)           Compliance with
Related Documents.  It will (i)
comply with all of its Agreements Relating to Ford in accordance with the terms
of the Related Documents for the benefit of Ford and (ii) comply in all
material respects with all of its other obligations under the Related Documents
in accordance with the Related Documents for the benefit of Ford.

 

(b)           Distribution 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.

 

(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 any 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.

 

(d)           Third Party
Beneficiary.  Ford shall be a third
party beneficiary to each Agreement Related to Ford in the Related Documents.

 

ARTICLE VII.

EVENTS OF DEFAULT

 

Section 7.1.            Listing of
Events of Default.  Each of
the following events or occurrences described in this Section 7.1 shall
constitute an “Event of Default”.

 

 

7.1.1.          Non-Payment of Obligations.  HVF shall default in the payment when due
under the Indenture of any Ford Reimbursement Obligations and such default shall
continue for a period of five (5) Business Days; provided, that a
failure to pay due to a lack of available funds for distribution pursuant to
the Indenture shall not constitute an Event of Default under this Section
7.1.1.

 

7.1.2.          Non-Performance of Covenants and
Obligations.  HVF or Hertz shall
default in the performance or observance of any agreement contained herein and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to HVF or Hertz, as applicable, by Ford.

 

7.1.3.          Bankruptcy, Insolvency, etc.  An Event of Bankruptcy shall have occurred
with respect to HVF.

 

Section 7.2.            Action if Bankruptcy.  If any Event of Default described in Section
7.1.3 shall occur, the Commitment (if not theretofore terminated) shall
automatically terminate without notice or demand.

 

Section 7.3.            Action if Other
Event of Default.  If any
Event of Default (other than any Event of Default described in Section 7.1.3)
shall occur for any reason, whether voluntary or involuntary, and be
continuing, Ford may, by notice to HVF declare the Commitment (if not
theretofore terminated) to be terminated, whereupon, without further notice,
demand or presentment, the Commitment shall terminate.

 

Section 7.4.            Letter of
Credit Commitment Termination Date. 
Upon the Letter of Credit Commitment Termination Date, the Commitment
shall automatically terminate and Ford shall not be obligated to cause any new
Ford Letters of Credit to be issued.

 

ARTICLE VIII.

MISCELLANEOUS PROVISIONS

 

Section 8.1.            Waivers,
Amendments, etc.  The
provisions of this Agreement may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented
to by Hertz, HVF and Ford.

 

Section 8.2.            Notices.  All notices and other communications provided
to any party hereto under this Agreement shall be in writing or by facsimile
and addressed, delivered or transmitted to such party at its address or
facsimile number set forth below its signature hereto or at such other address
or facsimile number as may be designated by such party in a notice to the other
parties.  Any notice, if mailed and
properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any notice, if
transmitted by facsimile, shall be deemed given when the confirmation thereof
is received by the transmitter.

 

 

Section 8.3.            Survival.  The obligations of HVF and Ford under Section
3.4, shall survive any termination of this Agreement, the payment in full
of all Ford Reimbursement Obligations and the termination of the
Commitment.  The representations and
warranties made by HVF and Hertz in this Agreement shall survive the execution
and delivery of this Agreement.

 

Section 8.4.            Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.

 

Section 8.5.            Headings.  The various headings of this Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provisions hereof.

 

Section 8.6.            Execution in
Counterparts, Effectiveness, etc. 
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall constitute together but one and the same
agreement.

 

Section 8.7.            Governing Law.  THIS AGREEMENT SHALL BE
DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

Section 8.8.            Successors and
Assigns.  This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that no
party hereto may assign or transfer any of its rights or obligations hereunder
without the prior written consent of each other party hereto; provided
further that HVF may assign its rights hereunder to the Trustee under the
Indenture without the prior written consent of any of the parties hereto.

 

Section 8.9.            Independence of
Covenants.  All covenants
contained in this Agreement shall be given independent effect such that, in the
event a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not, unless
expressly so provided in such first covenant, avoid the occurrence of a Default
or an Event of Default if such action is taken or such condition exists.

 

Section 8.10.          Forum Selection and Consent to
Jurisdiction.  ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EACH OF
THE PARTIES HERETO SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF
THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK.  EACH OF THE
PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE

 

 

JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE.  EACH OF THE PARTIES HERETO FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE, IN THE CASE OF FORD, AT ITS PRINCIPAL OFFICES
IN DEARBORN, MICHIGAN, AND IN THE CASE OF HVF OR HERTZ, AT ITS PRINCIPAL
OFFICES IN PARK RIDGE, NEW JERSEY.  EACH
OF THE PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH SUCH PERSON MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.  TO THE EXTENT
THAT ANY PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO SUCH PERSON OR THE PROPERTY OF SUCH PERSON, SUCH PARTY HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF THE OBLIGATIONS OF SUCH PERSON UNDER THIS
AGREEMENT.

 

Section 8.11.          Waiver of Jury
Trial.  EACH OF THE
PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
SUCH PARTY.  EACH PARTY HERETO
ACKNOWLEDGES AND AGREES THAT EACH SUCH PERSON HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR ALL OF THE PARTIES ENTERING INTO THIS AGREEMENT.

 

[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]

 

 

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

 

	
  THE HERTZ CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Robert H. Rillings

  	
   

  
	
  Name:

  	
  Robert H. Rillings

  
	
  Title:

  	
  Treasurer

  
	
   

  
	
  Address:

  	
  225 Brae Boulevard

  
	
   

  	
  Park Ridge, New Jersey

  
	
   

  
	
  Facsimile
  No.:

  	
  (201)
  307-2746

  
	
   

  	
   

  
	
  Attention:

  	
  Robert Rillings

  
	
   

  	
  Staff Vice President
  and Treasurer

  
	
   

  
	
   

  
	
  HERTZ VEHICLE
  FINANCING, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Robert H. Rillings

  	
   

  
	
  Name:

  	
  Robert H. Rillings

  
	
  Title:

  	
  Vice President and
  Treasurer

  
	
   

  
	
  Address:

  	
  225
  Brae Blvd.

  
	
   

  	
  Park
  Ridge, NJ 07656

  
	
   

  
	
  Facsimile
  No.:

  	
  (201) 307-2746

  
	
   

  
	
  Attention:

  	
  Treasury Department

  
	
   

  
	
  FORD MOTOR COMPANY

  
	
   

  
	
   

  
	
  By:

  	
  /s/ K.R. Kent

  	
   

  
	
  Name:

  	
  K.R. Kent

  
	
  Title:

  	
  Assistant Treasurer

  
	
   

  
	
  Address:

  	
  1 American Road

  
	
   

  	
  Dearborn, Michigan
  48126

  
	
   

  
	
  Facsimile
  No.: (313)
  594-0110

  
	
  Attention: Director —
  Global BankingExhibit 4.9.19

 

INSURANCE AGREEMENT

 

Among

 

MBIA
INSURANCE CORPORATION,
as
Insurer,

 

HERTZ
VEHICLE FINANCING LLC,
as Issuer,

 

and

 

BNY
MIDWEST TRUST COMPANY,
as Trustee

 

$500,000,000
Series 2005-1 Floating Rate Rental Car Asset Backed Notes, Class A-1

$275,000,000
Series 2005-1 Floating Rate Rental Car Asset Backed Notes, Class A-2

$100,000,000
Series 2005-1 5.010% Rental Car Asset Backed Notes, Class A-3

$1,150,000,000
Series 2005-1 Floating Rate Rental Car Asset Backed Notes, Class A-4

$125,000,000
Series 2005-1 5.080% Rental Car Asset Backed Notes, Class A-5

$250,000,000
Series 2005-4 Variable Funding Rental Car Asset Backed Notes, Class A

 

Dated as of December 21,2005

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
  ARTICLE I

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  	
   

  
	
   

  
	
  Section 2.01.

  	
  Representation and Warranties of
  the Issuer

  	
  7

  
	
  Section 2.02.

  	
  Affirmative Covenants of the
  Issuer

  	
  10

  
	
  Section 2.03.

  	
  Negative Covenants of the Issuer

  	
  16

  
	
  Section 2.04.

  	
  Representations, Warranties and
  Covenants of Trustee.

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
  THE
  POLICIES; REIMBURSEMENT

  	
   

  
	
  Section 3.01.

  	
  Issuance of the Policies

  	
  17

  
	
  Section 3.02.

  	
  Payment of Fees and Premium.

  	
  20

  
	
  Section 3.03.

  	
  Reimbursement and Additional
  Payment Obligation.

  	
  21

  
	
  Section 3.04.

  	
  Indemnification.

  	
  22

  
	
  Section 3.05.

  	
  Payment Procedure

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
  FURTHER
  AGREEMENTS

  	
   

  
	
  Section 4.01.

  	
  Effective Date; Term of the
  Insurance Agreement

  	
  25

  
	
  Section 4.02.

  	
  Obligations Absolute.

  	
  25

  
	
  Section 4.03.

  	
  Assignments; Reinsurance;
  Third-Party Rights.

  	
  27

  
	
  Section 4.04.

  	
  Liability of the Insurer

  	
  28

  
	
  Section 4.05.

  	
  Parties Will Not Institute
  Insolvency Proceedings

  	
  28

  
	
  Section 4.06.

  	
  Parties To Join in Enforcement
  Action

  	
  29

  
	
  Section 4.07.

  	
  Further Assurances and
  Corrective Instruments

  	
  29

  
	
  Section 4.08.

  	
  Subrogation

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
  DEFAULTS;
  REMEDIES

  	
   

  
	
  Section 5.01.

  	
  Defaults

  	
  29

  
	
  Section 5.02.

  	
  Remedies; No Remedy Exclusive.

  	
  30

  
	
  Section 5.03.

  	
  Waivers.

  	
  31

  

 

 

	
  ARTICLE VI

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
  Section 6.01.

  	
  Amendments, Etc

  	
  32

  
	
  Section 6.02.

  	
  Notices

  	
  32

  
	
  Section 6.03.

  	
  Severability

  	
  33

  
	
  Section 6.04.

  	
  Governing Law

  	
  33

  
	
  Section 6.05.

  	
  Consent to Jurisdiction.

  	
  33

  
	
  Section 6.06.

  	
  Counterparts

  	
  34

  
	
  Section 6.07.

  	
  Headings

  	
  34

  
	
  Section 6.08.

  	
  Trial by Jury Waived

  	
  34

  
	
  Section 6.09.

  	
  Limited Liability

  	
  34

  
	
  Section 6.10.

  	
  Entire Agreement

  	
  34

  
	
  Section 6.11.

  	
  Certain Opinions

  	
  34

  
	
  Section 6.12.

