Document:

Exhibit
4.9.12

 

AMENDED AND RESTATED
ADMINISTRATION AGREEMENT

 

Dated as of December 21,
2005

 

 

among

 

HERTZ VEHICLE FINANCING LLC,

 

as Issuer,

 

THE HERTZ CORPORATION,

 

as Administrator,

 

and

 

BNY MIDWEST TRUST COMPANY,

 

as Trustee

 

 

TABLE OF CONTENTS

 

	
   

  	
  Page

  
	
  SECTION 1. Duties of Administrator

  	
  1

  
	
  SECTION 2. Records

  	
  5

  
	
  SECTION 3. Compensation

  	
  5

  
	
  SECTION 4. Additional Information To Be
  Furnished to Issuer

  	
  5

  
	
  SECTION 5. Independence of Administrator

  	
  5

  
	
  SECTION 6. No Joint Venture

  	
  5

  
	
  SECTION 7. Other Activities of Administrato

  	
  5

  
	
  SECTION 8. Term of Agreement; Resignation
  and Removal of Administrator

  	
  6

  
	
  SECTION 9. Action upon Termination,
  Resignation or Removal

  	
  7

  
	
  SECTION 10. Notices

  	
  7

  
	
  SECTION 11. Amendments

  	
  8

  
	
  SECTION 12. Successors and Assigns

  	
  8

  
	
  SECTION 13. GOVERNING LAW

  	
  9

  
	
  SECTION 14. Heading

  	
  9

  
	
  SECTION 15. Counterparts

  	
  9

  
	
  SECTION 16. Severability

  	
  9

  
	
  SECTION 17. Limitation of Liability of
  Trustee and Administrator

  	
  9

  
	
  SECTION 18. Nonpetition Covenants

  	
  9

  
	
  SECTION 19. Liability of Administrator

  	
  9

  
	
   

  	
   

  
	
  EXHIBIT A - Form of Power of Attorney

  	
   

  

 

2

 

AMENDED AND
RESTATED ADMINISTRATION AGREEMENT dated as of December 21, 2005, among
HERTZ VEHICLE FINANCING LLC, a Delaware limited liability company (the “Issuer”),
THE HERTZ CORPORATION, a Delaware corporation, as administrator (the “Administrator”),
and BNY MIDWEST TRUST COMPANY, an Illinois trust company, not in its individual
capacity but solely as trustee (the “Trustee”) under the Base Indenture
(as hereinafter defined). Except as otherwise specified, capitalized terms used
but not defined herein have the respective meanings set forth in Schedule I to
the Amended and Restated Base Indenture dated as of December 21, 2005 (as
amended, modified or supplemented from time to time in accordance with the
provisions thereof, the “Indenture”) between the Issuer and the Trustee.

 

W I
T  N  E  S  S  E  T  H:

 

WHEREAS the
Issuer has entered into the Related Documents to which it is a party in
connection with the issuance of certain notes (the “Notes”) under the
Indenture;

 

WHEREAS
pursuant to the Related Documents, the Issuer is required to perform certain
duties in connection with the Notes and the collateral pledged therefor
pursuant to the Indenture (the “Collateral”);

 

WHEREAS the
Issuer desires to have the Administrator perform certain of the duties of the
Issuer referred to in the preceding clause, and to provide such additional
services consistent with the terms of this Agreement and the Related Documents
as the Issuer may from time to time request;

 

WHEREAS the
Administrator has the capacity to provide the services required hereby and is
willing to perform such services for the Issuer on the terms set forth herein;

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

 

SECTION 1. Duties
of Administrator. (a)  Duties with
Respect to the Related Documents. The Administrator agrees to perform all
its duties as Administrator under the Related Documents. The Administrator
shall prepare for execution by the Issuer or shall cause the preparation by
other appropriate persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare,
file or deliver pursuant to the Indenture. In furtherance of the foregoing, the
Administrator shall take all appropriate action that it is the duty of the
Issuer to take pursuant to the Indenture including, without limitation, such of
the foregoing as are required with respect to the following matters under the
Base Indenture (references are to sections of the Base Indenture):

 

1

 

(A)  the preparation of or obtaining of the
documents and instruments required for authentication of the Notes, if any, and
delivery of the same to the Trustee (Sections 2.2 and 2.4);

 

(B)  the duty to cause the Note Register to be
kept and to give the Trustee notice of any appointment of a new Registrar and
the location, or change in location, of the Note Register and the office or
offices where Notes may be surrendered for registration of transfer or exchange
(Section 2.5);

 

(C)  the maintenance of an office or agency for
registration of transfer or exchange of Notes and the notification of the
Trustee or any change in the location of such office or agency (Sections 2.5
and 8.2);

 

(D)  the duty to cause newly appointed Paying
Agents, if any, to deliver to the Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 2.6);

 

(E)  the direction to Paying Agents to pay to the
Trustee all sums held in trust by such Paying Agents (Section 2.6);

 

(F)  the notification of the Trustee in writing
that the Clearing Agency is no longer willing or able to properly discharge its
duties under the Indenture or that the Issuer at its option elects to terminate
the book entry system through the Clearing Agency (Section 2.13);

 

(G)  the preparation of Definitive Notes and
arranging the delivery thereof (Section 2.13);

 

(H)  the taking of such further acts as may be
reasonably necessary or proper to compel or secure the performance and
observance by Hertz Vehicles LLC, HGI, the Servicer, the Lessee (or such other party
thereto) under any Collateral Agreement, or by a Manufacturer under a
Manufacturer Program, of their respective obligations thereunder (Section 3.3);

 

(I)  the preparation, obtaining or filing of the
instruments, opinions and certificates and other documents required for the
release of the Collateral (Sections 3.4 and 3.5);

 

(J)  the preparation and delivery to the Trustee
of each of the reports, certificates, statements and other materials required
to be delivered by the Issuer pursuant to Section 4.1 of the Base Indenture
(Section 4.1);

 

(K)  the direction, if necessary, to the firm of
independent certified public accountants to furnish reports to the Trustee and
the Rating Agencies in accordance with Sections 4.1(g) and (h) of the Base
Indenture (Sections 4.1(g) and (h));

 

(L)  the furnishing, or causing to be furnished,
to the Trustee or the Paying Agent, as applicable, instructions as to
withdrawals and payments from the Collection Account and any other accounts
specified in a Series Supplement in accordance with Section 4.1(j) of the Base
Indenture (Section 4.1(j));

 

2

 

(M)  if so requested, the furnishing to any
Noteholder, Note Owner or prospective purchaser of the Notes any information
required pursuant to Rule 144(d)(4) under the Securities Act
(Section 4.3);

 

(N)  the preparation and delivery of written
instructions with respect to the investment of funds on deposit in the
Collection Account and any other accounts specified in a Series Supplement (Section 5.1(b));

 

(O)  the maintenance of the Issuer’s qualification
to do business in each jurisdiction in which the failure to so qualify would be
reasonably likely to result in a Material Adverse Effect (Section 8.4);

 

(P)  the keeping of books of record and account
(Section 8.6);

 

(Q)  the delivery of notice to the Trustee of each
default described in Section 8.8 of the Base Indenture, and preparation and
delivery of an Officer’s Certificate of the Issuer setting forth the details of
such default and any action with respect thereto taken or contemplated to be
taken by the Issuer (Section 8.8);

 

(R)  the delivery of notice to the Trustee and the
Rating Agencies of material proceedings (Section 8.9);

 

(S)  the furnishing of other information to the
Trustee as the Trustee may reasonably request (Section 8.10);

 

(T)  the preparation and filing of all
supplements, amendments, financing statements, continuation statements, if any,
instruments of further assurance and other instruments, in accordance with
Section 8.1(a) of the Base Indenture, necessary to protect the Collateral
(Section 8.11(a));

 

(U)  the obtaining of and the annual delivery of
an Opinion of Counsel, in accordance with Section 8.11(d) of the Indenture, as
to the Collateral (Section 8.11(d));

 

(V)  the preparation and obtaining of, and
delivery to the Trustee and the Collateral Agent of, filings, Officer’s
Certificates and Opinions of Counsel upon the Issuer changing its location or
legal name (Section 8.19);

 

(W)  the preparation and delivery of instruments,
agreements and Officer’s Certificates to the Trustee, the Lessor and the Rating
Agencies with respect to Manufacturer Programs in accordance with
Section 8.25 (Section 8.25);

 

(X)  the turning back, or causing to be turned
back, of Program Vehicles to the applicable Manufacturers pursuant to Section
2.6 of the HVF Lease (Section 8.26(a));

 

(Y) the
arranging for the prompt sale of Non-Program Vehicles returned to HVF pursuant
to Section 2.5(c) of the HVF Lease (Section 8.26(b));

 

(Z)  the obtaining and the maintenance of
insurance in accordance with Section 8.27 of the Base Indenture, and the
delivery of notice to the Trustee and 

 

3

 

the Collateral Agent of any change or
cancellation of such insurance (Section 8.27);

 

(AA)  the preparation and the obtaining of
documents and instruments required for the release of the Issuer from its
obligation under the Indenture (Section 11.1);

 

(BB)  the preparation of Officer’s Certificates and
the obtaining of Opinions of Counsel with respect to the execution of
Supplements to the Indenture (Section 12.6); and

 

(CC)  the preparation of Officer’s Certificates
with respect to any requests by HVF to the Trustee to take any action under the
Indenture (Section 13.3).

