Document:

Exhibit 10.16

 

 

April 2,
2009

 

Re:                                                                               Side Letter Agreement to the 10% Senior
Secured Convertible Note, the Registration Rights Agreement and the Purchase
Agreement between Precision Optics Corporation, Inc. (the “Company”) and each
Holder thereto, all dated June 25, 2008.

 

Dear
Holder:

 

This
Side Letter Agreement entered into on April 2, 2009, by and between the
Company and the Holder signatory to the 10% Senior Secured Convertible Note
(the “Holder”), dated June 25, 2008 (the “Note”), will serve to further modify
the first paragraph of the Note, as modified by the Side Letter Agreement dated
December 11, 2008.  Pursuant to this
modification, the last sentence in the above-described paragraph shall be
removed so that all accrued interest on the Note shall henceforth be paid
solely in cash.

 

This
Side Letter Agreement shall also serve to make the following changes to the
Registration Rights Agreement dated June 25, 2008 by and between the
Company and each Holder:

 

1.          The definition of “Interest Shares” shall be
removed from Section 1, entitled “Certain Definitions”;

 

2.          The term “Interest Shares” shall be removed
from the definition of “Registrable Securities,” so that the first sentence of the definition of “Registrable
Securities” shall now read as follows:

 

“Registrable
Securities” means (i) the Conversion Shares, (ii) the Warrant
Shares and (iii) any other securities issued or issuable with respect to
or in exchange for Registrable Securities;

 

3.   The term “Interest
Shares” shall be removed from Section 2(a)(i), which shall now read as
follows:

 

(a) Registration Statements.

(i) 
No later than the earlier of (i) two (2) Business Days after the
Amendment Effective Date and (ii) December 15, 2008 (the earlier of
such dates, the “Filing Deadline”), the Company shall prepare and file with the
SEC one Registration Statement on Form S-1 (or, if Form S-1 is not
then available to the Company, on such form of registration statement as is
then available to the Company to effect a registration for resale of the
Registrable Securities), covering the resale of the Registrable Securities in
an amount at least equal to the Conversion Shares and the Warrant Shares.
Subject to any SEC comments, such Registration Statement shall include the plan
of distribution substantially in the form attached hereto as Exhibit A;
provided, however, that no Investor shall be named as an “underwriter” in the
Registration Statement without the Investor’s prior written consent. Such
Registration Statement also shall cover, to the extent allowable 

 

 

under
the 1933 Act and the rules promulgated thereunder (including Rule 416),
such indeterminate number of additional shares of Common Stock resulting from
stock splits, stock dividends or similar transactions with respect to the
Registrable Securities. Such Registration Statement shall not include any
shares of Common Stock or other securities for the account of any other holder
without the prior written consent of the Required Investors; provided, however,
that the Registration Statement may include the Antidilution Shares. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 3(c) to the Investors and their counsel prior
to its filing or other submission. If a Registration Statement covering the
Registrable Securities is not filed with the SEC on or prior to the Filing
Deadline, the Company will make pro rata payments to each Investor, as
liquidated damages and not as a penalty, in an amount equal to 1.0% of the
aggregate amount invested by such Investor for each 30-day period or pro rata
for any portion thereof following the Filing Deadline for which no Registration
Statement is filed with respect to the Registrable Securities. Such payments
shall constitute the Investors’ exclusive monetary remedy for such events, but
shall not affect the right of the Investors to seek injunctive relief. Such
payments shall be made to each Investor in cash.

 

In
addition, this Side Letter Agreement shall also serve to make the following
changes to the Purchase Agreement dated June 25, 2008 by and between the
Company and each Holder:

 

1.          The definition of “Interest Shares”
shall be removed from Section 1, entitled “Definitions”;

 

2.          The term “Interest Shares” shall be removed
from the definition of “Securities,” so that the definition of “Securities” shall now read as follows:

 

“Securities”
means the Notes, the Warrants, the Conversion Shares and the Warrant Shares.

 

3.   The term “Interest
Shares” shall be removed from Section 4.4, which shall now read as follows:

 

4.4  Valid Issuance. From and after the
Amendment Effective Date, (i) the Conversion Shares will have been duly
and validly authorized and, when issued upon the due conversion of the Notes,
will be validly issued, fully paid and nonassessable, and shall be free and
clear of all encumbrances and restrictions (other than those created by the
Investors), except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws. The Warrants have been duly
and validly authorized. From and after the Amendment Effective Date, the
Warrant Shares will have been duly and validly authorized and, when issued upon
the due exercise of the Warrants, will be validly issued, fully paid and
non-assessable free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws and except for those created by the Investors. From
and after the Amendment Effective Date, the Company will have reserved a
sufficient number of shares of Common Stock for issuance upon the conversion of
the Notes and upon exercise of the Warrants, free and clear of all encumbrances
and restrictions, except for restrictions on transfer set forth in the
Transaction Documents or imposed by applicable securities laws and except for
those created by the Investors.

 

4.   The term “Interest
Shares” shall be removed from Section 4.5, which shall now read as   follows:

 

4.5  Consents. Except for the approval of
the Proposal by its stockholders and the filing of the Certificate of Amendment
as contemplated in Section 7.10, the execution, delivery and 

 

 

performance
by the Company of the Transaction Documents and the offer, issuance and sale of
the Securities require no consent of, action by or in respect of, or filing
with, any Person, governmental body, agency, or official other than filings
that have been made pursuant to applicable state securities laws and post-sale
filings pursuant to applicable state and federal securities laws which the
Company undertakes to file within the applicable time periods. Subject to the
accuracy of the representations and warranties of each Investor set forth in Section 5
hereof, the Company has taken all action necessary to exempt (i) the
issuance and sale of the Securities, (ii) the issuance of the Conversion
Shares upon the due conversion of the Notes and the issuance of the Warrant
Shares upon due exercise of the Warrants, and (iii) the other transactions
contemplated by the Transaction Documents from the provisions of any
stockholder rights plan or other “poison pill” arrangement, any anti-takeover,
business combination or control share law or statute binding on the Company or
to which the Company or any of its assets and properties may be subject and any
provision of the Company’s Articles of Organization or Bylaws that is or could
reasonably be expected to become applicable to the Investors as a result of the
transactions contemplated hereby, including without limitation, the issuance of
the Securities and the ownership, disposition or voting of the Securities by
the Investors or the exercise of any right granted to the Investors pursuant to
this Agreement or the other Transaction Documents.

