BARCLAYS 745 Seventh Avenue New York, NY 10019

DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH DEUTSCHE BANK SECURITIES INC. 60 Wall Street New York, New York 10005

BANK OF AMERICA, N.A. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED One Bryant Park New York, New York 10036

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                To help facilitate an orderly and effective syndication of the Financing and the Commitments provided herein, you agree that, prior to and during the primary syndication of the Financing prior to the Closing Date, you will not and will not permit any of your subsidiaries to, and will use commercially reasonable efforts to cause the Acquired Business not to, syndicate or issue, attempt to syndicate or issue, announce or authorize the announcement of the syndication or issuance of any competing offering, placement or arrangement of any debt securities or bank financing (other than a Permitted Financing (as defined below)), without the prior written consent of the Required Lead Arrangers (such consent not to be unreasonably withheld) if such debt securities or bank financing would have, in the reasonable judgment of the Required Lead Arrangers, a detrimental effect upon the primary syndication of the Financing.  The Lead Arrangers shall give prompt written notice to the Company of the completion of the primary syndication of the Financing.  The term “Permitted Financing” means (a) the Financing and (i) any high yield debt securities issued by the Borrower and (ii) any incremental term loan debt incurred by the Borrower under the Borrower’s existing Senior Term Facility, in each case to the extent incurred by the Borrower to finance the Acquisition in lieu of a funding (in whole or in part) of the Loans, (b) any financing by Dakota or any of its subsidiaries permitted pursuant to the Acquisition Agreement, (c) any Specified Financing (as defined below), (d) any debt securities or bank financing consisting of or in connection with any Special Purpose Financing (as defined in the Existing Senior Indenture) and (e) any debt securities or bank financing of or by any Foreign Subsidiary (as defined in the Existing Senior Indenture), whether or not the Company or any of its subsidiaries is a guarantor in respect thereof or otherwise a party to any documentation governing such debt securities or bank financing.  The term “Specified Financing” means (i) any financing agreement or arrangement of Holding, the Company or any of its subsidiaries with a principal or notional amount that, in each case, does not individually exceed $50 million, (ii) any renewal, extension, deferral, replacement, refunding, amendment, restatement, supplementation, reissuance, resale, substitution or refinancing (whether in whole or in part, whether with one or more of the original parties thereto or with other parties or otherwise) of the 5.25% Convertible Senior Notes Due 2014 of the Company and/or indebtedness incurred in connection with the Donlen GN Funding II Variable Funding Notes and (iii) any financing incurred in connection with any asset backed securitization financing, lease syndication facilities and like-kind exchange programs sponsored by Donlen Corporation, a subsidiary of the Company.

 

 

 

 

 

 

 

 

	Very truly yours,
	BARCLAYS BANK PLC
	By:	/s/ Mark C. Liggitt
		Name:  Mark C. Liggitt
		Title:  Managing Director

 

 

 

 

 

 

 

 

 

 

 

 

	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
	By:	/s/ Michael Browne
		Name:  Michael Browne
		Title:  Managing Director

 

 

 

 

 

 

 

 

 

Accepted and Agreed to as of the date first above written:
THE HERTZ CORPORATION
By:	/s/ Scott Massengill
	Name:  Scott Massengill
	Title:  Treasurer

 

 

 

 

 

 

 

 

Required Lenders and Amendments:		No less favorable to the Company than the corresponding provisions in the Senior Term Agreement).
Yield Protection, Increased Costs, Gross-ups and other Tax Indemnities:		The Financing Documentation shall include customary protective provisions (no less favorable to the Company than the Senior Term Agreement, and with protections with respect to Dodd Frank Wall Street Reform and Consumer Protection Act and Basel III to be mutually agreed) for such matters as capital adequacy, increased costs, reserves, funding losses, illegality and withholding taxes, provided that the tax gross-up and indemnity will not apply to any U.S. federal withholding taxes imposed pursuant to current Section 1471 or Section 1472 of the U.S. Internal Revenue Code of 1986, as amended (and any amended or successor version that is substantively comparable), and any regulations issued thereunder or published administrative guidance issued pursuant thereto.  The Borrower shall have the right to replace any lender that charges an amount with respect to contingencies described in the immediately preceding sentence.
Governing Law:		All documentation shall be governed by the internal laws of the State of New York.