 

(b)  Additional Duties. In addition to the
duties of the Administrator set forth above, the Administrator shall perform
such calculations and shall prepare for execution by the Issuer or shall cause
the preparation by other appropriate persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Related Documents, and shall
take all appropriate action that it is the duty of the Issuer to take pursuant
to the Related Documents.

 

(c)           Dealings
with Affiliates. In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its Affiliates; provided, however,
that the terms of any such transactions or dealings shall be in accordance with
any directions received from the Issuer and shall be, in the Administrator’s
opinion, no less favorable to the Issuer than would be available from
unaffiliated parties.

 

(d)           Power
of Attorney. The Issuer shall execute and deliver to the Administrator, and
to each successor Administrator appointed pursuant to the terms hereof, one or
more powers of attorney substantially in the form of Exhibit A hereto,
appointing the Administrator the attorney-in-fact of the Issuer for the purpose
of executing on behalf of the Issuer all such documents, reports, filings,
instruments, certificates and opinions that the Administrator has agreed to
prepare, file or deliver pursuant to this Agreement.

 

(e)   Non-Ministerial Matters. (i)  With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Issuer of the proposed
action and the Issuer shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence, “non-ministerial
matters” shall include, without limitation:

 

(A)   the initiation of any claim or lawsuit by
the Issuer, the compromise of any action, claim or lawsuit brought by the
Issuer, and the compromise of any action, claim or lawsuit brought against the
Issuer (other than in the ordinary course of business);

 

(B)   the amendment, change or modification of the
Related Documents;

 

4

 

(C)   the appointment of successor Registrars,
successor Paying Agents and successor Trustees pursuant to the Indenture or the
appointment of successor Administrators, or the consent to the assignment by
the Registrar, the Paying Agent or the Trustee of its obligations under the
Indenture; and

 

(D)   the removal of the Trustee.

 

(ii)  Notwithstanding anything to the contrary in
this Agreement, the Administrator shall not be obligated to, and shall not, (x)
make any payments to the Noteholders under the Related Documents, (y) sell the
Collateral pursuant to the Indenture or (z) take any action that the Issuer
directs the Administrator not to take on its behalf.

 

SECTION 2. Records.
The Administrator shall maintain appropriate books of account and records
relating to services performed hereunder, which books of account and records
shall be accessible for inspection by the Issuer or the Trustee at any time
during normal business hours.

 

SECTION 3. Compensation.
As compensation for the performance of the Administrator’s obligations under
this Agreement, the Administrator shall be entitled to $1,000 per month (the “Monthly
Administration Fee”) which shall be payable on each Payment Date.

 

SECTION 4. Additional
Information To Be Furnished to Issuer. The Administrator shall furnish to
the Issuer from time to time such additional information regarding the
Collateral as the Issuer shall reasonably request.

 

SECTION 5. Independence
of Administrator. For all purposes of this Agreement, the Administrator
shall be an independent contractor and shall not be subject to the supervision
of the Issuer with respect to the manner in which it accomplishes the
performance of its obligations hereunder. Unless expressly authorized by the
Issuer, the Administrator shall have no authority to act for or represent the
Issuer in any way and shall not otherwise be deemed an agent of the Issuer.

 

SECTION 6. No
Joint Venture. Nothing contained in this Agreement shall (i) constitute the
Administrator or the Issuer as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (ii)
be construed to impose any liability as such on any of them or (iii) be deemed
to confer on any of them any express, implied or apparent authority to incur
any obligation or liability on behalf of the others.

 

SECTION 7. Other
Activities of Administrator. (a) 
Nothing herein shall prevent the Administrator or its Affiliates from
engaging in other businesses or, in its sole discretion, from acting in a
similar capacity as an administrator for any other person or entity even though
such person or entity may engage in business activities similar to those of the
Issuer or the Trustee.

 

(b)   The Administrator and its Affiliates may
generally engage in any kind of business with any person party to a Related
Document, any of its Affiliates and 

 

5

 

any person who may do business
with or own securities of any such person or any of its Affiliates, without any
duty to account therefor to the Issuer or the Trustee.

 

SECTION 8. Term
of Agreement; Resignation and Removal of Administrator. (a)  This Agreement shall continue in force until
termination of the Indenture and the Related Documents in accordance with their
respective terms and the payment in full of all obligations owing thereunder,
upon which event this Agreement shall automatically terminate.

 

(b)   Subject to Sections 8(d) and (e), the
Issuer, with the written consent of the Requisite Investors, may remove the
Administrator without cause by providing the Administrator with at least 60
days’ prior written notice.

 

(c)   Subject to Sections 8(d) and (e), the
Trustee may, and at the direction of the Requisite Investors shall, remove the
Administrator upon written notice of termination from the Trustee to the
Administrator if any of the following events shall occur (each an “Administrator
Default”):

 

(i)   the Administrator shall default in the
performance of any of its duties under this Agreement and, after notice of such
default, shall not cure such default within thirty days (or, if such default
cannot be cured in such time, shall not give within thirty days such assurance
of cure as shall be reasonably satisfactory to the Issuer);

 

(ii)   a court having jurisdiction in the premises
shall enter a decree or order for relief, and such decree or order shall not
have been vacated within 60 days, in respect of the Administrator in any
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for the Administrator or
any substantial part of its property or order the winding-up or liquidation of
its affairs; or

 

(iii)   the Administrator shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or similar
official for the Administrator or any substantial part of its property, shall
consent to the taking of possession by any such official of any substantial
part of its property, shall make any general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due.

 

The
Administrator agrees that if any of the events specified in clause (ii) or
(iii) of this Section shall occur, it shall give written notice thereof to the
Issuer and the Trustee within five days after the happening of such event.

 

(d)   No resignation or removal of the
Administrator pursuant to this Section shall be effective until (i) a successor
Administrator acceptable to each Enhancement Provider, if any, shall have been
appointed by the Issuer and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this 

 

6

 

Agreement in the same manner as
the Administrator is bound hereunder. The Issuer shall provide written notice
of any such removal to the Trustee, each Enhancement Provider, and the Rating
Agencies.

 

(e)   The appointment of any successor
Administrator shall be effective only after receipt of written confirmation
from each Rating Agency that the proposed appointment will not result in the
qualification, downgrading or withdrawal of any rating assigned to the Notes by
such Rating Agency.

 

(f)   A successor Administrator shall execute,
acknowledge and deliver a written acceptance of its appointment hereunder to
the resigning Administrator and to the Issuer. Thereupon the resignation or
removal of the resigning Administrator shall become effective and the successor
Administrator shall have all the rights, powers and duties of the Administrator
under this Agreement. The successor Administrator shall mail a notice of its
succession to the Noteholders. The resigning Administrator shall promptly
transfer or cause to be transferred all property and any related agreements,
documents and statements held by it as Administrator to the successor
Administrator and the resigning Administrator shall execute and deliver such
instruments and do other things as may reasonably be required for fully and
certainly vesting in the successor Administrator all rights, powers, duties and
obligations hereunder.

 

(g)   In no event shall a resigning Administrator
be liable for the acts or omissions of any successor Administrator hereunder.

