EXHIBIT 10.1
EXECUTION COPY
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LOAN AGREEMENT
dated as of August 7, 1997
between
RCTR, INC.,
as Borrower
and
FCTR, INC.,
as Lender
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TABLE OF CONTENTS
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Page
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ARTICLE I. Certain Definitions..........................................................1
SECTION 1.1. Certain Definitions................................................1
SECTION 1.2. Accounting and Financial Determinations............................1
SECTION 1.3. Cross References; Headings.........................................2
SECTION 1.4. Interpretation.....................................................2
ARTICLE II. Loan Commitment of Xxxxx....................................................2
SECTION 2.1. Loan Commitment....................................................2
SECTION 2.2. Certain Waivers....................................................3
SECTION 2.3. Conditions.........................................................3
SECTION 2.4. Use of Proceeds....................................................3
ARTICLE III. Loan Notes; Loan Procedure; Recordkeeping..................................3
SECTION 3.1. Loan Notes.........................................................3
SECTION 3.2. Loan Procedure.....................................................3
SECTION 3.3. Recordkeeping......................................................4
ARTICLE IV. Interest....................................................................4
SECTION 4.1. Interest Rate on Loans.............................................4
SECTION 4.2. Interest Payment Dates.............................................4
SECTION 4.3. Setting of Rates...................................................4
SECTION 4.4. Supplemental Interest..............................................4
ARTICLE V. Repayment....................................................................4
SECTION 5.1. Mandatory Payment of Loans.........................................4
SECTION 5.2. Voluntary Prepayments..............................................5
ARTICLE VI. Making of Payments..........................................................5
SECTION 6.1. Making of Payments.................................................5
SECTION 6.2. Due Date Extension.................................................5
SECTION 6.3. Application of Sale Proceeds.......................................5
ARTICLE VII. Loan Collateral Security...................................................6
SECTION 7.1. Grant of Security Interest.........................................6
SECTION 7.2. Certificates of Title..............................................6
SECTION 7.3. Release of Loan Collateral.........................................6
SECTION 7.4. Change of Location or Name.........................................7
SECTION 7.5. Deliveries; Further Assurances.....................................7
ARTICLE VIII. Representations and Warranties............................................7
SECTION 8.1. Organization; Power................................................7
SECTION 8.2. Authorization......................................................7
SECTION 8.3. Enforceability.....................................................8
SECTION 8.4. Governmental Approvals.............................................8
SECTION 8.5. Financial Information; Financial Condition.........................8
SECTION 8.6. Litigation; Compliance with Laws...................................8
SECTION 8.7. Liens..............................................................8
SECTION 8.8. Employee Benefit Plans.............................................9
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SECTION 8.9. Investment Company Act; Public Utility Holding Company Act........9
SECTION 8.10. Regulations G, T, U and X.........................................9
SECTION 8.11. Proceeds..........................................................9
SECTION 8.12. Business Locations; Trade Names...................................9
SECTION 8.13. Taxes.............................................................9
SECTION 8.14. No Consent; Governmental Authorizations...........................10
SECTION 8.15. Eligible Vehicles.................................................10
SECTION 8.16. Title to Assets; Security Interests...............................10
SECTION 8.17. No Material Misstatements........................................10
SECTION 8.18. Insurance.........................................................10
SECTION 8.19. Collateral Agreement..............................................11
SECTION 8.20. No Property.......................................................11
SECTION 8.21. Burdensome Provisions.............................................11
SECTION 8.22. Solvency..........................................................11
SECTION 8.23. Ownership; Subsidiaries...........................................11
SECTION 8.24. No Material Adverse Change........................................11
SECTION 8.25. Other Representations.............................................11
SECTION 8.26. Capitalization....................................................11
ARTICLE IX. Affirmative Covenants.......................................................12
SECTION 9.1. Corporate Existence; Foreign Qualification........................12
SECTION 9.2. Books, Records and Inspections....................................12
SECTION 9.3. Maintenance of Properties.........................................12
SECTION 9.4. Insurance.........................................................13
SECTION 9.5. Reporting Requirements............................................14
SECTION 9.6. Taxes and Obligations.............................................16
SECTION 9.7. Protection from Liens.............................................16
SECTION 9.8. Maintenance of the Vehicles.......................................17
SECTION 9.9. Maintenance of Separate Existence.................................17
SECTION 9.10. Proceeds..........................................................17
SECTION 9.11. Vehicle Titles Check..............................................17
SECTION 9.12. Collateral Agreement..............................................17
SECTION 9.13. Compliance with Laws..............................................18
SECTION 9.14. Delivery of Information...........................................18
SECTION 9.15. Restrictions......................................................18
SECTION 9.16. Cash Audit........................................................18
SECTION 9.17. Compliance with Covenants.........................................18
SECTION 9.18. Payment of Obligations............................................18
SECTION 9.19. Employee Benefits.................................................18
SECTION 9.20. Certificates of Title.............................................19
ARTICLE X. Negative Covenants...........................................................19
SECTION 10.1. Mergers, Consolidations...........................................19
SECTION 10.2. Regulations G, T, U and X.........................................19
SECTION 10.3. Liens.............................................................19
SECTION 10.4. Use of Vehicles...................................................19
SECTION 10.5. Other Indebtedness................................................19
SECTION 10.6. Restrictions on Distributions; Affiliated Transactions............20
SECTION 10.7. Sales of Assets...................................................20
SECTION 10.8. Acquisition of Assets.............................................20
SECTION 10.9. Name; Chief Executive Office......................................20
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SECTION 10.10. Organic Documents................................................20
SECTION 10.11. Investments......................................................20
SECTION 10.12. No Other Agreements; Amendments to Related Documents.............20
SECTION 10.13. Obligations of Leasco............................................21
SECTION 10.14. Manufacturer Bankruptcy..........................................21
SECTION 10.15. Business.........................................................21
ARTICLE XI. Conditions..................................................................21
SECTION 11.1. Initial Loans.....................................................21
SECTION 11.2. All Loans.........................................................22
ARTICLE XII. Loan Events of Default and Their Effect....................................22
SECTION 12.1. Loan Events of Default............................................23
SECTION 12.2. Effect of Loan Event of Default or Liquidation Event of Default...24
SECTION 12.3. Rights of Agent Upon Liquidation Event of Default and
Non-Performance of Certain Covenants............................24
SECTION 12.4. Application of Proceeds...........................................24
ARTICLE XIII. General...................................................................25
SECTION 13.1. Waiver; Amendments................................................25
SECTION 13.2. Confirmations.....................................................25
SECTION 13.3. Notices...........................................................25
SECTION 13.4. Costs, Expenses and Taxes.........................................25
SECTION 13.5. Indemnification...................................................26
SECTION 13.6. No Petition.......................................................26
SECTION 13.7. No Recourse.......................................................27
SECTION 13.8. Waiver of Set-Off.................................................27
SECTION 13.9. Forum Selection and Consent to Jurisdiction.......................27
SECTION 13.10. Governing Law....................................................28
SECTION 13.11. Jury Trial.......................................................28
SECTION 13.12. Successors and Assigns...........................................28
Schedules
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SCHEDULE 8.18 Insurance
SCHEDULE 8.19 UCC Filing Offices
SCHEDULE 10.06 Employees to be Compensated by Leasco
Exhibits
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EXHIBIT A Form of Loan Note
EXHIBIT B-1 Form of Loan Request
EXHIBIT B-2 Form of Loan Request Response
EXHIBIT C Form of Monthly Report
EXHIBIT D Form of WF&G Opinion
EXHIBIT E Vehicle Title Nominee Agreement
EXHIBIT F Form of Monthly Vehicle Statement
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THIS LOAN AGREEMENT (this "Agreement"), dated as of August 7,
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1997, is entered into between RCTR, INC., a Delaware corporation ("Leasco") and
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FCTR, INC., a Delaware corporation ("Xxxxx").
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BACKGROUND
WHEREAS Leasco intends to purchase or finance Vehicles (such
capitalized term, together with all other capitalized terms used herein, shall
have the meaning assigned thereto in Section 1.01) and to make the Repayment
Distribution, and desires to obtain financing therefor from Xxxxx.
WHEREAS Xxxxx is willing to make Loans to Leasco on the terms and
conditions set forth herein.
WHEREAS Xxxxx will utilize the proceeds of the issuance and sale
of Commercial Paper Notes and certain Liquidity Advances made pursuant to the
Liquidity Agreement to make Loans to Leasco hereunder, and in connection
therewith will assign its rights hereunder to the Agent to secure its
obligations to the Secured Parties.
WHEREAS the Loans made to Leasco hereunder will be secured by all
of Leasco's right, title and interest in and to, among other things, (a) the
Vehicles owned by it, (b) the Vehicle Title Nominee Agreement and (c) the Lease.
WHEREAS Leasco has entered into the Collateral Agreement under
which it grants to the Agent a first priority security interest in, among other
things, the Vehicles owned by it, its rights under the Vehicle Title Nominee
Agreement as it relates to such Vehicles and the Lease.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to the terms and
conditions hereof, the parties hereto agree as follows:
ARTICLE I.
Certain Definitions
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SECTION 1.1. Certain Definitions. As used in this Agreement and
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unless the context requires a different meaning, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions
List attached as Annex A to the Liquidity Agreement, dated as of the Closing
Date (as such agreement may be amended, supplemented, restated or otherwise
modified from time to time in accordance with its terms, the "Liquidity
Agreement"), among Xxxxx, the liquidity lenders set forth therein, and Citibank,
N.A., as liquidity agent, as in effect on the date hereof and as such Annex A
may be amended or modified from time to time in accordance with the terms of the
Liquidity Agreement (the "Definitions List").
SECTION 1.2. Accounting and Financial Determinations. Where the
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character or amount of any asset or liability or item of income or expense is
required to be determined, or any accounting computation is required to be made,
for the purpose of this Agreement, such determination or calculation shall be
made, to the extent applicable and except as otherwise specified in this
Agreement, in accordance with GAAP; provided, however, that if any change in
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GAAP in itself
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materially affects any such calculation or determination, Leasco may by notice
to Xxxxx and the Agent, or alternatively Xxxxx or the Agent may by notice to
Leasco, require that any such determination or calculation thereafter be made in
accordance with GAAP as in effect, and applied by Leasco, immediately before
such change in GAAP occurs. Each of Leasco, Xxxxx and the Agent agrees to enter
into negotiations in good faith to modify the financial representations and
covenants and other applicable provisions contained herein in a manner which
reflects any such change in GAAP without adversely affecting the rights of Xxxxx
and the Agent. When used herein, the term "financial statement" shall include
the notes and schedules thereto.