 

5.   The term “Interest
Shares” shall be removed from Section 7.1, which shall now read as  follows:

 

7.1
Reservation of Common Stock. From and after the Amendment Effective
Date, the Company shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of providing for
the conversion of the Notes and the exercise of the Warrants, such number of
shares of Common Stock as shall from time to time equal the Conversion Shares
and the Warrant Shares.

 

6.   The term “Interest
Shares” shall be removed from Section 7.6, which shall now read as  follows:

 

7.6  Listing of Underlying Shares and Related
Matters. If the Company applies to have its Common Stock or other
securities traded on any stock exchange or market, it shall include in such
application the Conversion Shares and the Warrant Shares and will take such
other action as is necessary to cause such Common Stock to be so listed.
Following any such listing, the Company will use commercially reasonable
efforts to continue the listing and trading of its Common Stock on such stock
exchange or market and, in accordance, therewith, will use commercially
reasonable efforts to comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of such stock
exchange or market, as applicable.

 

7.   The term “Interest
Shares” shall be removed from Section 7.6, which shall now read as  follows:

 

7.8  Removal of Legends. In connection with
any sale or disposition of the Securities by an Investor pursuant to Rule 144
or pursuant to any other exemption under the 1933 Act such that the purchaser
acquires freely tradable shares and upon compliance by the Investor with the
requirements of this Agreement, the Company shall or, in the case of Common
Stock, shall cause the transfer agent for the Common Stock (the “Transfer Agent”)
to issue replacement certificates representing the Securities sold or disposed
of without restrictive legends. Upon the earlier of (i) registration for resale
pursuant to the Registration Rights Agreement or (ii) the Conversion
Shares or the Warrant Shares, as applicable, becoming freely tradable by a
non-affiliate pursuant to Rule 144 the Company shall (A) deliver to
the Transfer Agent irrevocable instructions that the Transfer Agent shall issue
a certificate representing shares of Common Stock without legends upon receipt
by such Transfer Agent of (X) either (1) a customary representation
by the Investor that Rule 144 applies to the shares of Common Stock
represented thereby or (2) a statement by the Investor that such Investor
has sold the shares of Common Stock represented thereby in accordance with the 

 

 

Plan
of Distribution contained in the Registration Statement, and (Y) if
applicable, the legended certificates for such shares, and (B) cause its
counsel to deliver to the Transfer Agent one or more blanket opinions to the
effect that the removal of such legends in such circumstances may be effected
under the 1933 Act. At any time when one or more of the Securities may be
freely sold or is covered by an effective Registration Statement, the Company
shall, or shall cause the Transfer Agent to, promptly cause the Investor’s
Securities to be replaced with Securities which do not bear restrictive
legends, and Conversion Shares subsequently issued upon the due conversion of
the Notes and Warrant Shares subsequently issued upon due exercise of the
Warrants shall not bear such restrictive legends provided such Securities may
be freely sold or are covered by an effective Registration Statement. When the
Company is required to cause an unlegended Security to be issued as provided
herein, if: (1) the unlegended Security is not delivered to an Investor
within three (3) Business Days of submission by that Investor of a request
for unlegended Securities and, if applicable, the documentation specified above
to the Transfer Agent or the Company, as applicable, and (2) prior to the
time such unlegended Security is received by the Investor, the Investor, or any
third party on behalf of such Investor or for the Investor’s account, purchases
(in an open market transaction or otherwise) another Security to deliver in
satisfaction of a sale by the Investor of such Security (a “Buy-In”), then the
Company shall pay in cash to the Investor (for costs incurred either directly
by such Purchaser or on behalf of a third party) the amount by which the total
purchase price paid for the replacement Security as a result of the Buy-In
(including brokerage commissions, if any) exceeds the proceeds received by such
Investor as a result of the sale to which such Buy-In relates. The Investor
shall provide the Company written notice indicating the amounts payable to the
Investor in respect of the Buy-In.

 

Capitalized
terms used herein which are not otherwise defined shall have the same meaning
as those given to them in the Note. No other terms, rights or provisions of the
Note are or should be considered to have been modified by the terms of this
Side Letter Agreement and each party retains all other rights, obligations,
privileges and duties contained in the Agreement.

 

Agreed and Accepted on April 2, 2009:

 

	
  Very
  truly yours,

  
	
   

  
	
  Precision
  Optics Corporation, Inc.

  
	
   

  
	
  Name:
  Richard E. Forkey

  
	
   

  
	
  /s/
  Richard E. Forkey

  	
   

  
	
  Name:
  Richard E. Forkey

  Title:
  President and Chief Executive Officer

  
	
   

  
	
  4/2/09

  	
   

  
	
  Date

  

 

 

Agreed
to and Accepted by:

 

Special
Situations Fund III QP, L.P.

 

 

	
  /s/
  Austin W. Marxe

  	
   

  
	
  Name:
  Austin W. Marxe

  
	
  Title:
  General Partner

  
	
   

  
	
  4/2/09

  	
   

  
	
  Date

  
	
   

  
	
  Special
  Situations Private Equity Fund, L.P.

  
	
   

  
	
   

  
	
  /s/ Austin
  W. Marxe

  	
   

  
	
  Name:
  Austin W. Marxe

  
	
  Title:
  General Partner

  
	
   

  
	
  4/2/09

  	
   

  
	
  Date

  
	
   

  
	
   

  
	
  /s/
  Arnold Schumsky

  	
   

  
	
  Name:
  Arnold Schumsky

  
	
   

  
	
  4/2/09

  	
   

  
	
  DateExhibit
4.1

 

EXECUTION VERSION

 

FOURTH AMENDMENT AND WAIVER

TO 

CREDIT AGREEMENT

 

This FOURTH
AMENDMENT AND WAIVER, dated as of March 31, 2009 (this “Fourth
Amendment”), is entered into among THE HERTZ CORPORATION, a Delaware
corporation (together with its successors and assigns, the “Parent Borrower”),
DEUTSCHE BANK AG, NEW YORK BRANCH (“DBNY”), as administrative agent (the
“Administrative Agent”), and the other parties signatory hereto.