  	
  Certain Definitions

  	
  35

  
	
  Section 6.13.

  	
  Eligible Program Manufacturer

  	
  35

  
	
  Section 6.14.

  	
  Series 2005-1 and Series 2005-4
  Rating Agency Condition

  	
  35

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  ACKNOWLEDGEMENT
  AND CONSENT OF THE HERTZ CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
  ACKNOWLEDGMENT
  AND CONSENT OF HERTZ VEHICLES LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  ACKNOWLEDGMENT
  AND CONSENT OF HERTZ GENERAL INTEREST LLC

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT D

  	
  ACKNOWLEDGMENT
  AND CONSENT OF HERTZ FUNDING CORPORATION

  	
   

  
				

 

 

INSURANCE AGREEMENT

 

This Insurance Agreement, dated
as of December 21, 2005, among Hertz Vehicle Financing LLC, as the Issuer, MBIA Insurance
Corporation and BNY Midwest Trust Company, as Trustee and Securities
Intermediary.

 

Whereas, the Indenture relating to the Notes provides for, among other things,
the issuance of the Notes and MBIA has issued the Policies that guarantee
certain payments on the Notes; and

 

Whereas,
the Insurer shall be paid an
insurance premium pursuant to the Indenture and the details of such premium are
set forth herein; and

 

Whereas, the Issuer has undertaken certain obligations in consideration for the
Insurer’s issuance of the Policies;

 

Now, Therefore, in consideration of the premises and the mutual agreements herein
contained, the parties hereto agree as follows.

 

ARTICLE I

 

DEFINITIONS

 

The terms
defined in this Insurance Agreement shall have the meanings provided herein for
all purposes of this Insurance Agreement, unless the context clearly requires
otherwise, in both singular and plural form, as appropriate. Unless the context
clearly requires otherwise, all capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Indenture. All
words used herein shall be construed to be of such gender or number as the
circumstances require. This “Insurance Agreement” shall mean this Insurance
Agreement as a whole and as the same may, from time to time hereafter, be
amended, supplemented or modified. The words “herein,” “hereby,” “hereof,” “hereto,”
“hereinabove” and “hereinbelow,” and words of similar import, refer to this
Insurance Agreement as a whole and not to any particular paragraph, clause or
other subdivision hereof, unless otherwise specifically noted. Any reference
herein to any agreement or instrument shall mean such agreement or instrument
as the same may, from time to time be amended, supplemented or modified in
accordance with its terms.

 

“Acknowledgment and Consent” means each
Acknowledgment and Consent dated the date hereof of each Hertz Company, HFC and
of HGI.

 

“Agreement Relating to MBIA” means any clause
or section of a Transaction Document which grants a right to, or provides for a
right of, the Insurer in its capacity as an Enhancement

 

 

Provider, requires that the Insurer receive notice of a certain event,
or requires the Insurer’s consent with respect to certain events.

 

“Assignment Agreements” shall have the meaning
ascribed thereto in the Base Indenture.

 

“Base Indenture” means the Amended and Restated Base
Indenture, dated as of December 21, between the Trustee and the Issuer.

 

“Business Day” means any day other than (a) a
Saturday or a Sunday, (b) a day on which the Insurer is closed or (c) a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee under the Indenture is located are
authorized or obligated by law or executive order to close.

 

“Collateral” shall have the meaning ascribed
thereto in the Base Indenture.

 

“Collateral Agency Agreement” means the
Amended and Restated Collateral Agency Agreement dated as of December 21, 2005 among Hertz Vehicle Financing
LLC, as a grantor, Hertz General Interest LLC, as a grantor, The Hertz
Corporation, as Servicer and as a secured party, BNY Midwest Trust Company, as
a secured party, as Trustee and as Collateral Agent.

 

“Collateral Agent” shall have the meaning
ascribed thereto in the Base Indenture.

 

“Commission” means the Securities and Exchange
Commission.

 

“Date of
Issuance” means the date on which the Policies are
issued as specified therein.

 

“Default”
means any event which results, or which with the giving of notice or the lapse
of time or both would result, in an Event of Default.

 

“Event of
Default” means any Event of Default specified in
Section 5.01 hereof.

 

“Fee Letter”
means the fee letter dated December 21, 2005 among the Issuer, the Trustee and
the Insurer relating to the insurance premium and expenses payable to the
Insurer.

 

“Fiscal
Agent” means the Fiscal Agent, if any, designated by
the Insurer pursuant to the terms of the related Policy.

 

“Fitch”
means Fitch, Inc. and any successor thereto, and, if such corporation shall for
any reason no longer perform the functions of a securities rating agency, “Fitch”
shall be deemed to refer to any other nationally recognized rating agency
designated the Insurer.

 

“HFC” means Hertz Funding Corporation, a Delaware
corporation, and its successors.

 

2

 

“HFC Nominee Agreement” means the Vehicle Title Nominee
Agreement, dated as of December 21, 2005, among HFC, HVF, Hertz and the
Collateral Agent, as the same may be amended, restated, modified or
supplemented from time to time in accordance with its terms.

 

“HGI”
means Hertz General Interest LLC, a Delaware limited liability company.

 

“HVF Credit
Facility” shall have the meaning ascribed thereto in
the Base Indenture.

 

“HVLLC”
means Hertz Vehicles LLC, a Delaware limited liability company.

 

“Hertz”
means The Hertz Corporation, a Delaware corporation.

 

“Hertz
Companies” means Hertz, as Lessee, as Administrator,
and as Servicer, and HVLLC.

 

“Hertz Nominee Agreement” means the Vehicle Title Nominee
Agreement, dated as of December 21, among Hertz, HVF and the Collateral Agent,
as the same may be amended, restated, modified or supplemented from time to
time in accordance with its terms.

 

“Indenture”means the Base Indenture together with
the Supplement.

 

“Initial
Purchasers” means Lehman Brothers Inc., Deutsche Bank
AG, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman Sachs
Credit Partners L.P. and J.P. Morgan Securities Inc.

 

“Insurance Agreement” means this agreement.

 

“Insurer” means MBIA.

 

“Issuer” means Hertz Vehicle Financing LLC.

 

“Interest
Rate Hedge Agreement” shall have the meaning ascribed
to “Series 2005-1 Interest Rate Hedge” in the Supplements.

 

“Investment
Company Act” means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended.

 

“Issuer
Organizational Document” means the HVF LLC Agreement.

 

“Late
Payment Rate” means, for any date of determination,
the rate of interest as it is publicly announced by Citibank, N.A. at its
principal office in New York, New York as its prime rate (any change in such
prime rate of interest to be effective on the date such change is announced by
Citibank, N.A.) plus 2%. The Late Payment Rate shall be computed on the basis
of a year of 365 days calculating the actual number of days elapsed. In no
event shall the Late

 

3

 

Payment Rate exceed the maximum rate permissible under any applicable
law limiting interest rates.

 

“Lease
Agreement” means the Amended and Restated Master Motor
Vehicle Operating Lease and Servicing Agreement dated as of December 21, 2005
among the Lessor, as lessor, the Lessee, as lessee and the Servicer, as
servicer.

 

“Lessee”
means The Hertz Corporation in its capacity as Lessee under the Lease
Agreement.

 

“Lessor”
means Hertz Vehicle Financing LLC, in its capacity as Lessor under the Lease
Agreement.

 

“Losses”
means (i) any actual out-of-pocket loss paid by the Insurer, each of its
parents, subsidiaries and affiliates, or any shareholder, director, officer,
employee, agent or any “controlling person” (within the meaning of the
Securities Act or the Securities Exchange Act) of the Insurer or any of the
foregoing, and (ii) any actual out-of-pocket costs and expenses paid by such
party, including reasonable fees and expenses of its counsel, to the extent not
paid, satisfied or reimbursed from funds provided by any other Person (provided
that the foregoing shall not create or imply any obligation to pursue recourse
against any such other Person).

 

“Material
Adverse Change” means, in respect of any Person, a
material adverse change in (i) the business, financial condition, results of operations
or properties of such Person or (ii) the ability of such Person to perform
its obligations under any of the Transaction Documents.

 

“MBIA” means MBIA Insurance
Corporation.

 

“Moody’s”
means Moody’s Investors Service, Inc., a Delaware corporation, and any
successor thereto, and, if such corporation shall for any reason no longer
perform the functions of a securities rating agency, “Moody’s” shall be deemed
to refer to any other nationally recognized rating agency designated by the
Insurer.

 

“Note Purchase
Agreements” means, collectively, the Series 2005-1
Note Purchase Agreement and the Series 2005-4 Note Purchase Agreement.

 

“Notes” means the Series 2005-1 Notes and the
Series 2005-4 Notes issued under the Supplements.

 

“Offering
Document” means the final Offering Circular dated
December 15, 2005 in respect of the Series 2005-1 Notes together with the final
Supplement to Offering Circular dated December 15, 2005 in respect of the
Series 2005-1 Notes.

 

4

 

“Opinion
Facts and Assumptions” means the facts and assumptions
contained in the opinions addressing bankruptcy and insolvency matters dated on
or about the Date of Issuance of Cravath, Swaine & Moore LLP insofar as
they relate to the Issuer.

 

“Owners”
means the registered holders of Notes.

 

“Person”
means an individual, joint stock company, trust, unincorporated association,
joint venture, corporation, business or owner trust, limited liability company,
partnership or other organization or entity (whether governmental or private).

 

“Policies”
means, collectively, the Series 2005-1 Policy and the Series 2005-4 Policy.

 

“Premium”
means the premium due to the Insurer in accordance with Section 3.02 hereof.

 

“Purchase
Agreement” means the Amended and Restated
Participation, Purchase and Sale Agreement dated as of December 21, 2005 among
The Hertz Corporation, Hertz General Interest LLC and Hertz Vehicle Financing
LLC.

 

“S&P”
means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and
any successor thereto, and, if such division shall for any reason no longer
perform the functions of a securities rating agency, “S&P” shall be deemed
to refer to any other nationally recognized rating agency designated by the
Insurer.

 

“Securities
Act” means the Securities Act of 1933, including,
unless the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.

 

“Securities
Exchange Act” means the Securities Exchange Act of
1934, including, unless the context otherwise requires, the rules and
regulations thereunder, as amended from time to time.

 

“Series
2005-1 Note Purchase Agreement” means the Purchase
Agreement dated as of December 21, 2005 among the Issuer and the Initial
Purchasers, related to the Series 2005-1 Notes.

 

“Series
2005-1 Policy” means the note guaranty insurance
policy number 47437, issued by MBIA, guaranteeing certain payments on the
Series 2005-1 Notes.

