Document:

Exhibit 4.9.3.3

 

EXECUTION COPY

 

AMENDMENT
NO. 3 (this “Amendment”), dated as of September 18, 2009, between
HERTZ VEHICLE FINANCING LLC (“HVF”) and THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., a national banking association (as successor to BNY MIDWEST
TRUST COMPANY, an Illinois trust company), as trustee (together with its
successors in trust thereunder as provided in the Base Indenture referred to
below, the “Trustee”) to the Amended and Restated Series 2005-2
Supplement dated as of August 1, 2006 (as amended, modified, restated or
supplemented from time to time, the “Series 2005-2 Supplement”),
between HVF and the Trustee to the Second Amended and Restated Base Indenture,
dated as of August 1, 2006, between HVF and the Trustee (as amended,
modified, restated or supplemented from time to time, exclusive of Series Supplements,
the “Base Indenture”).

 

WITNESSETH:

 

WHEREAS,
HVF and the Trustee desire to amend the Series 2005-2 Supplement as herein
set forth;

 

WHEREAS, Section 6.12 of the Series 2005-2 Supplement
permits the Series 2005-2 Supplement to be amended in accordance with the
terms of the Base Indenture;

 

WHEREAS, with the satisfaction of the Rating Agency
Condition with respect to each Series of Notes Outstanding, the delivery
of an Opinion of Counsel and the consent of the Required Noteholders or the
consent of each affected Noteholder, as applicable, Sections 12.2 and 12.3 of
the Base Indenture permit HVF and the Trustee to enter into certain amendments
to the Series 2005-2 Supplement;

 

WHEREAS, pursuant to Section 6.6 of the Series 2005-2
Supplement Ambac Assurance Corporation (“Ambac”) is deemed to be the
holder of 100% of the Class A Notes for purposes of consenting to an
amendment of the Series 2005-2 Supplement, waiving any provision of the Base
Indenture and giving consent pursuant to the Base Indenture; and

 

WHEREAS, Section 2.03 of the Insurance Agreement
requires HVF to obtain the consent of Ambac in connection with any amendment to
any provision of the Series 2005-2 Supplement;

 

NOW,
THEREFORE, based upon the mutual promises and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned, intending to be legally bound, hereby
agree as follows:

 

 

AGREEMENTS

 

1.  Defined Terms.  Capitalized terms used but not defined herein
shall have the respective meanings assigned to them in the Base Indenture or,
if not defined therein, in the Series 2005-2 Supplement.

 

2.  Amendments to Definitions.

 

(i) The following shall be added to the
definition of “Class A-1 Outstanding Principal Amount” immediately after
the phrase “on or prior to such date”:

 

“minus (c) the amount of any Class A-1 Notes that have been
delivered to the Trustee for cancellation pursuant to Section 2.14 of the Base
Indenture or otherwise redeemed or retired on or prior to such date”.

 

(ii) The following shall be added to the
definition of “Class A-2 Outstanding Principal Amount” immediately after
the phrase “on or prior to such date”:

 

“minus (c) the amount of any Class A-2 Notes that have been
delivered to the Trustee for cancellation pursuant to Section 2.14 of the Base
Indenture or otherwise redeemed or retired on or prior to such date”.

 

(iii) The following shall be added to the definition
of “Class A-3 Outstanding Principal Amount” immediately after the phrase “on
or prior to such date”:

 

“minus (c) the amount of any Class A-3 Notes that have been
delivered to the Trustee for cancellation pursuant to Section 2.14 of the Base
Indenture or otherwise redeemed or retired on or prior to such date”.

 

(iv) The following shall be added to the
definition of “Class A-4 Outstanding Principal Amount” immediately after
the phrase “on or prior to such date”:

 

“minus (c) the amount of any Class A-4 Notes that have been
delivered to the Trustee for cancellation pursuant to Section 2.14 of the Base
Indenture or otherwise redeemed or retired on or prior to such date”.

 

(v) The following shall be added to the
definition of “Class A-5 Outstanding Principal Amount” immediately after
the phrase “on or prior to such date”:

 

“minus (c) the amount of any Class A-5 Notes that have been
delivered to the Trustee for cancellation pursuant to Section 2.14 of the Base
Indenture or otherwise redeemed or retired on or prior to such date”.

 

(vi) The following shall be added to the
definition of “Class A-6 Outstanding Principal Amount” immediately after
the phrase “on or prior to such date”:

 

“minus (c) the amount of any Class A-6 Notes that have been
delivered to the Trustee for cancellation pursuant to Section 2.14 of the Base
Indenture or otherwise redeemed or retired on or prior to such date”.

 

2

 

(vii) The following shall be added to the
definition of “Required Noteholders” immediately after the phrase “held by HVF
or any Affiliate of HVF”:

 

“(other than an Affiliate Issuer)”.

 

(viii) The following
definitions shall be added to Section 1(b) and shall be inserted
where alphabetically appropriate:

 

“‘Aggregate Kia/Hyundai Amount’ means, as of
any date of determination, the sum of the Kia Amount and the Hyundai Amount, in
each case, as of such date.”

 

“‘Aggregate Kia/Subaru/Hyundai Amount’ means,
as of any date of determination, the sum of the Kia Amount, the Subaru Amount
and the Hyundai Amount, in each case, as of such date.”

 

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

 

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

 

“‘Eligible Manufacturer’ means (a) Ford,
GM, Chrysler, Toyota, Honda, Mazda, Nissan, Volvo, Jaguar, Audi, Volkswagen,
Land Rover, Hyundai, Kia, Lexus, Mercedes, Suzuki, BMW, Mitsubishi and Subaru
and each other Manufacturer that becomes an Eligible Program Manufacturer and (b) any
other Manufacturer with respect to which the Rating Agency Condition with
respect to the Series 2005-2 Rating Agency Condition shall have been
satisfied; provided, that (i) for purposes of this definition, any
Vehicles manufactured by Old GM that were leased to Hertz as of the Restatement
Effective Date with respect to which GM has assumed or otherwise become
obligated in respect of all of Old GM’s obligations (other than any immaterial
obligations and any obligations in respect of Old GM’s Manufacturer Program)
shall be deemed to have been manufactured by GM and (ii) for purposes of
this definition, any Vehicles manufactured by Old Chrysler that were leased to
Hertz as of the Restatement Effective Date with respect to which Chrysler has
assumed or otherwise become obligated in respect of all of Old Chrysler’s
obligations (other than any immaterial obligations and any obligations in
respect of Old Chrysler’s Manufacturer Program) shall be deemed to have been
manufactured by Chrysler.”

 

3

 

“Eligible Program Manufacturer’ means (a) Ford,
GM, Toyota, Honda, Mazda, Nissan, Volvo, Jaguar, Audi, Volkswagen, Land Rover,
Hyundai, Kia, Lexus, Mercedes and BMW, or (b) a Manufacturer (i) who,
at the time that such Manufacturer is proposed for consideration as an Eligible
Program Manufacturer, has a long term unsecured debt rating of at least “BBB-”
from S&P, at least “Baa3” from Moody’s and, unless otherwise agreed to by Fitch,
at least “BBB-” from Fitch, provided, that if a Manufacturer proposed
for consideration under the preceding clause (b) does not have a rating
from S&P or Moody’s, then the rating of the entity specified by the Rating
Agencies shall apply, or (ii) with respect to which the Series 2005-2
Rating Agency Condition shall have been satisfied; provided, however,
that for so long as a Manufacturer Event of Default is occurring with respect
to any such Manufacturer, such Manufacturer shall not qualify as an Eligible
Program Manufacturer; provided, further, that, for purposes of
this definition, any Vehicles manufactured by Old GM that were leased to Hertz
as of the Restatement Effective Date with respect to which GM has assumed or
otherwise become obligated in respect of all obligations of Old GM (other than
immaterial obligations but including, for the avoidance of doubt, Old GM’s
obligations under its Manufacturer Program) shall be deemed to have been
manufactured by GM.”

 

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

 

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

 

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

 

“‘Series 2005-2 Maximum Aggregate Kia/Hyundai Amount’
means, as of any day, an amount equal to 25% of the Adjusted Aggregate Asset
Amount on such day.”