 

W I T N E S S E T H :

 

WHEREAS,
the Parent Borrower has entered into that certain Credit Agreement, dated as of
December 21, 2005 (as it may be amended, amended and restated,
supplemented or otherwise modified (including as amended by that certain
Amendment to Credit Agreement, dated as of June 30, 2006, that certain
Second Amendment to Credit Agreement, dated as of February 9, 2007 and
that certain Third Amendment to Credit Agreement, dated as of May 23,
2007), the “Credit Agreement”) among the Parent Borrower, the Lenders
from time to time party thereto, DBNY, as Administrative Agent and Collateral
Agent, Lehman Commercial Paper Inc., as syndication agent, and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated, as documentation
agent;

 

WHEREAS,
pursuant to the Credit Agreement, the Lenders have extended credit to the
Parent Borrower on the terms and conditions set forth in the Credit Agreement;

 

WHEREAS,
the Parent Borrower has requested certain amendments, consents and waivers to
the Credit Agreement in connection with the prepayment of the Loans pursuant to
the Discounted Voluntary Prepayment Transaction (as defined below); and

 

WHEREAS,
the Parent Borrower and the Lenders have agreed to amend certain provisions of
the Credit Agreement on the terms and conditions contained herein.

 

NOW,
THEREFORE, it is agreed as follows:

 

ARTICLE 1

 

Definitions

 

Section 1.1                                      Defined Terms.  Terms defined in the Credit Agreement and
used herein shall have the meanings assigned to such terms in the Credit
Agreement, unless otherwise defined herein or the context otherwise requires.

 

 

ARTICLE 2

 

Amendments

 

As of the Fourth Amendment
Effective Date (as defined in Article 3 hereof), the Credit Agreement is
hereby amended as set forth in this Article Two.

 

Section 2.1                                      Amendments to Section 1 of the Credit Agreement.   (a) 
Subsection 1.1 of the Credit Agreement (Definitions) is hereby amended by
inserting in such subsection the following definitions in the appropriate
alphabetical order:

 

“Acceptable Discount”:  as defined in
subsection 4.4(i)(ii).

 

“Accepting Lenders”:  as defined in
subsection 4.4(i)(ii).

 

“Applicable Discount”:  as defined in
subsection 4.4(i)(ii).

 

“Discount”:  as defined in
subsection 4.4(i)(i).

 

“Discounted
Voluntary Prepayment”:  as defined in
subsection 4.4(i)(i).

 

“Discounted Voluntary
Prepayment Period”:  as defined in subsection 4.4(i)(i).

 

“Discounted Voluntary
Prepayment Transaction”:  as defined in subsection 4.4(i)(i).

 

“Expiration Date”: as defined in subsection
4.4(i)(v).

 

“Fourth
Amendment Effective Date”:  March 31,
2009.

 

“Fourth
Amendment”: means that certain Fourth Amendment and Waiver
to Credit Agreement, dated as of March 31, 2009, by and between Parent
Borrower, the Administrative Agent and the Lenders.

 

“Maximum Prepayment
Amount”:  as defined in subsection 4.4(i)(i).

 

“Prepayment Amount”:  as defined in
subsection 4.4(i)(i).

 

2

 

“Prepayment Notice”:  as defined in
subsection 4.4(i)(i).

 

“Prepayment Offer”:  as defined in
subsection 4.4(i)(ii).

 

“Qualifying Tender Term
Loans”:  as defined in subsection 4.4(i)(ii).

 

(b)                                 The definition of “EBITDA” in subsection 1.1 of the Credit
Agreement is hereby amended by inserting the words “and
any non-cash items of income attributable to cancellation of
indebtedness resulting from the repayment of Term Loans by the Parent
Borrower pursuant to subsection 4.4(i)”
after the words “of common stock of CCMGC or any Parent Entity,” in clause (G) of
such definition.

 

(c)                                  The definition of “Excess Cash Flow” in subsection 1.1 of
the Credit Agreement is hereby amended by deleting the words “minus (b) any
principal payments (other than principal payments during such period pursuant
to subsection 4.4(b) or (c) unless and to the extent that the event
giving rise to such mandatory prepayment causes an increase in EBITDA) of the
Term Loans made during such period,” and replacing them with the words “minus (b) any
principal payments (other than principal payments during such period pursuant
to subsection 4.4(b) unless and to the extent that the event giving rise
to such mandatory prepayment causes an increase in EBITDA) of the Term Loans
made during such period (which, for the avoidance of doubt, in the case of any
principal payment comprising a Discounted Voluntary Prepayment shall equal the
Prepayment Amount or such portion thereof that is actually paid by the Parent
Borrower in connection with such Discounted Voluntary Prepayment)”.

 

(d)                                 The definition of “Excess Cash Flow” in subsection 1.1 of
the Credit Agreement is hereby further amended by inserting “(less Consolidated
Vehicle Interest Expense)” after the words “minus (d) Consolidated
Interest Expense”.

 

Section 2.2.                                   Amendments to Section 4
of the Credit Agreement.  (a) Subsection
4.4(a) of the Credit Agreement is hereby amended by inserting “4.4(a)” in
clause (1) of the last full sentence of said subsection, immediately after
the words “the Term Loans pursuant to this subsection.”

 

(b)                                 Subsection 4.4 of the Credit Agreement is hereby further
amended by inserting the following new subsection 4.4(i) after subsection
4.4(h):

 

(i)                                     (i) Notwithstanding anything to the contrary contained
in this subsection 4.4 or any other provision of any Loan Document, the Parent Borrower
may make voluntary prepayments of the Loans (each such prepayment made pursuant
to this subsection 4.4(i), a “Discounted Voluntary Prepayment”) during
the period commencing on the Fourth Amendment Effective Date and ending on the
date that is one year following the Fourth Amendment Effective Date (the “Discounted
Voluntary Prepayment Period”) pursuant to the procedures and limitations
described in this subsection 4.4(i) (the transactions described in this
subsection 4.4(i), collectively, the “Discounted Voluntary 

 

3

 