 

“Series
2005-1 Supplement” means the Series 2005-1 Supplement between the Trustee and the
Issuer relating to the 3 year, 4 year and 5 year $2,150,000,000 Hertz Vehicle
Financing LLC Series 2005-1 Rental Car Asset Backed Notes and Floating Rental
Car Asset Backed Notes

 

5

 

“Series
2005-4 Note Purchase Agreement” means the Purchase
Agreement dated as of December 21, 2005 among the Issuer and the Initial
Purchasers, related to the Series 2005-4 Notes.

 

“Series
2005-4 Policy” means the note guaranty insurance
policy number 47444, issued by MBIA, guaranteeing certain payments on the
Series 2005-4 Notes.

 

“Series
2005-4 Supplement” means the Series 2005-4 Supplement between the Trustee and the
Issuer relating to the 3 year, 4 year and 5 year $250,000,000 Hertz Vehicle
Financing LLC Series 2005-4 Variable Funding Rental Car Asset Backed Notes and
Floating Rental Car Asset Backed Notes.

 

“Servicer”
means The Hertz Corporation in its capacity as Servicer under the Lease and the
Collateral Agency Agreement.

 

“Supplement”
or “Supplements” means, collectively, the Series 2005-1 Supplement and the Series
2005-4 Supplement.

 

“Term of
the Insurance Agreement” shall be determined as
provided in Section 4.01 hereof.

 

“Transaction”
means the transactions contemplated by the Transaction Documents, including the
transactions described in the Offering Document.

 

“Transaction
Documents” means this Insurance Agreement, the Fee
Letter, the Lease Agreement, the Indenture, the Notes, the Note Purchase
Agreements, the Assignment Agreements, the Administration Agreement, the
Collateral Agency Agreement, the HVF Credit Facility, the Nominee Agreement,
the Hertz Nominee Agreement, the HFC Nominee Agreement, the Indemnification
Agreement, the Purchase Agreement, any Interest Rate Hedge Agreement, any
Series 2005-1 Letter of Credit, the Issuer Organizational Document and each
Acknowledgment and Consent, as said documents may be amended, supplemented,
restated or otherwise modified from time to time in accordance with their
respective terms.

 

“Trustee”
means BNY Midwest Trust Company, as trustee and securities intermediary under
the Indenture, and any successor to the Trustee under the Indenture.

 

“Trust
Indenture Act” means the Trust Indenture Act of 1939,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

 

“Nominee
Agreement” means the Amended and Restated Vehicle
Title Nominee Agreement dated as of September 18, 2002 among Hertz Vehicles
LLC, Hertz Vehicle Financing LLC, Hertz General Interest LLC and BNY Midwest
Trust Company, as Collateral Agent.

 

6

 

ARTICLE II

 

REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

Section
2.01.  Representation and Warranties of
the Issuer. The
Issuer represents and warrants as of the Date of Issuance and covenants as
follows:

 

(a)           Due Organization and
Qualification. The Issuer is a limited liability company, duly
organized, validly existing and in good standing under the laws of Delaware.
The Issuer is duly qualified to do business, is in good standing and has obtained
all licenses, permits, charters, registrations and approvals (together, “approvals”) necessary for the conduct of its business as
currently conducted and as described in the Offering Document and necessary for
the performance of its obligations under the Transaction Documents, in each
jurisdiction in which the failure to be so qualified or to obtain such
approvals would render any Transaction Document unenforceable in any respect or
would have a material adverse effect upon the Transaction.

 

(b)           Power and Authority.
The Issuer has all necessary power and authority to conduct its business as
currently conducted and as described in the Offering Document and to execute,
deliver and perform its obligations under the Transaction Documents.

 

(c)           Due Authorization.
The execution, delivery and performance by the Issuer of the Transaction
Documents to which it is a party have been duly authorized by all necessary
action and do not require any additional approval or consent, or other action
by or any notice to or filing with any Person, including, without limitation,
any governmental entity or the Issuer’s members, as the case may be, (i) which
has not previously been obtained or given, or (ii) the absence of which is
reasonably likely to result in a Material Adverse Change with respect to the
Issuer.

 

(d)           Noncontravention.
Neither the execution and delivery of the Transaction Documents by the Issuer,
the consummation by the Issuer of the transactions contemplated thereby nor the
satisfaction by the Issuer of the terms and conditions of the Transaction
Documents:

 

(i)            conflicts
with or results in any material breach or violation of any provision of the
Issuer Organizational Document or any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award currently in effect having
applicability to the Issuer or any of its material properties, including
regulations issued by an administrative agency or other governmental authority
having supervisory powers over the Issuer;

 

7

 

(ii)           constitutes
a default by the Issuer under or a breach of any provision of any loan
agreement, mortgage, indenture or other agreement or instrument to which the
Issuer is a party or by which any of its properties is or may be bound or
affected, which is individually or in the aggregate material to the Issuer; or

 

(iii)          results
in or requires the creation of any lien upon or in respect of any assets of the
Issuer, except as permitted by the Transaction Documents.

 

(e)           Legal Proceedings.
There is no action, proceeding or investigation by or before any court,
governmental or administrative agency or arbitrator against or affecting the
Issuer or any properties or rights of the Issuer or any of its subsidiaries,
pending or, to the Issuer’s knowledge after reasonable inquiry, threatened,
which, in any case, could reasonably be expected to result in a Material
Adverse Change with respect to the Issuer.

 

(f)            Valid and Binding Obligations.
The Notes, when executed, authenticated and issued in accordance with the
Indenture, and the Transaction Documents to which the Issuer is a party (other
than the Notes), when executed and delivered by the Issuer, will constitute the
legal, valid and binding obligations of the Issuer, as applicable, enforceable
against the Issuer in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and
general equitable principles and public policy considerations as to rights of
indemnification for violations of federal securities laws.

 

(g)           Compliance With Law, Etc.
No practice, procedure or policy employed, or proposed to be employed, by the
Issuer in the conduct of its business violates any law, regulation, judgment,
agreement, order or decree applicable to it that, if enforced, could reasonably
be expected to result in a Material Adverse Change with respect to the Issuer.

 

(h)           Taxes. The Issuer has
filed prior to the date hereof all federal and state tax returns that are
required to be filed by it and paid all taxes, including any assessments
received by it, that are not being contested in good faith, to the extent that
such taxes have become due, except for any failures to file or pay that,
individually or in the aggregate, would not result in a Material Adverse Change
with respect to the Issuer.

 

(i)            Accuracy of Information.
Neither the Transaction Documents, nor any other written information relating
to the operations or the financial condition of the Issuer (collectively, the “Documents”), as amended, supplemented or superseded,

 

8

 

furnished to the Insurer, taken as a whole, contain any statement of a
material fact which was untrue or misleading in any material adverse respect
when made. The Issuer has no knowledge of circumstances that could reasonably
be expected to cause a Material Adverse Change with respect to the Issuer.
Since the furnishing of the Documents, there has been no change nor any
development or event involving a prospective change known to the Issuer that
would render the Documents, taken as a whole, untrue or misleading in a
material respect other than as disclosed to the Insurer after the furnishing of
the Documents.

 

(j)            Compliance With Securities Laws.
The offer and sale of the Notes comply in all material respects with all
requirements of law, including all registration requirements of applicable
securities laws. Without limitation of the foregoing, the Offering Document
does not contain any untrue statement of a material fact and does not omit to
state a material fact necessary to make the statements made therein, in light
of the circumstances under which they were made, not misleading; provided, however,
that no representation is made with respect to the information in Offering
Document set forth under the heading “DESCRIPTION OF CREDIT ENHANCEMENT—The
Policy and the Insurer” or the consolidated financial statements of the Insurer
incorporated by reference in the Offering Document. The Issuer is not required
to be registered as an “investment company” under the Investment Company Act.

 

(k)           Transaction Documents.
Each of the representations and warranties of the Issuer contained in the
Transaction Documents is true and correct in all material respects, and the
Issuer hereby makes each such representation and warranty to, and for the
benefit of, the Insurer as if the same were set forth in full herein. The
Issuer is in compliance in all material respects with, and the issuance of the
Notes is in compliance with, all provisions of the Transaction Documents to
which the Issuer is a party or by which the Issuer is bound.

 

(l)            Solvency. The Issuer
is solvent and will not be rendered insolvent by the Transaction and, after
giving effect to the Transaction, the Issuer will be solvent. As used in this
paragraph, the term “solvent” means, with respect to a particular date, that on
such date (i) the present fair market value (or present fair saleable value) of
the assets of the Issuer is not less than the total amount required to pay the
probable liabilities of the Issuer on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured, (ii)
the Issuer is able to realize upon its assets and pay its debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business, (iii) the Issuer is not incurring debts
or liabilities beyond its ability to pay as such debts and liabilities mature
and (iv) the Issuer is not engaged in any business or transaction, and is not
about to engage in any business or transaction, for which its property would
constitute

 

9

 

unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Issuer is engaged. In
computing the amount of such contingent liabilities at any time, it is intended
that such liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability. The Issuer
does not contemplate the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of any of the Hertz
Companies, the Issuer or any of their assets.

 

(m)          Opinion Facts and Assumptions.
The Opinion Facts and Assumptions insofar as they relate to the Issuer are true
and correct as of the Date of Issuance.

 

(n)           No Default. No
Default or Event of Default has occurred or would result from the issuance of
the Notes.

 

(o)           Enhancement Agreement.
This Insurance Agreement is an “Enhancement Agreement” and a “Related Document”
under the Indenture.

 

(p)           HVF Credit Facility.
The HVF Credit Facility is not secured by any assets of the Issuer.

 

Section
2.02.  Affirmative Covenants of the
Issuer. The
Issuer hereby agrees that during the Term of this Insurance Agreement unless
the Insurer shall otherwise expressly consent in writing:

 

(a)           Compliance With Agreements and
Applicable Laws. The Issuer shall comply with its obligations
under this Insurance Agreement, the Supplements and the other Transaction
Documents. The Issuer shall comply in all material respects with all
requirements of any law, rule or regulation applicable to it.

 

(b)           Existence. The Issuer
shall maintain its existence and shall at all times continue to be duly
organized under the laws of its respective jurisdiction of organization and
duly qualified and duly authorized (as described in subsections 2.01(a), (b)
and (c) hereof) and shall operate and conduct its business in accordance with
the terms of the Issuer Organizational Document and the Opinion Facts and
Assumptions.