 

 

 

 

 

Borrower:		The Company (the “Borrower”).
Extended Term Loan Facility:		The Loans will convert into Rollover Loans in an aggregate principal amount equal to 100% of the aggregate principal amount of the Loans on the Conversion Date.  The Rollover Loans will be governed by the Financing Documentation and, except as set forth below, shall have the same terms as the Loans.
Maturity:		Eight years from the Closing Date.
Interest:		The Rollover Loans shall bear interest at the Fixed Rate.
		Interest shall be payable in arrears semi-annually commencing on the date that is six months following the Conversion Date, computed on the basis of a 360-day year consisting of twelve 30-day months.
Covenants, Events of Default, Mandatory Prepayments and Optional Prepayments:		From and after the Conversion Date, the covenants, events of default and mandatory prepayments applicable to the Rollover Loans will conform to those applicable to the Rollover Notes as set forth in Exhibit B-2 to the Commitment Letter.
		Any Rollover Loans will be repayable in whole or in part at the option of the Company at par plus accrued and unpaid interest, if any.
Governing Law:		All documentation shall be governed by the internal laws of the State of New York.

 

 

 

 

Terms Relating to the Issuer:		The Company (the “Issuer”).
Securities:		An aggregate principal amount of senior unsecured fixed rate high yield securities (the “Rollover Notes”) equal to the aggregate principal amount of the Rollover Loans being converted into such Rollover Notes.
Maturity:		The Rollover Notes will mature approximately eight years from the Closing Date.
Interest:		A fixed rate per annum equal to the Fixed Rate.  Interest will be payable semi-annually.
Guarantees:		The Rollover Notes will be guaranteed on a senior unsecured basis by each U.S. restricted subsidiary of the Company) to the extent that such subsidiary guarantees all or a portion of the indebtedness of the Company under the Existing Senior Indenture (the “Guarantors”).  A subsidiary’s guarantee will be released in specified circumstances, including upon the consummation of any permitted transaction after which such subsidiary is no longer a subsidiary or otherwise obtains a release of its guarantee under the Existing Senior Indenture (except as a result of repayment or other discharge of all obligations outstanding under the Existing Senior Indenture at maturity or otherwise), on terms no less favorable to the Company than those in the Existing Senior Indenture.
Documentation:		The Rollover Notes will be governed by an indenture (the “Indenture”) in form and substance consistent with this Exhibit B-2 and otherwise no less favorable to the Company than the Existing Senior Indenture.
Change of Control:		Each holder of Rollover Notes will be entitled to require the Company, and the Company must offer, to repurchase the Rollover Notes held by such holder at a price of 101% of principal amount, plus accrued and unpaid interest, if any, to the date of repurchase, in the event of a Change of Control (to be defined as in the Existing Senior Indenture), unless the Issuer shall have exercised its right to redeem such Rollover Notes.  Other terms of the Change in Control provision will be no less favorable to the Company than the Existing Senior Indenture.

Optional Repayment:		Any Rollover Notes owned by any Lender or any affiliate thereof as of the Conversion Date (that have not been sold by it at the time of notice of redemption or purchase) will be redeemable or purchaseable in whole or in part at the option of the Company at a price equal to 100% of the aggregate principal amount of the Rollover Notes to be redeemed or purchased plus accrued and unpaid interest, if any.
		With respect to all Rollover Notes not covered by the foregoing, except as provided below, the Rollover Notes may not be redeemed prior to the fourth anniversary of the Closing Date. Thereafter, the Rollover Notes may be redeemed, in whole or in part, at the option of the Company at a price equal to 100% of the aggregate principal amount redeemed plus accrued and unpaid interest, if any, plus a premium equal to half the coupon of the Rollover Notes with such premium declining ratably to zero on the sixth anniversary of the Closing Date.
		In addition, at any time prior to the fourth anniversary of the Closing Date, the Issuer may redeem on one or more occasions Rollover Notes at redemption prices based upon the yield of U.S. Treasury securities plus 50 basis points to the first fixed redemption date plus accrued and unpaid interest.
		In addition, at any time prior to the third anniversary of the Closing Date, the Issuer may redeem on one or more occasions, Rollover Notes in a principal amount equal to up to 35% of the aggregate principal amount of Rollover Notes originally issued (including any additional Rollover Notes issued after the date of the Indenture) at a premium equal to the applicable coupon, with an amount equal to all or part of the proceeds of one or more equity offerings; provided, however, that Rollover Notes in a principal amount equal to at least 65% of the aggregate principal amount of such Rollover Notes originally issued remain outstanding immediately after such redemption.
Covenants:		The Indenture will contain affirmative and negative covenants of the Company, to apply to the Company and its restricted subsidiaries, and limited to the following:  (i) furnishing of financial information, (ii) restrictions on liens, (iii) restrictions on indebtedness, (iv) restrictions on restricted payments, including dividends and investments, (v) restrictions on limitations on distributions from subsidiaries, (vi) restrictions on sales of subsidiary stock and assets, (vii) restrictions on mergers and consolidations and sale of all or substantially all assets, (viii) restrictions on transactions with affiliates, (ix) payment of the Rollover Notes, (x) maintenance of office or agency, (xi) waiver of stay/usury laws and (xii) compliance certificates of the Company.  The affirmative and negative covenants will be, and will include carve-outs and exceptions, no less favorable to the Company than those in the Existing Senior Indenture.  The Indenture will contain no affirmative or negative covenants of the Company or any affiliate thereof other than the foregoing.