 

(h)   In the exercise or administration of its
duties hereunder and under the Related Documents, the Administrator may act
directly or through its agents or attorneys pursuant to agreements entered into
with any of them. Any such delegation shall not relieve the Administrator of
its liability and responsibility hereunder.

 

SECTION 9. Action
upon Termination, Resignation or Removal. Promptly upon the effective date
of termination of this Agreement pursuant to Section 8(a) or the resignation or
removal of the Administrator pursuant to Section 8(b) or (c), respectively, the
Administrator shall be entitled to be paid all fees and reimbursable expenses
accruing to it to the date of such termination, resignation or removal. The
Administrator shall forthwith upon termination pursuant to Section 8(a) deliver
to the Issuer all property and documents of or relating to the Collateral then
in the custody of the Administrator. In the event of the resignation or removal
of the Administrator pursuant to Section 8(b) or (c), respectively, the
Administrator shall cooperate with the Issuer and take all reasonable steps
requested to assist the Issuer in making an orderly transfer of the duties of
the Administrator.

 

SECTION 10. Notices.
Any notice, report or other communication given hereunder shall be in writing
and addressed as follows:

 

(a)  
if to the Issuer, to

 

Hertz Vehicle Financing LLC

225 Brae Boulevard

Park Ridge, NJ 07656

Attention: 
Treasury Department

 

7

 

(b)  
if to the Administrator, to

 

The Hertz Corporation

225 Brae Boulevard

Park Ridge, NJ 07656

Attention: 
Treasury Department

 

(c)  
if to the Trustee, to

 

BNY Midwest Trust Company

2 North LaSalle Street, Suite 1020

Chicago, IL 60602

Attention:  Corporate Trust Administration — Structured
Finance

 

or to such
other address as any party shall have provided to the other parties in writing.
Any notice required to be in writing hereunder shall be deemed given if such
notice is mailed by certified mail, postage prepaid, or hand-delivered to the
address of such party as provided above, except that notices to the Trustee are
effective only upon receipt.

 

SECTION 11. Amendments.
This Agreement may be amended from time to time by a written amendment duly
executed and delivered by the Issuer, the Administrator and the Trustee,
without the consent of the Noteholders, for the purpose of correcting or
supplementing any provision hereunder which may be inconsistent with any other
provision hereunder or to make any other provisions with respect to matters or
questions arising under this Agreement; provided that such amendment
will not, as evidenced by an Officer’s Certificate, materially and adversely
affect the interest of any Noteholder. This Agreement may also be amended by
the Issuer, the Administrator and the Trustee with the written consent of the
Requisite Investors for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of Noteholders. No amendment of any
provision of this Agreement will be valid unless the Rating Agency Condition
with respect to each Series of Notes Outstanding shall have been satisfied with
respect thereto.

 

SECTION 12. Successors
and Assigns. This Agreement may not be assigned by the Administrator unless
such assignment is previously consented to in writing by the Issuer and the
Trustee and subject to receipt by the Issuer of written confirmation from each
Rating Agency that such assignment will not result in the qualification,
downgrading or withdrawal of any rating assigned to the Notes by such Rating
Agency in respect thereof. An assignment with such consent and satisfaction, if
accepted by the assignee, shall bind the assignee hereunder in the same manner
as the Administrator is bound hereunder. Notwithstanding the foregoing, this
Agreement may be assigned by the Administrator without the consent of the
Issuer or the Trustee to a corporation or other organization that is a
successor (by merger, consolidation or purchase of assets) to the
Administrator; provided that such successor organization executes and
delivers to the Issuer and the Trustee an agreement in which such corporation
or other organization agrees to be bound hereunder by the terms of said
assignment in the same manner as the Administrator is bound hereunder; provided,
further, that the Rating Agency Condition with respect to each Series of
Notes Outstanding shall have been satisfied with respect to such successor. Subject
to the foregoing, this Agreement shall bind any successors or assigns of the
parties hereto.

 

8

 

SECTION 13. GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 14. Headings.
The section headings hereof have been inserted for convenience of reference
only and shall not be construed to affect the meaning, construction or effect
of this Agreement.

 

SECTION 15. Counterparts.
This Agreement may be executed in counterparts, each of which when so executed
shall together constitute but one and the same agreement.

 

SECTION 16. Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall 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 17. Limitation
of Liability of Trustee and Administrator. Notwithstanding anything
contained herein to the contrary, in no event shall either the Trustee or the
Administrator have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.

 

SECTION 18. Nonpetition
Covenants. Notwithstanding any prior termination of this Agreement, the
Administrator, the Issuer and the Trustee shall not, prior to the date which is
one year and one day after the termination of this Agreement with respect to
the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.

 

SECTION 19. Liability
of Administrator. The Administrator agrees to indemnify HVF and the Trustee
and their respective agents (the “Indemnified Parties”) from and against
any and all actions, causes of action, suits, losses, costs, liabilities and
damages, and expenses incurred therewith, including reasonable attorney’s fees
and expenses incurred by the Indemnified Parties as a result of, or arising out
of, or relating to the entering into and performance of this Agreement by the
Indemnified Parties or suffered or sustained by the Indemnified Parties by
reason of any acts, omissions or alleged acts or omissions arising out of the
Administrator’s activities pursuant to this Agreement. Notwithstanding anything
in the foregoing to the contrary, the Administrator shall not be obligated
under its agreements of indemnity contained in this Section 19 (i) for any
liabilities resulting from the gross negligence or willful misconduct of the
Indemnified Parties or (ii) in respect of any claim arising out of the
assessment of any tax against the Indemnified Parties. The obligations of the
Administrator and the rights of the Indemnified Parties under this Section 19
shall survive any termination of this Agreement, in whole or in part.

 

9

 

SECTION 20. Limited
Recourse to HVF. The obligations of HVF under this Agreement are solely the
obligations of HVF. No recourse shall be had for the payment of any amount
owing in respect of any fee hereunder or an other obligation or claim arising
out of or based upon this Agreement against any member, employee, officer or
director of HVF. Fees, expenses or costs payable by HVF hereunder shall be
payable by HVF to the extent and only to the extent that HVF is reimbursed
therefor pursuant to any of the Related Documents, or funds are then available
or thereafter become available for such purpose pursuant to Article 5 of the
Base Indenture, and the amount of any fees, expenses or costs exceeding such
funds shall in no event constitute a claim (as defined in Section 101 of the
Bankruptcy Code) against, or corporate obligation of, HVF.

 

10

 

IN WITNESS WHEREOF, the parties have caused
this Agreement to be duly executed and delivered as of the day and year first
above written.

 

 

	
   

  	
  HERTZ VEHICLE FINANCING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  Robert H. Rillings

  
	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
  Title:

  	
  Vice President & Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE HERTZ CORPORATION,

  
	
   

  	
  as Administrator

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  Robert H. Rillings

  
	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BNY MIDWEST TRUST COMPANY,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/  Eric A. Lindahl

  
	
   

  	
  Name:

  	
  Eric A. Lindahl

  
	
   

  	
  Title:

  	
  Vice President

  

 

1Exhibit 4.9.13

 

 

 

MASTER EXCHANGE AGREEMENT

 

dated as of December 21, 2005

 

among

 

THE HERTZ CORPORATION,

 

HERTZ VEHICLE FINANCING LLC,

 

HERTZ GENERAL INTEREST LLC,

 

HERTZ CAR EXCHANGE INC.

 

and

 

J.P. MORGAN PROPERTY HOLDINGS LLC

 

 

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
  General Exchange Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Exchange of Property

  	
  7

  
	
  SECTION 2.02.

  	
  Disposition and Transfer of Relinquished
  Property

  	
  8

  
	
  SECTION 2.03. 

  	
  Acquisition and Transfer of Replacement
  Property

  	
  9

  
	
  SECTION 2.04.

  	
  Assignment of Agreements.

  	
  9

  
	
  SECTION 2.05.

  	
  Notice to Purchasers and Sellers

  	
  10

  
	
  SECTION 2.06.

  	
  Direct Transfers

  	
  10

  
	
  SECTION 2.07.

  	
  Matching of Relinquished and Replacement
  Property

  	
  10

  
	
  SECTION 2.08.

  	
  Disclosure of Relationship

  	
  11

  
	
  SECTION 2.09.

  	
  Exclusivity

  	
  11

  
	
  SECTION 2.10.

  	
  Records

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
  Identification

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Identification of Replacement Property

  	
  11

  
	
  SECTION 3.02.