 

(c)           Financial Statements; Accountants’ Reports; Other Information. The Issuer shall
keep or cause to be kept in reasonable detail books and records of account of
its assets and business, including, but not limited to, books and records
relating to the Transaction. The Issuer shall furnish to the Insurer:

 

10

 

(i)            Initial and Continuing Reports. The Issuer
shall deliver to the Insurer not later than 5:00 p.m., New York City time, (A)
on the day that is four Business Days prior to each Payment Date the Monthly
Servicing Certificate required by Section 4.1(c) of the Base Indenture and the
Monthly Noteholders’ Statement required by Section 4.1(d) of the Base Indenture
and (B) on or before each Payment Date the Monthly Collateral Certificate
required by Section 4.1(e) of the Base Indenture. Upon the request of the
Insurer, the Issuer shall deliver to the Insurer within one Business Day of its
request, copies of any Daily Collection Report required by Section 4.1(a) of
the Base Indenture.

 

(ii)           Other Information. Promptly upon receipt
thereof, copies of all schedules, financial statements or other similar
reports, notices, opinions, certificates, or other items delivered to or by the
Issuer or the Trustee pursuant to the terms of the Transaction Documents
(including copies of each item required to be delivered to the Trustee and the
Rating Agencies pursuant to Sections 4.1(f), and (h) and Section 8.2 of the
Base Indenture) and, promptly upon request, such other data as the Insurer may
reasonably request with respect to the Notes.

 

(d)           Compliance Certificate.
The Issuer shall deliver to the Insurer, quarterly on the Payment Date in each
March, June, September, and December beginning in March 2006 one or more
certificates addressed to the Insurer and signed by an officer of the Issuer
authorized to execute such certificates on behalf of the Issuer containing the
certifications required by Section 4.1(f) of the Base Indenture and stating
that:

 

(i)            the
ratings assigned by the Rating Agencies in respect of any outstanding series of
notes have not been withdrawn or downgraded since the date of the related
Series Supplement,

 

(ii)           no
Rating Agency has determined that the amount of Enhancement for any outstanding
series of notes must be increased in order to maintain the then current rating
of such Series or, if any Rating Agency has made such a determination, the
amount of additional Enhancement that would be required in order to maintain
such current rating,

 

(iii)          no
change in the Manufacturer Program of any Manufacturer in respect of any new
model year shall have given rise to any request known to the Issuer on the part
of any Rating Agency that any modification be made to any Transaction Document,
and

 

11

 

(iv)          the
Issuer has apprised the Rating Agencies and the Insurer of all material changes
in the Manufacturer Programs known to the Issuer occurring since the date of
this Insurance Agreement.

 

(e)           Access to Records; Discussions With
Officers and Accountants. The Issuer shall, upon the reasonable
request of the Insurer and as often as the Insurer may reasonably request (but,
prior to the occurrence of a Potential Amortization Event or an Amortization
Event, not more than twice in any year), permit the Insurer or its authorized
agents:

 

(i)            to
inspect the properties, books and records of the Issuer as they may relate to
the Notes, the obligations of the Hertz Companies under the Transaction
Documents, and the Transaction;

 

(ii)           to
discuss the affairs, finances and accounts of the Issuer with the chief
operating officer, the chief financial officer or other relevant officers of
the Issuer; and

 

(iii)          to
discuss in the presence of the Issuer the affairs, finances and accounts of the
Issuer with the Issuer’s independent accountants.

 

Such inspections and
discussions shall be conducted during normal business hours and upon reasonable
notice. The books and records of the Issuer will be maintained at the address
of the Issuer designated herein for receipt of notices, unless it shall
otherwise advise the parties hereto in writing. After the occurrence of an
Amortization Event, the costs of such inspections with the Issuer or of similar
inspections with any Hertz Company or with HGI provided for in the Transaction
Documents shall be at the expense of the Issuer and included in the
Reimbursable Amounts.

 

(f)            Notice of
Material Events. The Issuer shall promptly inform the Insurer in
writing of the occurrence of any of the following to the extent any of the
following relate to it or, if related to a Hertz Company, insofar as such
occurrences are actually known to the Issuer:

 

(i)            the
submission of any claim or the initiation or threat of any legal process,
litigation or administrative or judicial investigation, or rule making or
disciplinary proceeding by or against any Hertz Company or the Issuer that
would result in a Material Adverse Change with respect to any Hertz Company or
the Issuer, or the promulgation of any proceeding or any proposed or final rule
which would result in a Material Adverse Change with respect to any Hertz
Company or the Issuer,

 

12

 

(ii)           the
submission of any claim or the initiation or threat of any legal process,
litigation or administrative or judicial investigation in any federal, state or
local court or before any arbitration board, or any such proceeding threatened
by any government agency, which, if adversely determined, would have a material
adverse effect on the Issuer, the Owners or the Insurer.

 

(iii)          any
change in the location of any Hertz Company’s or the Issuer’s principal offices
or any change in the location of any Hertz Company’s or the Issuer’s books and
records;

 

(iv)          the
issuance of a new series of notes pursuant to the Base Indenture;

 

(v)           the
replacement, resignation or removal (or proposed replacement, resignation or
removal) of the Trustee or the Collateral Agent;

 

(vi)          any
act, situation or occurrence as to which the Rating Agency Condition is sought
or required to be satisfied by the Issuer with respect to the Notes;

 

(vii)         the
occurrence of any Default or Event of Default or of any Material Adverse Change
with respect to any Hertz Company;

 

(viii)        the
commencement of any proceedings by or against any Hertz Company or the Issuer
under any applicable bankruptcy, reorganization, liquidation, rehabilitation,
insolvency or other similar law now or hereafter in effect or of any proceeding
in which a receiver, liquidator, conservator, trustee or similar official shall
have been appointed or requested for any Hertz Company or the Issuer or any of
their or its assets;

 

(ix)           the
receipt of notice that (A) any Hertz Company or the Issuer is being placed
under regulatory supervision, (B) any material license, permit, charter, registration or
approval necessary for the conduct of any Hertz Company’s or the Issuer’s
business is to be suspended or revoked, or (C) any Hertz Company or the Issuer
is required by any governmental authority to cease and desist any practice,
procedure or policy employed by such Hertz Company or the Issuer in the conduct
of its business, and such cessation would result in a Material Adverse Change
with respect to such Hertz Company or the Issuer; or

 

13

 

(x)            the
occurrence of an event that results in amounts due under Hertz’s Senior Credit
Facilities becoming immediately due and payable whether or not the event that
been waived by the lenders under such facilities.

 

(g)           Financing Statements and Further
Assurances. The Issuer will file or cause to be filed all
financing statements or other instruments, and any amendments or continuation
statements relating thereto, necessary to be kept and filed in such manner and
in such places as may be required by law to preserve and protect fully the
interest of the Trustee on behalf of the Owners and the Insurer in the
Indenture Collateral and the interest of the Collateral Agent in the Vehicle
Collateral. The Issuer agrees to cooperate with S&P, Moody’s and Fitch in
connection with any review of the Transaction that may be undertaken by
S&P, Moody’s or Fitch after the date hereof and to provide all information
reasonably requested by S&P, Moody’s or Fitch.

 

(h)           Maintenance of Licenses.
The Issuer shall maintain all licenses, permits, charters and registrations
which are material to the conduct of its business.

 

(i)            Redemption of Notes.
The Issuer shall instruct the Trustee, upon redemption of the Notes pursuant to
the Indenture, to furnish to the Insurer a notice of such redemption and, upon
a redemption or other payment of all of the Notes to surrender the Policies to
MBIA for cancellation.

 

(j)            Disclosure Document.
Each Offering Document delivered with respect to the Notes shall clearly
disclose that neither Policy is not covered by the property/casualty insurance
security fund specified in Article 76 of the New York Insurance Law.

 

(k)           Third Party Beneficiary.
The Issuer and the Trustee agree that the Insurer shall have all rights of a
third party beneficiary of, and pursuant to, the Supplements. The Issuer hereby
agrees the Insurer shall have all rights of a third-party beneficiary of, and
pursuant to, each Agreement Relating to MBIA of the Issuer in any of the
Transaction Documents. Each Agreement Relating to MBIA of the Issuer in the
Transaction Documents shall be performed by the Issuer in accordance with the
terms of the Transaction Documents for the benefit of the Insurer.

 

(l)            Maintenance of Interest.
On or before each March 31 beginning in 2006, the Issuer shall provide to the
Insurer, without any additional request by the Insurer, the Opinion of Counsel
referenced in Section 8.11(d) of the Base Indenture. On or before each March 31
beginning in 2006, so long as any of the Notes are outstanding, the Issuer
shall furnish to the Insurer and the Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, rerecording and refiling of any financing
statements and

 

14

 

continuation statements as is necessary to maintain the interest of the
Trustee and the interest of the Collateral Agent in the Collateral and reciting
the details of such action or stating that, in the opinion of such counsel, no
such action is necessary to maintain such interests. Such Opinion of Counsel
shall also describe the recording, filing, rerecording and refiling of any
financing statements and continuation statements that will be required to
maintain the interest of the Trustee in the Indenture Collateral and the
interest of the Collateral Agent in the Vehicle Collateral until the date such
next Opinion of Counsel is due.

 

(m)          Closing Documents. The
Issuer shall provide or cause to be provided to the Insurer a copy of each
document executed in connection with the Transaction within 30 days after the
Date of Issuance. Promptly following the execution of any Transaction Document
or amendment thereto, the Issuer shall provide to the Insurer a copy thereof.

 

(n)           Indemnification. The
Issuer hereby agrees to indemnify and hold harmless the Insurer (including its
directors, officers, employees and agents) from and against any and all losses,
liabilities (including liabilities for penalties), claims, demands, actions,
suits, judgments, reasonable out-of-pocket costs and expenses arising out of or
resulting from the assignment granted by the Indenture or by the Collateral
Agency Agreement or any Assignment Agreement, whether arising by virtue of any
act or omission on the part of the Issuer or otherwise, including, without
limitation, the reasonable out-of-pocket costs, expenses and disbursements
(including reasonable attorneys’ fees and expenses) incurred by the Insurer in
enforcing the Indenture or preserving any of its rights to, or realizing upon,
any of the Collateral; provided, however, the foregoing indemnification shall
not extend to any action by the Insurer which constitutes gross negligence or
willful misconduct by the Insurer or any other indemnified person related to
the Insurer hereunder or under the Indenture. This indemnification shall
survive the termination of this Insurance Agreement, the Indenture, the 2005-1
Series Supplement, the 2005-4 Series Supplement, the Collateral Agency
Agreement or any Assignment Agreement.