 

“‘Series 2005-2 Maximum Aggregate
Kia/Subaru/Hyundai Amount’ means, as of any day, an amount equal to 35% of
the Adjusted Aggregate Asset Amount on such day.”

 

4

 

“‘Series 2005-2 Maximum Chrysler Amount’
means, as of any day, an amount equal to 25% of the Adjusted Aggregate Asset
Amount on such day.”

 

“‘Series 2005-2 Maximum Ford Amount’
means, as of any day, an amount equal to 70% of the Adjusted Aggregate Asset
Amount on such day.”

 

“‘Series 2005-2 Maximum GM Amount’ means,
as of any day, an amount equal to 70% of the Adjusted Aggregate Asset Amount on
such day.”

 

“‘Series 2005-2 Maximum Honda Amount’
means, as of any day, an amount equal to 70% of the Adjusted Aggregate Asset
Amount on such day.”

 

“‘Series 2005-2 Maximum Nissan Amount’
means, as of any day, an amount equal to 20% of the Adjusted Aggregate Asset
Amount.”

 

“‘Series 2005-2 Maximum Suzuki Amount’
means, as of any day, an amount equal to 5% of the Adjusted Aggregate Asset
Amount on such day.”

 

“‘Series 2005-2 Maximum Toyota Amount’
means, as of any day, an amount equal to 70% of the Adjusted Aggregate Asset
Amount on such day.”

 

“‘Series 2005-2 Maximum Volkswagen Amount’
means, as of any day, an amount equal to 10% of the Adjusted Aggregate Asset
Amount on such day.”

 

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

 

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

 

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

 

5

 

(ix) The definition
of “Class A Required Enhancement Incremental Amount” shall be
deleted in its entirety and replaced with the following:

 

“‘Class A Required Enhancement Incremental Amount’ means

 

(i)            as of the Series 2005-2
Closing Date, $0; and

 

(ii)           as of any date
thereafter, the product of (A) the Class A Required Asset Amount
Percentage as of the immediately preceding Business Day and (B) the sum of
(1) the excess, if any, of the Non-Eligible Vehicle Amount (excluding from
the calculation thereof, to the extent that an Event of Bankruptcy has occurred
with respect to any of Ford, Nissan, GM, Kia, Chrysler, Toyota and Honda, the
Net Book Value of the HVF Vehicles (other than Non-Program Vehicles
manufactured by any such Manufacturer as of the date of the occurrence of such
Event of Bankruptcy) manufactured by each such Manufacturer for which an Event
of Bankruptcy has occurred and any amounts related to such HVF Vehicles due
from such Manufacturer) over the Series 2005-2 Maximum Non-Eligible
Vehicle Amount as of such immediately preceding Business Day, (2) the
excess, if any, of the Hyundai Amount over the Series 2005-2 Maximum
Hyundai Amount as of such immediately preceding Business Day, (3) the
excess, if any, of the Jaguar Amount over the Series 2005-2 Maximum Jaguar
Amount as of such immediately preceding Business Day, (4) the excess, if
any, of the Kia Amount over the Series 2005-2 Maximum Kia Amount as of such
immediately preceding Business Day, (5) the excess, if any, of the Land
Rover Amount over the Series 2005-2 Maximum Land Rover Amount as of such
immediately preceding Business Day, (6) the excess, if any, of the Mazda
Amount over the Series 2005-2 Maximum Mazda Amount as of such immediately
preceding Business Day, (7) the excess, if any, of the Mitsubishi Amount
over the Series 2005-2 Maximum Mitsubishi Amount as of such immediately
preceding Business Day, (8) the excess, if any, of the Subaru Amount over
the Series 2005-2 Maximum Subaru Amount as of such immediately preceding
Business Day, (9) the excess, if any, of the Suzuki Amount over the Series
2005-2 Maximum Suzuki Amount as of such immediately preceding Business Day, (10) the
excess, if any, of the Non-Eligible Manufacturer Amount over the Series 2005-2
Maximum Non-Eligible Manufacturer Amount as of such immediately preceding
Business Day, (11) the excess, if any, of the Manufacturer Non-Eligible Vehicle
Amount with respect to any Manufacturer (excluding from the calculation
thereof, to the extent that an Event of Bankruptcy has occurred with respect to
any of Ford, Nissan, GM, Kia, Chrysler, Toyota and Honda, the Net Book Value of
the HVF Vehicles (other than Non-Program Vehicles manufactured by any such
Manufacturer as of the date of the occurrence of such Event of Bankruptcy)
manufactured by each such Manufacturer for which an Event of Bankruptcy has
occurred and any amounts related to

 

6

 

such HVF Vehicles due from such Manufacturer) over the Series 2005-2
Maximum Manufacturer Non-Eligible Vehicle Amount as of such immediately
preceding Business Day, (12) the excess, if any, of the Audi Amount over the Series
2005-2 Maximum Audi Amount as of such immediately preceding Business Day, (13) the
excess, if any of the BMW Amount over the Series 2005-2 Maximum BMW Amount
as of such immediately preceding Business Day, (14) the excess, if any of the
Lexus Amount over the Series 2005-2 Maximum Lexus Amount as of such
immediately preceding Business Day, (15) the excess, if any of the Mercedes
Amount over the Series 2005-2 Maximum Mercedes Amount as of such
immediately preceding Business Day, (16) the excess, if any of the Aggregate
BMW/Lexus/Mercedes/Audi Amount over the Series 2005-2 Maximum Aggregate
BMW/Lexus/Mercedes/Audi Amount as of such immediately preceding Business Day,
(17) the excess, if any of the HVF Service Vehicle Amount over the Series 2005-2
Maximum HVF Service Vehicle Amount as of such immediately preceding Business
Day, (18) the excess, if any of the Ford Amount over the Series 2005-2
Maximum Ford Amount as of such immediately preceding Business Day, (19) the
excess, if any of the Honda Amount over the Series 2005-2 Maximum Honda Amount
as of such immediately preceding Business Day, (20) the excess, if any of the
GM Amount over the Series 2005-2 Maximum GM Amount as of such immediately
preceding Business Day, (21) the excess if any of the Chrysler Amount over the Series 2005-2
Maximum Chrysler Amount as of such immediately preceding Business Day, (22) the
excess if any of the Nissan Amount over the Series 2005-2 Nissan Amount as
of such immediately preceding Business Day, (23) the excess, if any of the
Toyota Amount over the Series 2005-2 Maximum Toyota Amount as of such
immediately preceding Business Day, (24) the excess, if any of the Volkswagen
Amount over the Series 2005-2 Maximum Volkswagen Amount as of such
immediately preceding Business Day, (25) the excess, if any of the Aggregate
Kia/Subaru/Hyundai Amount over the Series 2005-2 Maximum Aggregate
Kia/Subaru/Hyundai Amount as of such immediately preceding Business Day, (26)
the excess, if any of the Volvo Amount over the Series 2005-2 Maximum
Volvo Amount as of such immediately preceding Business Day and (27) the excess,
if any of the Aggregate Kia/Hyundai Amount over the Series 2005-2 Maximum
Aggregate Kia/Hyundai Amount.  The Manufacturer Non-Eligible
Vehicle Amounts with respect to Ford, Volvo, Jaguar and Land Rover shall be
calculated on an aggregate basis so that they will be considered as one
Manufacturer for the purpose of the calculation of the Series 2005-2
Maximum Manufacturer Non-Eligible Vehicle Amount for so long as each of Volvo,
Jaguar and Land Rover is an Affiliate of Ford.”

 

(x) The definition of “Series 2005-2 Maximum
Manufacturer Non-Eligible Vehicle Amount” shall be deleted in its entirety and
replaced with the following:

 

7

 

“‘Series 2005-2 Maximum Manufacturer Non-Eligible Vehicle Amount
means, as of any day, (x) with respect to Toyota, an amount equal to 50%
of the Non-Eligible Vehicle Amount and (y) with respect to any other
Manufacturer, an amount equal to 40% of the Non-Eligible Vehicle Amount”

 

(xi) The number “6%” shall be deleted from the
definition of “Series 2005-2 Maximum Aggregate BMW/Lexus/Mercedes/Audi
Amount” and shall be replaced with the number “12%”.

 

(xii) The number “3%” shall be deleted from the
definition of “Series 2005-2 Maximum Audi Amount” and shall be replaced
with the number “5%”.