  	
  Revocation of Identification

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Accounts

  	
  12

  
	
  SECTION 4.02.

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

  	
  14

  
	
  SECTION 4.03.

  	
  Payment for Replacement Property.

  	
  15

  
	
  SECTION 4.04.

  	
  Investment of Funds in the Exchange
  Account.

  	
  16

  
	
  SECTION 4.05.

  	
  Disbursements from Account

  	
  16

  
	
  SECTION 4.06.

  	
  Disbursement Occurrence

  	
  17

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
  Indemnity By Each Legal Entity

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  No Personal Liability

  	
  17

  
	
  SECTION 5.02.

  	
  Indemnity

  	
  17

  
	
  SECTION 5.03.

  	
  Survival

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  
	
  Representations, Warranties And Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Representations and Warranties of the QI

  	
  18

  
	
  SECTION 6.02.

  	
  Representations and Warranties of Owner

  	
  20

  
	
  SECTION 6.03.

  	
  Representations and Warranties of Each
  Legal Entity

  	
  21

  
	
  SECTION 6.04.

  	
  Survival of Representations and Warranties

  	
  22

  
	
  SECTION 6.05.

  	
  Maintenance of Separate Existence

  	
  22

  
	
  SECTION 6.06.

  	
  Ownership by Owner; Mergers

  	
  23

  
	
  SECTION 6.07.

  	
  Organizational Documents

  	
  23

  
	
  SECTION 6.08.

  	
  No Other Agreements

  	
  23

  
	
  SECTION 6.09.

  	
  Other Business

  	
  23

  
	
  SECTION 6.10.

  	
  QI Parent Downgrade Event Sale.

  	
  23

  
	
  SECTION 6.11.

  	
  Trademark License

  	
  24

  
	
  SECTION 6.12.

  	
  Confidentiality

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  	
   

  
	
  Term And Compensation; Escrow Agreement
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Term

  	
  26

  
	
  SECTION 7.02.

  	
  Compensation

  	
  27

  
	
  SECTION 7.03.

  	
  Escrow Agreement Termination

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
  Pending Litigation

  	
  28

  
	
  SECTION 8.02.

  	
  Notices

  	
  28

  
	
  SECTION 8.03.

  	
  Amendments

  	
  29

  
	
  SECTION 8.04.

  	
  Successors and Assigns; No Third-Party
  Beneficiaries

  	
  29

  
	
  SECTION 8.05.

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

  	
  30

  
	
  SECTION 8.06.

  	
  Indebtedness

  	
  30

  
	
  SECTION 8.07.

  	
  Strict Performance

  	
  30

  
	
  SECTION 8.08.

  	
  Severability; Interpretation

  	
  30

  
	
  SECTION 8.09.

  	
  Dates, Descriptions, Values, and Matching

  	
  30

  

 

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 8.10.

  	
  Counterparts

  	
  30

  
	
  SECTION 8.11.

  	
  Entire Agreement

  	
  31

  
	
  SECTION 8.12.

  	
  Electronic Signature

  	
  31

  
	
  SECTION 8.13.

  	
  Acknowledgment of Independent Relationship

  	
  31

  
	
  SECTION 8.14.

  	
  Headings

  	
  31

  
	
  SECTION 8.15.

  	
  Force Majeure

  	
  31

  
	
  SECTION 8.16.

  	
  Consequential Damages

  	
  31

  
	
  SECTION 8.17.

  	
  Investment Losses

  	
  32

  
	
  SECTION 8.18.

  	
  Treasury Regulations Disclosure
  Requirements

  	
  32

  
	
  SECTION 8.19.

  	
  No Petitions

  	
  32

  
	
  SECTION 8.20.

  	
  Servicer

  	
  33

  
	
  SECTION 8.21.

  	
  Effective Time

  	
  33

  

 

 

This MASTER
EXCHANGE AGREEMENT (this “Agreement”) is entered into as of December 21,
2005, by and among, HERTZ CAR EXCHANGE INC., a Delaware corporation (the “QI”),
J.P. MORGAN PROPERTY HOLDINGS LLC, a Delaware limited liability company, THE HERTZ
CORPORATION, a Delaware corporation (“Hertz”), HERTZ VEHICLE FINANCING
LLC, a Delaware limited liability company (“HVF”) and HERTZ GENERAL
INTEREST LLC, a Delaware limited liability company (“HGI”).

 

W
I  T  N  E  S  S  E  T  H:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

WHEREAS, the QI is willing to act as a “qualified
intermediary” within the meaning of Section 1031 of the Code and Section 1.1031(k)-1(g)(4) of
the Treasury Regulations

 

 

(such entity, a “Qualified
Intermediary”) in order to facilitate Exchanges of Relinquished Property
for Replacement Property;

 

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

 

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

 

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

 

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

 

ARTICLE I

 

Definitions

 

SECTION 1.01.
Definitions. Capitalized terms used herein and not otherwise defined
herein shall have the meaning set forth in Schedule I to the Base
Indenture. The following terms used in this Agreement shall have the following
meanings, unless otherwise expressly provided herein:

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

“Base Indenture” shall mean the
Amended and Restated Base Indenture, dated as of the date hereof, between HVF
and BNY Midwest Trust Company, as trustee, as amended, modified or supplemented
from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Escrow Agreement” shall mean that
agreement by and among the Escrow Agent, each Legal Entity and the QI, dated as
of the date hereof, pursuant to which one or more

 

3

 

Exchange Accounts and Joint
Disbursement Accounts shall be maintained as escrow accounts on behalf of the
Legal Entities and any replacement of such agreement.

 

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

 

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

 

“Exchange Period” shall mean, with
respect to the Relinquished Property transferred in an Exchange, as defined in Section 1.1031(k)-1(b)(2) of
the Treasury Regulations, the period beginning on the date such Relinquished
Property is transferred to the QI and ending at 11:59 p.m. (New York City time)
on the earlier of (a) the one hundred eightieth (180th)
calendar day thereafter (irrespective of whether such day is a weekend day or a
holiday) or (b) the due date (including extensions) for Exchangor’s U.S.
federal income tax return for the year in which the transfer of the
Relinquished Property takes place.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Non-LKE Disbursements” shall mean
disbursements for items other than the acquisition of Replacement Property
(including the acquisition of non-Replacement Property and

 

5

 

any fees, expenses or other
costs required to be paid pursuant to Section 7.02 hereof) that are funded
solely with Additional Subsidies.

 

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

 

“Owner” shall mean J.P. Morgan
Property Holdings LLC, or any other entity that acquires all of the issued and
outstanding shares of the QI pursuant to Section 6.10 hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Replacement Property” shall mean certain
vehicles that are like-kind, as defined in Sections 1.1031(a)-1(b) and
1.1031(a)-2 of the Treasury Regulations, to the Relinquished

 

6

 

Property and held for
productive use, as described in Section 1.1031(a)-1 of the Treasury Regulations,
in connection with Exchangor’s business operations and qualifying as “replacement
property” within the meaning of Section 1.1031(k)-1(a) of the
Treasury Regulations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Vehicle” shall mean a “Vehicle” (as
defined in Schedule I to the Base Indenture) or a passenger automobile or
light duty-truck which is owned by Hertz, as applicable.

 

ARTICLE II

 

General Exchange Provisions

 

SECTION 2.01.
Exchange of Property. (a)  In accordance with the terms of this
Agreement, the QI agrees to transfer Relinquished Property to a Buyer, pursuant
to the terms of Section 2.02 hereof, and to subsequently acquire
Replacement Property of a like-kind from a

 

7

 

Seller pursuant to the terms of
Section 2.03 hereof in transactions intended to qualify as exchanges under
Section 1031 of the Code.