 

(o)           Certificates of Title Audits.
Within thirty (30) days after receipt by the Issuer of each report described in
either Section 4.1(h) of the Base Indenture or in clause (ii) of the next
sentence, Hertz and the Issuer will provide to the Insurer written notice of
how each exception identified in such report is being resolved, whether by
correcting the Certificate of Title, transferring an affected HVF Vehicle or
otherwise. If the number of exceptions cited in any report delivered pursuant
to Section 4.1(h) of the Base Indenture exceeds five percent (5%) of the
vehicle records sampled in such report, then Hertz and the Issuer will (i)
provide to the Insurer within thirty (30) days a written explanation of the
causes of such exceptions and what measures have been taken or are

 

15

 

proposed to be taken to resolve such causes and (ii) cause an
additional verification of title to be conducted and delivered in the manner
described in Section 4.1(h) of the Base Indenture prior to the next May 30,
provided that neither Hertz nor the Issuer will be required to do another title
audit if the exception rate in excess of 5% is due to Hertz and the Issuer
having failed to receive the Certificate of Title, and such failure is cured
prior to the next November 30. An exception will be determined to exist if the
Certificate of Title (or, if a Certificate of Title has not been received, the
registration card, application receipt or title inquiry report therefor) does
not correctly list HVLLC as owner and the Collateral Agent as first lienholder
(an exception may include the existence of an Initial Hertz Vehicle, a Kansas
Vehicle or a Service Vehicle).

 

(p)           Hertz Senior Credit Facilities
Compliance Reporting. The Issuer shall cause Hertz to provide to
the Insurer written periodic compliance reports as such reports are prepared
and delivered to the banks under the credit agreements for the Hertz’s Senior
Credit Facilities.

 

Section
2.03.  Negative Covenants of the Issuer. The Issuer hereby agrees
that during the Term of the Insurance Agreement, unless the Insurer shall
otherwise expressly consent in writing:

 

(a)           Impairment of Rights.
The Issuer shall not take any action if such action may reasonably be expected
to interfere in any material respect with the enforcement of any rights of the
Insurer under or with respect to the Transaction Documents. The Issuer shall
give the Insurer written notice of any such action on the earlier of: the date
upon which any publicly available filing or release is made with respect to
such action or promptly prior to the date of consummation of such action.

 

(b)           Waiver, Amendments, Etc.
The Issuer shall not waive, modify or amend, or consent to any waiver,
modification or amendment of, any of the terms, provisions or conditions of or
assign any of its rights, duties or obligations under the Transaction Documents
except in accordance with the terms thereof. The Issuer shall promptly provide
the Insurer with written notice of any such waiver, modification or amendment.
The Issuer shall not, without the consent of the Insurer, amend, supplement,
waive or otherwise modify any provision of the Supplements, such consent not to
be unreasonably withheld or delayed. The Issuer will not enter into any
amendment to the Indemnification Agreement unless the Rating Agency Condition
with respect to the Notes (without giving effect to either Policy) shall have
been satisfied with respect thereto. The Issuer will not enter into any
amendment to the HVF Credit Facility unless the Rating Agency Condition with
respect to the Notes (without giving effect to either Policy) shall have been
satisfied with respect thereto. The Issuer shall not enter into any assignment
of the Administration Agreement unless the Rating

 

16

 

Agency Condition with respect to the Notes (without giving effect to
either Policy) shall have been satisfied with respect thereto.

 

(c)           Use of Insurer’s Name.
The Issuer agrees not to use or permit any of its Affiliates to use the Insurer’s
name (other than to indicate that the Notes are insured by the Insurer) or any
information as to the details of the Transaction in any public document (other
than a Securities Act or Exchange Act filing) including, without limitation, a
press release or presentation, announcement or forum without the Insurer’s
prior consent, such consent not to be unreasonably withheld or delayed. In the
event that the Issuer or any of its Affiliates is advised by counsel that such
party has a legal obligation to disclose the Insurer’s name in any press
release, public announcement or other public document (other than a Securities
Act or Exchange Act filing), such party shall provide the Insurer with at least
three business days prior written notice of such party’s intent to use the
Insurer’s name together with a copy of the proposed use of the Insurer’s name
and of any description of a transaction with the Insurer and shall obtain the
Insurer’s prior consent as to the form and substance of the proposed use of the
Insurer’s name and any such description, such consent not to be unreasonably
withheld or delayed.

 

(d)           HVF Credit Facility.
The Issuer shall not grant or permit to exist any Lien on its assets to secure
the HVF Credit Facility.

 

Section
2.04.  Representations, Warranties and
Covenants of Trustee.

(a)           Representations and Warranties.
As of the Date of Issuance, each of the representations and warranties of the
Trustee set forth in the Transaction Documents are true and correct in all
material respects and the Trustee makes each such representation and warranty
to, and for the benefit of, the Insurer as if the same were set forth in full
herein.

 

(b)           Compliance and Amendments.
The Trustee shall comply in all material respects with the terms and conditions
of the Transaction Documents to which it is a party and the Trustee shall not
agree to any amendment to or modification of the terms of any of the
Transaction Documents except in accordance with the terms thereof and of the
Base Indenture.

 

ARTICLE III

 

THE POLICIES; REIMBURSEMENT

 

Section
3.01.  Issuance of the Policies. The Insurer agrees to
issue the Policies on the Closing Date subject to satisfaction of the
conditions precedent set forth below:

 

17

 

(a)           Payment of Initial Premium and
Expenses. The Insurer shall have been paid, by the Issuer, that
portion of a nonrefundable Premium payable on the Closing Date and the Issuer
shall agree to reimburse or pay directly other fees and expenses identified in
Section 3.02 as then payable to or in respect of the Insurer.

 

(b)           Transaction Documents.
The Insurer shall have received a copy of each of the Transaction Documents, in
form and substance satisfactory to it and its counsel, duly authorized,
executed and delivered by each party thereto.

 

(c)           Certified Documents and Resolutions.
The Insurer shall have received a copy of (i) the certificate of incorporation
and bylaws, limited partnership agreement, or limited liability company
agreement of each of the Hertz Companies and the Issuer and (ii) the
resolutions of each of the governing boards of each of the Hertz Companies and
the Issuer authorizing the issuance of the Notes and the execution, delivery
and performance by the Hertz Companies and the Issuer of the Transaction
Documents and the transactions contemplated thereby, as applicable to it,
certified by the Secretary or an Assistant Secretary of such Hertz Company or
the Issuer, as applicable (which certificate shall state that such certificate
of incorporation, agreements, bylaws and resolutions are in full force and
effect without modification on the Date of Issuance).

 

(d)           Incumbency Certificate.
The Insurer shall have received a certificate of the Secretary or an Assistant
Secretary of each of the Hertz Companies and the Issuer certifying the names
and signatures of the officers of each of the Hertz Companies and the Issuer
authorized to execute and deliver the Transaction Documents and that
shareholder or member, as applicable, consent to the execution and delivery of
such documents is not necessary or has been obtained.

 

(e)           Representations and Warranties;
Certificate. The representations and warranties of each of the
Hertz Companies and the Issuer set forth or incorporated by reference in the
Transaction Documents shall be true and correct in all material respects as of
the Date of Issuance as if made on the Date of Issuance and the Insurer shall
have received a certificate of an appropriate officer of each of the Hertz
Companies and the Issuer to that effect.

 

(f)            Opinions of Counsel.

 

(i)            The
law firm of Cravath, Swaine & Moore LLP shall have issued its favorable
opinion, in form and substance acceptable to the Insurer and its counsel,
regarding the validity and enforceability of the Transaction Documents against
the Hertz Companies, HFC and HGI.

 

18

 

(ii)           The
law firm of Cravath, Swaine & Moore LLP shall have furnished its opinions,
in form and substance acceptable to the Insurer and its counsel, regarding
certain bankruptcy and insolvency matters, the characterization of the Lease as
a “true lease” for bankruptcy purposes and the tax treatment of payments on the
Notes under federal and state tax laws.

 

(iii)          The
law firm of Richards, Layton & Finger shall have issued its favorable
opinion, in form and substance acceptable to the Insurer and its counsel,
regarding the priority and perfection of security interests and certain bankruptcy
and insolvency matters.

 

(iv)          Internal
counsel to each of the Hertz Companies, HFC and HGI shall have issued favorable
opinions, in form and substance acceptable to the Insurer and its counsel,
regarding the corporate or limited liability company existence and authority of
each of the Hertz Companies, HFC and HGI, respectively.

 

(v)           The
Insurer shall have received such other opinions of counsel, in form and
substance acceptable to it and its counsel, addressing such other matters as
the Insurer may reasonably request.

 

(g)           No Litigation, Etc.
No suit, action or other proceeding, investigation or injunction, or final
judgment relating thereto, shall be pending or threatened before any court or
governmental agency in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with the Transaction Documents or the
consummation of the Transaction.

 

(h)           Legality. No statute,
rule, regulation or order shall have been enacted, entered or deemed applicable
by any government or governmental or administrative agency or court that would
make the transactions contemplated by any of the Transaction Documents illegal
or otherwise prevent the consummation thereof.

 

(i)            Satisfaction of Conditions of the
Note Purchase Agreements. All conditions in the Note Purchase
Agreements shall have been satisfied.

 

(j)            Issuance of Ratings.
The Insurer shall have received confirmation that the risk secured by its
Policies is an investment grade risk rated at least BBB by S&P and at least
Baa2 by Moody’s. MBIA shall have received confirmation that the risk secured by
Policy Number 43613 relating to the Issuer’s Series 2004-1 Rental Car Asset
Backed Notes is an investment grade risk rated at least BBB- by S&P and at
least Baa3 by Moody’s or, if not so rated by either S&P or Moody’s, at
least $25.125 million

 

19

 

additional enhancement shall have been provided for the Issuer’s Series
2004-1 Rental Car Asset Backed Notes.

 

(k)           No Default. No
Default or Event of Default shall have occurred and be continuing.

 

(l)            Additional Items. The
Insurer shall have received such other documents, instruments, approvals or
opinions reasonably requested by the Insurer as may be reasonably necessary to
effect the Transaction, including, but not limited to, evidence satisfactory to
the Insurer that the conditions precedent, if any, in the Transaction Documents
have been satisfied.

 

(m)          Note Purchase Agreements.
The Insurer shall have received copies of each of the documents required to be
delivered to the Initial Purchasers pursuant to the Note Purchase Agreements.

 

(n)           Conform to Documents.
The Insurer and its counsel shall have determined that all instruments to be
furnished to the Trustee in connection with the Notes conform to the
requirements of the Indenture.

 

(o)           Acknowledgment and Consent.
The Insurer shall have received from each Hertz Company and HGI an
Acknowledgment and Consent consenting to the terms hereof substantially in the
form attached hereto as Exhibit A, B, C or D, as applicable.