 

(xiii) The number “10%” shall be deleted from the
definition of “Series 2005-2 Maximum Kia Amount” and shall be replaced
with the number “15%”.

 

(xiv) The number “3%” shall be deleted from the
definition of “Series 2005-2 Maximum Lexus Amount” and shall be replaced
with the number “5%”.

 

(xv) The number “3%” shall be deleted from the
definition of “Series 2005-2 Maximum Mercedes Amount” and shall be
replaced with the number “5%”.

 

(xvi) The number “3%” shall be deleted from the
definition of “Series 2005-2 Maximum BMW Amount” and shall be replaced
with the number “5%”.

 

(xvii) The definition of “Rating Agencies” shall be
deleted in its entirety and replaced with the following:

 

“Rating Agencies’ means, with respect to the Series 2005-2
Notes, notwithstanding the proviso in the definition of “Rating Agency” in the
Base Indenture, Standard & Poor’s and Moody’s and any other nationally
recognized rating agency rating the Series 2005-2 Notes at the request of
HVF.”

 

3.Amendments to Article VI.  The following shall be added as Section 6.19
of the Series 2005-2 Supplement:

 

“Section 6.19.  Additional Covenants.  HVF covenants and agrees that:

 

(a)       Amendments to Related Documents. 
Except as contemplated by Section 3.2(a) of the Base Indenture
or Section 12.1(a) of the Base Indenture, unless HVF shall have obtained the
prior written consent of the Requisite Investors with respect to any amendment,
modification, waiver, supplement, surrender or termination of, or any
assignment by any other party to, a Related Document, HVF shall not amend,
modify, waive, supplement, surrender or terminate, or consent to any assignment
by any other party to, any Related 

 

8

 

Document (other than (x) any
Related Document relating solely to one or more Segregated Series and (y) any
(i) Notes, (ii) Enhancement Agreement, (iii) Series-Specific
Swap Agreement, (iv) underwriting agreement, note purchase agreement,
purchase agreement or similar agreement, (v) Depository Agreement, (vi) premium
letter, fee letter or similar agreement, or (vii) any document similar to
the foregoing, in each case relating solely to any Series of Indenture Notes
other than the Series 2005-2 Notes) without the prior written consent of
the Required Noteholders.  Any such
amendment, modification, waiver, supplement, surrender, assignment or
termination made in violation of this Section 6.19(a) shall be void.

 

(b)       Purchase of Old GM and Old Chrysler
Vehicles.  HVF shall not purchase any Vehicles
manufactured by Old GM or Old Chrysler on or after the date of the Restatement
Effective Date.

 

(c)       Waivers of Base Indenture Series and
Supplement.  Prior to consenting to any waiver of the Base
Indenture or the Series 2005-2 Supplement, the Insurer shall be entitled to
request that any Rating Agency provide confirmation as to whether the Series 2005-2
Rating Agency Condition is satisfied with respect to such waiver.

 

(d)       Amendments to Series Supplement or
Base Indenture.  Unless HVF shall have obtained the consent of
(i) the Requisite Investors with respect to any amendment, modification or
waiver to the Base Indenture pursuant to Section 12.2(a) of the Base Indenture
which amendment, waiver or modification requires the consent of the Requisite
Indenture Investors or (ii) the Required Noteholders with respect to any
amendment, modification or waiver to the Base Indenture pursuant to Section 12.2(a)
of the Base Indenture which amendment, waiver or modification affects only the Series
2005-2 Noteholders and, for the avoidance of doubt, does not affect the
Noteholders of any other Series of Notes (as substantiated by an Officer’s
Certificate of HVF to such effect), HVF shall not enter into any such amendment,
modification or waiver to the Base Indenture without obtaining the consent of
the Required Noteholders.  Prior to
entering into any amendment, waiver or modification described in Sections
12.2(b)(i), (b)(ii), (b)(iii) or (b)(iv) of the Base Indenture that
affects the Series 2005-2 Noteholders, HVF shall obtain the consent of the
affected Noteholders.  Any such
amendment, modification or waiver made in violation of this Section 6.19(d) shall
be void.

 

(e)       Subordinated Notes. 
Prior to issuing a subordinated Series of Notes (other than, for
the avoidance of doubt, a subordinated class of Notes issued pursuant to a Series Supplement)
which is fully subordinated to each Series of Notes Outstanding, HVF shall
obtain the consent of the Required Noteholders.

 

4.Trustee Consent.  By agreeing, acknowledging and consenting to
this Amendment, Ambac (as deemed holder of 100% of the Class A Notes relating
to the Series 2005-2 Supplement) hereby consents to the Trustee entering
into this Amendment.

 

9

 

5.Effectiveness.  This Amendment shall be effective upon its
execution and delivery by each party hereto and the satisfaction or waiver of
the Rating Agency Condition with respect to each Series of Notes
Outstanding.

 

6.  Reference
to and Effect on the Series 2005-2 Supplement; Ratification.

 

(a) Except as
specifically amended above, the Series 2005-2 Supplement and Base
Indenture are and shall continue to be in full force and effect and are hereby
ratified and confirmed in all respects.

 

(b) The execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of any party hereto under the Series 2005-2
Supplement, or constitute a waiver of any provision of any other agreement.

 

(c) Upon the
effectiveness hereof, each reference in the Series 2005-2 Supplement to “this
Series Supplement”, “hereto”, “hereunder”, “hereof” or words of like import
referring to the Series 2005-2 Supplement, and each reference in any other
Related Document to “the Series 2005-2 Supplement”, “thereto”, “thereof”, “thereunder”
or words of like import referring to the Series 2005-2 Supplement, shall
mean and be a reference to the Series 2005-2 Supplement as amended hereby.

 

7.  Counterparts; Facsimile
Signature.  This Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same instrument.  Any signature page to this Amendment
containing a manual signature may be delivered by facsimile transmission or
other electronic communication device capable of transmitting or creating a
printable written record, and when so delivered shall have the effect of
delivery of an original manually signed signature page.

 

8.  Governing
Law.  THIS
AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW
YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAW.

 

9.  Headings.  The descriptive headings of the various
sections of this Amendment are inserted for convenience of reference only and
shall not be deemed to affect the meaning or construction of any of the
provisions thereof.

 

10.Third-Party Beneficiaries.   The Hertz Corporation shall be an express
third-party beneficiary under this Amendment.

 

11.Severability.  The failure or unenforceability of any
provision hereof shall not affect the other provisions of this Amendment.  Whenever possible each provision of this
Amendment shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Amendment shall be
prohibited by or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition

 

10

 

or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Amendment.

 

12.  Interpretation.  Whenever the context and construction so
require, all words used in the singular number herein shall be deemed to have
been used in the plural, and vice versa, and the masculine gender shall include
the feminine and neuter and the neuter shall include the masculine and
feminine.

 

11

 

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

 

	
   

  	
  HERTZ VEHICLE FINANCING
  LLC,

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name: R.
  Scott Massengill

  
	
   

  	
   

  	
  Title: Vice
  President & Treasurer

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK
  MELLON TRUST COMPANY, N.A., as successor to BNY MIDWEST TRUST COMPANY, as
  Trustee,

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/
  John D. Ask

  
	
   

  	
   

  	
  Name: John
  D. Ask

  
	
   

  	
   

  	
  Title: Senior
  Associate

  

 

12

 

AGREED, ACKNOWLEDGED AND
CONSENTED:

 

 

AMBAC
ASSURANCE CORPORATION,

 

	
  by

  	
  /s/ Anthony Nocera

  	
   

  
	
  Name: Anthony
  Nocera

  	
   

  
	
  Title: First Vice
  President

  	
   

  

 

13Exhibit 4.9.7

 

EXECUTION
VERSION

 

	
   

  

 

 

THIRD
AMENDED AND RESTATED MASTER MOTOR VEHICLE OPERATING LEASE AND SERVICING
AGREEMENT

 

 

Dated
as of September 18, 2009

 

 

between

 

 

HERTZ
VEHICLE FINANCING LLC

 

 

as
Lessor

 

 

and

 

 

THE
HERTZ CORPORATION

 

 

as
Lessee and Servicer

 

	
   

  

 

 

Table of Contents

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  1. DEFINITIONS

  	
  2

  
	
  2. GENERAL AGREEMENT

  	
  2

  
	