 

(b)  No
transfer by a Legal Entity of Relinquished Property pursuant to this Agreement
shall be made unless each of the following conditions are satisfied:  (u) the Escrow Agreement shall be in
effect; (v) no Manufacturer Event of Default with respect to the
Manufacturer Program pursuant to which such Relinquished Property is intended
to be transferred pursuant to this Agreement shall have occurred and be
continuing at the time of such transfer; (w) in connection with the
transfer of any Program Vehicle pursuant to an Eligible Manufacturer Program,
the applicable Legal Entity shall have contracted to sell such Program Vehicle
pursuant to such Eligible Manufacturer Program (the Manufacturer party to which
shall have consented to the purchase and sale of Vehicles by the QI pursuant to
an Assignment Agreement, which consent shall not have been revoked) and shall
have directed the QI to sell such Program Vehicle pursuant to such Eligible
Manufacturer Program on the date such Program Vehicle becomes Relinquished
Property pursuant to this Agreement; (x) on the date of any transfer of any
Vehicle to the QI, the only obligations or liabilities, if any, secured by such
Vehicle are obligations or liabilities arising under the Related Documents; (y) solely
with respect to a proposed transfer by HVF of Relinquished Property pursuant to
this Agreement, as of the date of any such transfer, a QI Parent Downgrade
Event shall not have occurred and continued unremedied for a period of seven
calendar days (ending at 11:59 p.m. on such seventh day) prior to such
date (unless such QI Parent Downgrade Event has been remedied) and (z) on
the date of any such transfer, the following statements shall be true:  (i) solely with respect to a proposed
transfer by HVF of Relinquished Property pursuant to this Agreement, no
Potential Amortization Event or Amortization Event and no Liquidation Event of
Default or Limited Liquidation Event of Default has occurred and is continuing
or would result from the making of such transfer, (ii) the Termination
Date has not occurred and (iii) the representations and warranties of the
QI in Article VI hereof are true and correct on and as of such date and
shall be deemed to have been made on and as of such date with the same effect
as though made on and as of such date. In connection with any such transfer of
Relinquished Property, (A) the applicable Legal Entity, by making such
transfer, shall be deemed to have represented and warranted to the effect set
forth in clauses (z)(i) and (ii) above, and (B) the QI
shall be deemed to have represented and warranted to the effect set forth in
clause (z)(iii) above.

 

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

 

8

 

SECTION 2.03.
Acquisition and Transfer of Replacement Property. HGI has entered,
and/or from time to time may enter, into one or more Replacement Property
Agreements with one or more Sellers for the purchase of Replacement Property. In
connection with each Exchange, HGI shall, in accordance with Section 1.1031(k)-1(g)(4)(v) of
the Treasury Regulations:  (a) assign
to the QI all of its Rights with respect to such Replacement Property under the
applicable Replacement Property Agreements in accordance with Section 2.04
hereof, any such assignment to be made without recourse to the QI (and the QI
agrees to accept such assignments); (b) notify all parties to the
applicable Replacement Property Agreement in writing of the assignment in
accordance with Section 2.05 prior to or concurrent with the date of
transfer of the Replacement Property from the applicable Seller, and (c) receive
an ownership interest in the Replacement Property from the applicable Seller
pursuant to the applicable Replacement Property Agreement.

 

SECTION 2.04.
Assignment of Agreements.

 

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

 

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

 

(c)  Revocation
of, or Change in, Assignment. (i) By notice to the QI, each Legal
Entity may revoke its assignment to the QI of its Rights with respect to
any Replacement Property identified in such notice. (ii) By notice to the
QI, each Legal Entity may cease assigning to the QI such Legal Entity’s
Rights pursuant to this Section 2.04 with respect to any of its
Relinquished Property identified in such notice and any related Relinquished
Property Agreement, if then in existence, whereupon the property identified in
such notice shall cease to be Relinquished Property and any related agreement
shall cease to be a Relinquished Property

 

9

 

Agreement to the extent related
to the property specified in such notice. (iii) Not later than the Termination
Date specified in any notice of termination delivered pursuant to Section 7.01(a) hereof
or the Special Termination Date specified in Section 7.01(b) hereof,
the applicable Legal Entity or all the Legal Entities, in the case of the
occurrence of the Special Termination Date, shall cease assigning to the QI its
Rights with respect to any Relinquished Property arising on or after such date.
Any such notices shall only be effective with respect to property transferred
or received after the date on which such notice is given.

 

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

 

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

 

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

 

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

 

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

 

SECTION 2.07.
Matching of Relinquished and Replacement Property. Exchangor shall match
Replacement Property with Relinquished Property for each Exchange on

 

10

 

its books and records in
accordance with Section 1.1031(a)-2 of the Treasury Regulations and the
Safe Harbor set forth in Sections 4.01 and 4.02 of Revenue Procedure 2003-39.

 

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

 

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

 

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

 

ARTICLE III

 

Identification

 

SECTION 3.01.
Identification of Replacement Property. Any Legal Entity may, at any
time during the Identification Period, with respect to an Exchange, by written
notice to the QI, signed by such Legal Entity and sent to the QI in any manner
prescribed by Section 1.1031(k)-1(c)(2) of the Treasury Regulations,
identify and designate the Replacement Property with respect to the
Relinquished Property transferred in such Exchange; provided, however,
that (a) HVF shall not so identify and designate Replacement Property (i) after
11:59 p.m. on the seventh calendar day after the occurrence of a QI Parent
Downgrade Event that continues unremedied at such time, unless such QI Parent
Downgrade Event has been remedied or (ii) after the occurrence of an
Amortization Event with respect to any Series of Notes or an Event of
Termination pursuant to the Purchase Agreement; and (b) no Legal Entity
shall so

 

11

 

identify and designate
Replacement Property after the Special Termination Date. The Legal Entities
shall only designate Replacement Property that is like-kind to such
Relinquished Property, as defined in Sections 1.1031(a)-(b) and
1.1031(a)-2 of the Treasury Regulations. The Legal Entities shall identify as
Replacement Property either (a) no more than three vehicles in the
aggregate or (b) any number of vehicles whose aggregate fair market value
does not exceed 200% of the aggregate fair market value of the related
Relinquished Property involved in such Exchange.

 

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

 

(b)  Upon
the occurrence of an Amortization Event with respect to any Series of
Notes or an Event of Termination pursuant to the Purchase Agreement, any
identification pursuant to Section 3.01 with respect to Relinquished
Property of HVF which can be revoked pursuant to Section 3.02(a) shall
be revoked.

 

(c)  If a
QI Parent Downgrade Event shall have occurred and continues unremedied at 11:59 p.m.
on the seventh calendar day after the occurrence of such event, any
identification pursuant to Section 3.01 with respect to Relinquished
Property of HVF which can be revoked pursuant to Section 3.02(a) shall
be revoked.

 

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

 

ARTICLE IV

 

Accounts

 

SECTION 4.01.
Accounts. (a)  Each Legal Entity and the QI shall enter into the
Escrow Agreement with the QI and the Escrow Agent, pursuant to which the Legal
Entities and the QI shall maintain one or more Exchange Accounts and Joint
Disbursement Accounts, at Bank of New York or JPMorgan Chase Bank, N.A. One or
more Joint Collection Accounts have been or will be established and will be maintained
by the Collateral Agent in accordance with Section 2.5 of the Collateral
Agency Agreement and one or more HVF Exchange Accounts have been or will be
established and will be maintained by the Trustee in accordance with Section 5A.1
of the Base Indenture, each in the name of “BNY Midwest Trust Company, as
Trustee, and Hertz Car Exchange Inc., as Qualified Intermediary for HVF” and
shall be operated in accordance with the terms of this Agreement, the
Collateral Agency Agreement and the Base Indenture. If any Joint Collection
Account is not maintained in accordance with Section 2.5 of the Collateral
Agency Agreement, then within ten (10) Business Days of obtaining
knowledge of such fact, the Collateral Agent and the QI shall establish a new
Joint Collection Account which complies with such section and transfer
into the new Joint Collection Account all funds from the non-qualifying Joint
Collection Account. If any HVF Exchange Account is not maintained in accordance
with Section 5A.1 of the Base Indenture, then within ten (10) Business
Days of

 

12

 

obtaining knowledge of such
fact, the Trustee and the QI shall establish a new HVF Exchange Account which
complies with such section and transfer into the new HVF Exchange Account
all funds from the non-qualifying HVF Exchange Account.