SECTION 1.3. Cross References; Headings. The words "hereof",
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"herein" and "hereunder" and words of a similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Section, Schedule and Exhibit references contained
in this Agreement are references to Sections, Schedules and Exhibits in or to
this Agreement unless otherwise specified. Any reference in any Section or
definition to any clause is, unless otherwise specified, to such clause of such
Section or definition. The various headings in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
SECTION 1.4. Interpretation. In this Agreement, unless the
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context otherwise requires:
(i) the singular includes the plural and vice versa;
(ii) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to any Person in a particular
capacity only refers to such Person in such capacity;
(iii) reference to any gender includes the other gender;
(iv) reference to any Requirement of Law means such Requirement
of Law as amended, modified, codified or reenacted, in whole or in part,
and in effect from time to time;
(v) "including" (and with correlative meaning "include") shall be
deemed to be followed by the words "without limitation" and means
including without limiting the generality of any description preceding
such term; and
(vi) with respect to the determination of any period of time,
"from" means "from and including" and "to" and "through" mean "to but
excluding".
ARTICLE II.
Loan Commitment of Xxxxx
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SECTION 2.1. Loan Commitment. Subject to the terms and conditions
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of this Agreement, Xxxxx agrees to make loans (the "Loans") from time to time on
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or after the Loan Closing Date and prior to the Loan Commitment Termination Date
to Leasco; provided, however, that (a) the aggregate principal amount of all
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Loans outstanding shall not at any time exceed the Loan Commitment Amount and
(b) the principal amount of Loans made to Leasco on any one date shall not
exceed the sum of (i) the Capitalized Cost of new Eligible Vehicles the
purchases of which are being financed by such Loans to Leasco under this
Agreement on such date and (ii) the Net Book Value of
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other Eligible Vehicles (other than new Vehicles) being newly financed by such
Loans to Leasco on such date. The foregoing commitment of Xxxxx is called the
"Loan Commitment".
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SECTION 2.2. Certain Waivers. Leasco waives presentment, demand
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for payment, notice of dishonor and protest, notice of the creation of any of
the Liabilities and all other notices whatsoever to Leasco with respect to the
Liabilities except notices required under Section 12.01. The obligations of
Leasco under this Agreement and the Loan Note shall not be affected by (i) the
failure of the Agent or Xxxxx or the holder of the Loan Note or any of the
Liabilities to assert any claim or demand or to exercise or enforce any right,
power or remedy against Leasco or the Loan Collateral or otherwise, (ii) any
extension or renewal for any period (whether or not longer than the original
period) or exchange of any of the Liabilities or the release or compromise of
any obligation of any nature of any Person with respect thereto, (iii) the
surrender, release or exchange of all or any part of any property (including the
Loan Collateral) securing payment and performance of any of the Liabilities or
the compromise or extension or renewal for any period (whether or not longer
than the original period) of any obligations of any nature of any Person with
respect to any such property, and (iv) any other act, matter or thing which
would or might, in the absence of this provision, operate to release, discharge
or otherwise prejudicially affect the obligations of Leasco.
SECTION 2.3. Conditions. The making of each Loan is subject to
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the satisfaction of the applicable conditions set forth in Article XI.
SECTION 2.4. Use of Proceeds. Leasco shall apply the proceeds of
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the Loans solely to purchase or finance Eligible Vehicles and, on the Closing
Date, to make the Repayment Distribution.
ARTICLE III.
Loan Notes; Loan Procedure; Recordkeeping
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SECTION 3.1. Loan Notes. The Loans shall be evidenced by a
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promissory note issued by Leasco (herein, as from time to time supplemented,
extended or replaced, the "Loan Note"), substantially in the form set forth in
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Exhibit A, with appropriate insertions, dated as of the Closing Date, payable to
the order of Xxxxx and assigned to the Agent pursuant to the Collateral
Agreement.
SECTION 3.2. Loan Procedure. Leasco shall deliver a Loan Request
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to Xxxxx not later than 4:00 p.m., New York City time, on a day that is not less
than one, nor more than five, Business Days prior to the proposed Borrowing Date
(which shall be a Business Day), but in any event after the date of
effectiveness of the Liquidity Agreement. Each Loan Request shall be
irrevocable, and shall specify (i) the amount of the proposed Loan, (ii) the
date of the proposed Loan and (iii) a summary of the Vehicles being financed
with such Loan and, (A) in the case of Vehicles acquired from Manufacturers, the
total Capitalized Cost thereof as of the Borrowing Date and, (B) in the case of
any other Vehicles, the Net Book Value of such Vehicles, in each case (such
summary to include all of the information otherwise included in the Vehicle
Acquisition Schedule with respect to Vehicles subject thereto) as of the end of
the Related Month. The aggregate requested borrowings hereunder on any Business
Day shall be for an initial aggregate principal amount of at least $100,000. On
the terms and subject to the conditions of this Agreement, not later than 2:00
p.m., New York City time, on the Borrowing Date specified in the Loan Request,
Xxxxx shall transfer same day or immediately available funds to Leasco's account
specified in such Loan Request in the amount specified in such Loan Request.
Each Loan Request made pursuant to this Section 3.02. shall constitute Leasco's
representation and warranty that all of the applicable conditions contained in
Article XI will, after giving effect to such Loan, be satisfied.
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SECTION 3.3. Recordkeeping. Xxxxx shall record in its records, or
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at its option on the schedule attached to the Loan Note, the date and amount of
each Loan made hereunder, each repayment thereof, and the other information
provided for thereon. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on the
Loan Note. The failure so to record any such information or any error in so
recording any such information shall not, however, limit or otherwise affect the
actual obligations of Leasco hereunder or under the Loan Note to repay the
principal amount of all Loans made to it, together with all interest accruing
thereon.
ARTICLE IV.
Interest
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SECTION 4.1. Interest Rate on Loans. Leasco hereby promises to
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pay interest on the aggregate unpaid principal amount of each Loan, for the
period commencing on the date such Loan is made to Leasco until such Loan is
paid in full at a rate not less than Xxxxx'x Carrying Cost Interest Rate for the
Related Month. The minimum rate of interest on each Loan shall be specified in a
Loan Request Response in the form of Exhibit B-2 hereto provided by Xxxxx to
Leasco on the date a Loan Request is delivered; provided, however, that if
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Xxxxx'x Carrying Cost Interest Rate for the Related Month is higher than the
rate of interest specified in the Loan Request Response, interest payable shall
be determined using the higher rate; provided, further, that if Xxxxx'x Carrying
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Cost Interest Rate for the period beginning on the first day after the Related
Month up to the date that one or more Loans mature is higher than both of (i)
Xxxxx'x Carrying Cost Interest Rate for the Related Month and (ii) the rate of
interest specified in the Loan Request Response, interest payable shall be
determined using such higher rate.
SECTION 4.2. Interest Payment Dates. Accrued interest on each
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Loan shall be payable on each Payment Date (with respect to the Related Month),
upon any prepayment and at maturity, commencing with the first of such dates to
occur after the date such Loan is made. After maturity (whether by acceleration
or otherwise) accrued interest on all Loans shall be payable on demand.
SECTION 4.3. Setting of Rates. Xxxxx'x Carrying Cost Interest
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Rate shall be calculated from time to time by the Agent in accordance with this
Agreement, which calculation shall be conclusive, absent demonstrable error.
SECTION 4.4. Supplemental Interest. The parties hereto
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acknowledge that it is the intention of each of them that the payments due from
Leasco to Xxxxx under this Loan Agreement shall at all times be sufficient to,
independent of any other funds available to Xxxxx, cover all of Xxxxx'x
obligations and costs relating to any of the Related Documents or otherwise, and
such parties agree that, if at any future time the payments hereunder are
insufficient to cover such obligations and costs, an additional amount shall be
payable by Leasco to Xxxxx pursuant to this Section 4.04, which amount shall be
referred to as "Supplemental Interest" and shall be payable upon the same terms
as other interest payments due under this Agreement.
ARTICLE V.
Repayment
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SECTION 5.1. Mandatory Payment of Loans. Leasco shall pay to
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Xxxxx, as a repayment of principal of its Loans, an amount equal to:
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(a) on each Payment Date at which time an Amortization Event has
occurred and is continuing, the sum of:
(i) the accrued Depreciation Charges for the Related Month for
all Vehicles owned by Leasco at any time during such Related Month and
(A) financed by Xxxxx under this Agreement as of the end of the Related
Month or, (B) without duplication, financed by Xxxxx under this
Agreement that are no longer Eligible Vehicles, have suffered a Casualty
or have been sold or otherwise disposed of during the Related Month; and
(ii) the aggregate Net Book Values (each determined as of the
date on which each Vehicle was no longer an Eligible Vehicle, became a
Casualty or was sold or otherwise disposed of, as applicable) of all
Vehicles owned by Leasco at any time during such Related Month that,
without double counting the amounts in clause (a)(i) of this Section
5.01, are no longer Eligible Vehicles, suffered a Casualty or were sold
or otherwise disposed of in accordance with this Agreement;
(b) on any other date, an amount such that, after giving effect
to the repayment of such amount, the Enhancement Test Percentage is equal to or
greater than the Required Enhancement Percentage;
provided, however, that unless otherwise required to be paid sooner pursuant to
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the terms of this Agreement, the entire unpaid balance of all Loans shall be
payable on the date that is 18 months from the Amortization Commencement Date.
All Loans shall be due on the maturity date therefor, whether by acceleration or
otherwise.
SECTION 5.2. Voluntary Prepayments. Leasco may from time to time
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prepay the Loans, in whole or in part, on any date; provided that Leasco shall
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give Xxxxx and the Agent not less than one Business Day's prior notice of any
such prepayment, specifying the date and amount of such prepayment, and, if
Leasco is requesting a release of Vehicles from the Lien hereof pursuant to
Section 7.03, the Vehicles to which such prepayment relates.
ARTICLE VI.
Making of Payments
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SECTION 6.1. Making of Payments. All payments of principal of, or
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interest on, the Loan Note and of all other Liabilities shall be made by Leasco
to, or for the account of, Xxxxx in immediately available Dollars, without
setoff, counterclaim or deduction of any kind. All such payments shall be made
to the Collateral Account (or such other account as Xxxxx may from time to time
specify with the consent of the Agent), not later than 12:00 noon, New York City
time, on the date due; and funds received after that hour shall be deemed to
have been received by Xxxxx on the next following Business Day. Xxxxx hereby
specifies that all (i) amounts representing Disposition Proceeds and (ii)
payments with respect to any other Loan Collateral (including insurance proceeds
with respect to Vehicles and warranty payments) shall be deposited in the
Collateral Account.
SECTION 6.2. Due Date Extension. If any payment of principal or
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interest with respect to any of the Loans falls due on a day which is not a
Business Day, then such due date shall be extended to the next following
Business Day and interest shall accrue to, but not including, such Business Day.
SECTION 6.3. Application of Sale Proceeds. Leasco agrees that all
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Disposition Proceeds deposited in the Collateral Account shall be applied, upon
receipt thereof in the Collateral Account, to prepay Loans and pay accrued
interest on such prepaid amount.
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ARTICLE VII.