 

Section
3.02.  Payment of Fees and Premium.

(a)           Legal and Accounting Fees.
The Issuer shall pay or cause to be paid, within ten (10) business days of the
Date of Issuance, reasonable legal fees and disbursements incurred by the
Insurer in connection with the issuance of the Policies and any reasonable fees
of the Insurer’s auditors in accordance with the terms of the Fee Letter. Any
reasonable fees of the Insurer’s auditors or attorneys payable in respect of
any amendment or supplement to the Offering Document or any other Offering
Document incurred after the Date of Issuance shall be paid by the Issuer within
ten (10) business days of the Issuer’s receipt of a written invoice or request
for payment of such amounts. The Insurer shall, upon written request, furnish
to the Issuer a written estimate of the anticipated fees for such auditors and
attorneys.

 

(b)           Premium. In
consideration of the issuance by the Insurer of the Policies, the Insurer shall
be entitled to receive the Premium as and when due in accordance with the terms
of the Fee Letter (i) in the case of Premium due on or before the Date of
Issuance, directly from the Issuer and (ii) in the case of Premium due after
the Date of Issuance, first, pursuant to the Indenture, and second, to the
extent the

 

20

 

amounts in subclause first are not
sufficient, directly from the Issuer. The Premium paid hereunder or under the
Indenture shall be nonrefundable without regard to whether the Insurer makes
any payment under the Policies or any other circumstances relating to the Notes
or provision being made for payment of the Notes prior to maturity. The Issuer
and the Trustee (with respect to the Trustee, to the extent the Trustee is
paying the premium on behalf of the Issuer in accordance with either Indenture)
shall make all payments of Premium to be made by them by wire transfer to an
account designated from time to time by the Insurer by written notice to the
Issuer and the Trustee.

 

Section
3.03.  Reimbursement and Additional
Payment Obligation.

 

(a)           In
accordance with the priorities established in Article II of the Supplements,
the Insurer shall be entitled to reimbursement for any payment made by it under
the Policies, which reimbursement shall be due and payable on the date that any
amount is paid pursuant to a Notice (as defined in the relevant Policy), in an
amount equal to the amount so paid and all amounts previously paid that remain
unreimbursed.

 

(b)           The
Issuer agrees to pay to the Insurer as follows: any and all charges, fees,
costs and expenses that the Insurer may reasonably pay or incur, including, but
not limited to, attorneys’ and accountants’ fees and expenses, in connection
with

 

(i)            the
enforcement, defense or preservation of any rights in respect of any of the
Transaction Documents, including, without limitation, defending, monitoring or
participating in any litigation or proceeding (including any insolvency or
bankruptcy proceeding in respect of any Transaction participant or any affiliate
thereof) relating to any of the Transaction Documents, any party to any of the
Transaction Documents, in its capacity as such a party, or the Transaction,

 

(ii)           any
action, proceeding or investigation affecting the Issuer, the Issuer’s assets,
the Collateral or the rights or obligations of the Insurer under the
Transaction Documents, including, without limitation, any judgment or
settlement entered into affecting the Insurer or the Insurer’s interests,

 

(iii)          any
consent, amendment, waiver or other action with respect to, or related to, any
Transaction Document, whether or not executed or completed or

 

(iv)          any
occurrence of any Default under this Agreement (“Reimbursable
Amounts”).

 

Notwithstanding anything to the contrary in any Section of this Insurance
Agreement, to the extent a dispute, action, proceeding or investigation is
between the Insurer and

 

21

 

HGI, HFC , the Issuer or a Hertz Company and HGI, HFC , the Issuer or
the applicable Hertz Company prevails (as determined by a court of competent
jurisdiction) in such dispute, action, proceeding or investigation, each party
to such a dispute, action, proceeding or investigation shall pay its own fees,
costs and expenses related thereto. Reimbursable Amounts due to the Insurer
shall bear interest as provided in subclause (e) of this Section 3.03. In the event that the Issuer fails to
pay the Insurer any Reimbursable Amounts, the Insurer shall be entitled to
reimbursement of such amount together with interest thereon as part of the
Insurer Reimbursement Amounts. The Insurer reserves the right to charge a fee
as a condition to executing any material waiver, consent or amendment proposed
in respect of any of the Transaction Documents.

 

(c)           The
Issuer agrees to pay to the Insurer as follows: any payments made by the
Insurer on behalf of, or advanced to, any of the Hertz Companies or the Issuer,
respectively, in connection with the Notes or any other Transaction Documents,
if such payment was made by the Insurer in order to avoid a claim on the
related Policy which was reasonably likely, including, without limitation, any
amounts payable by any of the Hertz Companies pursuant to the Notes or any
other Transaction Documents.

 

(d)           Following
termination of the Indenture pursuant to Section 11.1(b) of the Base Indenture
or Section 6.13 of the relevant Supplement, the Issuer agrees to reimburse the
Insurer for any Insured Payments required to be made pursuant to the related
Policy subsequent to the date of such termination.

 

(e)           The
Issuer agrees to pay to the Insurer as follows: interest on any and all amounts
described in subclauses (a), (b), (c) and (d) of this Section 3.03 (to the
extent permitted by law, if in respect of any unreimbursed amounts representing
interest) and any and all amounts described in Section 3.02 from the date due
until payment thereof in full (after as well as before judgment), in each case,
payable to the Insurer at the Late Payment Rate per annum. Any amount described
in clauses (b), (c), (d) or (e) of this Section 3.03 shall be due ten (10)
business days after demand therefor.

 

Section
3.04.  Indemnification.

 

(a)           In
addition to any and all rights of indemnification or any other rights of the
Insurer pursuant hereto or under law or equity or under any Transaction
Document, the Issuer agrees to pay, and to protect, indemnify and save
harmless, the Insurer, each of its parents, subsidiaries and affiliates and any
officer, director, shareholder, employee or agent of any of the foregoing, and
each person who controls the Insurer or any of the foregoing within the meaning
of either Section 15 of the Securities Act or Section 20 of the Securities
Exchange Act from and against any and

 

22

 

all Losses
whatsoever paid by the Insurer or other indemnified person of any nature
arising out of or by reason of:

 

(i)            any
untrue statement or alleged untrue statement of a material fact contained in
the Offering Document or in any amendment or supplement thereto or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such Losses arise out of or are based upon
any such untrue statement or omission or allegation thereof based upon
information set forth in the Offering Document under the caption (A) ”DESCRIPTION
OF CREDIT ENHANCEMENT—The Policies and the Insurer,” or (B) in the financial
statements of the Insurer, including any information in any amendment or
supplement to the Offering Document furnished by the Insurer in writing
expressly for use therein that amends or supplements such information;

 

(ii)           to
the extent not covered by clause (i) above, any act or omission of the Issuer
in connection with the offering, issuance, sale or delivery of the Notes other
than by reason of false or misleading information provided by the Insurer in
writing for inclusion in the Offering Document as specified in clause (i)
above or the allegation thereof or by reason of the Insurer’s gross negligence
or willful misconduct;

 

(b)           In
addition to any and all rights of indemnification or any other rights of the
Insurer pursuant hereto or under law or equity or under any Transaction Document,
the Issuer agrees to pay, and to protect, indemnify and save harmless, the
Insurer and its officers, directors, shareholders, employees, agents, and each
person, if any, who controls the Insurer within the meaning of either Section
15 of the Securities Act or Section 20 of the Securities Exchange Act from and
against any and all claims, losses, liabilities (including penalties), actions,
suits, judgments, demands, damages, costs or reasonable expenses (including,
without limitation, reasonable fees and expenses of attorneys, consultants and
auditors and reasonable costs of investigations) or obligations whatsoever paid
by the Insurer or other indemnified person of any nature arising out of or
relating to the transactions contemplated by the Transaction Documents by
reason of

 

(i)            the
misfeasance or malfeasance of, or negligence or theft committed by, any
director, officer, employee or agent of the Issuer;

 

(ii)           the
violation by the Issuer of any federal or state securities, banking or
antitrust laws, rules or regulations in connection with the issuance,

 

23

 

offer and sale of the Notes or the
transactions contemplated by the Transaction Documents;

 

(iii)          the
breach by the Issuer of any of its obligations under this Agreement or any of
the Transaction Documents; and

 

(iv)          the
breach by the Issuer of any representation or warranty on the part of the
Issuer contained in the Transaction Documents or in any certificate or report
furnished or delivered to the Insurer thereunder; provided, however, that any
such indemnified amounts arising for the account of an indemnified person shall
not include amounts to the extent caused by such person’s own gross negligence
or willful misconduct.

 

(c)           Any
party which proposes to assert the right to be indemnified under this Section
3.04 will promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim is to be made
under this Section 3.04, notify the Issuer of the commencement of such action,
suit or proceeding, enclosing a copy of all papers served. In case any action,
suit or proceeding shall be brought against any indemnified party and it shall
notify the Issuer of the commencement thereof, the Issuer shall be entitled to
participate in, and, to the extent that it shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the Issuer to such indemnified party of its election so to
assume the defense thereof, the Issuer shall not be liable to such indemnified
party for any legal expenses other than reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in
any such action the defense of which is assumed by the Issuer in accordance
with the terms of this subsection (c), but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by the indemnified party at the Issuer’s expense has been
authorized in writing by the Issuer, (ii) the Issuer has not in fact employed
counsel to assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action or (iii) the named parties
to any such action include the Issuer on the one hand and, on the other hand,
the indemnified party, and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them (in which case if such indemnified party notifies the Issuer in writing
that it elects to employ separate counsel at the expense of the Issuer, the
Issuer shall not have the right to assume the defense of such action or
proceeding on such indemnified party’s behalf), in each of which cases the
reasonable fees and expenses of counsel (including one local counsel for all
indemnified parties in any action or group of related actions) to the
indemnified party will be at the expense of the Issuer, and all such fees and
expenses will be

 

24

 

reimbursed promptly as they are incurred. The Issuer shall not under
any circumstances be liable for any settlement of any action or claim effected
without its prior written consent.

 

(d)           This
indemnity provision shall survive the termination of this Agreement and shall
survive until the statute of limitations has run on any causes of action which
arise from one of these reasons and until all suits filed as a result thereof
have been finally concluded.