Prepayment Transaction”).  In connection with any Discounted Voluntary
Prepayment of Loans, the Parent Borrower will notify the Administrative Agent
in writing (the “Prepayment Notice”) (and the Administrative Agent will
promptly deliver such Prepayment Notice to all of the Lenders of Loans) that
the Parent Borrower desires to prepay Loans with proceeds in an aggregate
amount specified by the Parent Borrower (which amount shall be not less than
the amount necessary to prepay $10,000,000 of par principal amount of Loans in
the aggregate (or such lesser par principal amount as can be prepaid with the
then unused amount of the Maximum Prepayment Amount (as defined below)),
determined using the lowest Discount (as defined below) in the range specified
by the Parent Borrower) (each, a “Prepayment Amount”) at a discount
(which is expected to be within a range to be specified by the Parent Borrower
with respect to each Discounted Voluntary Prepayment; the “Discount”)
equal to a percentage of par of the principal amount of such Loans being
prepaid; provided that (1) the aggregate par principal amount of
Loans prepaid pursuant to all Discounted Voluntary Prepayments during the
Discounted Voluntary Prepayment Period shall not exceed $500,000,000 in the
aggregate (the “Maximum Prepayment Amount”) (for such purpose, excluding
any voluntary prepayments of any Loans made in accordance with any other
provision of this Agreement), (2) the Parent Borrower may issue no more
than four Prepayment Notices that result in a Discounted Voluntary Prepayment
(and make no more than four Discounted Voluntary Prepayments) during the
Discounted Voluntary Prepayment Period and (3) the Parent Borrower may not
make any Discounted Voluntary Prepayments unless (X) (I) immediately
after giving effect to any such Discounted Voluntary Prepayment, the Payment
Conditions under the ABL Facility Documents  shall be satisfied, or (II) at
the time of the making thereof, such Discounted Voluntary Prepayment is
otherwise permitted under the ABL Facility Documents, (Y) immediately
after giving effect to the respective Discounted Voluntary Prepayment, the sum
of (A) the aggregate amount of cash and Cash Equivalents that are not
classified as “restricted” for financial statement purposes of the Parent
Borrower and its Subsidiaries plus (B) the Available Loan Commitments (as
defined in the ABL Facility Documents), shall equal or exceed $1,000,000,000,
and (Z) the Parent Borrower shall have delivered an officer’s certificate
to the Administrative Agent on the date of such Discounted Voluntary Prepayment
demonstrating compliance with the preceding subclauses (X) and (Y).

 

(ii)                                  In connection
with a Discounted Voluntary Prepayment, the Parent Borrower will allow each
Lender of Loans to specify (a “Prepayment Offer”) a discount to par (the
“Acceptable Discount”) for a principal amount (subject to rounding
requirements specified by the Administrative Agent) of such Term Loans at which
such Lender is willing to permit such Discounted Voluntary Prepayment (and
which shall be within any range specified by the Parent Borrower with respect
to such Discounted Voluntary Prepayment). 
The Parent Borrower will accept Prepayment Offers in the order of lowest
to highest prepayment price specified by the respective Lenders in the Prepayment
Offers so as to enable the Parent Borrower to complete the Discounted Voluntary
Prepayment for the Prepayment Amount. 
Based on the Acceptable Discounts and principal amounts of such Loans
specified by the Lenders that have submitted (and not revoked, prior to the
Expiration Date) a Prepayment Offer (the “Accepting Lenders”), the
applicable discount (the “Applicable Discount”) for any Discounted
Voluntary 

 

4

 

Prepayment will be the higher of (1) the
highest Acceptable Discount (i.e., the lowest prepayment price) at which
the Parent Borrower can complete such Discounted Voluntary Prepayment for the
full Prepayment Amount and which is within the range for the Discount specified
by the Parent Borrower and (2) in the event that the aggregate amount of
prepayments to all Accepting Lenders in connection with such Discounted
Voluntary Prepayment would be insufficient to allow the Parent Borrower to make
a prepayment with the entire Prepayment Amount, the lowest Acceptable Discount
offered by the Accepting Lenders and within the range for the Discount
specified by the Parent Borrower.  The
Parent Borrower shall prepay the Loans (or the respective portions thereof)
offered by Accepting Lenders at Acceptable Discounts specified by each such
Accepting Lender that are equal to or greater than the Applicable Discount (“Qualifying
Tender Term Loans”) at the Applicable Discount; provided that (x) if
the aggregate proceeds that would be required to prepay all Qualifying Tender
Term Loans (disregarding any interest payable under subsection 4.4(i)(iii) hereof)
would exceed the Prepayment Amount for such Discounted Voluntary Prepayment,
the Parent Borrower shall prepay such Qualifying Tender Term Loans at the
Applicable Discount ratably
based on the respective principal amounts of such Qualifying Tender Term Loans
(subject to rounding requirements specified by the Administrative Agent) and (y) if
the application of the Prepayment Amount for such Discounted Voluntary
Prepayment to prepay all Qualifying Tender Term Loans at the Applicable
Discount would cause the Maximum Prepayment Amount to be exceeded, the Parent
Borrower shall prepay such Qualifying Tender Term Loans at the Applicable
Discount in an aggregate principal amount equal to the maximum portion of the Prepayment
Amount that may be so applied without the Maximum Prepayment Amount being
exceeded, ratably based on the respective principal amounts of such Qualifying
Tender Term Loans (subject to rounding requirements specified by the
Administrative Agent).

 

(iii)                               All Loans
prepaid by the Parent Borrower pursuant to this subsection 4.4(i) shall be
accompanied by payment of accrued and unpaid interest on the par principal
amount so prepaid to, but not including, the date of prepayment.

 

(iv)                              The par
principal amount of Loans prepaid pursuant to this subsection 4.4(i) shall
be applied to reduce the remaining scheduled repayments of the Loans in reverse
order of maturity.