 

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

 

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

 

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

 

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

 

(f)  All
Relinquished Property Proceeds (and any earnings thereon), whether in a Joint
Collection Account, a Joint Disbursement Account or an Exchange Account, shall
be held subject to Sections 1.1031(k)-1(g)(4)(ii) and 1.1031(k)-1(g)(6) of
the Treasury Regulations, including the restrictions on Exchangor’s right to
receive, pledge, borrow, or otherwise obtain the benefits of Relinquished
Property Proceeds and Qualified Earnings thereon held by the QI. Subject to the
limitation that each Legal Entity shall have no right to receive, pledge,
borrow, or otherwise obtain the benefits of Relinquished Property Proceeds or
the Qualified Earnings thereon held by either the QI or the bank maintaining
the account where such Relinquished Property Proceeds are on deposit,
Relinquished Property Proceeds may be withdrawn from any Exchange Account
or Joint Disbursement Account upon a Disbursement Occurrence with respect to
the related Relinquished Property. Upon any Disbursement Occurrence, the QI
shall, at such time and in satisfaction of the QI’s remaining obligations under
this Agreement as to the related Exchange with respect to such Disbursement
Occurrence, have the bank maintaining the Account where the applicable funds
are on deposit pay any remaining amount relating to such Exchange, including
without limitation accumulated interest as to such Exchange in any

 

13

 

Exchange Account, to, or as
directed by, the Legal Entities; provided that in the case of HVF, such amount
shall be paid to the Collection Account.

 

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

 

(a)  Identification
of Funds. On each Business Day, (i) each Legal Entity shall: (1) identify
funds in the Joint Collection Accounts as of such Business Day which constitute
Non-Qualified Funds with respect to such Legal Entity and direct the QI to
immediately transfer such funds to (A) in the case of Non-Qualified Funds
of HVF, the Collection Account and (B) in the case of Non-Qualified Funds
of Hertz or HGI, to such other account as shall be specified by the applicable
Legal Entity; (2) initiate on such Business Day proposed Electronic Funds
Transfers from the Joint Collection Accounts in order to transfer funds in the
Joint Collection Accounts as of such Business Day which constitute Relinquished
Property Proceeds with respect to Relinquished Property transferred by such Legal
Entity to the applicable Exchange Account and (3) notify the QI and, in
the case of transfers to the Collection Account or an HVF Exchange Account, the
Trustee of such proposed transfers and (ii) each Legal Entity shall:  (1) identify funds in the Exchange
Accounts as of such Business Day which constitute Non-Qualified Funds with
respect to such Legal Entity and direct the QI to immediately transfer such
funds to (A) in the case of Non-Qualified Funds of HVF, the Collection
Account and (B) in the case of Non-Qualified Funds of Hertz or HGI, to
such other account as shall be specified by the applicable Legal Entity; (2) initiate
on such Business Day proposed Electronic Funds Transfers from (x) an Exchange
Account in order to transfer funds in such Exchange Account as of such Business
Day which constitute Relinquished Property Proceeds with respect to
Relinquished Property transferred by a Legal Entity (but which funds were previously
transferred to the Exchange Account of a different Legal Entity) to the
applicable Exchange Account, provided that, in the case of an HVF Exchange
Account, no Aggregate Asset Amount Deficiency exists or would result therefrom,
and (y) a Hertz Exchange Account or an HVF Exchange Account in order to
transfer funds in such Exchange Account as of such Business Day which
constitute Relinquished Property Proceeds with respect to Relinquished Property
transferred by such Legal Entity hereunder to an HGI Exchange Account upon the
purchase of a vehicle by Hertz or HVF from HGI and (3) notify the QI and,
in the case of a transfer from an HVF Exchange Account, the Trustee of such
proposed transfers.

 

(b)  Approval
of Certain Transfers. If upon notification to the QI of the proposed
Electronic Funds Transfers of Relinquished Property Proceeds pursuant to
clause (i)(2) or (ii)(2) of Section 4.02(a) hereof,
the QI approves of such proposed Electronic Funds Transfers, the QI agrees to
take, within 30 minutes of the receipt of such notification of transfers, all
appropriate actions needed to approve and transmit such transfers. If the QI
does not approve of any of such proposed Electronic Funds Transfers of
Relinquished Property Proceeds, the QI shall immediately notify the applicable Legal
Entity, and in the case of Relinquished Property Proceeds of HVF, the Trustee,
and the banking institution maintaining the applicable Joint Collection Account
or Exchange Account via telephone or fax (any such notice given by telephone to
be confirmed in writing), of the disapproval and the reasons for such
disapproval. The QI shall cause the bank maintaining the Joint Collection
Accounts and Exchange Accounts to accept the instructions of the applicable Legal
Entity to make each Electronic Funds Transfer

 

14

 

described in Section 4.02(a) hereof
that is subsequently approved by the QI pursuant to this Section 4.02(b) hereof.

 

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

 

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

 

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

 

SECTION 4.03.
Payment for Replacement Property.

 

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

 

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

 

15

 

confirmed in writing), of the
disapproval and the reasons for such disapproval. The QI shall cause the bank
maintaining each Joint Disbursement Account to accept the instructions of HGI
to make each Electronic Funds Transfer described above that is subsequently
approved by the QI.

 

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

 

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

 

(e)  Funding
by Exchangor. In the event that the aggregate funds transferred from an HGI
Exchange Account to the Joint Disbursement Accounts on any Business Day are
insufficient to fund all Replacement Property Acquisition Costs and Non-LKE
Disbursements to be made from each Joint Disbursement Account on such day, the
QI shall promptly notify HGI of such shortfall, and HGI may transfer
Additional Subsidies to the applicable Joint Disbursement Account in an amount
sufficient for the QI to acquire the Replacement Property and make such Non-LKE
Disbursements. The QI shall not be required to pay Replacement Property
Acquisition Costs or make Non-LKE Disbursements for which sufficient funds are
not available.

 

SECTION 4.04.
Investment of Funds in the Exchange Account.

 

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

 

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

 

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

 

16

 

SECTION 4.06.
Disbursement Occurrence. All Relinquished Property Proceeds and
Additional Subsidies shall be held subject to the terms of this Agreement, the
Escrow Agreement, and the Collateral Agency Agreement. In particular, all
Relinquished Property Proceeds (and any Qualified Earnings thereon) shall be
held subject to Treasury Regulations Sections 1.1031(k)-1(g)(4)(ii) and
(g)(6). Without limiting the foregoing, Exchangor’s rights to receive, pledge,
borrow, or otherwise obtain the benefits of any Relinquished Property Proceeds
(whether in the form of money or other property) and any Qualified Earnings
thereon are expressly limited as provided in Treasury Regulations Sections
1.1031(k)-1(g)(4)(ii) and 1.1031(k)-1(g)(6). Exchangor shall have no right
to receive, pledge, borrow, or otherwise obtain the benefits of Relinquished
Property Proceeds or the Qualified Earnings thereon held in the Accounts except
for amounts withdrawn solely for one of the following occurrences (each a “Disbursement
Occurrence”):  (a) if Exchangor
has not identified, or has revoked an identification with respect to, any
Replacement Property on or before the end of the Identification Period, (b) after
identification and after the Identification Period has expired, Exchangor has
received all of the identified Replacement Property to which Exchangor is
entitled, (c) after the end of the Exchange Period for any Relinquished
Property or (d) HGI, HVF or Hertz receiving written notification from one
or more Manufacturers of Identified Replacement Vehicles with respect to
Relinquished Property, stating that Manufacturers of Identified Replacement
Vehicles will not be delivering, before the end of the applicable Exchange
Period or otherwise, Identified Replacement Vehicles with an aggregate purchase
price of at least 80% of the aggregate proceeds of the sale of such Relinquished
Property. All funds held in the Joint Collection Accounts, Exchange Accounts
and Joint Disbursement Accounts shall be subject to such restrictions as are
necessary for such accounts to satisfy the requirements of Sections 5.02 and
5.03 of Rev. Proc. 2003-39.

 

ARTICLE V

 

Indemnity By Each Legal Entity

 

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

 

SECTION 5.02.
Indemnity. (a)  Hertz agrees to indemnify, hold harmless, and
defend the QI, its respective agents, officers, directors, employees, members
and affiliates (each a “QI Indemnitee”) from and against any and all
losses, liabilities, costs and expenses suffered in connection with any claims
or actions to the extent directly related to the QI’s involvement under this
Agreement as a “Qualified Intermediary”, pursuant to Treasury Regulation Section 1.1031(k)-1(g)(4)(iii),
unless such losses, liabilities, costs or expenses resulted from the gross
negligence or willful misconduct of a QI Indemnitee. This indemnity shall
include losses, liabilities and claims resulting from payments, withdrawals or
orders made or purported to be made in accordance with, or from actions taken
in good faith and in reliance upon the provisions of this Agreement. This
indemnity shall include any and all claims arising from or in connection with
the presence, release, threat of release, generation, analysis, storage,
transportation, discharge or disposal of hazardous substances or hazardous materials
(as such terms or similar terms may be defined in the provisions of
applicable federal, state or local laws, irrespective of whether such laws,
regulations, directives or ordinances are in existence at the date of this

 

17

 

Agreement) to, in, under,
about, adjacent, or from any Relinquished Property or Replacement Property, and
all costs of investigation, soil and water sampling, drilling, testing, reporting,
repair, removal, remediation, clean-up, closure, decontamination and
detoxification of any property, including the rental and use of any equipment
used in connection therewith; and including the cost of any professionals and
persons performing any services in connection with any environmental clean-up,
in each case, to the extent related to the QI’s involvement under this
Agreement.