Loan Collateral Security
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SECTION 7.1. Grant of Security Interest. As security for the
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prompt and complete payment and performance of the Liabilities, Leasco hereby
confirms the pledge, hypothecation, assignment, transfer and delivery to the
Agent under the Collateral Agreement for the benefit of Xxxxx, and hereby
confirms the grant to the Agent under the Collateral Agreement for the benefit
of Xxxxx, of a continuing, first priority security interest in, all of the
following, whether now owned or hereafter acquired: all of Leasco's right, title
and interest in and to (i) all Vehicles owned by Leasco, and all Certificates of
Title with respect thereto; (ii) the Vehicle Title Nominee Agreement; (iii) all
payments under insurance policies (whether or not the Agent is named as the loss
payee thereof) or any warranty payable by reason of loss or damage to, or
otherwise with respect to, any of the Vehicles; (iv) the Lease; (v) the Lease
File; and (vi) all products and proceeds of all of the foregoing.
SECTION 7.2. Certificates of Title. Leasco shall take, or shall
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cause to be taken, such action as shall be necessary to submit all of the
Certificates of Title to the appropriate state authority for notation thereon of
the Lien of the Agent. Pursuant to the Collateral Agreement, the original
Certificates of Title relating to the Vehicles shall be held by Leasco, in trust
for the benefit of the Agent as assignee of Xxxxx. The Certificates of Title
shall be subject to all of the provisions of the Collateral Agreement.
SECTION 7.3. Release of Loan Collateral. (a) The parties agree
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that pursuant to the provisions of this Section 7.03. and Section 9.07 of the
Collateral Agreement, any and all of the Liens for the benefit of Xxxxx
(including the Lien of the Agent as assignee of Xxxxx under the Collateral
Agreement) on the Vehicles and the Certificates of Title therefor shall be
released or deemed to be released, as provided in this Section 7.03. As to any
Vehicle, so long as no Amortization Event or Potential Amortization Event has
occurred and is continuing, and after the:
(i) deposit of the Disposition Proceeds with respect to such
Vehicle if it is sold or otherwise disposed of in accordance with this
Agreement; and
(ii) Agent has determined that, excluding the Vehicles with
respect to which the Lien of the Agent would be released pursuant to
this Section 7.03, the Enhancement Test Percentage will be equal to or
greater than the Required Enhancement Percentage;
any and all Liens for the benefit of Xxxxx (including the Lien of the Agent as
assignee of Xxxxx under the Collateral Agreement) on such Vehicle and the
Certificate of Title therefor shall be deemed to be released.
(b) Leasco may direct TRS to sell any Vehicle in an ordinary
course sale, provided, that such sale is made in accordance with this Section
7.03. Xxxxx shall and shall cause the Agent to execute such documents and
instruments as Leasco may reasonably request (including a power of attorney of
the Agent appointing Leasco to act as the agent of the Agent in releasing the
Lien of the Agent on Vehicles sold pursuant to the provisions of this Section
7.03, which power of attorney shall be revocable at any time following a
Liquidation Event of Default). The parties hereto agree, however, that until
such time that no Commercial Paper Notes are Outstanding, the number of Vehicles
sold or disposed of during any month shall not exceed the Fleet Disposition
Limit unless the aggregate Disposition Proceeds from such sales or dispositions
exceed the aggregate Net Book Value of all Vehicles sold or disposed of during
such month (such Net Book Value to be measured for each Vehicle as of the date
such Vehicle was sold or disposed of).
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SECTION 7.4. Change of Location or Name. So long as any of the
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Liabilities shall remain outstanding or Xxxxx shall continue to have any Loan
Commitment, and except as acknowledged by the parties hereto in the last
sentence of Section 8.12, Leasco will not change (a) the location of its
principal place of business, chief executive office or its consolidated records
concerning its business and financial affairs, or (b) its legal name or the name
under or by which it conducts its business, in each case without first giving
the Agent and Xxxxx at least 60 days' advance written notice thereof and having
taken any and all action required to maintain and preserve the first priority
perfected Lien of the Agent on the Loan Collateral; provided, however, that
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notwithstanding the foregoing, Leasco shall not change the location of its
principal place of business, chief executive office or its consolidated records
concerning its business and financial affairs to any place outside the United
States of America.
SECTION 7.5. Deliveries; Further Assurances. Leasco agrees that
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it will, at its sole expense, (i) immediately deliver or cause to be delivered
to Xxxxx (or the Agent on Xxxxx'x behalf), in due form for transfer (i.e.,
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endorsed in blank), all securities, chattel paper, instruments and documents, if
any, at any time representing all or any of the Loan Collateral (it being
understood that the Certificates of Title shall be held by Leasco pursuant to
the provisions of the Collateral Agreement) and (ii) execute and deliver, or
cause to be executed and delivered, to Xxxxx or the Agent, as the case may be,
in due form for filing or recording (and pay the cost of filing or recording the
same in all public offices reasonably deemed necessary or advisable by Xxxxx or
the Agent, as the case may be), such assignments, security agreements,
mortgages, consents, waivers, financing statements, and other documents, and do
such other acts and things, all as may from time to time be reasonably necessary
or desirable to establish and maintain to the satisfaction of Xxxxx and the
Agent a valid perfected Lien on and security interest in all of the Loan
Collateral now or hereafter existing or acquired to secure payment and
performance of the Liabilities.
ARTICLE VIII.
Representations and Warranties
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To induce Xxxxx to enter into this Agreement and to make Loans
hereunder, Leasco represents and warrants to Xxxxx that:
SECTION 8.1. Organization; Power. Leasco (a) is a corporation
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duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure so to qualify could not reasonably be expected to result in a
Material Adverse Effect, and (d) has the corporate power and authority to
execute, deliver and perform its obligations under each of the Related Documents
and each other agreement or instrument contemplated hereby to which it is or
will be a party and to borrow hereunder.
(b) There have been no amendments to the Organic Documents of
Leasco since the respective dates of the certified copies furnished to Xxxxx
pursuant to Section 11.01, other than amendments, if any, not prohibited by this
Agreement (copies of which have been furnished to Xxxxx).
SECTION 8.2. Authorization. The execution, delivery and
-------------
performance by Leasco of each of the Related Documents, the borrowings hereunder
and the Transactions (a) have been duly authorized by all requisite corporate
and, if required, stockholder action, (b) will not violate any provision of the
certificate or articles of incorporation or other constitutive documents or
by-laws of
-7-
Leasco and (c) will not (i) violate (A) any material provision of any
law, statute, rule or regulation, (B) any order of any Governmental Authority or
(C) any material provision of any indenture, agreement or other instrument to
which Leasco is a party or by which Leasco or any of its property is or may be
bound, (ii) be in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under, or give rise to any right
to accelerate or to require the prepayment, repurchase or redemption of any
obligation under, any such indenture, agreement or other instrument or (iii)
result in the creation or imposition of any Lien upon or with respect to any
property or assets now owned or hereafter acquired by Leasco (other than any
Lien created hereunder, under the Collateral Agreement or Permitted Liens).
SECTION 8.3. Enforceability. This Agreement has been duly
--------------
executed and delivered by Leasco and constitutes, and each other Related
Document when executed and delivered by each party thereto will constitute, a
legal, valid and binding obligation of Leasco enforceable against Leasco in
accordance with its terms.
SECTION 8.4. Governmental Approvals. No action, consent or
----------------------
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required by or on the part of Leasco in connection with
the Transactions, except for the filing of Uniform Commercial Code financing
statements.
SECTION 8.5. Financial Information; Financial Condition. Leasco
------------------------------------------
has heretofore furnished to Xxxxx (i) the consolidated and combined balance
sheets and related statements of income and cash flow for the Consumer Truck
Rental business unit of Old Ryder ("CTR") at and for the year ended December 31,
1995, together with the notes and schedules thereto, which include statements of
divisional equity, such financial statements having been audited by and
accompanied by the opinion of KPMG Peat Marwick LLP, independent public
accountants, (ii) the consolidated and combined balance sheets and related
statements of income and cash flow for TRS at and for the year ended December
31, 1996, and the 3 months ended March 31, 1997, together with the notes and
schedules thereto, which include statements of equity, such financial statements
(except for the financial statements for the 3 months ended March 31, 1997)
having been audited by and accompanied by the opinion of Coopers & Xxxxxxx LLP,
independent public accountants, and (iii) the internal unaudited consolidated
and combined statements of income for TRS for the month ended April 30, 1997.
SECTION 8.6. Litigation; Compliance with Laws. (a) There are no
--------------------------------
actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of Leasco, threatened
against or affecting Leasco or any business, property or rights of Leasco (i)
that involve any Related Document or the Transactions or (ii) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect.
(b) Neither Leasco nor any of its respective material
properties or assets is in violation of, nor will the continued operation of
their material properties and assets as currently conducted violate, any law,
rule or regulation, or is in default with respect to any judgment, writ,
injunction, decree or order of any Governmental Authority, where such violation
or default could reasonably be expected to result in a Material Adverse Effect.
SECTION 8.7. Liens. The Loan Collateral is free and clear of all
-----
Liens other than Permitted Liens. Xxxxx (or the Agent on behalf of Xxxxx) has
obtained, as security for the Liabilities, a first priority perfected Lien on
all Loan Collateral. All Vehicle Perfection and Documentation Requirements with
respect to all Vehicles on or after the date hereof have and will continue to be
-8-
satisfied; except to the extent that the failure to comply with such
requirements does not, in the aggregate, materially adversely affect either the
interests of Xxxxx, the Agent or the Secured Parties under this Agreement or the
Collateral Agreement or the likelihood of repayment of the Loans hereunder.
SECTION 8.8. Employee Benefit Plans. Each of Leasco and its ERISA
----------------------
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA, the Code and the regulations and published interpretations
thereunder with respect to Plans and Multiemployer Plans. Neither Leasco nor any
of its ERISA Affiliates (a) maintains or contributes to or is or has within the
past five years been required to maintain or contribute to a Plan or a
Multiemployer Plan or (b) will be required to maintain or contribute to, or has
any obligation with respect to, a Plan or a Multiemployer Plan prior to the
termination of this Agreement or during such period that Leasco has any
obligations to Xxxxx under this Agreement. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with other such ERISA
Events, could be reasonably expected to result in a Material Adverse Effect.
SECTION 8.9. Investment Company Act; Public Utility Holding
----------------------------------------------
Company Act. Leasco is not (a) an "investment company" as defined in, or subject
-----------
to regulation under, the Investment Company Act or (b) a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.
SECTION 8.10. Regulations G, T, U and X. (a) Leasco is not
-------------------------
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan hereunder will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation G, T,
U or X.
SECTION 8.11. Proceeds. The proceeds of the Loans will be used
--------
solely to purchase or finance Eligible Vehicles or make the Repayment
Distribution.
SECTION 8.12. Business Locations; Trade Names. (a) Leasco
-------------------------------
maintains its chief executive office, principal place of business and
consolidated business and financial records at 0000 X.X. 00xx Xxxxxx, Xxxxx,
Xxxxxxx, 00000, (b) Leasco's legal name is RCTR, Inc. and (c) Leasco does not
conduct its business under any other name. The parties hereto acknowledge that,
as of the date hereof, Leasco plans to change the location of its chief
executive office, principal place of business and consolidated business and
financial records to 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx, 00000.