 

(v)                                 Except as
otherwise provided in this subsection 4.4(i), each Discounted Voluntary Prepayment
shall be consummated pursuant to procedures (as to timing, settlement,
acceptances of Prepayment Offers and rounding and minimum amounts and other
notices by the Parent Borrower and the Lenders) established by the
Administrative Agent and the Parent Borrower in accordance with the procedures
set forth in Exhibit B of the Fourth Amendment; it being understood and
agreed that (v) the Parent Borrower shall have the right, by written
notice to the Administrative Agent, to revoke in full (but not in part) its
offer for a Discounted Voluntary Prepayment and rescind its Prepayment Notice
therefor (I) at its discretion at any time prior to the Parent Borrower’s
delivery of a final notice of acceptance of the related Prepayment Offers, and (II) at
any time after the delivery of a final notice of acceptance of the related
Prepayment Offers and on or before

 

5

 

the settlement date for the payment of such
Prepayment Offers, if the consummation of such Discounted Voluntary Prepayment
on such settlement date would result in the Parent Borrower failing to comply
with Section 4.4(i)(i)(3) hereof (and if such offer is revoked
pursuant to the preceding clauses (I) or (II), any failure by the Parent
Borrower to make any prepayment to a Lender pursuant to this subsection 4.4(i) shall
not constitute a Default or Event of Default under Section 9(a) or
otherwise), (w) the Prepayment Notice shall specify that each Prepayment
Offer must be submitted by a date and time to be specified in the Prepayment
Notice, which date (the “Expiration Date”) shall be no earlier than the
fifth Business Day following the date of the Prepayment Notice, (x) upon
submission by a Lender of a Prepayment Offer, such Lender will be obligated to
accept prepayment of the entirety or its pro rata portion (as applicable
pursuant to the proviso to subsection 4.4(i)(ii) above) of the principal
amount specified therein at a Discount equal to or less than the Acceptable
Discount specified by such Lender (unless such Lender revokes its offer and
rescinds its Prepayment Offer prior to the Expiration Date), and (y) the
settlement date for payment of accepted Prepayment Offers shall not be later
than 30 days after the Parent Borrower’s delivery of a final notice of acceptance
therefor.   The Lenders hereby further
agree that, following a Discounted Voluntary Prepayment of Loans and
notwithstanding anything to the contrary contained in this Agreement, (i) interest
in respect of the Loans may be made on a non-pro  rata basis among
the Lenders holding such Loans to reflect the payment of accrued interest to
certain Lenders as provided in subsection 4.4(i)(iii) above and (ii) all
subsequent prepayments and repayments of the Loans (other than a Discounted
Voluntary Prepayment) shall be made on a pro  rata basis among the
respective Lenders based upon the then outstanding principal amounts of the
Loans then held by the respective Lenders after giving effect to any Discounted
Voluntary Prepayment as if made at par.

 

(vi)                              Except as otherwise
expressly provided herein, each Discounted Voluntary Prepayment of Loans shall
constitute a voluntary prepayment of such Loans for all purposes under the
Credit Agreement; it being understood and agreed that such prepayments shall
not be subject to subsection 4.4(a), or, for the avoidance of doubt, subsection
11.7(a) or the pro rata allocation requirements of subsection 4.8(a).

 

(vii)                           The Lenders
hereby (i) consent to the transactions described in this subsection 4.4(i) notwithstanding
anything to the contrary in this Agreement or any other Loan Document and (ii) waive
the requirements of any provision of this Agreement or any other Loan Document
that might otherwise prohibit the Discounted Voluntary Prepayment Transaction
or result in a breach of this Agreement or any other Loan Document or a Default
or an Event of Default as a result of the Discounted Voluntary Prepayment
Transaction, including without limitation, subsections 4.4(a), 4.8(a), and 

11.7(a).

 

(viii)                        This subsection
4.4(i) shall not (i) require the Parent Borrower to undertake any
Discounted Voluntary Prepayment during the Discounted Voluntary Prepayment
Period or (ii) limit or restrict the Parent Borrower from making voluntary
prepayments of the Loans in accordance with the other provisions of this
Agreement.

 

6

 

(c)                                  Subsection 4.8(a) of
the Credit Agreement is hereby amended by (x) inserting “(other than any
Discounted Voluntary Prepayments which shall be allocated as set forth in
subsection 4.4(i))” in the second sentence of said subsection immediately after
the words “on account of principal of and interest on any Term Loans” and (y) inserting
“holding the relevant Loans” in the third sentence of such subsection
immediately after the words “for account of the Lenders”.

 

Section 2.3                                      Amendments to Section 11
of the Credit Agreement. 
Subsection 11.7(a) of the Credit Agreement is hereby amended by
inserting “; provided, further, that the provisions set forth in
this Section 11.7(a) shall not apply to any payments received by any
Lender in connection with any Discounted Voluntary Prepayments paid in
accordance with subsection 4.4(i)” immediately after the words “but without
interest” at the end of such subsection.

 

ARTICLE 3

 

Miscellaneous

 

Section 3.1                                      Conditions to
Effectiveness.  This Fourth
Amendment shall become effective as of the date (the “Fourth Amendment
Effective Date”)on which:

 

(a)                                  Amendment.  The Administrative Agent shall have received
this Fourth Amendment, executed and delivered by a duly authorized officer of
the Parent Borrower and the requisite Lenders set forth in Section 11.1 of
the Credit Agreement;

 

(b)                                 Acknowledgment and Confirmation.  The Administrative
Agent shall have received the Acknowledgment and Confirmation, substantially in
the form of Exhibit A hereto (the “Consent”), executed and
delivered by an authorized officer of each Guarantor; and

 

(c)                                  Fees and Expenses.  Parent 
Borrower shall have paid or caused to be paid to the Administrative
Agent all fees payable to the Administrative Agent or the Lenders then due (or
due upon the effectiveness of the Fourth Amendment) in connection with the
transactions contemplated by this Fourth Amendment.

 

The Administrative Agent shall give prompt notice in writing to the
Parent Borrower of the occurrence of the Fourth Amendment Effective Date.

 

Section 3.2                                      Representations and
Warranties.   On the
Fourth Amendment Effective Date (both before and after giving effect to the
Fourth Amendment), each of the representations and warranties made by any Loan
Party pursuant to this Amendment or any other Loan Document (or in any
amendment, modification or supplement thereto) to which it is a party, and each
of the representations and warranties contained in any certificate furnished at
any time by or on behalf of any Loan Party pursuant to this Amendment or any
other Loan Document shall, except to the extent that they relate to a
particular date, be true and correct in all material respects on and as of such
date as if made on and as of such date. As of the date hereof, the Parent
Borrower has the corporate power and authority, and the legal right, to enter
into and perform

 

7

 

this Fourth Amendment.  The
execution, delivery and performance of this Fourth Amendment has been duly
authorized by all necessary corporate action on the part of the Parent
Borrower.  The execution and delivery by
the Parent Borrower of this Fourth Amendment, and performance by the Parent
Borrower of the Credit Agreement as amended hereby, will not (a) violate
any Requirement of Law or Contractual Obligation of such Loan Party in any
respect that would reasonably be expected to have a Material Adverse Effect, or
(b) result in, or require, the creation or imposition of any Lien (other
than any Lien permitted by subsection 8.3 of the Credit Agreement) on any of
its properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation.  This Fourth
Amendment constitutes a legal, valid and binding obligation of the Parent
Borrower, enforceable against the Parent Borrower in accordance with its terms,
except as enforceability may be limited by applicable domestic or foreign
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at
law).  The Consent, when executed and
delivered by each Guarantor, will constitute a legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, except as enforceability may be limited by applicable domestic
or foreign bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).  On the Fourth Amendment
Effective Date (both before and after giving effect to the Fourth Amendment),
no Default or Event of Default has occurred and is continuing.