  2.1. Lease of Vehicles

  	
  4

  
	
  2.2. Non-Liability of Lessor

  	
  4

  
	
  2.3. Return

  	
  5

  
	
  2.4. Lessee’s Right to Purchase
  Vehicles

  	
  5

  
	
  2.5. Lessor’s Right to Cause
  Vehicles to be Sold

  	
  6

  
	
  2.6. Redesignation of Vehicles

  	
  7

  
	
  2.7. Limitations on the Leasing
  or Redesignation of Certain Vehicles

  	
  8

  
	
  2.8. Conditions to Each Lease of
  Vehicle

  	
  8

  
	
  2.9. Compliance with Master
  Exchange Agreement

  	
  9

  
	
  3. TERM

  	
  9

  
	
  3.1. Vehicle Term

  	
  9

  
	
  3.2. Term

  	
  10

  
	
  4. RENT AND CHARGES

  	
  11

  
	
  4.1. Monthly Base Rent

  	
  11

  
	
  4.2. Monthly Variable Rent

  	
  11

  
	
  4.3. Rent

  	
  11

  
	
  4.4. Monthly Base Rent
  Adjustments

  	
  11

  
	
  4.5. Payment of Monthly Base Rent

  	
  12

  
	
  4.6. Payment of Monthly Variable
  Rent

  	
  12

  
	
  4.7. Rejected Vehicles

  	
  12

  
	
  4.8. Making of Payments

  	
  12

  
	
  4.9. Billing Process

  	
  13

  
	
  4.10. Casualty Payments

  	
  13

  
	
  4.11. Late Payment

  	
  13

  
	
  4.12. Prepayments

  	
  13

  
	
  4.13. Net Lease

  	
  13

  
	
  5. INSURANCE

  	
  14

  
	
  5.1. Comprehensive Public
  Liability, Property Damage, and Catastrophic Physical Damage

  	
  14

  
	
  5.2. Delivery of Certificate of
  Insurance

  	
  15

  
	
  6. RISK OF LOSS; CASUALTY AND INELIGIBLE VEHICLE
  OBLIGATIONS

  	
  15

  
	
  6.1. Risk of Loss Borne by
  Lessees

  	
  15

  
	
  6.2. Casualty; Ineligible
  Vehicles

  	
  15

  
	
  7. VEHICLE USE

  	
  15

  
	
  8. LIENS

  	
  16

  
	
  9. NON-DISTURBANCE

  	
  16

  
	
  10. FEES; TRAFFIC SUMMONSES; PENALTIES AND FINES

  	
  17

  
	
  11. MAINTENANCE AND REPAIRS

  	
  17

  
	
  12. VEHICLE WARRANTIES

  	
  17

  
	
  12.1. No Lessor Warranties

  	
  17

  
	
  12.2.
  Manufacturer’s Warranties

  	
  18

  

 

i

 

Table of Contents

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

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

  	
  18

  
	
  13.1. Usage

  	
  18

  
	
  13.2. Return

  	
  18

  
	
  13.3. Special Default Payments

  	
  18

  
	
  13.4. Early Termination Payments

  	
  19

  
	
  14. DISPOSITION PROCEDURE

  	
  19

  
	
  15. ODOMETER DISCLOSURE REQUIREMENT

  	
  19

  
	
  16. ASSIGNMENT

  	
  20

  
	
  16.1. Right of the Lessor to
  Assign this Agreement

  	
  20

  
	
  16.2. Limitations on the Right of
  the Lessee to Assign this Agreement

  	
  20

  
	
  17. DEFAULT AND REMEDIES THEREFOR

  	
  20

  
	
  17.1. Events of Default

  	
  20

  
	
  17.2. Effect of Operating Lease
  Event of Default

  	
  21

  
	
  17.3. Rights of Lessor Upon
  Operating Lease Event of Default

  	
  21

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

  	
  22

  
	
  17.5. Measure of Damages

  	
  23

  
	
  17.6. Vehicle Return Default

  	
  24

  
	
  17.7. Servicer Default

  	
  25

  
	
  17.8. Application of Proceeds

  	
  25

  
	
  18. MANUFACTURER EVENTS OF DEFAULT

  	
  25

  
	
  19. CERTIFICATION OF TRADE OR BUSINESS USE

  	
  26

  
	
  20. TITLE TO VEHICLES

  	
  26

  
	
  21. RIGHTS OF LESSOR ASSIGNED TO TRUSTEE

  	
  26

  
	
  22. MODIFICATION AND SEVERABILITY

  	
  27

  
	
  23. SERVICER ACTING AS AGENT OF THE LESSOR

  	
  27

  
	
  24. MINIMUM DEPRECIATION RATE

  	
  27

  
	
  25. CERTAIN REPRESENTATIONS AND WARRANTIES

  	
  28

  
	
  25.1. Organization; Power;
  Qualification

  	
  28

  
	
  25.2. Authorization;
  Enforceability

  	
  28

  
	
  25.3. Compliance

  	
  28

  
	
  25.4. Other

  	
  28

  
	
  25.5. Financial Statements

  	
  29

  
	
  25.6. Investment Company Act

  	
  29

  
	
  25.7. Supplemental Documents True
  and Correct

  	
  29

  
	
  25.8. [Reserved]

  	
  29

  
	
  25.9. ERISA

  	
  30

  
	
  25.10. Indemnification Agreement

  	
  30

  
	
  25.11. Eligible Vehicles

  	
  30

  
	
  26. CERTAIN AFFIRMATIVE COVENANTS

  	
  30

  
	
  26.1. Corporate Existence;
  Foreign Qualification

  	
  30

  
	
  26.2.
  Books, Records and Inspections

  	
  30

  

 

ii

 

Table of Contents

(continued)

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  26.3. ERISA

  	
  31

  
	
  26.4. Merger

  	
  31

  
	
  26.5. Reporting Requirements

  	
  31

  
	
  26.6. Indemnification Agreement

  	
  32

  
	
  26.7. Ford Program Agreements

  	
  32

  
	
  27. NO PETITION

  	
  33

  
	
  28. SUBMISSION TO JURISDICTION

  	
  33

  
	
  29. GOVERNING LAW

  	
  33

  
	
  30. JURY TRIAL

  	
  34

  
	
  31. NOTICES

  	
  34

  
	
  32. SURVIVABILITY

  	
  35

  
	
  33. HEADINGS

  	
  35

  
	
  34. EXECUTION IN COUNTERPARTS

  	
  35

  

 

iii

 

THIRD
AMENDED AND RESTATED MASTER MOTOR VEHICLE OPERATING LEASE AND SERVICING
AGREEMENT

 

This Third Amended and
Restated Master Motor Vehicle Operating Lease and Servicing Agreement
(this “Agreement”), dated as of September 18, 2009, by and between
HERTZ VEHICLE FINANCING LLC, a Delaware limited liability company (“HVF”),
as lessor (in such capacity, the “Lessor”) and THE HERTZ CORPORATION, a
Delaware corporation (“Hertz”), as lessee (in such capacity, the “Lessee”)
and as servicer (in such capacity, the “Servicer”).

 

W I
T N E S S E T H:

 

WHEREAS, HVF and Hertz entered into a Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of September 18,
2002, as amended pursuant to Amendment No. 1 to the Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of March 31,
2004, as amended and restated pursuant to the Amended and Restated Master Motor Vehicle Operating Lease and Servicing Agreement, dated as of December 21,
2005, and as further amended and restated pursuant to the Second Amended and
Restated Master Motor Vehicle Operating Lease and Servicing Agreement, dated as
of August 1, 2006 (the “Prior Agreement”);

 

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

 

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

 

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

 

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

 

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

 

 

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

 

1.  DEFINITIONS.  Except as otherwise specified, capitalized
terms used but not defined herein shall have the meanings ascribed to such
terms in the Definitions List attached as Schedule 1 to the Second Amended
and Restated Base Indenture, dated as of September 18, 2009, between HVF,
as Issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee, as
such indenture may be amended, supplemented, restated or otherwise modified
from time to time in accordance with its terms.