SECTION 8.13. Taxes. Leasco and each consolidated, combined or
-----
affiliated group of which Leasco is a member (a "consolidated group") have filed
all tax returns which have been required to be filed by them and have paid all
taxes, including all payroll taxes and Federal and state withholding taxes, and
all assessments payable by them that have become due, other than those taxes and
assessments that are not yet delinquent or that are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been established, and are being maintained, in accordance with GAAP. As of
the date hereof, there is no ongoing audit (other than routine sales tax audits
and other routine audits) or, to Leasco's knowledge, other governmental
investigation of the tax liability of Leasco or any such consolidated group and
there is no unresolved claim by a taxing authority concerning Leasco's or such
consolidated group's tax liability for any
-9-
period for which returns have been filed or were due other than those being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been established, and are being maintained, in accordance
with GAAP.
SECTION 8.14. No Consent; Governmental Authorizations. (a) No
---------------------------------------
consent, 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 and performance of this
Agreement or any other Related Document by Leasco for the payment of any amounts
by Leasco hereunder or thereunder other than such consents, approvals,
authorizations, registrations, declarations or filings as shall have been
obtained by Leasco prior to the Closing Date.
(b) Leasco has all licenses, franchises, permits and other
governmental authorizations necessary for all businesses presently carried on by
it (including owning and leasing the real and personal property owned and leased
by it).
SECTION 8.15. Eligible Vehicles. Each Vehicle was, on the date of
-----------------
purchase thereof by Leasco and on the date of the making of the Loan for the
financing thereof hereunder, an Eligible Vehicle.
SECTION 8.16. Title to Assets; Security Interests. Leasco has
----------------------------------
good and marketable title to all its material properties and assets, except (a)
for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties and assets for
their intended purposes and (b) that Vehicles covered by the Vehicle Title
Nominee Agreement are titled in the name of Old Ryder. Leasco enjoys beneficial
ownership of all such Vehicles titled in the name of Old Ryder pursuant to the
Vehicle Title Nominee Agreement. All material properties and assets of Leasco
are free and clear of Liens, other than Permitted Liens.
SECTION 8.17. No Material Misstatements. None of the Offering
-------------------------
Memorandum or any other information, report, financial statement, exhibit or
schedule furnished in writing by or on behalf of Leasco to Xxxxx or the Agent in
connection with the negotiation of any Related Document or included therein or
delivered pursuant thereto (collectively, "information") contained, contains or
-----------
will contain any material misstatement of fact or omitted, omits or will omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were, are or will be made, not misleading,
provided that (a) the statements therein describing documents and agreements are
--------
summaries only and as such are qualified in their entirety by reference to such
documents and agreements, (b) as to information therein that is specified as
having been supplied by persons other than Leasco or an Affiliate of Leasco, the
foregoing representation is limited to the knowledge of Leasco, (c) to the
extent any such information was based upon or constitutes a forecast or
projection, Leasco represents only that it acted in good faith and utilized
reasonable assumptions and due care in the preparation of such information and
(d) to the extent any such information was subsequently replaced, prior to the
date hereof, by other information expressly correcting such earlier information
(and either Xxxxx or the Agent was expressly informed by or on behalf of Leasco
that such other information was correcting such earlier information), the
foregoing representation does not apply to such earlier information.
SECTION 8.18. Insurance. Schedule 8.18 sets forth a true,
---------
complete and correct description of all insurance maintained by or for Leasco as
of the date hereof and the Closing Date. As of each such date, such insurance is
in full force and effect and all premiums due and payable on the Closing Date
have been duly paid. Leasco has insurance in such amounts and covering such
risks and liabilities as are in accordance with normal industry practice.
-10-
SECTION 8.19. Collateral Agreement. The Collateral Agreement is
--------------------
effective to create in favor of the Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the Loan
Collateral and, when financing statements in appropriate form are filed in the
offices specified in Schedule 8.19 hereto, the Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the grantors thereunder in such Loan Collateral, in each case
prior and superior in right to any other Person, other than with respect to any
Permitted Liens.
SECTION 8.20. No Property. Except as set forth on Schedule 8.20,
-----------
Leasco does not (a) own or lease any real property or (b) own or lease any
personal property (except for the Vehicles), in each case as of the Closing
Date.
SECTION 8.21. Burdensome Provisions. (a) Leasco is not a party to
---------------------
any agreement or instrument or subject to any corporate restriction that has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(b) Leasco is not in default in any manner under any provision
of any indenture or other agreement or instrument evidencing Indebtedness, or
any other material agreement or instrument to which it is a party or by which it
or any of its properties or assets are or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect.
SECTION 8.22. Solvency. Immediately after the consummation of the
--------
Transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, (i) the fair value of the assets of Leasco will
exceed its debts and liabilities, subordinated, contingent or otherwise; (ii)
the present fair saleable value of the property of Leasco will be greater than
the amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) Leasco will be able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured; and (iv) Leasco will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 8.23. Ownership; Subsidiaries. (a) 100% of the common
-----------------------
stock of Leasco is owned by TRS and (b) Leasco has no Subsidiaries and owns no
capital stock of, or other interest in, any other Person.
SECTION 8.24. No Material Adverse Change. There has been no
--------------------------
material adverse change in the business, assets, operations, prospects,
condition, financial or otherwise, or material agreements of Leasco since March
31, 1997.
SECTION 8.25. Other Representations. All representations and
---------------------
warranties of Leasco made in each Related Document to which it is a party are
true and correct (in all material respects to the extent such representations
and warranties do not incorporate a materiality limitation in their terms) and
are repeated herein as though fully set forth herein.
SECTION 8.26. Capitalization. Leasco is capitalized with equity
--------------
or cash equal to or greater than $10,000,000.
-11-
ARTICLE IX.
Affirmative Covenants
---------------------
Until the expiration or termination of the Loan Commitment and
thereafter until the Loan Note and all other Liabilities are paid in full,
Leasco agrees that, unless at any time Xxxxx shall otherwise expressly consent
in writing, it will perform and comply with each of the following covenants.
SECTION 9.1. Corporate Existence; Foreign Qualification. (a)
------------------------------------------
Leasco will do and cause to be done at all times all things necessary to (i)
maintain and preserve its corporate existence and (ii) be duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction
where the nature of its business makes such qualification necessary and the
failure to so qualify is reasonably likely to have a Material Adverse Effect and
(iii) comply with all Contractual Obligations and Requirements of Law binding
upon it, except to the extent that the failure to comply therewith is not
reasonably likely to, in the aggregate, have a Material Adverse Effect.
(b) Leasco will do or cause to be done all things necessary to
obtain, preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, contracts, patents, copyrights,
trademarks and trade names material to the conduct of its business; maintain and
operate such business in substantially the manner in which it is presently
conducted and operated (or in any manner reasonably incidental thereto); comply
in all material respects with all applicable laws, rules, regulations and
decrees and orders of any Governmental Authority, whether now in effect or
hereafter enacted; and at all times maintain and preserve all property material
to the conduct of such business and keep such property in good repair, working
order and condition and from time to time make, or cause to be made, all needful
and proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
SECTION 9.2. Books, Records and Inspections. Leasco will and will
------------------------------
cause its Subsidiaries to (a) keep proper books of record and account in which
full, true and correct entries in conformity with GAAP and all requirements of
law are made of all dealings and transactions in relation to its business
activities; (b) maintain complete and accurate books and records with respect to
the Loan Collateral; (c) at any time and from time to time during regular
business hours, upon reasonable prior notice from Xxxxx or the Agent, permit
Xxxxx or the Agent (or such other Person who may be designated from time to time
by Xxxxx or the Agent), their agents and representatives to examine and make
copies of such books, records and documents in the possession or under the
control of Leasco relating to the Loan Collateral as Xxxxx, the Agent or such
Person may reasonably request; and (d) permit Xxxxx or the Agent to visit the
offices and properties of Leasco for the purpose of examining such materials,
and to discuss matters relating to the Loan Collateral or Leasco's performance
under this Agreement with Leasco's independent public accountants or with any of
the officers or employees of Leasco having knowledge of such matters; provided,
---------
however, that the business of Leasco and such Subsidiaries shall not be
-------
unreasonably disrupted by any such visit, inspection or verification.
SECTION 9.3. Maintenance of Properties. (a) Leasco will maintain
-------------------------
or cause to be maintained in the ordinary course of business in good repair,
working order and condition (reasonable wear and tear excepted) all properties,
including vehicles necessary for the operation of its businesses, and from time
to time make or cause to be made all needed and appropriate repairs, renewals,
replacements, additions, betterments, and improvements thereto, except to the
extent no Material
-12-
Adverse Effect is reasonably likely to result from the failure to do so and
good, legal and marketable title to all of its assets.
(b) Xxxxx and the Agent, and such Persons as Xxxxx and the
Agent may reasonably designate, shall have the right, at Leasco's own cost and
expense, to inspect the Vehicles and the premises upon which any of the Vehicles
are located (including Ryder Dealer locations), to verify under reasonable
procedures the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Vehicles, including, in the case of
Vehicles in the possession of any third person (including Ryder Dealers), by
contacting such third person possessing such Vehicle or Vehicles for the purpose
of making such a verification; provided, however, that (i) so long as no Loan
-----------------
Event of Default shall have occurred and be continuing, there shall be no more
than one such inspection and verification by Xxxxx or the Agent or such other
Persons in any fiscal quarter of Leasco and (ii) the business of Leasco and its
Subsidiaries shall not be unreasonably disrupted by any such inspection and
verification. Xxxxx and the Agent shall have the absolute right to share any
information it gains from such inspection with any Secured Party.
SECTION 9.4. Insurance. Leasco will:
---------
(a) Keep the Vehicles adequately insured at all times by
financially sound and reputable insurers; maintain such other insurance, to such
extent and against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies in the same or similar
businesses operating in the same or similar locations, including public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; and maintain such other insurance as may be
required by law; provided, however, that in the case of the Vehicles, Leasco may
-----------------
cause TRS to satisfy Leasco's obligations under this paragraph; provided,
--------
further, that notwithstanding anything to the contrary contained herein, Leasco
-------
may cause TRS to satisfy its obligations hereunder through its current practices
of self insurance.