 

Section 3.3                                      Severability.  Any
provision of this Fourth Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

Section 3.4                                      Continuing
Effect; No Other Waivers or Amendments. 
This Fourth Amendment shall not constitute an amendment to or waiver of
any provision of the Credit Agreement and the other Credit Documents except as
expressly stated herein and shall not be construed as a consent to any action
on the part of the Parent Borrower, or any other Subsidiary of the Parent
Borrower that would require an amendment, waiver or consent of the
Administrative Agent or the Lenders except as expressly stated herein.  Except as expressly amended or waived hereby,
the provisions of the Credit Agreement and the other Credit Documents are and
shall remain in full force and effect in accordance with their terms. On and
after the Fourth Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like
import, and each reference in the Notes to the Credit Agreement, shall mean and
be a reference to the Credit Agreement as amended hereby, and this Fourth
Amendment and the Credit Agreement shall be read together and construed as a
single instrument.

 

Section 3.5                                      Counterparts.  This Fourth Amendment may be executed in any
number of separate counterparts by the parties hereto (including by telecopy or
via electronic mail), each of which counterparts when so executed shall be an
original, but all the counterparts shall together constitute one and the same
instrument.

 

8

 

Section 3.6                                      Payment
of Fees and Expenses.  The Parent
Borrower agrees to pay or reimburse the Administrative Agent for (1) all
of its reasonable out-of-pocket costs and expenses incurred in connection with
this Fourth Amendment, any other documents prepared in connection herewith and
the transactions contemplated hereby, and (2) the reasonable fees, charges
and disbursements of Latham & Watkins LLP, as counsel to the
Administrative Agent, and White & Case LLP, as special counsel to the
Administrative Agent (in the case of White & Case LLP only, up to a
maximum amount of $20,000).

 

Section 3.7                                      GOVERNING
LAW.  THIS FOURTH AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS FOURTH AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

Section 3.8                                      Amendment
Work Fee.  The Parent Borrower hereby
covenants and agrees that, so long as the Fourth Amendment Effective Date
occurs, it shall pay to each Lender which executes and delivers to the
Administrative Agent (or its designee) a counterpart hereof by 5:00 P.M.
(New York time) on Monday, March 30, 2009, a non-refundable cash fee (the
“Amendment Work Fee”) in Dollars in an amount equal to 10 basis points
(i.e., 0.10%) of the aggregate principal amount of all Term Loans and Credit
Linked Deposits of such Lender outstanding on the Fourth Amendment Effective
Date (immediately before giving effect to this Fourth Amendment). The
Amendment Work Fee shall not be subject to counterclaim or set-off, or be
otherwise affected by, any claim or dispute relating to any other matter.  The Amendment Work Fee shall be paid by the
Parent Borrower to the Administrative Agent for the account of and distribution
to the relevant Lenders not later than the third Business Day following the
Fourth Amendment Effective Date.

*
* *

 

9

 

IN WITNESS
WHEREOF, the parties hereto have caused this Fourth Amendment and Waiver to
Credit Agreement to be executed and delivered by their respective duly authorized
officers as of the date first above written.

 

 

	
   

  	
  THE HERTZ CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Scott
  Massengill

  
	
   

  	
   

  	
  Name: R. Scott Massengill

  
	
   

  	
   

  	
  Title: Treasurer

  

 

[Hertz – Term Loan
–Fourth Amendment]

 

 

	
   

  	
  DEUTSCHE BANK AG, NEW YORK BRANCH

  
	
   

  	
  as Administrative
  Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marguerite
  Sutton

  
	
   

  	
   

  	
  Name: Marguerite Sutton

  
	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan LeFevre

  
	
   

  	
   

  	
  Name: Susan LeFevre

  
	
   

  	
   

  	
  Title: Managing
  Director

  

 

[Hertz – Term Loan
–Fourth Amendment]

 

 

	
  LENDERS:

  	
   

  	
   

  
	
   

  	
   

  	
  By signing below, you have indicated your consent to the Fourth
  Amendment and Waiver to Credit Agreement 

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name of Institution: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

[This Amendment was executed by authorized
signatories of 428 Lenders]

 

[Hertz – Term Loan
–Fourth Amendment]

 

 

EXHIBIT A

TO FOURTH AMENDMENT AND WAIVER

 

ACKNOWLEDGMENT AND CONFIRMATION

 

1.                                       Reference
is made to the Fourth Amendment and Waiver to Credit Agreement, dated as of March 31,
2009 (the “Fourth Amendment”), by and between Parent Borrower, the
Administrative Agent and the Lenders from time to time party thereto.

 

2.                                       Certain
provisions of the Credit Agreement are being waived pursuant to the Fourth
Amendment.  Each of the undersigned is a
Guarantor of the Borrower Obligations of the Parent Borrower pursuant to the
Guarantee and Collateral Agreement (as defined in the Credit Agreement) and
hereby

 

(a)                                  consents
to the foregoing Fourth Amendment,

 

(b)                                 acknowledges
that, notwithstanding the execution and delivery of the foregoing Fourth Amendment,
the Guarantor Obligations of such Guarantor are not impaired or affected and
all guaranties made by such Guarantor pursuant to the Guarantee and Collateral
Agreement and all Liens granted by such Guarantor as security for the Guarantor
Obligations of such Guarantor pursuant to the Guarantee and Collateral
Agreement continue in full force and effect; and

 

(c)                                  confirms
and ratifies its obligations under each of the Loan Documents executed by
it.  Capitalized terms used herein
without definition shall have the meanings given to such terms in the Amendment
to which this Consent is attached or in the Credit Agreement referred to
therein or in the Guarantee and Collateral Agreement, as applicable.