 

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

 

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

 

ARTICLE VI

 

Representations, Warranties And Covenants

 

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

 

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

 

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

 

(c)  Validity
of Contemplated Transactions. The execution and delivery of this Agreement
by the QI and the performance of the QI’s obligations hereunder (i) will
not violate the certificate of incorporation or bylaws of the QI, (ii) will
not conflict with, violate, result in a breach of or constitute a default under
any provision of applicable law, (iii) will not violate any

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)  Not a Disqualified Person. Prior to,
as of and after the date hereof and all of the time that this Agreement is in
force and effect, the QI is not a disqualified person within the meaning of
such term as set forth in Section 1.1031(k)-1(k) of the Treasury
Regulations (a

 

19

 

“Disqualified Person”),
taking into account all exceptions and exclusions therefrom. The QI shall not
become a Disqualified Person during the period commencing on the execution date
hereof through the Termination Date and, if any Exchange is pending after the
Termination Date, including the Exchange Period relating to the same.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(f)  Not
a Disqualified Person. Such Legal Entity hereby represents and warrants to
the QI that, to the best of such Legal Entity’s knowledge, as of the date
hereof, the QI is not a Disqualified Person. Such Legal Entity shall not cause
the QI to become a Disqualified Person

 

21

 

during the period commencing on
the execution date hereof through and including the date of transfer of any
Replacement Property to such Legal Entity as part of the LKE Program.

 

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

 

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

 

SECTION 6.05.
Maintenance of Separate Existence. The QI covenants and agrees that it
shall do all things necessary to continue to be readily distinguishable from
Owner and its affiliates and maintain its corporate existence separate and apart from
that of Owner and its affiliates including, without limitation, (i) practicing
and adhering to organizational formalities, such as maintaining appropriate
books and records; (ii) observing all organizational formalities in
connection with all dealings between itself and Owner, and the affiliates or
any unaffiliated entity with respect to Owner; (iii) observing all
procedures required by its certificate of incorporation, its by-laws and the
laws of the state of its incorporation; (iv) acting solely in its name and
through its duly authorized officers or agents in the conduct of its
businesses; (v) managing its business and affairs by or under the
direction of its board of directors; (vi) ensuring that its board of
directors duly authorizes all of its actions; (vii) maintaining at least
one director who is an Independent Director and maintaining the requirement in
its organic documents that no Material Action may be taken without the
affirmative vote of its Independent Director; (viii) owning or leasing
(including through shared arrangements with affiliates) all office furniture
and equipment necessary to operate its business; (ix) not (A) having
or incurring any indebtedness to Owner or its affiliates or any other Person; (B) guaranteeing
or otherwise becoming liable for any obligations of Owner or its affiliates or
any other Person; (C) having obligations guaranteed by Owner or its
affiliates or any other Person; (D) holding itself out as responsible for
debts of Owner or its affiliates or any other Person or for decisions or
actions with respect to the affairs of Owner or its affiliates or any other
Person; (E) operating or purporting to operate as an integrated, single
economic unit with respect to Owner, its affiliates or any other Person; (F) seeking
to obtain credit or incur any obligation to any third party based upon the
assets of Owner, its affiliates or any other Person; (G) inducing any such
third party to reasonably rely on the creditworthiness of Owner, its affiliates
or any other Person; and (H) being directly or indirectly named as a
direct or contingent beneficiary or loss payee on any insurance policy of Owner,
its affiliates or any other Person; (x) maintaining its deposit and other
bank accounts and all of its assets separate from those of any other Person;
(xi) maintaining its financial records separate and apart from those
of any other Person; (xii) not suggesting in any way, within its financial
statements, that its assets are available to pay the claims of creditors of Owner,
its affiliates or any other Person; (xiii) compensating all its employees,
officers, consultants and agents for services provided to it by such Persons
out of its own funds; (xiv) maintaining office space separate and apart from
that of Owner, its affiliates and any other Person and a telephone number
separate and apart from that of Owner, its affiliates and any other

 

22

 

Person; (xv) conducting all
oral and written communications, including, without limitation, letters,
invoices, purchase orders, contracts, statements, and applications solely in
its own name; (xvi) having separate stationery from Owner, its affiliates
or any other Person; (xvii) accounting for and managing all of its
liabilities separately from those of Owner, its affiliates and any other Person;
(xviii) allocating, on an arm’s-length basis, all shared corporate
operating services, leases and expenses, including those associated with the
services of shared consultants and agents and shared computer and other office
equipment and software; and otherwise maintaining an arm’s-length relationship
with each of Owner, its affiliates and any other Person; (xix) refraining
from filing or otherwise initiating or supporting the filing of a motion in any
bankruptcy or other insolvency proceeding involving Owner to substantively
consolidate Owner with an affiliate or any other Person; (xx) remaining
solvent and assuring adequate capitalization for the business in which it is
engaged; (xxi) conducting all of its business (whether written or oral)
solely in its own name so as not to mislead others as to the identity of Owner
or its affiliates; and (xxii) not taking any Material Action without the affirmative
vote of its Independent Director.

 

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

 

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

 

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

 

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

 

SECTION 6.10.
QI Parent Downgrade Event Sale.

 

(a)  If a
QI Parent Downgrade Event occurs, Hertz may deliver a written notice (a “Sale
Notice”) to Owner at any time after the occurrence of such QI Parent
Downgrade Event. If Hertz delivers a Sale Notice and does not deliver another
written notice to the Owner withdrawing such sale Notice before the Downgrade
Sale is consummated, then the Owner shall transfer all of the capital stock of
the QI to such purchaser as may be designated by Hertz in such Sale Notice
(the “Downgrade Sale”) on the date specified for such transfer in the Sale
Notice,

 

23

 

which date shall not be less
than five days (or such shorter period as may be agreed upon by Hertz and
Owner) after the delivery of such Sale Notice. Any such purchaser shall not be
Hertz or a Disqualified Person.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)  The
QI acknowledges that Hertz owns the Licensed Trademark, and that it has no
rights with respect thereto other than the licenses set forth in this Section 6.11.
Any rights

 

24

 

in the Licensed Trademark
arising from the use of the Licensed Trademark by the QI shall inure and accrue
exclusively to Hertz.

 

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

 

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

 

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

 

(g)  In
the event the QI is named as defendant in any action based on its use of the
Licensed Trademark, the QI agrees to immediately notify Hertz, and Hertz shall
have the right to intervene in any such action and to control and direct the
defense thereof, including the right to select defense counsel, provided that
in the event Hertz chooses to exercise control Hertz agrees to reimburse the QI
for the cost of the QI’s defense and to indemnify the QI against all damages
arising therefrom, provided that the QI has complied with all its obligations
under this Section 6.11 and has cooperated with Hertz in the defense of
such action.

 

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

 

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

 

(b)  Notwithstanding
anything to the contrary set forth in Section 6.12(a), (i) the QI may disclose
any of the Confidential Information provided by a Legal Entity to any bank or
other governmental regulatory authority having jurisdiction over the QI upon
the request of the regulatory authority without having to provide such Legal
Entity with notice of any kind and (ii) in the event that the QI is
requested or required (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any Confidential Information, it is agreed that the QI
will, if reasonably practicable and to the extent permitted by law, provide
Hertz with prompt notice of such request or requirement so that

 

25

 

Hertz may seek an
appropriate protective order or waive compliance by the QI with the provisions
of this Agreement, and if, in the absence of such protective order or the
receipt of such waiver hereunder, the QI is nonetheless, in the opinion of the
QI’s counsel, legally required to disclose such Confidential Information or
else stand liable for contempt or suffer other censure or penalty, the QI may disclose
such information without liability hereunder, provided, however, that the QI
shall disclose only that portion of such Confidential Information which it is
legally required to disclose.