(b) Cause all such policies relating to the Vehicles to be
endorsed or otherwise amended to include a "standard" or "New York" lender's
loss payable endorsement, in form and substance satisfactory to Xxxxx and the
Agent, which endorsement shall provide that, from and after the Closing Date, if
the insurance carrier shall have received written notice from Xxxxx or the Agent
of the occurrence of a Lease Event of Default, the insurance carrier shall pay
all proceeds otherwise payable to Leasco under such policies directly to the
Collateral Account; cause all such policies to provide that, other than Leasco
or Xxxxx, no other party shall be a coinsurer thereunder and to contain a
"Replacement Cost Endorsement", without any deduction for depreciation, and such
other provisions as Xxxxx or the Agent may reasonably require from time to time
to protect their interests; deliver original or certified copies of all such
certificates of insurance to Xxxxx and the Agent; cause each such policy to
provide that it shall not be canceled, modified or not renewed (i) by reason of
nonpayment of premium upon not less than 10 days' prior written notice thereof
by the insurer to Xxxxx and the Agent (giving Xxxxx and the Agent the right to
cure defaults in the payment of premiums) or (ii) for any other reason upon not
less than 30 days' prior written notice thereof by the insurer to Xxxxx and the
Agent; deliver to Xxxxx and the Agent, prior to the cancelation, modification or
nonrenewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to Xxxxx
and the Agent) together with evidence satisfactory to Xxxxx and the Agent of
payment of the premium therefor.
(c) Notify Xxxxx and the Agent immediately whenever any separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained under this
-13-
Section 9.04 is taken out by Leasco; and promptly deliver to Xxxxx and the Agent
a duplicate original copy of such policy or policies.
(d) In connection with the covenants set forth in this Section
9.04, it is understood and agreed that:
(i) neither Xxxxx nor the Agent or their respective agents or
employees shall be liable for any loss or damage insured by the
insurance policies required to be maintained under this Section 9.04, it
being understood that (A) Leasco shall look solely to its insurance
companies or any other parties other than the aforesaid parties for the
recovery of such loss or damage and (B) such insurance companies shall
have no rights of subrogation against Xxxxx or the Agent or their agents
or employees. If, however, the insurance policies do not provide waiver
of subrogation rights against such parties, as required above, then
Leasco hereby agrees, to the extent permitted by law, to waive its right
of recovery, if any, against Xxxxx and the Agent and their agents and
employees; and
(ii) the designation of any form, type or amount of insurance
coverage by Xxxxx or the Agent under this Section 9.04 shall in no event
be deemed a representation, warranty or advice by Xxxxx or the Agent
that such insurance is adequate for the purposes of the business of
Leasco or the protection of its properties and Xxxxx and the Agent shall
have the right from time to time to require Leasco to keep other
insurance in such form and amount as Xxxxx and the Agent or the Majority
Banks may reasonably request, provided that such insurance shall be
obtainable on commercially reasonable terms.
(iii) Leasco irrevocably makes, constitutes and appoints the
Agent (and all officers, employees or agents designated by the Agent) as
Leasco's true and lawful agent (and attorney-in-fact) for the purpose,
during the continuance of a Lease Event of Default, of making, settling
and adjusting claims in respect of the Vehicles under policies of
insurance, endorsing the name of Leasco on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance
and for making all determinations and decisions with respect thereto. In
the event that Leasco at any time or times shall fail to obtain or
maintain any of the policies of insurance required hereby or to pay any
premium in whole or part relating thereto, Xxxxx or the Agent may,
without waiving or releasing any obligation or liability of Leasco
hereunder or any Lease Event of Default, in its sole discretion, obtain
and maintain such policies of insurance and pay such premium and take
any other actions with respect thereto as the Agent deems advisable. All
sums disbursed by the Agent in connection with this Section 9.04,
including reasonable attorneys' fees, court costs, expenses and other
charges relating thereto, shall be payable, upon demand, by Leasco to
the Agent and shall be additional payment obligations under this
Agreement.
SECTION 9.5. Reporting Requirements. Leasco will furnish, or,
----------------------
under and in accordance with the Lease with respect to information regarding
TRS, cause TRS to furnish, Finco, the Agent and each Rating Agency:
(a) within 90 days after the end of each fiscal year of TRS, the
consolidated and combined balance sheet and related statements of income,
stockholders' equity and cash flows showing the financial condition of TRS and
its consolidated Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such Subsidiaries during such
year, all audited by Coopers & Xxxxxxx LLP or other independent public
accountants of recognized national standing and accompanied by an opinion of
such accountants (which shall not be qualified in any material respect) to
-14-
the effect that such consolidated financial statements fairly present the
financial condition and results of operations of TRS and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied; provided, however, that such financial statements will contain
footnotes or other information to the effect that: (i) Leasco's business
consists of the purchase and lease of vehicles; (ii) Xxxxx'x business consists
of the issuance of commercial paper notes and the making of loans to Leasco;
(iii) each of Leasco and Xxxxx is a separate corporate entity with its own
separate creditors which, upon its liquidation, will be entitled to be satisfied
out of Leasco's or Xxxxx'x assets, as the case may be, prior to any value in
Leasco or Xxxxx, as the case may be, becoming available to Leasco's or Xxxxx'x
equity holders, as the case may be.
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of TRS, the consolidated and combined
balance sheet and related statements of income, stockholders' equity and cash
flows showing the financial condition of TRS and its consolidated Subsidiaries
as of the close of such fiscal quarter and the results of its operations and the
operations of such Subsidiaries during such fiscal quarter and the then elapsed
portion of the fiscal year, all certified by one of its Financial Officers as
fairly presenting the financial condition and results of operations of TRS and
its consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments;
(c) within 30 days after the end of each of the first two months
of each fiscal quarter, the consolidated and combined balance sheet and related
statements of income, stockholders' equity and cash flows showing the financial
condition of TRS and its consolidated Subsidiaries as of the close of such month
and the results of its operations and the operations of such Subsidiaries during
such month and the then elapsed portion of the fiscal year, all certified by one
of its Financial Officers as fairly presenting the financial condition and
results of operations of TRS and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments;
(d) concurrently with any delivery of financial statements under
sub-paragraph (a), (b) or (c) above, a certificate of the accounting firm or
Financial Officer opining on or certifying such statements (which certificate,
when furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) (i) certifying that no Loan
Event of Default has occurred or, if such a Loan Event of Default has occurred,
specifying the nature and extent thereof and any corrective action taken or
proposed to be taken with respect thereto and (ii) with respect to the financial
statements delivered under sub-paragraph (a) or (b) above, setting forth
computations in reasonable detail satisfactory to the Agent demonstrating
whether or not there has been compliance with the covenants contained in Section
23.4 of the Lease;
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed by
TRS or any of its Subsidiaries with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to its
shareholders, as the case may be;
(f) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of TRS or any of its
Subsidiaries, as Xxxxx or the Agent may reasonably request.
(g) promptly after becoming aware thereof, (i) notice of the
occurrence of any Potential Loan Event of Default or Loan Event of Default,
together with a written statement of an
-15-
Authorized Officer of TRS describing such event and the action Leasco proposes
to take with respect thereto, and (ii) notice of any Potential Lease Event of
Default or Lease Event of Default;
(h) on or before each Determination Date, a monthly statement
(each, a "Monthly Vehicle Statement") in the form attached as Exhibit F hereto
and a Monthly Report in the Form attached as Exhibit C hereto;
(i) promptly after obtaining actual knowledge thereof, notice of
any Manufacturer Ineligibility Event;
(j) promptly after becoming aware thereof, prompt written notice
of (i) any Lease Event of Default, specifying the nature and extent thereof and
the corrective action (if any) taken or proposed to be taken with respect
thereto, (ii) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or proceeding,
whether at law or in equity or by or before any Governmental Authority, against
TRS or any of its Affiliates that could reasonably be expected to result in a
Material Adverse Effect, and (iii) any development that has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect;
(k) for each fiscal quarter of TRS, (i) by the first date
following the end of such fiscal quarter by which TRS is required to deliver the
information described in item (a) or (b) above, an Officer's Certificate
addressed to Leasco from a duly authorized financial officer of TRS certifying
that TRS is in compliance with its covenants set forth in Section 23.4 of the
Lease with respect to the period ending on the last day of such fiscal quarter
and specifying the method of calculation used in determining such compliance and
(ii) those reports required to be delivered by TRS to Leasco pursuant to Section
12.5 of the Lease; and
(l) promptly, from time to time, such other information,
documents, or reports respecting the Vehicles or the other Loan Collateral or
the condition, financial or otherwise, or operations of TRS as Xxxxx or the
Agent may from time to time reasonably request in order to protect the interests
of Xxxxx or the Agent under or as contemplated by this Loan Agreement or any
other Related Document.
SECTION 9.6. Taxes and Obligations. Leasco will pay its
---------------------
Indebtedness and other obligations promptly and in accordance with their terms
and pay and discharge promptly when due all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
-------- -------
respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and Leasco shall have set aside on its books adequate reserves with
respect thereto in accordance with GAAP and such contest operates to suspend
collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien.
SECTION 9.7. Protection from Liens. Leasco will, at its own cost
---------------------
and expense and as Xxxxx'x Agent, take or cause to be taken any and all actions
necessary to defend title to each of the Vehicles against all Persons and, at
Xxxxx'x request and as Xxxxx'x agent, defend the Security Interest of the Agent
in the Vehicles and the priority thereof against any Lien other than Permitted
Liens.
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SECTION 9.8. Maintenance of the Vehicles. Leasco will maintain
---------------------------
and cause all of the Vehicles to be maintained in good repair, working order,
and condition.
SECTION 9.9. Maintenance of Separate Existence. Leasco will do
---------------------------------
all things necessary to maintain its corporate existence separate and apart from
that of TRS and Affiliates of TRS as described in that certain opinion letter
issued by Xxxxxxx Xxxx & Xxxxxxxxx in the form of Exhibit D attached hereto and
dated as of the Closing Date addressing the issue of substantive consolidation
as it may relate to Leasco and TRS. Leasco acknowledges its receipt of such copy
of that certain opinion letter issued by Xxxxxxx Xxxx & Xxxxxxxxx and hereby
agrees to maintain in place all policies and procedures, and take and continue
to take all action, described in the factual assumptions set forth in such
opinion letter and relating to Leasco.
SECTION 9.10. Proceeds. Leasco will (a) cause all payments with
--------
respect to any Loan Collateral to be made directly to the Collateral Account (or
as otherwise directed by Leasco, with the prior written consent of the Agent);
and (b) in the case of any such payments with respect to any Loan Collateral
received directly by Leasco, deposit all such payments in the Collateral Account
by the second Business Day following (i) in the case of a sale by a corporation
on behalf of Leasco whose short-term debt has been assigned a rating of at least
A-1 and Prime-1 by S&P and Xxxxx'x, respectively, receipt of such payments by
Leasco; provided, however, that under all circumstances all such payments shall
-------- -------
be deposited into the Collateral Account prior to the expiration of 30 days
after the date on which such corporation receives such funds, and (ii) in the
case of a sale by any other Person on behalf of Leasco, the date upon which the
Certificate of Title with respect to such Vehicle is transferred by Leasco or
TRS (as Leasco's agent) to such Person.
SECTION 9.11. Vehicle Titles Check. (a) Leasco will take all
--------------------
actions necessary to ensure that TRS has filed and recorded all documents, and
taken all actions necessary to title, register and maintain the title and
registration of each Vehicle pursuant to Section 12 of the Lease.