 

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

 

(b)           If, notwithstanding the intent of the parties to
this Agreement, this Agreement is characterized by any third party as a
financing arrangement or as otherwise not constituting a “true lease,” then it
is the intention of the parties that this Agreement shall constitute a security
agreement under applicable law, and, to secure all of its obligations under
this Agreement, the Lessee hereby grants to the Lessor a security interest in
all of the Lessee’s right, title and interest, if any, in and to all of the
following assets, property and interests in property, whether now owned or
hereafter acquired or created:

 

(i)            the rights of the Lessee under this Agreement, as
the same may be amended, modified or supplemented from time to time in
accordance with its terms, and each Supplemental Document (other than the
Manufacturer Programs) (the “Lessee Agreements”), including, without
limitation, (a) all monies, if any, due and to become due to the Lessee
under or in connection with any of the Lessee Agreements, whether payable as
rent, fees, expenses, costs, indemnities, insurance recoveries, damages for the
breach of any of the Lessee Agreements or otherwise, and (b) all rights,
remedies, powers, privileges and claims of the Lessee against any other party
under or with respect to the Lessee Agreements (whether arising pursuant to the
terms of such Lessee Agreements or otherwise available to the Lessee at law or
in equity), including the right to enforce any of the Lessee Agreements and to
give or withhold any and all consents, requests, notices, directions, approvals,
extensions or waivers under or with respect to the Lessee Agreements or the
obligations and liabilities of any party thereunder, (c) all liens and
property from time to time purporting to secure payment of the obligations and
liabilities of the Lessee arising under or in connection with the Lessee
Agreements, 

 

2

 

together with any documents or agreements describing any collateral
securing such obligations or liabilities, and (d) all guarantees, insurance
and other agreements or arrangements of whatever character from time to time
supporting or securing payment of such obligations and liabilities of the
Lessee pursuant to the Lessee Agreements;

 

(ii)           all HVF Vehicles which, notwithstanding that this
Agreement is intended to convey only a leasehold interest, are determined to be
owned by the Lessee, and all Certificates of Title with respect to the HVF
Vehicles;

 

(iii)          all right, title and interest of the Lessee in and
to any proceeds from the sale of HVF Vehicles which, notwithstanding that this
Agreement is intended to convey only a leasehold interest, are determined to be
owned by the Lessee, including all monies due in respect of such HVF Vehicles,
whether payable as the purchase price of such HVF Vehicles or as fees,
expenses, costs, indemnities, insurance recoveries or otherwise;

 

(iv)          all payments under insurance policies (whether or
not the Lessor, the Collateral Agent or the Trustee is named as the loss payee
thereof) with respect to the HVF Vehicles or any warranty payable by reason of
loss or damage to, or otherwise with respect to, any of the HVF Vehicles;

 

(v)           all additional property relating to the HVF Vehicles
that may from time to time hereafter be subjected to the grant and pledge under
this Agreement, as same may be modified or supplemented from time to time, by
the Lessee or by anyone on its behalf; and

 

(vi)          all Proceeds of any and all of the foregoing
including, without limitation, payments under insurance (whether or not the
Lessor is named as the loss payee thereof) and cash.

 

(c)           To secure the Note Obligations, the Lessee hereby
grants to the Collateral Agent on behalf of the Noteholders, a first priority
security interest in all of the Lessee’s right, title and interest, if any, in
and to all of the collateral described in Section 2(b) above,
whether now owned or hereafter acquired or created.  Upon the occurrence of a Liquidation Event of
Default or a Limited Liquidation Event of Default with respect to any Series of
Notes Outstanding and subject to the provisions of the Related Documents, the
Collateral Agent shall have all of the rights and remedies of a secured party,
including, without limitation, the rights and remedies granted under the UCC.

 

(d)           The Lessee agrees to deliver to the Lessor and the
HVF Secured Party on or before the Series 2009-1 Closing Date:

 

(i)            a written search report from a Person satisfactory
to the Lessor listing all effective financing statements that name the Lessee
as debtor or assignor, and that are filed in the jurisdictions in which filings
were made pursuant to clause (ii) below, together with copies of such
financing statements;

 

(ii)           evidence of the filing in the State of Delaware of
proper financing statements on Form UCC-1 naming the Lessee, as debtor,
and the Lessor, as secured 

 

3

 

party and the Collateral Agent as assignee secured party, covering the
collateral described in Section 2(b) above; and

 

(iii)          evidence of the filing in the State of Delaware of
proper financing statements on Form UCC-l naming the Lessee, as debtor,
and the Collateral Agent as secured party covering the collateral described in Section 2(b) above;

 

(e)           The Lessee hereby authorizes the Lessor to file, or
cause to be filed, financing or continuation statements, and amendments thereto
and assignments thereof, under the applicable UCC in order to perfect its
interest in the security granted pursuant to Section 2(b) hereof.

 

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

 

2.2.  Non-Liability of Lessor. AS BETWEEN THE LESSOR
AND THE LESSEE, ACCEPTANCE FOR LEASE OF THE VEHICLES UNDER THE PURCHASE
AGREEMENT SHALL CONSTITUTE THE LESSEE’S ACKNOWLEDGMENT AND AGREEMENT THAT THE
LESSEE HAS FULLY INSPECTED SUCH VEHICLES, THAT SUCH VEHICLES ARE IN GOOD ORDER
AND CONDITION AND ARE OF THE MANUFACTURE, DESIGN, SPECIFICATIONS AND CAPACITY
SELECTED BY THE LESSEE, THAT THE LESSEE IS SATISFIED THAT THE SAME ARE SUITABLE
FOR THIS USE AND THAT THE LESSOR IS NOT A MANUFACTURER OR ENGAGED IN THE SALE
OR DISTRIBUTION OF VEHICLES, AND HAS NOT MADE AND DOES NOT HEREBY MAKE ANY
REPRESENTATION, WARRANTY OR COVENANT WITH RESPECT TO MERCHANTABILITY,
CONDITION, QUALITY, DURABILITY OR SUITABILITY OF SUCH VEHICLE IN ANY RESPECT OR
IN CONNECTION WITH OR FOR THE PURPOSES OR USES OF THE LESSEE, OR ANY OTHER REPRESENTATION,
WARRANTY OR COVENANT EXPRESS OR IMPLIED OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, WITH RESPECT THERETO.  THE
LESSOR SHALL NOT BE LIABLE FOR ANY FAILURE TO PERFORM ANY PROVISION HEREOF
RESULTING FROM FIRE OR OTHER CASUALTY, NATURAL DISASTER, RIOT, STRIKE OR OTHER
LABOR DIFFICULTY, GOVERNMENTAL REGULATION OR RESTRICTION, OR ANY CAUSE BEYOND
THE LESSOR’S DIRECT CONTROL.  IN NO EVENT
SHALL 

 

4

 

THE LESSOR BE LIABLE FOR ANY
INCONVENIENCES, LOSS OF PROFITS OR ANY OTHER CONSEQUENTIAL, INCIDENTAL OR
SPECIAL DAMAGES RESULTING FROM ANY DEFECT IN OR ANY THEFT, DAMAGE, LOSS OR
FAILURE OF ANY VEHICLE, AND THERE SHALL BE NO ABATEMENT OF RENT OR OTHER
AMOUNTS PAYABLE HEREUNDER BECAUSE OF THE SAME.

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

(b)  The Servicer shall use commercially
reasonable efforts, at its own expense, to arrange for the sale of each
Non-Program Vehicle to a third party for the Vehicle Purchase Price with
respect to such Vehicle on or prior to the Maximum Lease Termination Date with
respect to such Non-Program Vehicle. 
Notwithstanding the disposition of a Non-Program Vehicle by the Servicer
prior to the end of a calendar month, the Lessee shall pay to the Lessor all
accrued and unpaid Monthly Base Rent and any Monthly Variable Rent then due and
payable with respect to such Non-Program Vehicle through the Payment Date with
respect to the Related Month during which the Disposition Proceeds of such
Non-Program Vehicle are deposited into the Collection Account, unless such
Non-Program Vehicle is a Casualty or becomes an Ineligible Vehicle, payment for
which will be made in accordance with Section 6.  When a sale of such Non-Program Vehicle is
arranged by the Servicer pursuant to this Section 2.5(b), (i) the
Servicer shall deliver the Vehicle to the purchaser thereof and (ii) the
Servicer shall cause to be deposited into the Collateral Account the funds paid
for such Vehicle by the purchaser; provided, that, the Lessee may
deliver to the Servicer any Non-Program Vehicle that remains eligible under,
and subject to, a Manufacturer Program for return to the related Manufacturer
in accordance with Section 3.1(b) hereof as if such Non-Program
Vehicle were a Program Vehicle if the Servicer reasonably believes that such
Manufacturer will honor its obligations under such Manufacturer Program with
respect to such Vehicle.