 

ARTICLE VII

 

Term And Compensation; Escrow Agreement Termination

 

SECTION 7.01.
Term. (a)  The term of this Agreement shall begin on the date first
written above and shall continue for thirty-six (36) months from the date
hereof. This Agreement shall be automatically renewed for successive thirty-six
(36) month terms, unless the QI notifies each of the Legal Entities, the
Trustee and each Enhancement Provider (or, if there is an agent for two or more
Enhancement Providers, such agent) in writing at least one-hundred-twenty (120)
days prior to the end of a term of its desire to terminate this Agreement. In
addition, (i) a Legal Entity may terminate this Agreement at any time
with respect to such Legal Entity, by providing not less than sixty (60) days’
prior written notice to the QI, the Trustee and each Enhancement Provider (or,
if there is an agent for two or more Enhancement Providers, such agent) and (ii) this
Agreement shall automatically terminate with respect to HVF (x) at 11:59 p.m.
on the 45th calendar day after the occurrence of a QI Parent Downgrade Event
that continues unremedied at such time (y) on the date of the occurrence
of an Amortization Event with respect to any Series of Notes or (z) the
date of the occurrence of an Event of Termination under the Purchase Agreement.
The date which is (x) the end of a thirty-six (36) month term (as may be
renewed), (y) sixty (60) days after a Legal Entity’s notice as provided
herein, solely with respect to such Legal Entity, or (z) (i) the 45th
calendar day following the occurrence of a QI Parent Downgrade Event that
continues unremedied at such time, (ii) the date of the occurrence of an
Amortization Event with respect to any Series of Notes or (iii) the
date of the occurrence of an Event of Termination under the Purchase Agreement,
solely with respect to HVF, shall be called the “Termination Date”. Upon
any such termination, (i) this Agreement shall remain in effect with
respect to Relinquished Property Proceeds relating to a sale to a Buyer prior
to the Termination Date and for which no Disbursement Occurrence has taken
place, (ii) any indemnities and obligations owing to the QI under this
Agreement as of the Termination Date shall survive until satisfied or otherwise
terminated and (iii) no further Relinquished Property Proceeds, Qualified
Earnings thereon or other amounts attributable to the transfer of an HVF
Vehicle or other HVF Vehicle Collateral shall be transferred from an HVF Exchange
Account to any Escrow Account, Joint Disbursement Account or any account other
than the Collection Account. Termination of this Agreement pursuant to this Section 7.01(a) shall
not affect any rights or obligations of the parties hereto under an Exchange
that has not yet been completed as of the Termination Date, and in the event
that this Agreement terminates with respect to any party hereto pursuant to
this Section 7.01(a), such party shall not take any action that causes a
pending Exchange not to qualify under Section 1031 of the Code or in a
manner that would violate Sections 1.1031(k)-1(g)(4)(ii) or (g)(6) of
the Treasury Regulations or Revenue Procedure 2003-39. Subject to the
restrictions above, upon the Termination Date, the QI shall, at such time, and
in satisfaction of the QI’s remaining obligations under this Agreement, pay all

 

26

 

funds in any Account to the
applicable Legal Entity or such Legal Entity’s designee or, in the case of
funds in an HVF Exchange Account or otherwise arising from or attributable to
the disposition of Vehicles owned by HVF, to the Collection Account. The
Servicer will provide notice of the Termination Date to each Rating Agency.

 

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

 

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

 

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

 

27

 

ARTICLE VIII

 

Miscellaneous

 

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

 

SECTION 8.02.
Notices. All notices, requests, demands, waivers, consents, approvals or
other communications required or permitted hereunder will be in writing, will
be deemed given when actually received and will be given by personal delivery,
by facsimile transmission with receipt acknowledged, by means of electronic
mail, by same day or overnight courier services or by registered or certified
mail, postage prepaid, return receipt requested, to the following addresses:

 

If to the QI or the Owner:

J.P. Morgan Property Exchange Inc.

1001 Hingham Street, Suite 300

Rockland, MA 02370

Attention:  William P. Lopriore, Jr.

Fax:  (781) 982-9558

 

If to Hertz,
HGI, or HVF:

 

c/o The Hertz Corporation

225 Brae Boulevard

Park Ridge, NJ 07656

Attention: 
Treasurer

Fax: 
(201) 307-2476

 

with a copy to the Administrator at:

 

The Hertz Corporation

225 Brae Boulevard

Park Ridge, NJ 07656

Attention: 
Treasurer

Fax: 
(201) 307-2476

 

If to Trustee:

 

 

 

 

Fax:
             

E-Mail:
            

 

28

 

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

 

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

 

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

 

29

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

30

 

delivered by each other party
hereto. It will not be necessary in making proof of this Agreement or any counterpart hereof
to produce or account for any other counterparts.

 

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

 

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

 

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

 

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

 

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

 

SECTION 8.16.
Consequential Damages. Notwithstanding anything to the contrary in this
Agreement, in no event shall the QI or any director, officer, employee, member,
shareholder or agent of the QI be liable for, and each Legal Entity releases
the QI and each director, officer, employee, member, shareholder or agent of
the QI from, any and all liability for special, indirect, incidental or
consequential damages of any kind whatsoever (including lost profits) even if
the QI or any director, officer, employee, member, shareholder or agent of the
QI is advised of such loss or damage and regardless of the form of action.
The aforesaid is not 

 

31

 

intended to and shall in no way
diminish or bar Hertz’s obligation to indemnify the QI Indemnitees for third
party claims for such damages.

 

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

 

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

 

SECTION 8.19.
No Petitions. (a)  Each Legal Entity hereby covenants and agrees
that, prior to the date which is one year and one day after the payment in full
of all of the Notes, it will not institute against, or join any other Person in
instituting against, the QI, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States. In the event that
any Legal Entity takes action in violation of this Section 8.19(a), the QI
agrees, for the benefit of the HVF Secured Parties, that it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such a petition by any Legal Entity against the QI or the commencement of such
action and raise the defense that such Legal Entity has agreed in writing not
to take such action and should be estopped and precluded therefrom and such
other defenses, if any, as its counsel advises that it may assert.

 

(b)  The
QI hereby covenants and agrees that, prior to the date which is one year and
one day after the payment in full of all of the Notes, it will not institute
against, or join any other Person in instituting against, HVF, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States. In the event that the QI takes action in violation of this Section 8.19(b),
HVF agrees, for the benefit of the HVF Secured Parties, that it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such a petition by the QI against HVF or the commencement of such action and
raise the defense that the QI has agreed in writing not to take such action and
should be estopped and precluded therefrom and such other defenses, if any, as
its counsel advises that it may assert.

 

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

 

32

 

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

 

SECTION 8.21.
Effective Time. Notwithstanding anything to the contrary in this
Agreement, all the provisions of this Agreement (other than Sections 8.05, 810
and this Section 8.21) shall not become effective until January 6,
2006. Upon such date, the provisions of this Agreement shall be in full force
and effect and shall be binding upon all parties hereto.

 

[signature page follows]

 

33

 

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

 

	
   

  	
  THE HERTZ CORPORATION,

  
	
   

  	
   

  
	
   

  	
      by

  
	
   

  	
   

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ VEHICLE FINANCING LLC,

  
	
   

  	
   

  
	
   

  	
      by

  
	
   

  	
   

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ GENERAL INTEREST LLC,

  
	
   

  	
   

  
	
   

  	
      by

  
	
   

  	
   

  	
  /s/ Robert H. Rillings

  
	
   

  	
   

  	
  Name:

  	
  Robert H. Rillings

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HERTZ CAR EXCHANGE INC.,

  
	
   

  	
   

  
	
   

  	
      by

  
	
   

  	
   

  	
  /s/ William P. Lopriore

  
	
   

  	
   

  	
  Name:

  	
  William P. Lopriore

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.P. MORGAN PROPERTY HOLDINGS LLC,

  
	
   

  	
   

  
	
   

  	
      by

  
	
   

  	
   

  	
  /s/ William P. Lopriore

  
	
   

  	
   

  	
  Name:

  	
  William P. Lopriore

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  

 

34

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