(b) No more than once semi-annually, upon the request of Xxxxx
or the Agent, Leasco will cause a title check of a representative or random
sample of titles (such random sample to be compiled taking into account the
multiple locations at which the Certificates of Title with respect to the
Vehicles are held by the Custodian) by a Person acceptable to the Agent on a
reasonable number (but in no event less than 2%) of the Vehicles (other than
Initial Vehicles subject to the Vehicle Title Nominee Agreement), including
verification that the titles reflect the pledge to the Agent, and shall prepare
a report of exceptions with the results of such title check and cause such
report to be furnished to the Agent, with a copy for Xxxxx, and the Rating
Agencies.
(c) If (i) any such title check reveals that 5% of such sample
does not comply with the requirement that (A) the Agent be noted as the first
lienholder on such titles or (B) Leasco be listed as the registered owner on
such titles or (ii) a Potential Loan Event of Default has occurred and is
continuing, then upon the request of Xxxxx or the Agent, Leasco will cause
additional title checks to be performed (at Leasco's expense) on a reasonable
number of the Vehicles (other than Initial Vehicles subject to the Vehicle Title
Nominee Agreement).
SECTION 9.12. Collateral Agreement. Concurrently with each
--------------------
financing of a Vehicle under this Agreement, Leasco shall indicate on its
computer records that the Agent as assignee of Xxxxx is the holder of a Lien on
such Vehicle for the benefit of the Secured Parties pursuant to the terms of the
Collateral Agreement.
-17-
SECTION 9.13. Compliance with Laws. Leasco (a) shall not violate
--------------------
any law, ordinance, rule, regulation (including ERISA and the rules and
regulations thereunder) or order of any Governmental Authority applicable to it
or its property, which violation is reasonably likely to have a Material Adverse
Effect, (b) shall file in a timely manner all reports, documents and other
materials required to be filed by it with any governmental bureau, agency or
instrumentality, except where failure to make such filings is not reasonably
likely to have a Material Adverse Effect and (c) shall retain all records and
documents required to be retained by it pursuant to any Requirement of Law,
except where failure to retain such records is not reasonably likely to have a
Material Adverse Effect.
SECTION 9.14. Delivery of Information. Leasco shall provide Xxxxx
-----------------------
with any information or materials necessary for Xxxxx to comply with its
obligations under the Liquidity Agreement.
SECTION 9.15. Restrictions. Leasco agrees that, except as
------------
otherwise approved by the Majority Banks and upon receipt of written
confirmation by each of the Rating Agencies that such action will not result in
the downgrading or withdrawal of the then current ratings of the Commercial
Paper Notes, (a) Vehicles representing at least 70% of the Net Book Value of the
Fleet will have been, at any time, manufactured (to the extent of the chassis)
by either GM or Ford, (b) Vehicles representing not more than 30% of the Net
Book Values of the Fleet will have been, at any time, manufactured (to the
extent of the chassis) by any of Navistar International Transportation Company,
Isuzu Motors Limited, Chrysler Corporation or Freightliner Corporation and (c)
Vehicles representing not more than 10% of the Net Book Value of the Fleet will
have been, at any time, manufactured (to the extent of the chassis) by Isuzu
Motors Limited.
SECTION 9.16. Cash Audit. At the request of Xxxxx, or the Agent,
----------
Leasco shall cause a semi-annual retroactive cash analysis to be performed by
nationally recognized independent auditors with respect to at least fifty
Vehicles (each such fifty Vehicles to be a random sample compiled taking into
account the multiple locations at which Vehicles are located) sold in each month
during such semi-annual period, verifying that proceeds from such sales have
been deposited into the Collateral Account in accordance with Section 9.10
hereof, and shall cause such auditors to prepare a report of exceptions to be
delivered to the Agent with a copy for Xxxxx, and the Rating Agencies.
SECTION 9.17. Compliance with Covenants. Leasco will comply with
-------------------------
each covenant made by it and contained in any Related Document to which it is a
party (subject to the applicable materiality provisions and grace periods set
forth therein).
SECTION 9.18. Payment of Obligations. Leasco will (a) pay its
---------------------
Indebtedness and other obligations in accordance with their terms and (b) pay
and discharge when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property, in
each case before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise that, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
--------
however, that such payment and discharge shall not be required with respect to
-------
any such tax, assessment, charge, levy or claim so long as the validity or
amount thereof shall be contested in good faith by appropriate proceedings and
Leasco shall have set aside on its books adequate reserves with respect thereto
in accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien.
SECTION 9.19. Employee Benefits. Leasco will (a) comply in all
-----------------
material respects with the applicable provisions of ERISA, the Code and the
regulations and published interpretations
-18-
thereunder with respect to Plans and Multiemployer Plans and (b) furnish to the
Agent as soon as possible after, and in any event within 10 days after any
Responsible Officer of the Leasco or any of its ERISA Affiliates knows or has
reason to know that, any ERISA Event has occurred that, alone or together with
any other ERISA Event could reasonably be expected to result in a Material
Adverse Effect, a statement of an Authorized Officer of Leasco setting forth
details as to such ERISA Event and the action, if any, that Leasco proposes to
take with respect thereto.
SECTION 9.20. Certificates of Title. Leasco will take or cause to
---------------------
be taken, such action as shall be necessary to submit all of the Certificates of
Title to the appropriate state authority for notation of the Agent's lien
thereon.
ARTICLE X.
Negative Covenants
------------------
Until the expiration or termination of the Loan Commitment and
thereafter until the Loan Note and all other Liabilities are paid in full,
Leasco agrees that, unless at any time Xxxxx shall otherwise expressly consent
in writing, it will comply with the following covenants.
SECTION 10.1. Mergers, Consolidations. Leasco will not, except as
-----------------------
may be permitted by the express written approval of Xxxxx and the Agent and upon
the receipt of written confirmation of the Rating Agencies that such action will
not result in the downgrading or withdrawal of the then current ratings on the
Commercial Paper Notes, merge with or into or consolidate with, any other
Person.
SECTION 10.2. Regulations G, T, U and X. Leasco will not use or
-------------------------
permit any proceeds of the Loans to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of "purchasing or
carrying margin stock" within the meaning of Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System, as amended from time to time.
SECTION 10.3. Liens. Leasco will not create, incur, assume or
-----
permit to exist any Lien with respect to any Loan Collateral now or hereafter
existing or acquired, except for Liens created by or permitted under the Related
Documents.
SECTION 10.4. Use of Vehicles. Leasco will not use or
---------------
contractually permit the Vehicles to be used in any manner (i) for any illegal
purposes or (ii) that could subject the vehicles to confiscation.
SECTION 10.5. Other Indebtedness. Leasco will not create, assume,
------------------
incur, suffer to exist or otherwise become or remain liable in respect of any
Indebtedness, other than (i) Indebtedness incurred under the Related Documents
and (ii) other Indebtedness incurred in connection with which, in each case, (a)
each Ratings Agency shall have notified Leasco, Xxxxx and the Liquidity Bank in
writing that such action will not result in the downgrading or withdrawal of the
then current ratings of the Commercial Paper Notes by such Rating Agencies, (b)
each party to which Leasco will have any obligation in connection with such
Indebtedness covenants in writing for the benefit of Leasco, Xxxxx and the
Agent, that, prior to the date which is one year and one day after the payment
in full of all obligations of Leasco in connection with such Indebtedness, it
will not institute against, or join any other Person in instituting against,
Leasco or any of its Affiliates any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of any jurisdiction, (c) Leasco has obtained the written consent of Xxxxx and
(d) each party to which Leasco
-19-
will have any obligation in connection with such Indebtedness covenants in
writing for the benefit of Leasco, Xxxxx and the Agent, that such Indebtedness
is without recourse to the Loan Collateral.
SECTION 10.6. Restrictions on Distributions; Affiliated
-----------------------------------------
Transactions. Leasco will not (a), if any Loan Event of Default or Potential
------------
Loan Event of Default has occurred and is continuing, declare or pay any
dividends on any shares of its capital stock or make any other distribution on,
or any purchase, redemption or other acquisition of, any shares of its capital
stock, (b) except in the ordinary course of business, pay any wages or salaries
or other compensation to officers, directors, employees or others or (c) except
as contemplated by the Related Documents, sell or transfer property to, or
purchase or acquire property from or otherwise engage in any transactions with,
any of its Affiliates, except that Leasco engage in any of the foregoing
transactions in the ordinary course of business at prices and on terms and
conditions no less favorable to Leasco than could be obtained on an arm's-length
basis from unrelated third parties.
SECTION 10.7. Sales of Assets. Leasco will not sell, lease,
---------------
transfer, liquidate or otherwise dispose of any Assets, except as contemplated
by the Related Documents and provided that the proceeds thereof are paid
directly to the Collateral Account.
SECTION 10.8. Acquisition of Assets. Leasco will not acquire, by
---------------------
long-term or operating lease or otherwise, any Assets, except as contemplated by
the Related Documents.
SECTION 10.9. Name; Chief Executive Office. Leasco will neither
----------------------------
(i) change the location of its chief executive office (within the meaning of the
UCC) without 60 days' prior notice to Xxxxx, the Agent and each Rating Agency
nor (ii) change its name without prior notice to Xxxxx, the Agent and each
Rating Agency sufficient to allow the Agent to make all filings (including
filings of financing statements on form UCC-1) and recordings necessary to
perfect the interest of the Agent in the Loan Collateral pursuant to the
Collateral Agreement.
SECTION 10.10. Organic Documents. Leasco will not amend any of
-----------------
its Organic Documents without the written consent of Xxxxx, the Agent and the
Majority Banks, which shall not be unreasonably withheld, and without having
received written confirmation of the then current ratings of the Commercial
Paper Notes from each of the Rating Agencies.
SECTION 10.11. Investments. Leasco will not make, incur, or
-----------
suffer to exist any loan, advance, extension of credit to, guarantee on behalf
of or other investment in, any Person other than (i) pursuant to or as permitted
by the Related Documents or (ii) in connection with Eligible Investments.
SECTION 10.12. No Other Agreements; Amendments to Related
------------------------------------------
Documents. Leasco will not, without the prior written consent of Xxxxx, the
---------
Agent and the Ratings Agencies, (i) enter into or be a party to any material
agreement or instrument other than any Related Document or documents and
agreements incidental thereto or (ii) amend, modify, waive or give any approval,
consent or permission under, any provision of any Related Document to which it
is a party other than such amendments that relate to minor administrative
matters that do not amend or modify (A) the amount or timing of any payments (or
priorities for payments) to be made under the Related Documents, (B) any rights
in the Loan Collateral (or any priorities or rights or restrictions on
encumbrances with respect thereto), or (C) any prohibition or restriction on the
incurrence of any Indebtedness under the Related Documents.