 

3.                                       THIS
ACKNOWLEDGMENT AND CONFIRMATION SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

4.                                       This
Acknowledgment and Confirmation may be executed by one or more of the parties
hereto on any number of separate counterparts (including by telecopy or
electronic mail), and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.

 

[rest
of page intentionally left blank]

 

 

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

 

	
   

  	
  HERTZ INVESTORS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HERTZ EQUIPMENT RENTAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRAE HOLDING CORP.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Hertz – Term Loan
–Fourth Amendment - Acknowledgement]

 

 

	
   

  	
  HERTZ
  CLAIM MANAGEMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HCM
  MARKETING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ
  LOCAL EDITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ
  LOCAL EDITION TRANSPORTING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ
  GLOBAL SERVICES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Hertz – Term Loan –Fourth Amendment -
Acknowledgement]

 

 

	
   

  	
  HERTZ
  SYSTEM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ
  TRANSPORTING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SMARTZ
  VEHICLE RENTAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  R. Scott Massengill

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[Hertz – Term Loan –Fourth Amendment -
Acknowledgement]

 

 

EXECUTION VERISION

 

EXHIBIT B

TO FOURTH AMENDMENT AND
WAIVER

 

DEUTSCHE
BANK AG, NEW YORK BRANCH

60 Wall Street

New York, NY 10005

 

[·]

 

	
  TO:

  	
   

  	
  Lenders under that
  certain Credit Agreement, dated as of December 21, 2005 (as it may be
  amended, amended and restated, supplemented or otherwise modified (including
  as amended by that certain Amendment to Credit Agreement, dated as of
  June 30, 2006, that certain Second Amendment to Credit Agreement, dated
  as of February 9, 2007, that certain Third Amendment to Credit
  Agreement, dated as of May 23, 2007 and that certain Fourth Amendment to
  Credit Agreement, dated as of March [ ], 2009), the “Credit Agreement”)
  among the Parent Borrower, the Lenders from time to time party thereto,
  Deutsche Bank AG, New York Branch, as Administrative Agent and Collateral
  Agent, Lehman Commercial Paper Inc., as syndication agent, and Merrill
  Lynch & Co., Merrill Lynch, Pierce, Fenner and Smith Incorporated,
  as documentation agent

  
	
   

  	
   

  	
   

  
	
  FROM:

  	
   

  	
  DEUTSCHE BANK AG, NEW
  YORK BRANCH, as Administrative Agent

  
	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  Procedures
  for Discounted Voluntary Prepayment Transaction

  

 

1.                                       The Parent
Borrower has submitted to Deutsche Bank AG, New York Branch, in its capacity as
Administrative Agent, a Prepayment Notice for the following Discounted
Voluntary Prepayment Transaction:

 

·                  Prepayment
Amount: 
$[                    ]

 

·                  Discount:  
not less than [    ]% nor greater than [      ]%
of par of the principal amount of Loans (the “Discount Range”)
(i.e. for a range of prepayment prices of not less than $[     ]
nor greater than $[     ] per $1000 principal
amount of Loans)

 

Capitalized terms used
herein without definition shall have the meanings given to such terms in the
Credit Agreement.

 

2.                                       Each Lender of
Loans is hereby invited to specify a discount to par (the “Acceptable
Discount”) within the Discount Range for a principal amount of Loans (which
principal amount shall be equal to $[·] or a whole
multiple of $[·] in excess
thereof (or such lesser amount as equals the principal amount of Loans of such
Lender)) at which such Lender is willing to receive a Discounted Voluntary Prepayment
by submitting an offer (a “Prepayment Offer”) in the form of Exhibit A
hereto.  A Lender may offer different
portions of the principal amount of its Loans at 

 

 

different Acceptable
Discounts; however, a Lender may not offer an aggregate principal amount of
Loans in excess of the aggregate principal amount of Loans of such Lender.

 

Each Prepayment Offer shall
be sent via fax or email to the attention of [·] at the Administrative Agent no later than [·] p.m., New York time, on [·], unless extended by the Parent Borrower by up to [·] Business Days (such time and date as to the
Discounted Voluntary Prepayment, as it may be extended, the “Expiration Date”).  A Prepayment Offer received by the
Administrative Agent may be withdrawn only by written notice received by the
Administrative Agent (sent as set forth in the preceding sentence) at any time
up until the Expiration Date.  Prepayment
Offers received after, or validly withdrawn prior to, the Expiration Date will
not be taken into account in determining the Applicable Discount, and the
respective Loans will not be eligible to participate in the Discounted
Voluntary Prepayment.

 

3.                                       Based on all
Prepayment Offers received by the Administrative Agent by the Expiration Date,
the Administrative Agent, after consultation with the Borrower, will determine
the Applicable Discount for the Discounted Voluntary Prepayment under the
following “Modified Dutch Auction” procedure:

 

The Parent Borrower will
accept Prepayment Offers in the order of lowest to highest prepayment price
specified by the respective Lenders in the Prepayment Offers so as to enable
the Parent Borrower to complete the Discounted Voluntary Prepayment for the
Prepayment Amount.  Based on the
Acceptable Discounts and principal amounts of such Loans specified by the
Lenders that have submitted (and not revoked, prior to the Expiration Date) a
Prepayment Offer (the “Accepting Lenders”), the applicable discount (the
“Applicable Discount”) for any Discounted Voluntary Prepayment will be
the higher of (1) the highest Acceptable Discount (i.e., the lowest
prepayment price) at which the Parent Borrower can complete such Discounted
Voluntary Prepayment for the full Prepayment Amount and which is within the
Discount Range and (2) in the event that the aggregate amount of
prepayments to all Accepting Lenders in connection with such Discounted
Voluntary Prepayment would be insufficient to allow the Parent Borrower to make
a prepayment with the entire Prepayment Amount, the lowest Acceptable Discount
offered by Accepting Lenders and within the Discount Range.  The Parent Borrower shall prepay the Loans
(or the respective portions thereof) offered by Accepting Lenders at Acceptable
Discounts specified by each such Accepting Lender that are equal to or greater
than the Applicable Discount (“Qualifying Tender Term Loans”) at the
Applicable Discount; provided that (x) if the aggregate proceeds
that would be required to prepay all Qualifying Tender Term Loans (disregarding
any interest payable under subsection 4.4(i)(iii) of the Credit Agreement)
would exceed the Prepayment Amount for such Discounted Voluntary Prepayment,
the Parent Borrower shall prepay such Qualifying Tender Term Loans at the
Applicable Discount ratably based on the respective principal amounts of such
Qualifying Tender Term Loans (subject to rounding requirements specified by the
Administrative Agent) and (y) if the application of the Prepayment Amount
for such Discounted Voluntary Prepayment to prepay all Qualifying Tender Term
Loans at the Applicable Discount would cause the Maximum Prepayment Amount to
be exceeded, the Parent Borrower shall prepay such Qualifying Tender Term Loans
at the Applicable Discount in an aggregate principal amount equal to the
maximum portion of the Prepayment Amount that may be so applied without the
Maximum Prepayment Amount being exceeded, ratably based on the respective
principal amounts of such Qualifying Tender Term Loans (subject to rounding
requirements specified by the Administrative Agent).