 

(c)  In the event any Vehicle or Vehicles are
not purchased by the Lessee pursuant to Section 2.4, sold to a third party
pursuant to Section 2.5 or returned to a Manufacturer pursuant to Section 3.1(b),
the Servicer shall return such Vehicle to the Lessor, on the 

 

6

 

Payment Date with respect to the Related Month in which the applicable
Maximum Lease Termination Date falls, and the Lessee shall pay an amount equal
to all accrued but unpaid Monthly Base Rent and all Monthly Variable Rent
payable with respect to such Vehicles through such Payment Date.

 

2.6.  Redesignation of Vehicles.  At any time, including without limitation, if
(i) a Program Vehicle becomes ineligible for repurchase by its
Manufacturer or for sale at Auction under the applicable Manufacturer Program
or (ii) the return of a Program Vehicle to the applicable Manufacturer
cannot otherwise be effected for any reason, the Lessor (or the Servicer on its
behalf and at its instruction) may redesignate a Program Vehicle as a
Non-Program Vehicle, provided that, unless such Manufacturer is a
Defaulting Manufacturer, no Amortization Event or Potential Amortization Event
with respect to any Series of Notes Outstanding has occurred and is
continuing or would be caused by such redesignation and provided  further,
in each case, that in connection with such redesignation the Lessor shall
establish a Depreciation Schedule for such redesignated Non-Program Vehicle in
accordance with Section 24 and the Lessee shall pay to the Lessor on the next
succeeding Payment Date an amount equal to the difference, if any, between the
Net Book Value of such Vehicle as of the date of redesignation and an amount
(the “Redesignation Amount”) equal to the Net Book Value of such Vehicle
as of the date of redesignation calculated as if such Vehicle been a
Non-Program Vehicle on the Vehicle Operating Lease Commencement Date for such
Vehicle subject to such newly established Depreciation Schedule; provided
further, however, that if (I) a Program Vehicle is redesignated
as a Non-Program Vehicle under the circumstances described in Section 18(b) or
(II) a Non-Program Vehicle is purchased from a Manufacturer during the
continuance of a Manufacturer Event of Default pursuant to clause (ii) of
the definition thereof with respect to such Manufacturer and such Vehicle would
constitute a Program Vehicle but for the existence of such Manufacturer Event
of Default (each such Vehicle, a “Redesignated Ineligible Program Vehicle”),
if (x) the Manufacturer of such Vehicle assumes its Manufacturer Program
in accordance with the Bankruptcy Code, (y) following the assumption described
in such clause (x), such Non-Program Vehicle is eligible under such assumed
Manufacturer Program and otherwise meets the qualifications for Program
Vehicles under an Eligible Manufacturer Program and (z) there are at least
thirty (30) days prior to the expiration of the Maximum Term for a Program
Vehicle, the Lessor may redesignate such Non-Program Vehicle as a Program
Vehicle, and, in connection with such redesignation, future Depreciation
Charges in respect of such redesignated Program Vehicle shall be made in
accordance with requirements for Program Vehicles set forth in the definition
of Depreciation Charges and the Lessor shall pay to the Lessee on the next
succeeding Payment Date (a) in the case of any Vehicle that has not
previously been redesignated as a Non-Program Vehicle, an amount equal to the
difference, if any, between the Net Book Value of such Vehicle as of the date
of redesignation and an amount equal to the Net Book Value of such Vehicle as
of the date of redesignation calculated as if such Vehicle had been a Program
Vehicle at all times on and after the Vehicle Operating Lease Commencement Date
for such Vehicle or (b) in all other cases an amount (the “Assumption
Redesignation Amount”) equal to the difference, if any, between the Net
Book Value of such redesignated Program Vehicle as of the date of such redesignation
of such Vehicle as a Program Vehicle and an amount equal to the Net Book Value
of such redesignated Program Vehicle as of such date of 

 

7

 

redesignation calculated as
if such Vehicle been a Program Vehicle on the Vehicle Operating Lease
Commencement Date for such Vehicle and such Vehicle had never been redesignated
from a Program Vehicle to a Non-Program Vehicle; provided  further
that (1) no payment shall be required to be made and no payment may be made by
the Lessor pursuant to the immediately preceding proviso to the extent that an
Amortization Event of Potential Amortization Event with respect to any Series of
Notes Outstanding exists or would be caused by such payment, (2) the
amount of any such payment to be made by the Lessor on any such date shall be
capped at and be paid from (and the obligation of the Lessor to make such
payment on such date shall be limited to) the amount of funds available to be
released to the Lessor on such date and (3) if any such payment from the
Lessor is limited in amount pursuant to either clause (1) or clause (2) above,
the Lessor shall pay to the Lessee the funds available to be released to the
Lessor on such Payment Date and shall pay to the Lessee on each Payment Date
thereafter the amount available to be released to the Lessor until such payment
described in clause (a) or clause (b) above has been paid in full to
the Lessee.

 

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

 

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

 

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

 

8

 

(b)  Funding.  HVF shall have sufficient funds (other than
funds allocated to one or more Segregated Series of Indenture Notes
relating to or constituting Series-Specific Collateral) available under the
Indenture or otherwise to purchase such Vehicle from HGI or HFC pursuant to the
Purchase Agreement or the HFC Purchase Agreement, respectively;

 

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

 

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

 

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

 

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

 

3.  TERM.

 

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

 

9

 

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

 

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

 

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

 

10

 

The “Term” of this
Agreement shall mean the period commencing on the Operating Lease Commencement
Date and ending on the Operating Lease Expiration Date.

 

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

 

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

 

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

 

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

 

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

 

(b)  If the Vehicle Operating Lease
Commencement Date occurs (i) with respect to a Program Vehicle, after the
In-Service Date for such Program Vehicle pursuant to its 

 

11

 

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

 

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

 

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

 

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

 

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

 

4.8.  Making of Payments.  All payments of Rent hereunder (and any other
payments hereunder) shall be made by the Lessee to, or for the account of, the
Lessor in immediately available funds, without setoff, counterclaim or
deduction of any kind.  All such payments
shall be deposited into the Collection Account not later than 12:00 noon,
New York City time, on the date due.  If
any payment of Rent (or any other payments hereunder) falls due on a day which
is not a Business Day, then such due date shall be extended to the next
following Business Day and Monthly Variable Rent shall accrue 

 

12

 

through such Business
Day.  If the Lessee pays less than the
entire amount of Rent (or any other amounts) due on any Payment Date, after
giving full credit for all prepayments made with respect to such Payment Date
pursuant to Section 4.12, then the payment received from the Lessee in
respect of such Payment Date shall be first applied to the Monthly Variable
Rent due on such Payment Date.

 

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

 

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

 

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

 

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

 

4.13.  Net Lease. 
THIS AGREEMENT SHALL BE A NET LEASE, AND THE LESSEE’S OBLIGATION TO PAY
ALL RENT AND OTHER SUMS HEREUNDER SHALL BE ABSOLUTE AND UNCONDITIONAL, AND
SHALL NOT BE SUBJECT TO ANY ABATEMENT, SETOFF, COUNTERCLAIM, DEDUCTION OR
REDUCTION FOR ANY REASON WHATSOEVER.  The
obligations and liabilities of the Lessee hereunder shall in no way be
released, discharged or otherwise 

 

13

 

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

 

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

 

5.1.  Comprehensive Public Liability, Property
Damage, and Catastrophic Physical Damage. 
Comprehensive public liability and property damage protection in respect
of the possession, condition, maintenance, operation and use of the Vehicles,
in the amount required to meet the minimum financial responsibility
requirements mandated by applicable state law for each occurrence, and
catastrophic physical damage insurance, 

 

14

 

in an amount not less than
$50,000,000.  Catastrophic physical
damage insurance shall name the Collateral Agent as loss payee as its interests
may appear.