 

Section
3.05.  Payment Procedure. In the event of any
payment by the Insurer, the Trustee and the Issuer agree to accept the vouchers
or other evidence of payment in accordance with this Insurance Agreement and
properly approved by the Insurer as prima facie evidence of the propriety
thereof and the liability therefor to the Insurer. All payments to be made to
the Insurer under this Insurance Agreement shall be made to the Insurer in lawful
currency of the United States of America in immediately available funds at the
notice address for the Insurer as specified in the Indenture on the date when
due or as the Insurer shall otherwise direct by written notice to the other
parties hereto. In the event that the date of any payment to the Insurer or the
expiration of any time period hereunder occurs on a day which is not a Business
Day, then such payment or expiration of time period shall be made or occur on
the next succeeding Business Day with the same force and effect as if such
payment was made or time period expired on the scheduled date of payment or
expiration date. Payments to be made to the Insurer under this Insurance
Agreement shall bear interest at the Late Payment Rate from the date fifteen
days after demand is made therefore to the date paid.

 

ARTICLE IV

 

FURTHER
AGREEMENTS

 

Section
4.01.  Effective Date; Term of the
Insurance Agreement. This
Insurance Agreement shall take effect on the Date of Issuance and shall remain
in effect until the later of (a) such time as the Insurer is no longer
subject to a claim under the Policies and the Policies shall have been
surrendered to the Insurer for cancellation and (b) all amounts payable to the
Insurer by the Issuer or from any other source under the Transaction Documents
or any Acknowledgment and Consent and all amounts payable under the Notes have
been paid in full; provided, however, that the provisions of Sections 3.03 and 3.04 hereof shall survive any termination of this Insurance
Agreement.

 

Section
4.02.  Obligations Absolute.

 

(a)           The
obligations of the Issuer hereunder shall be absolute and unconditional and
shall be paid or performed strictly in accordance with this Insurance Agreement
under all circumstances irrespective of:

 

 

25

 

(i)            any
lack of validity or enforceability of, or any amendment or other modifications
of, or waiver, with respect to any of the Transaction Documents, the Notes or
the Policies;

 

(ii)           any
exchange or release of any other obligations hereunder;

 

(iii)          the
existence of any claim, setoff, defense, reduction, abatement or other right
that any of the Hertz Companies or the Issuer may have at any time against the
Insurer or any other Person;

 

(iv)          any
document presented in connection with either Policy proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;

 

(v)           any
payment by the Insurer under a Policy against presentation of a certificate or
other document that does not strictly comply with terms of the Policy;

 

(vi)          any
failure of the Issuer to receive the proceeds from the sale of the Notes; or

 

(vii)         any
breach by any of the Hertz Companies or the Issuer of any representation, warranty
or covenant contained in any of the Transaction Documents.

 

(b)           The
Issuer and any and all others who are now or may become liable for all or part
of the obligations of the Issuer under this Insurance Agreement agree to be
bound by this Insurance Agreement and:

 

(i)            to
the extent permitted by law, waive and renounce any and all redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness and obligations evidenced by any Transaction Document
or by any extension or renewal thereof;

 

(ii)           waive
presentment and demand for payment, notices of nonpayment and of dishonor,
protest of dishonor and notice of protest;

 

(iii)          waive
all notices in connection with the delivery and acceptance hereof and all other
notices in connection with the performance, default or enforcement of any
payment hereunder, except as required by the Transaction Documents;

 

26

 

(iv)          waive
all rights of abatement, diminution, postponement or deduction, or any defense
other than payment, or to any right of setoff or recoupment arising out of any
breach under any of the Transaction Documents, by any party thereto or any
beneficiary thereof, or out of any obligation at any time owing to any of the
Hertz Companies or the Issuer;

 

(v)           agree
that its liabilities hereunder shall, except as otherwise expressly provided in
this Section 4.02, be unconditional and without regard to any setoff,
counterclaim or the liability of any other Person for the payment hereof

 

(vi)          agree
that any consent, waiver or forbearance hereunder with respect to an event
shall operate only for such event and not for any subsequent event;

 

(vii)         consent
to any and all extensions of time that may be granted by the Insurer with
respect to any payment hereunder or other provisions hereof and to the release
of any security at any time given for any payment hereunder, or any part
thereof, with or without substitution, and to the release of any Person or
entity liable for any such payment; and

 

(viii)        consent
to the addition of any and all other makers, endorsers, guarantors and other
obligors for any payment hereunder, and to the acceptance of any and all other
security for any payment hereunder, and agree that the addition of any such
obligors or security shall not affect the liability of the parties hereto for
any payment hereunder.

 

Section
4.03.  Assignments; Reinsurance;
Third-Party Rights.

 

(a)           This
Insurance Agreement shall be a continuing obligation of the parties hereto and
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The Issuer may not assign its
rights under this Insurance Agreement, or delegate any of its duties hereunder,
without the prior written consent of the Insurer; any assignment made in
violation of this Insurance Agreement shall be null and void.

 

(b)           The
Insurer shall have the right to give participations in its rights under this
Insurance Agreement and to enter into contracts of reinsurance with respect to
the Policies upon such terms and conditions as it may in its discretion
determine; provided, however, that no such participation or reinsurance
agreement or arrangement shall relieve the Insurer of any of its obligations
hereunder or under the Policies.

 

27

 

(c)           In
addition, the Insurer shall be entitled to assign or pledge to any bank or
other lender providing liquidity or credit with respect to the Transaction or
the obligations of the Insurer in connection therewith any of its rights under
the Transaction Documents or with respect to any real or personal property or
other interests pledged to it, or in which it has a security interest, in
connection with the Transaction.

 

(d)           In
the event of an assignment of this Insurance Agreement and/or any
Acknowledgment and Consent effected without the Issuer’s consent, the Issuer
(and in the case of an assignment of an Acknowledgment and Consent, the
affected Hertz Company or HGI), shall only be required to deal with the Insurer
on all matters pertaining to the assigned agreement.

 

(e)           Except
as provided herein with respect to participants and reinsurers, nothing in this
Insurance Agreement shall confer any right, remedy or claim, express or implied,
upon any Person, including, particularly, any Owner, other than the Insurer
against the Issuer, and all the terms, covenants, conditions, promises and
agreements contained herein shall be for the sole and exclusive benefit of the
parties hereto and their successors and permitted assigns. Neither the Trustee
nor any Owner shall have any right to payment from any Premiums paid or payable
hereunder or under the Indenture or from any other amounts paid by any of the
parties hereto or any Hertz Company pursuant to Sections 3.02, 3.03 or 3.04
hereof or any Acknowledgment and Consent.

 

Section
4.04.  Liability of the Insurer. Neither the Insurer nor
or any of its officers, directors or employees shall be liable or responsible
for: (a) the use that may be made of the Policies by the Trustee or for any
acts or omissions of the Trustee in connection therewith; or the validity,
sufficiency, accuracy or genuineness of documents delivered to the Insurer (or
its Fiscal Agent or any other Person) in connection with any claim under either
Policy, or of any signatures thereon, even if such documents or signatures
should in fact prove to be in any or all respects invalid, insufficient,
fraudulent or forged (unless an officer or employee of the Insurer with
responsibility for the administration hereof shall have actual knowledge
thereof). In furtherance and not in limitation of the foregoing, the Insurer
(or its Fiscal Agent) may accept documents that appear on their face to be in
order, without responsibility for further investigation.

 

Section
4.05.  Parties Will Not Institute
Insolvency Proceedings. So
long as this Agreement is in effect, and for one year and one day following its
termination, and for a period of one year and one day following payment in full
of all series of notes of the Issuer issued under the Base Indenture the
parties hereto will not file any involuntary petition or otherwise institute
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceedings under any federal or state bankruptcy or
similar law against the Issuer.

 

28

 

Section
4.06.  Parties To Join in Enforcement
Action. To
the extent necessary to enforce any right of the Insurer in or remedy of the
Insurer with respect to the Collateral, the parties hereto agree to join in any
action initiated by the Insurer for the protection of such right or exercise of
such remedy.

 

Section
4.07.  Further Assurances and Corrective
Instruments. To
the extent permitted by law, the parties hereto agree that they will, from time
to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further
instruments as the Insurer may request and as may be required in the Insurer’s
judgment to carry into effect the purposes of this Insurance Agreement or to
better assure and confirm to the Insurer its rights, powers and remedies
hereunder.

 

Section
4.08.  Subrogation. To the extent of any
payments under the Policies, MBIA shall be fully subrogated to any remedies
against the Issuer or any Hertz Company available to the Trustee under its
Indenture or any other Transaction Document. The Trustee acknowledges such
subrogation and, further, agrees to execute such instruments prepared by the
Insurer and to take such reasonable actions as are necessary to evidence such
subrogation and to perfect the rights of the Insurer to receive any moneys paid
or payable under the Indenture or any other Transaction Document.

 

ARTICLE V

 

DEFAULTS;
REMEDIES

 

Section
5.01.  Defaults. The occurrence of any of
the following events shall constitute an Event of Default hereunder:

 

(a)           Any
representation or warranty made by the Issuer hereunder or under the
Transaction Documents, or in any certificate furnished hereunder or under the
Transaction Documents, shall prove to be untrue or incomplete in any material
respect as of the date made or deemed to be made;

 

(b)           The
Issuer shall fail to pay within five (5) business days after the due date
therefor any amount payable by the Issuer hereunder or a legislative body has
enacted any law that declares or a court of competent jurisdiction shall find
or rule that this Insurance Agreement, the Lease or the Indenture is not valid
and binding on any of the Hertz Companies, the Issuer or the Trustee;

 

(c)           Any
failure on the part of the Issuer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Issuer
contained in this Insurance Agreement or in any other Transaction Document
which continues unremedied for a period of 30 days with respect to this
Insurance Agreement, 

 

29

 

or, with respect to any other Transaction Document, beyond any cure
period provided for therein, after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the Issuer
by the Insurer (with a copy to the Trustee) or by the Trustee (with a copy to
the Insurer);

 

(d)           A
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises in an involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law or the appointment of a conservator or
receiver or liquidator or other similar official in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Issuer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 consecutive days;

 

(e)           Any
of the Hertz Companies or the Issuer shall consent to the appointment of a
conservator or receiver or liquidator or other similar official in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to any of the Hertz Companies or the Issuer
or of or relating to all or substantially all of the property of either;

 

(f)            Any
of the Hertz Companies or the Issuer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage
of or otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations;

 

(g)           The
occurrence and continuance, with respect to the Series 2005-1 Notes, of an
Amortization Event, a Lease Event of Default, a Liquidation Event of Default or
a Limited Liquidation Event of Default; or

 

(h)           The
occurrence and continuance, with respect to the Series 2005-4 Notes, of an
Amortization Event, a Lease Event of Default, a Liquidation Event of Default or
a Limited Liquidation Event of Default.

 

Section
5.02.  Remedies; No Remedy Exclusive.