-20-
SECTION 10.13. Obligations of Leasco. Leasco will (a) not take
---------------------
any action which would reasonably be expected to result in TRS or any Affiliate
of TRS having a right to refuse to perform any of its obligations under any of
the Related Documents and (b) promptly notify Xxxxx upon learning of the
occurrence of a Lease Event of Default or Potential Lease Event of Default.
SECTION 10.14. Manufacturer Bankruptcy. Following an Event of
-----------------------
Bankruptcy with respect to an Eligible Chassis Manufacturer, Leasco will refrain
from placing any Vehicle Order with such Manufacturer.
SECTION 10.15. Business. Leasco will not engage in any business
--------
or enterprise or enter into any transaction other than the acquisition,
ownership, leasing and sale of Vehicles.
ARTICLE XI.
Conditions
----------
SECTION 11.1. Initial Loans. The effectiveness of this Agreement
-------------
and the obligation of Xxxxx to make the initial Loans shall be subject to the
prior or concurrent delivery of each of the following documents (in form and
substance satisfactory to Xxxxx):
(a) Loan Note. A Loan Note duly executed by Leasco.
---------
(b) Certificate of Incorporation. The certificate of
----------------------------
incorporation of Leasco, duly certified by the Secretary of State of the
jurisdiction of its incorporation, together with a copy of its By-laws, duly
certified by the Secretary of Leasco.
(c) Resolutions. Copies of resolutions of the Board of Directors
-----------
of Leasco authorizing or ratifying the execution, delivery and performance of
those documents and matters required of it with respect to this Agreement, duly
certified by the Secretary of Leasco.
(d) Consents, etc. Certified copies of all documents evidencing
-------------
any necessary corporate action, consents and governmental approvals (if any)
with respect to this Agreement.
(e) Incumbency and Signatures. A certificate of the Secretary of
-------------------------
Leasco certifying the names of the individual or individuals authorized to sign
this Agreement and the other Related Documents to be executed by it, together
with a sample of the true signature of each such individual (Xxxxx and the Agent
may conclusively rely on each such certificate until formally advised by a like
certificate of any changes therein).
(f) Opinions of Counsel. The opinion of Willkie, Xxxx and
-------------------
Xxxxxxxxx, counsel for Leasco, addressed to Xxxxx, the Agent, the Liquidity
Agent, the Depositary, the Dealers and the Rating Agencies substantially in the
form of Exhibit D hereto.
(g) Good Standing Certificates. Certificates of good standing for
--------------------------
Leasco in the jurisdiction of its organization and the jurisdiction of its
principal place of business.
(h) Search Reports. A written search report from a Person
--------------
satisfactory to Xxxxx and the Agent listing all effective financing statements
that name Leasco as debtor or assignor and that are filed in the jurisdictions
in which filings were made pursuant to subsection (i) below, together with
copies of such financing statements, and tax and judgment lien search reports
from a Person satisfactory to Xxxxx and the Agent showing no evidence of such
Liens filed against Leasco.
-21-
(i) Evidence. Evidence (which may be telephonic) of the filing of
--------
proper financing statements on Form UCC-1, naming Leasco as debtor, the Agent as
secured party and assignee or other, similar instruments or documents, as may be
necessary or, in the reasonable opinion of Xxxxx and the Agent, desirable under
the UCC of all applicable jurisdictions to perfect the Agent's interest in the
Loan Collateral.
(j) Collateral Agreement. An executed copy of the Collateral
--------------------
Agreement substantially in the form of Exhibit D hereto.
(k) No Material Adverse Change. A certificate of the Chief
--------------------------
Financial Officer of Leasco certifying that (i) since December 31, 1996, there
has been no material adverse change in the financial condition, business or
results of operations of Leasco and (ii) as of the Closing Date, the
representations and warranties contained in Article VIII are true and correct in
all material respects, to the extent any such representations and warranties do
not incorporate a materiality limitation in their terms, and to the extent that
such representations and warranties do incorporate a materiality limitation in
their terms, are true and correct in all respects.
(l) Vehicle Title Nominee Agreement. An executed copy of the
-------------------------------
Vehicle Title Nominee Agreement substantially in the form of Exhibit E hereto.
(m) Capitalization of Leasco. Evidence, in form and substance
------------------------
reasonably satisfactory to the Liquidity Agent and the Agent, that as of the
Loan Closing Date, Leasco has been capitalized with equity in cash equal to or
greater than $10,000,000.
(n) Vehicle Acquisition Schedule. The Vehicle Acquisition
----------------------------
Schedule with respect to the Initial Vehicles.
(o) Other. Such other documents as the Agent or Xxxxx may
-----
reasonably request.
SECTION 11.2. All Loans. All Loans (including the initial Loan)
---------
shall be subject to the further conditions precedent that Xxxxx or the Agent
shall have received a completed Loan Request therefor and on the date of such
Loan, the following statements shall be true (and Leasco, by accepting the
amount of such Loan, shall be deemed to have represented and warranted that):
(a) the representations and warranties contained in Article VIII
are true and correct (in all material respects to the extent any such
representations and warranties do not incorporate a materiality limitation in
their terms) on and as of such date with the same effect as though made on and
as of such date and shall be deemed to have made on such date; and
(b) no Potential Loan Event of Default or Loan Event of Default
has occurred and is continuing nor would result from the making of such Loan or
from the application of the proceeds of such Loan.
(c) the Enhancement Test Percentage shall be equal to or greater
than the Required Enhancement Percentage.
ARTICLE XII.
Loan Events of Default and Their Effect
---------------------------------------
-22-
SECTION 12.1. Loan Events of Default. Each of the following shall
----------------------
constitute a Loan Event of Default under this Agreement:
(a) Non-Payment of Loans. Failure by Leasco to (i) make a payment
--------------------
or prepayment of any principal amount of any Loan within two Business Days of
the date on which such payment or prepayment is due or (ii) make a payment of
any interest on any Loan, any fees or any other amount payable hereunder within
five Business Days after the earlier of (x) the date Xxxxx delivers written
notice thereof to Leasco or (y) the date a Responsible Officer of Leasco has
knowledge thereof.
(b) Bankruptcy, Insolvency, etc. The occurrence of an Event of
---------------------------
Bankruptcy with respect to Leasco.
(c) Non-Compliance With Provisions. Failure by Leasco to comply
------------------------------
with any provision of or perform any obligation on its part to be performed or
observed under this Agreement (and not constituting a Loan Event of Default
under any of the other provisions of this Section 12.01) other than Section
10.05 hereof and the continuance of such failure for 10 days after written
notice thereof from Xxxxx to Leasco or after actual knowledge thereof by Leasco.
(d) Warranties and Representations. (i) Any warranty or
------------------------------
representation made by Leasco in this Agreement is incorrect in any material
respect (to the extent that any such warranty or representation does not
incorporate a materiality limitation in its terms) as of the date such warranty
or representation is made and continues to be incorrect in any material respect
(to the extent that any such warranty or representation does not incorporate a
materiality limitation in its terms) for a period of 30 days after the earlier
of (A) the date on which written notice thereof shall have been given to Leasco
by Xxxxx and (B) the date on which Leasco obtains actual knowledge thereof; or
(ii) any schedule, certificate, financial statement, report, notice, or other
material writing furnished by Leasco to Xxxxx is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified and continues to be incorrect in any material respect for a period
of 10 days after the earlier of (A) the date on which written notice thereof
shall have been given to Leasco by Xxxxx and (B) the date on which Leasco
obtains actual knowledge thereof.
(e) [Reserved].
-----------
(f) Change in Control. The occurrence of a Change in Control.
------------------
(g) Judgments Against Leasco. If one or more final judgments
------------------------
shall be entered by any court or courts against Leasco for the payment of money
which exceed $1,000,000 in the aggregate which are not fully covered by
insurance or by reserves shown on the financial statements of Leasco and its
Consolidated Subsidiaries which have been delivered to Xxxxx and the Agent in
accordance herewith; or a warrant of attachment or execution or similar process
shall be issued or levied against property of Leasco which, together with all
other such property of Leasco subject to other such process, exceeds in value
$1,000,000 in the aggregate, and if, within 30 days after the entry, issue or
levy thereof, such judgment, warrant or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any such
stay, such judgment, warrant or process shall not have been paid or discharged.
(h) Defaults on Other Indebtedness. If there shall occur any
------------------------------
default under any indenture, agreement or instrument evidencing or securing
Indebtedness of Leasco in an aggregate principal amount of $1,000,000 or more as
a result of which payment of such Indebtedness shall have become due prior to
its stated maturity.
-23-
(i) Invalidity of Related Documents. If all or any portion of any
-------------------------------
Related Document (other than the Dealer Agreement) shall at any time and for any
reason be declared to be null and void, or a proceeding shall be commenced by
Leasco, or by any governmental authority having jurisdiction over Leasco,
seeking to establish the invalidity or unenforceability thereof (exclusive of
questions of interpretation of any provision thereof).
(j) Lease Event of Default. The occurrence of a Lease Event
-----------------------
of Default.
SECTION 12.2. Effect of Loan Event of Default or Liquidation
----------------------------------------------
Event of Default. If any Loan Event of Default described in Section 12.01(b) or
----------------
any Liquidation Event of Default shall occur, the Loan Commitment (if not
theretofore terminated) shall immediately terminate and in the case of any other
Loan Event of Default, Amortization Event, Limited Amortization Event, Potential
Amortization Event or Potential Limited Amortization Event, Xxxxx may declare
its Loan Commitment (if not theretofore terminated) to be terminated, whereupon
it shall immediately terminate and, if no Commercial Paper Notes are
Outstanding, may declare the Loan Note and all other Liabilities to be due and
payable, whereupon the Loan Note shall become immediately due and payable.
SECTION 12.3. Rights of Agent Upon Liquidation Event of Default
-------------------------------------------------
and Non-Performance of Certain Covenants. (a) If a Liquidation Event of Default
----------------------------------------
shall have occurred and be continuing, Xxxxx and the Agent, to the extent
provided in the Collateral Agreement, shall have all the rights against Leasco
and the Loan Collateral provided in the Collateral Agreement, including the
right to take (under the specified circumstances) possession of all Vehicles (in
accordance with the provisions of the Lease) immediately. Upon a default in the
performance (after giving effect to any grace periods provided herein) by Leasco
of its obligations under Section 7.05 or 9.12 hereof with respect to certain
Vehicles, Xxxxx and the Agent shall have the right to take actions reasonably
necessary to correct such default with respect to the subject Vehicles including
the execution of UCC financing statements and other general intangibles and the
completion of Vehicle Perfection and Documentation Requirements on behalf of
Leasco or Xxxxx, as applicable.
(b) Upon the occurrence of a Liquidation Event of Default,
Xxxxx and the Agent shall have all of the rights, remedies, powers, privileges
and claims vis-a-vis Leasco, necessary or desirable to allow the Agent to
exercise the rights, remedies, powers, privileges and claims given to the Agent
pursuant to Sections 4.03, 6.01 and 6.02 of the Collateral Agreement and Leasco
acknowledges that it has hereby granted Xxxxx and the Agent all of the rights,
remedies, powers, privileges and claims granted to the Agent pursuant to Article
VI of the Collateral Agreement and that, under certain circumstances set forth
in the Collateral Agreement, the Agent may act in lieu of Xxxxx in the exercise
of such rights, remedies, powers, privileges and claims.