 

[Other
procedures mutually acceptable to the Parent Borrower and the Administrative
Agent, each acting reasonably, as to timing of acceptances of Prepayment
Offers, settlement and rounding and other administrative matters to be
inserted]

 

 

The Parent Borrower shall
have the right to revoke in full its offer for a Discounted Voluntary
Prepayment and rescind its Prepayment Notice therefor at its discretion (I) at
any time prior to the Parent Borrower’s delivery of a final notice of
acceptance of the related Prepayment Offers, and (II) at any time after
the delivery of a final notice of acceptance of the related Prepayment Offers
and on or before the settlement date for the payment of such Prepayment Offers
if the consummation of such Discounted Voluntary Prepayment on such settlement
date would result in the Parent Borrower failing to comply with subsection
4.4(i)(i)(3) of the Credit Agreement (and if such offer is revoked
pursuant to the preceding clauses (I) or (II), any failure by the Parent
Borrower to make any prepayment to a Lender pursuant to subsection 4.4(i) of
the Credit Agreement shall not constitute a Default or Event of Default under Section 9(a) of
the Credit Agreement or otherwise)

 

Upon submission by a Lender
of a Prepayment Offer, such Lender will be obligated to accept prepayment of
the entirety or its pro rata portion (as applicable pursuant to the proviso to
subsection 4.4(i)(ii) of the Credit Agreement) of the principal amount
specified therein at a Discount equal to or less than the Acceptable Discount
specified by such Lender (unless such Lender revokes its offer and rescinds its
Prepayment Offer prior to the Expiration Date)

 

The settlement date for
payment of accepted Prepayment Offers shall not be later than 30 days after the
Parent Borrower’s delivery of a final notice of acceptance therefor. Following
a Discounted Voluntary Prepayment of Loans, (i) interest in respect of the
Loans may be made on a non-pro  rata basis among the Lenders
holding such Loans to reflect the payment of accrued interest to certain Lenders
as provided in subsection 4.4(i)(iii) of the Credit Agreement and (ii) all
subsequent prepayments and repayments of the Loans (other than a Discounted
Voluntary Prepayment) shall be made on a pro  rata basis among the
Lenders based upon the then outstanding principal amounts of the Loans then
held by the respective Lenders after giving effect to any Discounted Voluntary
Prepayment as if made at par.

 

4.                                       The
Administrative Agent will notify each Lender whose Loans (or a portion thereof)
will be prepaid in the Discounted Voluntary Prepayment as soon as practicable
after the Applicable Discount for the Discounted Voluntary Prepayment and any
proration has been determined, indicating the Applicable Discount and the
amount of Loans of such Lender that is being prepaid by the Parent Borrower in
the Discounted Voluntary Prepayment.

 

All Loans prepaid by Parent
Borrower shall be accompanied by payment of accrued and unpaid interest on the
par principal amount so prepaid to, but not including, the date of prepayment.

 

The par principal amount of
Loans prepaid shall be applied to reduce the remaining scheduled repayments of
Loans in reverse order of maturity.

 

 

FORM OF PREPAYMENT
OFFER

 

DEUTSCHE BANK AG,
NEW YORK BRANCH

60 Wall Street

New York, NY 10005

Attention: [·]

 

Re: Discounted Voluntary
Prepayment under The Hertz Corporation Credit Agreement

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit
Agreement, dated as of December 21, 2005 (as it may be amended, amended
and restated, supplemented or otherwise modified (including as amended by that
certain Amendment to Credit Agreement, dated as of June 30, 2006, that
certain Second Amendment to Credit Agreement, dated as of February 9,
2007, that certain Third Amendment to Credit Agreement, dated as of May 23,
2007), and that certain Fourth Amendment and Waiver to Credit Agreement, dated
as of [·], 2009, the “Credit
Agreement”) among Parent Borrower, the Lenders from time to time party
thereto, Deutsche Bank AG., New York Branch, as Administrative Agent and
Collateral Agent,  Lehman Commercial
Paper Inc., as syndication agent, and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner and Smith Incorporated, as documentation agent. Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement, as applicable.

 

The undersigned Lender of Loans hereby gives
notice that it is willing to permit the Discounted Voluntary Prepayment on the
terms set forth in the Credit Agreement of the following principal amount of
Loans held by such Lender at the Acceptable Discount (and resulting prepayment
price) specified below next to such principal amount:

 

	
  Aggregate 

  Principal 

  Amount of Loans 

  Offered for 

  Prepayment(1)

  	
   

  	
  Acceptable 

  Discount 

  (expressed as a 

  percentage of 

  principal (face) 

  amount of 

  Loans)

  	
   

  	
  Prepayment 

  Price per $ 1,000 

  principal (face) 

  amount of 

  Loans

  	
   

  
	
  $

  	
   

  	
  %

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

This notice may be withdrawn only by written
notice received by the Administrative Agent at any time up until [·] p.m., New York time, on [·] (or such later date 

 

(1)                                  Amount shall be equal to $[·] or
a whole multiple of $[·] in excess thereof (or such lesser
amount as equals the principal amount of Loans of the Lender).

 

 

until which the Expiration
Date has been extended by the Parent Borrower).    Unless this notice is so revoked by such
date, the undersigned acknowledges it will be obligated to accept prepayment of
the entirety or its pro rata portion (as applicable pursuant to the proviso to
subsection 4.4(i)(ii) of the Credit Agreement) of the principal amount
specified above at a Discount equal to or less than the Acceptable Discount
specified above.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name
  of Lender]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]