		The Indenture will provide for a termination of covenants upon achievement of an investment grade rating, on terms consistent with the Existing Senior Indenture.
Defeasance; Satisfaction and Discharge:		Terms no less favorable to the Company than the corresponding provisions in the Existing Senior Indenture.
Registration Rights:		The Company will be required to file a shelf registration statement with respect to the Rollover Notes (as defined below) (a “Shelf Registration Statement”). The Company will pay liquidated damages in the form of increased interest of 0.25% on the principal amount of such Rollover Notes outstanding to holders thereof (i) if the Shelf Registration Statement is not declared effective by the SEC within 365 days of the date of issuance of such Rollover Notes, until the earlier of the date such Shelf Registration Statement is declared effective (as applicable) and the date such Rollover Notes may be sold by the applicable holder without registration under the Securities Act of 1933, as amended (the “Securities Act”), and (ii) during any period of time (subject to customary exceptions no less favorable to the Company than those in that exchange and registration rights agreement dated as of March 13, 2012 entered into in connection with the Existing Senior Indenture) following the effectiveness of the Shelf Registration Statement that such Shelf Registration Statement is not available for sales thereunder until the Company is no longer required to keep such Shelf Registration Statement effective under the terms of the Financing Documentation (which in any event shall be no later than the date on which such Rollover Notes may be sold without registration under the Securities Act).  After 90 days, the liquidated damages will increase by 0.25% up to a maximum of 0.50% in the aggregate.  At the Company’s election, the Company may file an exchange offer registration statement in lieu of a Shelf Registration Statement.

Events of Default:		The Indenture will include the following events of default, to apply to the Company and its restricted subsidiaries, in each case (including as to grace periods, thresholds and qualifications) no less favorable to the Company than those in the Existing Senior Indenture:  (i) failure to pay principal or interest on the Rollover Notes when due, (ii) breach of other provisions of the Rollover Notes, (iii) “cross-acceleration” to material payment defaults on or acceleration of certain other material indebtedness in excess of an amount to be agreed upon, (iv) undischarged judgments in excess of an amount to be agreed upon, (v) certain bankruptcy events and (vi) actual invalidity of any material guarantee of the Rollover Notes (if applicable).  The Indenture will contain no other events of default.
Governing Law:		All documentation shall be governed by the internal laws of the State of New York.

 

 

(a)

The Tender Offer shall be consummated substantially concurrently with the initial funding of the Loans without any waiver of the conditions set forth in Annex I to the Acquisition Agreement, which waiver is materially adverse to the Lenders (unless the waiver of such condition has been approved by the Required Lead Arrangers, which approval shall not be unreasonably withheld or delayed).

(b)

The Financing Documentation consistent with the Term Sheet and the Commitment Letter shall have been executed by the Borrower and the Guarantors and delivered to the applicable Administrative Agent. The applicable Administrative Agent shall have received such additional customary certificates, legal opinions and other documents as the Required Lead Arrangers shall reasonably request.

(c)

The Specified Representations shall be true and correct in all material respects on and as of the date of the borrowing (although any Specified Representation that expressly relates to a given date or period shall be required only to be true and correct in all material respects as of the respective date or for the respective period, as the case may be) (it being understood that the representation in Section 3.06(a) (including any related definitions therein to the extent those definitions are used therein) of the Acquisition Agreement shall not have been modified, waived or amended without the consent of the Required Lead Arrangers).

(d)

The Lenders shall have received all fees required to be paid or delivered by the Borrower to them pursuant to the Fee Letter on or prior to the Closing Date.

(e)

The Administrative Agent shall have received a certificate of the chief financial officer of the Company certifying the solvency, as of the Closing Date after giving effect to the Transactions, of the Company and its subsidiaries on a consolidated basis, in customary form as reasonably agreed between the Administrative Agent and the Company.

(f)

The Administrative Agent shall have received all documentation and other information about the Borrower and the Guarantors as has been reasonably requested in writing at least 10 days prior to the Closing Date by the Administrative Agent that the Administrative Agent reasonably determines is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the PATRIOT Act.