(c) If a Liquidation Event of Default shall occur, Leasco shall
sell all Vehicles, to generate proceeds sufficient to pay all interest on and
principal of the Loans, in accordance with the instructions of the Agent on
behalf of the Secured Parties; provided, however, that until such time that no
----------------
Commercial Paper Notes are Outstanding, the number of Vehicles sold or disposed
of during any month shall not exceed the Fleet Disposition Limit unless the
aggregate Disposition Proceeds from such sales or dispositions exceeds the
aggregate Net Book Value of all Vehicles sold or disposed of during such month
(such Net Book Value to be measured for each Vehicle as of the date such Vehicle
was sold or disposed of).
SECTION 12.4. Application of Proceeds. The proceeds of any sale
-----------------------
or other disposition pursuant to Section 12.03 shall be applied in the following
order: (a) to the reasonable costs and expenses incurred by Xxxxx or its agent
in connection with such sale or disposition, including
-24-
any reasonable costs associated with repairing any Vehicles, and reasonable
attorneys' fees in connection with the enforcement of this Agreement; (b) to the
payment of accrued interest and outstanding principal of the Loans, and all
other amounts due hereunder; and (c) any remaining amounts to Leasco or such
Person as may be lawfully entitled thereto.
ARTICLE XIII.
General
-------
SECTION 13.1. Waiver; Amendments. (a) No delay on the part of
------------------
Xxxxx or the holder of the Loan Note or other Liabilities in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise by any of them of any right, power or remedy preclude other
or further exercise thereof, or the exercise of any other right, power or
remedy. No amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement or the Loan Note shall in any event be effective
unless (i) the same shall be in writing and signed and delivered by Xxxxx and
Leasco and consented to in writing by the Agent and (ii) Xxxxx shall have
received in writing confirmation from each of the Rating Agencies that its then
current rating of the Commercial Paper Notes will not be reduced or withdrawn as
a result thereof; provided, however, that any amendment or modification of the
-----------------
Loan Note need only be signed by Leasco.
(b) Notwithstanding the foregoing paragraph (a) of this
Section 13.01, Xxxxx and Leasco may, at any time and from time to time, without
the consent of the Agent, enter into any amendment, supplement or other
modification to this Agreement to cure any apparent ambiguity or to correct or
supplement any provision in this Agreement that may be inconsistent with any
other provision herein; provided, however, that (i) any such action shall not
-----------------
have a material adverse effect on the interest of the Liquidity Lenders and (ii)
a copy of any such amendment, supplement or other modification is furnished to
the Agent in accordance with the notice provisions hereof not later than ten
days prior to the execution thereof by Xxxxx and Leasco.
SECTION 13.2. Confirmations. Leasco and Xxxxx (or the holder of
-------------
the Loan Note) agree from time to time, upon written request received by it from
the other, to confirm to the other in writing the aggregate unpaid principal
amount of the Loans then outstanding under the Loan Note.
SECTION 13.3. Notices. All notices, amendments, waivers, consents
-------
and other communications provided to any party hereto under this Agreement shall
be in writing and addressed, delivered or transmitted to such party at its
address or facsimile number set forth below its signature hereto or at such
other address or facsimile number as may be designated by such party in a notice
to the other parties. Any notice, if mailed and properly addressed with postage
prepaid or if properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any notice, if transmitted by facsimile, shall be
deemed given when transmitted upon receipt of electronic confirmation of
transmission.
SECTION 13.4. Costs, Expenses and Taxes. (a) Leasco agrees to pay
-------------------------
within five Business Days of demand all, out-of-pocket costs, fees and expenses
of Xxxxx (including the reasonable fees and out-of-pocket expenses of counsel
for Xxxxx) in connection with the preparation, execution, delivery and
performance of this Agreement and all other Related Documents, including costs
and expenses payable by Xxxxx (i) pursuant to Sections 4.02(a), 4.05, 5.03,
5.04, 5.05, 5.06, 8.01(c) and 11.03 of the Liquidity Agreement, (ii) pursuant to
Section 9.05 of the Collateral Agreement, (iii) pursuant to Section 10 of the
Dealer Agreement, (iv) pursuant to Section 8 of the Depositary Agreement and (v)
pursuant to Section 6 of the Custody Agreement.
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(b) Leasco further agrees to pay all out-of-pocket costs and
expenses (including reasonable attorneys' fees and legal expenses) incurred by
Xxxxx in connection with the administration, enforcement, waiver or amendment of
this Agreement, and any other Related Document. Leasco further agrees to pay
within five Business Days of demand, and to save Xxxxx harmless from any
indemnities payable by Xxxxx under any of the Related Documents, including those
indemnities payable pursuant to (i) Section 11.04 of the Liquidity Agreement,
(ii) Section 9.05 of the Collateral Agreement, (iii) Section 9 of the Dealer
Agreement and (iv) Section 8 of the Depositary Agreement.
(c) In addition, Leasco agrees to pay within five Business Days
of demand, and to save the Agent and Xxxxx harmless from all liability for, any
document, stamp, filing, recording, mortgage or other taxes (other than net
income taxes of Xxxxx) which may be payable in connection with the borrowings
hereunder or the execution, delivery, recording or filing of this Agreement or
of any other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith.
All obligations provided for in this Section 13.04 shall survive
any termination of this Agreement.
SECTION 13.5. Indemnification. In consideration of Xxxxx'x
---------------
execution and delivery of this Agreement and Xxxxx'x extension of the Loan
Commitment, Leasco hereby agrees to indemnify, exonerate and hold Xxxxx and its
officers, directors, stockholders and employees (herein collectively called
"Xxxxx Parties" and individually called a "Xxxxx Party") free and harmless from
and against any and all claims, demands, actions, causes of action, suits,
losses, costs (including all documentary, recording, filing, or other stamp
taxes or duties), charges, liabilities, damages, and expenses in connection
therewith (irrespective of whether such Xxxxx Party is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys'
fees and disbursements (called in this paragraph the "Indemnified Liabilities"),
incurred by the Xxxxx Parties or any of them as a result of, or arising out of,
or relating to (a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or involving any
Loan, or (b) the execution, delivery, performance or enforcement of this
Agreement and any instrument, document or agreement executed pursuant hereto by
any of the Xxxxx Parties, or (c) the ownership, operation, maintenance, leasing,
or titling of the Vehicles, except in each case, for any such Indemnified
Liabilities arising on account of the relevant Xxxxx Party's gross negligence or
wilful misconduct and, to the extent that the foregoing undertaking may be
unenforceable for any reason, Leasco agrees to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law.
SECTION 13.6. No Petition. Leasco hereby covenants and agrees
------------
that, prior to the date which is one year and one day after the payment in full
of all Commercial Paper Notes Outstanding and all other obligations of Xxxxx
under the Related Documents, it will not institute against, or join any other
Person in instituting against, Xxxxx 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 Leasco takes action in violation of this Section 13.06, Xxxxx agrees,
for the benefit of the Holders, that it shall file an answer with the bankruptcy
court or otherwise properly contest the filing of such a petition by Leasco
against Xxxxx or the commencement of such action and raise the defense that
Leasco 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. The provisions of this Section 13.06 shall survive the
termination of this Agreement.
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SECTION 13.7. No Recourse. (a) Xxxxx agrees that the obligations
-----------
of Leasco to Xxxxx hereunder shall be due and payable only to the extent that
Leasco's assets are sufficient to pay such obligations. No claims of Xxxxx
arising under or in connection with the Collateral Agreement are intended to be
impaired or waived by this Section 13.07.
(b) Without limitation to the obligations of Leasco hereunder,
no recourse shall be had for the payment of any amount owing in respect of Loans
or for the payment of any fee hereunder or any other obligation or claim arising
out of or based upon this Agreement or any other Related Document against any
stockholder, employee, officer, director, affiliate or incorporator of Leasco
based on their status as such or their actions in connection therewith. The
provisions of this Section 13.07 shall survive the termination of this
Agreement.
SECTION 13.8. Waiver of Set-Off. Xxxxx hereby waives and
-----------------
relinquishes any right that it has or may have to set-off or to exercise any
banker's lien or any right of attachment or garnishment with respect to any
funds at any time and from time to time on deposit in, or otherwise to the
credit of, any account and any claims of Leasco therein or with respect to any
right to payment from Leasco, it being understood, however, that nothing
contained in this Section 13.08 shall, or is intended to, derogate from the
assignment and security interest granted to the Agent under the Collateral
Agreement or impair any rights of Xxxxx or the Agent thereunder.
SECTION 13.9. Forum Selection and Consent to Jurisdiction. ANY
-------------------------------------------
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR THE LOAN NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, XXXXX OR LEASCO
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY LOAN
-------- -------
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT XXXXX'X OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH LOAN COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
LEASCO HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ALL FEDERAL AND STATE COURTS OF THE STATE OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
LEASCO FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. LEASCO AND XXXXX HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT LEASCO HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE LOAN NOTE.
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SECTION 13.10. Governing Law. THIS AGREEMENT AND THE LOAN NOTE
-------------
SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of Leasco and rights of Xxxxx and the holder of the
Loan Note or Liability expressed herein shall be in addition to and not in
limitation of those provided by applicable law or in any other written
instrument or agreement relating to any of the Liabilities.
SECTION 13.11. Jury Trial. EACH PARTY HERETO HEREBY EXPRESSLY
----------
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER RELATED DOCUMENT TO WHICH IT
IS A PARTY, OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION THEREWITH OR ARISING FROM
ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY RELATED
TRANSACTION, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY.
SECTION 13.12. Successors and Assigns. (a) This Agreement shall
----------------------
be binding upon Leasco, Xxxxx and their respective successors and assigns, and
shall inure to the benefit of Leasco, Xxxxx and the Agent as a third party
beneficiary and their respective successors and assigns; provided, however, that
Leasco shall not have the right to assign its rights or delegate its duties
under this Agreement without (i) Xxxxx'x and the Agent's prior written consent
and (ii) receipt of written confirmation from each of the Rating Agencies that
its then current rating of the Commercial Paper Notes will not be reduced or
withdrawn as a result thereof.
(b) Leasco acknowledges that this Agreement and the Loan Note
will be assigned by Xxxxx to the Agent pursuant to the Collateral Agreement, and
hereby agrees that the Agent may exercise all of Xxxxx'x rights hereunder.
(c) This Agreement and the other Related Documents contain the
entire agreement of the parties hereto with respect to the matters covered
hereby.
IN WITNESS WHEREOF, Leasco and Xxxxx have caused this Loan
Agreement to be duly executed by their respective officers all as of the day and
year first above written.
RCTR, INC.,
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention of: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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by
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
FCTR, INC.,
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention of: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
by
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Treasurer
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