 

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

 

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

 

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

 

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

 

7.  VEHICLE
USE.  The Lessee may use Vehicles leased
hereunder in its regular course of business and the Lessee’s and its
subsidiaries’ employees may use Vehicles leased hereunder in their personal or
professional capacities, subject to Sections 2.5 and 17 hereof and Section 9.2
of the Base Indenture.  Such use shall be
confined primarily to the United States, with limited use in Canada and Mexico;
provided that the principal place of business or rental office of the
Lessee with respect to the Vehicles is located in the United States.  Subject to the preceding sentence, the Lessee
may, at its sole expense, change the place of principal location of any
Vehicles.  Notwithstanding the foregoing,
no change of location shall be undertaken unless and until all legal
requirements 

 

15

 

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

 

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

 

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

 

16

 

pertaining to the Vehicles available to the Lessor
or the Trustee for inspection at the location where the Lessee’s records are
normally domiciled.

 

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

 

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

 

12.  VEHICLE
WARRANTIES.

 

12.1.  No Lessor Warranties.  THE LESSEE ACKNOWLEDGES THAT THE LESSOR IS
NOT THE MANUFACTURER, THE AGENT OF THE MANUFACTURER, OR THE DISTRIBUTOR OF THE
VEHICLES.  THE LESSOR MAKES NO WARRANTY
OR REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE FITNESS, SAFENESS, DESIGN,
MERCHANTABILITY, CONDITION, QUALITY, CAPACITY OR WORKMANSHIP OF THE VEHICLES
NOR ANY WARRANTY THAT THE VEHICLES WILL SATISFY THE REQUIREMENTS OF ANY LAW OR
ANY CONTRACT SPECIFICATION, AND AS BETWEEN THE LESSOR AND THE LESSEE, THE LESSEE
AGREES TO BEAR ALL SUCH RISKS 

 

17

 

AT ITS SOLE COST AND
EXPENSE.  THE LESSEE SPECIFICALLY WAIVES
ALL RIGHTS TO MAKE CLAIMS AGAINST THE LESSOR AND ANY VEHICLE FOR BREACH OF ANY
WARRANTY OF ANY KIND WHATSOEVER AND, AS TO THE LESSOR, THE LESSEE LEASES THE
VEHICLES “AS IS.”  IN NO EVENT SHALL THE
LESSOR BE LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, WHATSOEVER
OR HOWSOEVER CAUSED.

 

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

 

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

 

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

 

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

 

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

 

18

 

following such Determination Date (any such charges
are referred to as “Program Vehicle Special Default Payments”).

 

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

 

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

 

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

 

15.  ODOMETER DISCLOSURE
REQUIREMENT.  The Servicer agrees to
comply with all requirements of law and all Manufacturer Program requirements
with respect to each Vehicle in connection with the transfer of ownership by
the Lessor of 

 

19

 

such Vehicle, including, without limitation, the
submission of any required odometer disclosure statement at the time of any
such transfer of ownership.

 

16.  ASSIGNMENT.

 

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

 

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

 

17.  DEFAULT AND REMEDIES THEREFOR.

 

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

 

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

 

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

 

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

 

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

 

17.1.5.  if any representation or warranty made by the
Lessee herein is inaccurate or incorrect or is breached or is false or
misleading in any material respect as of the date of the making thereof or any
schedule, certificate, financial 

 

20

 

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

 

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

 

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

 

17.1.8.  a Servicer Default occurs; or

 

17.1.9.  a Liquidation Event of Default occurs.

 

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

 

17.3.  Rights of Lessor Upon Operating Lease Event
of Default.  If an Operating Lease Event
of Default, Limited Liquidation Event of Default (other than any Limited
Liquidation Event of Default relating solely to any Segregated Series of
Notes) or Liquidation Event of Default shall occur, then the Lessor at its
option may:

 

(i)  in the case of an Operating Lease Event of
Default, proceed by appropriate court action or actions, either at law or in
equity, to enforce performance by the Lessee of the applicable covenants and
terms of this Agreement or to recover damages for the breach hereof calculated
in accordance with Section 17.5; or

 

21

 

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

 

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

 

(i)  If a Liquidation Event of Default or a
Limited Liquidation Event of Default (other than any Limited Liquidation Event
of Default relating solely to any Segregated Series of Notes) shall have
occurred and be continuing, the Trustee, to the extent provided in the
Indenture, shall have the rights against the Lessee and the Collateral provided
in the Indenture and the Collateral Agency Agreement upon a Liquidation Event
of Default or such a Limited Liquidation Event of Default, as the case may be,
including 

 

22

 

the right to take possession of all or a portion of the Vehicles
immediately from the Lessee.

 

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

 

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

 

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

 

(ii)  any reasonable out-of-pocket damages and
expenses, including reasonable attorneys’ fees and expenses which the Lessor or
the Trustee will have sustained by reason of such an Operating Lease Event of
Default, Limited Liquidation Event of Default or Liquidation Event of Default,
together with reasonable sums for such attorneys’ fees and such expenses as
will be expended or incurred in the seizure, storage, 

 

23

 

rental or sale of the Vehicles or in the enforcement of any right or
privilege hereunder or in any consultation or action in such connection; plus

 

(iii)  interest from time to time on amounts
due and unpaid under this Agreement at one-month LIBOR plus 1.0%
computed from the date of such an Operating Lease Event of Default, Limited
Liquidation Event of Default or Liquidation Event of Default or the date
payments were originally due to the Lessor under this Agreement or from the
date of each expenditure by the Lessor or the Trustee, as applicable, which is
recoverable from the Lessee pursuant to this Section 17, as applicable, to
and including the date payments are made by the Lessee.

 

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

 

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

 

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

 

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

 

24

 

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

 

(v)  if the Lessor shall have sold any Vehicle
repossessed by the Lessor pursuant to clause (ii) above, the Lessor
in lieu of exercising its rights under clause (iv) above with respect
to such Vehicle may, if it shall so elect, demand that the Lessee pay to the
Lessor and the Lessee shall pay to the Lessor on the date of such sale as
liquidated damages for loss of a bargain and not as a penalty, any unpaid Rent
due through such date of sale plus the amount of any deficiency between the net
proceeds of such sale and the Termination Value of such Vehicle computed as of
the date of the sale.

 

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

 

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

 

18.  MANUFACTURER EVENTS OF
DEFAULT.  (a)   During the continuance of a Manufacturer
Event of Default with respect to any Manufacturer (a “Defaulting 

 

25

 

Manufacturer”), the Lessor shall not purchase
Program Vehicles from such Defaulting Manufacturer pursuant to the Purchase
Agreement.

 

(b)           Upon the occurrence of a Manufacturer Event of
Default the Servicer agrees to (i) act at the direction of the Lessor or
the Trustee to take commercially reasonable action to liquidate the Program
Vehicles subject to a Manufacturer Program with respect to such Manufacturer
(provided that if such Manufacturer Event of Default is cured and is no longer
continuing at any time when the Servicer is liquidating such Program Vehicles,
the Servicer may cease liquidating such Program Vehicles) or (ii) convert
such Program Vehicles to Non-Program Vehicles in accordance with Section 2.6
and subject to the limitations set forth therein.

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

24.  MINIMUM DEPRECIATION
RATE.  The Lessor agrees that the
Depreciation Schedules with respect to Non-Program Vehicles leased under this
Agreement shall be established such that (i) the Depreciation Charges
accruing with respect to each Non-Program Vehicle during each Related Month
shall be at least equal to 1.25%, and (ii) the weighted average of the
Depreciation Charges accruing with respect to all Non-Program Vehicles during each
Related Month shall be at least equal to the lesser of (a) 1.50% and (b) such
lower percentage in respect of which the Rating Agency Condition with respect
to each Series of Notes Outstanding shall have been satisfied.

 

27

 

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

 

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

 

25.2.  Authorization; Enforceability.  Each of this Agreement and the other Related
Documents (other than any Related Documents relating only to a Segregated Series of
Notes) to which it is a party has been duly authorized, executed and delivered
on behalf of the Lessee and, assuming due authorization, execution and delivery
by the other parties hereto or thereto, is a valid and legally binding
agreement of the Lessee enforceable against the Lessee in accordance with its
terms (except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity or by an implied
covenant of good faith and fair dealing).