 

(a)           Upon
the occurrence of an Event of Default, the Insurer may exercise any one or more
of the rights and remedies set forth below:

 

(i)            declare
all indebtedness of every type or description then owed by the Issuer to the
Insurer to be immediately due and payable, and the same shall thereupon be
immediately due and payable;

 

30

 

(ii)           to
the extent permitted by the Transaction Documents, exercise any rights and
remedies of the Insurer under the Transaction Documents in accordance with the
terms of the Transaction Documents or direct the Trustee to exercise such
remedies in accordance with the terms of the Transaction Documents; or

 

(iii)          to
the extent permitted by the Transaction Documents, take whatever action at law
or in equity as may appear necessary or desirable in its judgment to collect
the amounts then due to the Insurer under this Insurance Agreement, the
Indenture or any other Transaction Document.

 

(b)           Unless
otherwise expressly provided, no remedy herein conferred upon or reserved is
intended to be exclusive of any other available remedy, but each remedy shall
be cumulative and shall be in addition to other remedies given under this
Insurance Agreement, the Indenture, any other Transaction Document, any
Acknowledgment and Consent or existing at law or in equity. No delay or
omission to exercise any right or power accruing under this Insurance Agreement
or the Indenture upon the happening of any event set forth in Section 5.01
hereof shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the Insurer to
exercise any remedy reserved to it in this Article, it shall not be necessary
to give any notice, other than such notice as may be required in this Article.

 

Section
5.03.  Waivers.

 

(a)           No
failure by the Insurer to exercise, and no delay by the Insurer in exercising,
any right hereunder shall operate as a waiver thereof.

 

(b)           The
Insurer shall have the right, to be exercised in its complete discretion, to
waive any Event of Default hereunder, by a writing setting forth the terms,
conditions and extent of such waiver signed by the Insurer and delivered to the
Issuer and the Trustee. Unless such writing provides to the contrary, any
waiver so granted shall extend only to the specific event or occurrence which
gave rise to the Event of Default so waived and not to any other similar event
or occurrence which occurs subsequent to the date of such waiver.

 

31

 

ARTICLE VI

 

MISCELLANEOUS

 

Section
6.01.  Amendments, Etc. This Insurance Agreement
may be amended, modified or terminated only by written instrument or written
instruments signed by the parties hereto. No act or course of dealing shall be
deemed to constitute an amendment, modification or termination hereof.

 

Section
6.02.  Notices. All demands, notices and
other communications to be given hereunder shall be in writing (except as
otherwise specifically provided herein) and shall be mailed by registered mail
or express mail or personally delivered or telecopied to the recipient as
follows:

 

To the
Insurer:      MBIA Insurance Corporation

113 King Street

Armonk, NY 10504

Attention: Insured Portfolio Management –Structured Finance (IPM-SF) (Hertz
Vehicle Financing LLC   Series 2005­1
Rental Car Asset Backed Notes)

Facsimile No.: (914) 765-3810

Confirmation No.: (914) 765-3781

 

(in each case in which notice or other
communication to MBIA refers to an Event of Default, a claim on the Policies or
with respect to which failure on the part of MBIA to respond shall be deemed to
constitute consent or acceptance, then two copies of such notice or other
communication should be sent, one to the attention of Insured Portfolio
Management-Structured Finance and the other to the attention of the General
Counsel of MBIA and each shall be marked to indicate “URGENT MATERIAL ENCLOSED.”)

 

To the Issuer:       Hertz Vehicle Financing LLC

225 Brae Boulevard

Park Ridge, NJ 07656

Attention: Treasury Department

Facsimile No.: (201) 307-2746

Confirmation
No.: (201) 307-2000

 

To the Trustee:     BNY Midwest
Trust Company

2 La Salle Street, Suite 1020

Chicago, 1L 60602

Attention: Structured Finance Group

Facsimile No.: (312) 827-8562

Confirmation
No.: (312) 827-8569

 

32

 

A
party may specify an
additional or different address or addresses by writing mailed or delivered to
the other parties as aforesaid. All such notices and other communications shall
be effective upon receipt.

 

Section
6.03.  Severability. In the event that any
provision of this Insurance Agreement shall be held invalid or unenforceable by
any court of competent jurisdiction, the parties hereto agree that such holding
shall not invalidate or render unenforceable any other provision hereof. The
parties hereto further agree that the holding by any court of competent
jurisdiction that any remedy pursued by any party hereto is unavailable or
unenforceable shall not affect in any way the ability of such party to pursue
any other remedy available to it.

 

Section
6.04.  Governing Law. THIS INSURANCE AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO ITS CONFLICT OF LAW PRINCIPLES.

 

Section
6.05.  Consent to Jurisdiction.

 

(a)           The
parties hereto hereby irrevocably submit to the jurisdiction of the United
States District Court for the Southern District of New York and any court in
the State of New York located in the City and County of New York, and any
appellate court from any thereof, in any action, suit or proceeding brought
against it and to or in connection with any of the Transaction Documents or the
transactions contemplated thereunder or for recognition or enforcement of any
judgment, and the parties hereto hereby irrevocably and unconditionally agree
that all claims in respect of any such action or proceeding may be heard or
determined in such New York state court or, to the extent permitted by law, in
such federal court. The parties hereto agree that a final judgment in any such
action, suit or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
To the extent permitted by applicable law, the parties hereto hereby waive and
agree not to assert by way of motion, as a defense or otherwise in any such
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of such courts, that the suit, action or proceeding is brought in
an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that the related documents or the subject matter thereof may not be
litigated in or by such courts.

 

(b)           To
the extent permitted by applicable law, the parties hereto shall not seek and
hereby waive the right to any review of the judgment of any such court by any
court of any other nation or jurisdiction which may be called upon to grant an
enforcement of such judgment.

 

(c)           Except
as provided in Section 4.05, nothing contained in this Insurance Agreement
shall limit or affect the Insurer’s right to serve process in any manner

 

33

 

permitted by law or to start legal proceedings relating to any of the
Transaction Documents against any of the Hertz Companies or the Issuer or its
or their property in the courts of any jurisdiction.

 

Section
6.06.  Counterparts. This Insurance Agreement
may be executed in counterparts by the parties hereto, and all such
counterparts shall constitute one and the same instrument.

 

Section
6.07.  Headings. The headings of Articles
and Sections and the Table of Contents contained in this Insurance Agreement
are provided for convenience only. They form no part of this Insurance
Agreement and shall not affect its construction or interpretation. Unless
otherwise indicated, all references to Articles and Sections in this Insurance
Agreement refer to the corresponding Articles and Sections of this Insurance
Agreement.

 

Section
6.08.  Trial by Jury Waived. Each party hereto hereby
waives, to the fullest extent permitted by law, any right to a trial by jury in
respect of any litigation arising directly or indirectly out of, under or in
connection with any of the Transaction Documents or any of the transactions
contemplated thereunder. Each party hereto (a) certifies that no
representative, agent or attorney of any party hereto has represented,
expressly or otherwise, that it would not, in the event of litigation, seek to
enforce the foregoing waiver and (b) acknowledges that it has been induced to
enter into the Transaction Documents to which it is a party by, among other
things, this waiver.

 

Section
6.09.  Limited Liability. No recourse under this
Insurance Agreement shall be had against, and no personal liability shall
attach to, any officer, employee, director, affiliate, member or shareholder of
any party hereto, as such, by the enforcement of any assessment or by any legal
or equitable proceeding, by virtue of any statute or otherwise in respect of
this Insurance Agreement or either Policy, it being expressly agreed and
understood that this Insurance Agreement is solely a corporate or limited
liability company obligation of each party hereto, and that any and all
personal liability, either at common law or in equity, or by statute or
constitution, of every such officer, employee, director, affiliate, shareholder
or member for breaches by any party hereto of any obligations under this
Insurance Agreement is hereby expressly waived as a condition of and in
consideration for the execution and delivery of this Insurance Agreement.

 

Section
6.10.  Entire Agreement. This Insurance Agreement
and the Policies set forth the entire agreement between the parties with
respect to the subject matter thereof, and this Insurance Agreement supersedes
and replaces any agreement or understanding that may have existed between the
parties prior to the date hereof in respect of such subject matter.

 

Section
6.11.  Certain Opinions. The Issuer shall cause to
be addressed to and delivered to the Insurer in respect of each new Class A
Letter of Credit, legal opinions in

 

34

 

substantially the form delivered on the Date
of Issuance with respect to the initial Class A Letters of Credit.

 

Section
6.12.  Certain Definitions. Any change in the
definition of the following terms in the Definitions List attached as Schedule
1 to the Base Indenture (including any change in the definition of any term
used in any such definition), any change in any Agreement relating to MBIA
shall require the consent of the Insurer: “Aggregate Asset Amount,” “Aggregate
Asset Amount Deficiency,” “Eligible Manufacturer Program,” “Eligible
Manufacturer, “Eligible Program Manufacturer,” “Ineligible Asset Amount,” “Limited
Liquidation Event of Default,” “Liquidation Event of Default,” “Manufacturer
Event of Default” and “Manufacturer Program.”

 

Section
6.13.  Eligible Program Manufacturer. No Person who is not an
Eligible Program Manufacturer on the date hereof shall be an Eligible Program
Manufacturer for any purpose under the Transaction Documents unless, at any
time of determination, such Person has a long-term unsecured debt rating of at
least “BBB-” from S&P and “Baa3” from Moody’s and unless otherwise agreed
to by Fitch, “BBB-” from Fitch, and has been previously approved by the
Insurer, such approval not to be unreasonably withheld or delayed.

 

Section
6.14.  Series 2005-1 and Series 2005-4
Rating Agency Condition. No
action which is subject to the satisfaction of the Series 2005-1 Rating Agency
Condition or the Series 2005-4 Rating Agency Condition shall be taken or become
effective without the prior written consent of the Insurer (such consent not to
be unreasonably withheld or delayed) unless each Rating Agency shall have
notified the Insurer that such action will not result in a reduction or
withdrawal of the ratings of the related Notes without giving effect to the
related Policy.

 

[Remainder of page intentionally left blank]

 

35

 

In
Witness Whereof,  the
parties hereto have executed this Insurance Agreement, all as of the day and
year first above mentioned.

 

	
   

  	
  MBIA
  Insurance Corporation

  
	
   

  	
  as an
  Insurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
            /s/
  Stephanie Taylor Ciavarello

  	
   

  
	
   

  	
  Name

  	
  Stephanie
  Taylor Ciavarello

  
	
   

  	
  Title

  	
  Assistant
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Hertz
  Vehicle Financing LLC

  
	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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

  
								

 

36

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