 

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

 

25.4.  Other. 
There is no consent, approval, authorization, order, registration or
qualification of or with any Governmental Authority having jurisdiction over
the Lessee which is required for, and the absence of which would materially
affect, the execution, delivery and performance of this Agreement or the
Related Documents (other than any Related Documents relating only to a
Segregated Series of Notes).

 

28

 

25.5.  Financial Statements.  (a)  The Lessee has furnished each of
the Lessor and the Trustee with, and the Lessor and the Trustee hereby
acknowledge receipt of, a copy of the Lessee’s Annual Report to the Securities
and Exchange Commission (the “SEC”) on Form 10-K for the year ended December 31,
2008 (the “10-K Report”).  The
financial statements set forth in such report present fairly in all material
respects the consolidated financial position of the Lessee and its consolidated
subsidiaries at December 31, 2008 and 2007, and the consolidated results
of operations and cash flows for each of the three years in the period ended December 31,
2008, in conformity with generally accepted accounting principles in the United
States.

 

(b)  The Lessee has furnished each of the
Lessor and the Trustee with, and the Lessor and the Trustee hereby acknowledge
receipt of, a copy of the Lessee’s Quarterly Report to the SEC on Form 10-Q
for the quarter ended June 30, 2009 (the “10-Q Report”).  The financial statements set forth in such
report present fairly in all material respects the consolidated financial
position of the Lessee and its consolidated subsidiaries at June 30, 2009
and the consolidated results of operations and cash flows of the Lessee and its
consolidated subsidiaries for the quarterly period ended June 30, 2009, in
conformity with generally accepted accounting principles in the United States.

 

(c)  As of the date of this Agreement there has
not occurred any material adverse change in the financial position of the
Lessee and its subsidiaries considered as a whole, since December 31,
2008, other than as set forth or contemplated in the 10-K Report or the 10-Q
Report.

 

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

 

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

 

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

 

25.8.  [Reserved].

 

29

 

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

 

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

 

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

 

26.  CERTAIN AFFIRMATIVE
COVENANTS.  Until the expiration or
termination of this Agreement, and thereafter until the obligations of the
Lessee under this Agreement and the Related Documents (other than any Related
Documents or portions thereof relating only to a Segregated Series of
Notes) are satisfied in full, the Lessee covenants and agrees that, unless at
any time the Lessor and the Trustee shall otherwise expressly consent in
writing, it will:

 

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

 

26.2.  Books, Records and Inspections.  (i) Maintain complete and accurate books
and records with respect to the Vehicles leased by it under this Agreement and
the other HVF Vehicle Collateral and (ii) at any time and from time to
time during regular business hours, upon not less than reasonable prior notice
from the Lessor or the Trustee, permit the Lessor or the Trustee (or such other
person who may be designated from time to time by the Lessor or the Trustee) to
examine and make copies of such books, records and documents in the possession
or under the control of the Lessee relating to the Vehicles leased under this
Agreement and the other HVF Vehicle Collateral; and (iii) permit the
Lessor, the Trustee or the Collateral Agent (or such other person who may be
designated from time to time by the Lessor, the Trustee or the Collateral
Agent) to visit the office and properties of the Lessee for the purpose of
examining such materials, and to discuss matters relating to the Vehicles
leased under this Agreement with the Lessee’s independent public accountants or
with any of the officers or employees of the Lessee having knowledge of such
matters, all at such reasonable times and as often as the Lessor or the Trustee
may reasonably request.  The Lessor
agrees that it will not disclose 

 

30

 

any information obtained
pursuant to this Section 26.2 which is not otherwise publicly available
without the prior approval of the Lessee, except that the Lessor may disclose
such information (x) to its officers, employees, attorneys and advisors,
in each case on a confidential and need-to-know basis, and (y) as required
by applicable law or compulsory legal process.

 

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

 

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

 

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

 

(i)  within 120 days after the end of each
of its fiscal years, copies of the Annual Report on Form 10-K filed by the
Lessee with the SEC or, if the Lessee is not a reporting company, information
equivalent to that which would be required to be included in such an Annual
Report if it were a reporting company, including without limitation,
consolidated financial statements consisting of a balance sheet of the Lessee
and its consolidated subsidiaries as at the end of such fiscal year and
statements of income, stockholders’ equity and cash flows of the Lessee and its
consolidated subsidiaries for such fiscal year, setting forth in comparative
form the corresponding figures for the preceding fiscal year (if applicable),
certified by and containing an opinion, unqualified as to scope, of a firm of
independent certified public accountants of nationally recognized standing selected
by the Lessee and acceptable to the Lessor and the Trustee;

 

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

 

(iii)  simultaneously with the delivery of the
Annual Report on Form 10-K (or equivalent information) referred to in (i) above
and the Quarterly Report on Form 10-Q (or equivalent information) referred
to in (ii) above, an Officer’s Certificate of the Lessee 

 

31

 

stating whether, to the knowledge of such officer, there exists on the
date of the certificate any condition or event which then constitutes, or which
after notice or lapse of time or both would constitute, a Potential Operating
Lease Event of Default or Operating Lease Event of Default, and, if any such
condition or event exists, specifying the nature and period of existence
thereof and the action of the Lessee is taking and proposes to take with
respect thereto.

 

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

 

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

 

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

 

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

 

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

 

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

 

26.7.  Ford Program Agreements.  Comply in all material respects with all of
its obligations (other than to the extent to which any such obligations and
rights of the 

 

32

 

applicable counterparties
arising from non-compliance with such obligations relate solely to any
Series-Specific Collateral for any Segregated Series) under those certain
Auction Agent Agreements dated as of various dates by and among the Servicer,
the Lessee, the Trustee and the various auction houses at which Program
Vehicles manufactured by Ford are sold pursuant to which such auction houses
agree to certain procedures regarding the transfer of title to such Program
Vehicles.

 

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

 

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

 

29.   GOVERNING
LAW.  THIS AGREEMENT SHALL BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.  Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision 

 

33

 

shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement. 
All obligations of the Lessee and the Servicer and all rights of the
Lessor or the Trustee expressed herein shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement.

 

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

 

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

 

TRUSTEE:

 

The Bank of New York Mellon
Trust Company, N.A.

2 North LaSalle Street

Chicago, IL 60602

Attention:  Corporate Trust
Administration Structured

Finance

Telephone:  (312) 827-8569

Fax:  (312) 827-8562

 

LESSOR:

 

225 Brae Boulevard

Park Ridge, NJ 07656

Attention:  Treasury Department

Telephone:  (201) 307-2000

Fax:  (201) 307-2746

 

34

 

LESSEE:

 

225 Brae Boulevard

Park Ridge, NJ 07656

Attention:  Treasury Department

Telephone:  (201) 307-2000

Fax:  (201) 307-2746

 

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

 

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

 

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

 

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

 

35

 

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

 

	
   

  	
  LESSOR:

  
	
   

  	
   

  
	
   

  	
  HERTZ VEHICLE FINANCING LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Scott
  Massengill

  
	
   

  	
   

  	
  Vice
  President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  225 Brae Boulevard

  
	
   

  	
   

  	
   

  	
  Park Ridge, NJ 07656

  
	
   

  	
   

  	
  Attention:

  	
  Treasury Department

  
	
   

  	
   

  	
  Telephone:

  	
  (201) 307-2000

  
	
   

  	
   

  	
  Fax:

  	
  (201) 307-2746

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LESSEE AND SERVICER:

  
	
   

  	
   

  
	
   

  	
  THE HERTZ CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Scott
  Massengill

  
	
   

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  225
  Brae Boulevard

  
	
   

  	
   

  	
   

  	
  Park
  Ridge, NJ 07656

  
	
   

  	
   

  	
  Attention:

  	
  Treasury
  Department

  
	
   

  	
   

  	
  Telephone:

  	
  (201)
  307-2000

  
	
   

  	
   

  	
  Fax:

  	
  (201)
  307-2746

  

 

36

 

Acknowledging
its obligations under Section 27 hereof:

 

 

	
   

  	
  NOMINEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ
  VEHICLES LLC,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:
  R. Scott Massengill

  
	
   

  	
   

  	
  Title:
  Vice President & Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HFC
  NOMINEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ
  FUNDING CORPORATION,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:
  R. Scott Massengill

  
	
   

  	
   

  	
  Title:
  Vice President & Treasurer

  

 

37

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